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Game Group PLC (GMG)

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Wednesday 23 September, 2009

Game Group PLC

Interim Results

RNS Number : 4612Z
Game Group PLC
23 September 2009
 



RNS


Half Year Results for the six months ended 31 July 2009  


THE GAME GROUP PLCEurope's leading retailer of pc and video games products, today announces half year results for the six months ended 31 July 2009.


Summary of results


All figures in £'m (unless stated)

Six months ended 31/7/09

Six months ended 31/7/08

Group turnover

690.8

742.6

Gross profit margin (%)

28.9

27.0

Operating profit before non-recurring costs

16.7

38.5

Non-recurring costs

3.7

3.0

Operating profit

13.0

35.5

Profit before tax 

10.8

32.8

Profit before non-recurring costs and tax

14.5

35.8

Basic earnings per share before non-recurring costs (pence)

3.29

7.51

Basic earnings per share (pence)

2.23

6.63

Interim dividend per share (pence)

1.88

1.79

Trading store numbers

1,368

1,245

Trading square footage (sq. ft.thousands)

1,417

1,296


Financial highlights 

  • Total Group sales down 7.0% and like for like ('lfl') sales down by 16.3%
  • Strong growth in gross margin, up 190 basis points ('bps')
  • First half profit in line with expectations at £14.5m before non-recurring costs and tax (2008: £35.8m)
  • Interim dividend up 5.0% to 1.88p
  • Total sales in the 33 weeks ended 19 September 2009 down 8.8% and lfl sales down 16.6% 


Operational highlights

  • Dual brand proposition working well and on track to deliver full year synergies of £16m
  • Revenues for preowned increased to £177.3m (2008: £157.8m) representing 25.7% (2008: 21.3%) of first half sales.

  • Preowned gross margin up by 290 bps to 41.0% 

  • Online strategy progressing well, with 12.1% increase in revenues 

  • Continued focus on costs 

  • Strong balance sheet with minimal gearing, and refinanced facilities


Revised Guidance

  • Gross margin growth guidance for the full year raised to 170 - 220 bps from 150 - 175 bps

  

Peter Lewis, Chairman, said:


'These were solid results for the Group. We have returned to more normal trading patterns where historically we have generated nearly all Group profits in the second half of the year. 


We outperformed markets that showed year on year declines following last year's unprecedented sales of hardware and record breaking software launches.  


Key elements of our business have shown resilience. We achieved year on year growth in preowned sales, which increased 12.3% and now account for 25.7% (2008: 21.3%) of total sales, and in our online business we increased revenues by 12.1%. Our Reward Card membership has increased by over 1 million customers since the start of the year to more than 13.3m.


We have increased total half year gross margins by 190 bps to 28.9%, with preowned margins up 290 basis points to 41.0%. 


In the second half, the installed base of third generation consoles will continue to build. The recent manufacturer price reductions on the Microsoft Xbox 360 Elite and Sony's new model Playstation 3 are helping to stimulate the market for hardware. There is a broad and exciting line up of software and accessory products scheduled for all consoles before Christmas.


The retail environment continues to be tough. In uncertain times, our brand loyalty and our unique specialist proposition have never been more important. This, combined with our strict cost disciplines, the record console installed base and strong software line-up, means we remain optimistic for the key Christmas selling period.'


-ends -



Enquiries:


The GAME Group plc 

+44 (0)1256 784566

Lisa Morgan, Group Chief Executive


Ben White, Group Finance Director 


Simon Soffe, Director of Investor Relations and Group Communications



Brunswick 

+44 (0)20 7404 5959

Jonathan Glass


Nina Coad


Oliver Hughes 



  CHAIRMAN'S REPORT


Introduction:


'These were solid results for the Group, as we have returned to more normal trading patterns where historically we have generated nearly all Group profits in the second half of the year. 


We outperformed markets that showed year on year declines following last year's unprecedented sales of hardware and record breaking software launches including Mario Kart, Wii Fit and Grand Theft Auto IV.  


Key elements of our business have shown resilience. We achieved year on year growth in preowned sales, which increased 12.3% and now account for 25.7% (2008: 21.3%) of total sales, and in our online business we increased revenues by 12.1%. Our Reward Card membership has increased by over 1 million customers since the start of the year to more than 13.3m.


We have increased total half year gross margins by 190 bps to 28.9% with preowned margins up 290 basis points to 41.0%. 


Our performance is shaped by the technology in the market place and the customer demand that it creates. The third generation of video games consoles is now well established in the market with an installed base of just over 25m consoles, an increase of 45% on last year. Manufacturers and publishers are focussed on leveraging the substantial console installed base by releasing new software and innovative ways to play, and a significant number of exciting new releases will be launched into the market before Christmas.


Whilst we recognise that we are operating in a challenging wider economic environment, the sales performance of the limited number of AAA new software releases in the first half gives us continued confidence in customer demand for video game products. Furthermore, the performance of our preowned business has benefited the Group as customers increasingly seek out the best value for money.


