21st Mar 2019 08:11
LONDON (Alliance News) - Shares in computer game retailer GAME Digital PLC jumped Thursday after it reported interim profit jumped by more than a fifth on lower costs, despite revenue struggling in a tough market.
Shares in GAME were 4.8% higher at 27.87 pence on Thursday.
For the six months ended January 26, pretax profit widened 20% to GBP14.8 million from GBP12.3 million the year prior. This was despite revenue falling 4.7% to GBP492.9 million from GBP517.4 million the year before.
Profit performance was helped by a fall in operating expenses to GBP106.2 million from GBP116.2 million, but was hindered by a jump in exceptional costs to GBP5.1 million from GBP1.9 million the year before. These one-off costs were primarily due to redundancy and restructuring costs.
Underlying pretax profit - excluding one-off costs - improved 40% to GBP19.9 million from GBP14.2 million the year prior.
"We are pleased with our performance in the first half delivering a 22% growth in adjusted Ebitda and a material improvement in cash and liquidity during the period," GAME Chief Executive Officer Martyn Gibbs said.
Adjusted earnings before interest, taxes, depreciation and amortisation widened 22% to GBP25.8 million from GBP21.2 million the year prior. Cash from operating activities rose 29% to GBP41.6 million, taking cash reserves 12% higher to GBPP95.5 million from GBP84.9 million the year before.
"Our core retail businesses are facing a challenging retail environment that continues to evolve at pace, but we have set ourselves up well with our transformation programme and continued focus on costs and efficiencies."
GAME does not pay an interim dividend.
"During the period the UK Retail business delivered further efficiency improvements and achieved considerable cost savings across all areas including store operating and fixed costs, distribution and head office costs," Gibbs added. "Our flexible lease profile gives us a unique opportunity to work closely with landlords to manage our store portfolio and we continue to deliver, and anticipate ongoing, rent reductions."
"The improved group profitability in the half and strong cash position means that we are well placed to advance our strategic priorities in the coming months whilst managing our business closely in the current challenging retail environment", Gibbs concluded.