Results


Group turnover for the six months to 31 July 2009 decreased by 7.0% to £690.8m (2008: £742.6m), with lfl sales down by 16.3%. In the UK and Ireland, total store sales decreased by 14.2% and lfl sales were down by 17.9%. In our International operations, total store sales increased by 7.3% and lfl sales decreased by 15.5%. Sales in our online business increased by 12.1%. This overall Group performance can be attributed to the slower rate of hardware sales and the paucity of major software launches, particularly compared to the first half of last year.


We have delivered an increase in our gross margin of 190 bps. The increase was achieved predominantly through higher margin preowned sales becoming a larger part of the overall mix, and the improved gross margin on those preowned sales. Additionally, we continue to benefit from our Gamestation acquisition synergies.


Group profit before tax and non-recurring costs was £14.5m (2008: £35.8m). Profit before tax was £10.8m (2008: £32.8m) and basic earnings per share were 2.23p (2008: 6.63p).


Your Board is declaring an interim dividend of 1.88p per share, an increase of 5%. Whilst the Board remains mindful of wider economic conditions, this progressive dividend policy reflects the Board's views on the quality of the pc and video games launch schedule in the second half.


Our net debt position at 31 July 2009 was £80.2m (2008: £57.8m). The slight increase in cash outflow year on year is attributable to the reduced operating profit and the timing of non-stock supplier payments.


Business Development


Our Market


The pc and video games market was worth approximately £4bn in the UK last year, larger than either the music (£1.3bn3) or film markets (£2.3bn). The third generation consoles and handheld machines from each of the main hardware manufacturers, namely PS3 (Sony), Xbox360 (Microsoft), Wii (Nintendo), PSP (Sony) and DS (Nintendo), have all been available in the market for at least two years. In the first half of the year Nintendo launched a new version of the Nintendo DS (the DSi). The overall rate of hardware growth has slowed compared to the record levels of last year. However a price cut on the Xbox 360 Elite and the introduction of a new Sony Playstation 3 model at a lower price have stimulated sales in recent weeks. 


The installed base of consoles in each of the territories in which we operate is at significant levels, ranging from 140% of households in the UK to 66% in France. The pc and video games market has a larger and more diverse customer base than ever before with customers playing across multiple formats, and genre types inspired by products offering new and innovative ways to play. 


The schedule of new software releases across all formats is very strong for the second half of this year and into 2010. There will be titles such as Call of Duty Modern Warfare 2, Halo 3 ODST and Assassin's Creed 2 for the core gamers, and much loved titles such as Mario & Sonic at the Winter Olympic Games, FIFA 2010, Professor Layton and Pandora's Box, and Wii Fit Plus for the more casual players. Historically we have seen that popular new software releases also drive the sale of hardware.


Our Proposition


In a marketplace which displays significant product range, choice and technical innovation, the role of the specialist is crucial. 


We offer customers the same unique specialist proposition through every market in which we trade:


  • Employees: We recruit and train employees with a passion for games and an aptitude for retail, who are dedicated to giving our customers the highest levels of service and advice.

  • Product and Range: We stock the widest range of pc and video games on the high street and, as a leading specialist, we receive significant quantities of new product. We are able to offer unique promotions, hardware bundle deals, limited edition products and offers, and our own range of accessories. We offer customers what they want at prices they can afford.

  • Preowned: This is a vital component of our specialist offer. The ability to trade-in and buy preowned games at GAME and Gamestation provides a material benefit for customers, particularly in today's challenging economic climate. We have developed our preowned offering over more than ten years, allowing us to perfect our customer offer and enhance gross margins.

  • Customer Loyalty: We have 13.3m Reward Card members around the world. They receive points on every purchase that can later be used as discounts against future purchases. This, together with preowned, is a significant part of our customer value proposition. The resulting customer and transactional data allows us to achieve a unique point of difference in our customer relationship management.


Our customer facing proposition is underpinned by a strong operating infrastructure:


  • Property: We identify the store locations that will give us the best returns on our investment in each country in which we operate. In the first half we have opened a net 26 stores, bringing us to a total store number of 1,368. We plan to open a further 50-60 stores before the end of the year.

  • Ecommerce: We have an online offering that matches the quality and reputation of our stores, selling both boxed and digital products. We continue to evolve our online brand presence and digital offer as customers become more comfortable with the technology.

  • Business Relationships: To provide customers with a range of product and offers, it is important that we maintain long-term and successful relationships with all key suppliers. 

  • Distribution: Our distribution centres are dedicated to getting product quickly and efficiently to our stores and to customers' homes.


We continue to target the Group's resources towards each of these operating features, in each of our markets, depending on which displays the strongest return on investment characteristics.

  

Store portfolio




31 July 2009

31 July 2008

31 January 2009



Number

Number

Number

Company owned and concessions





UK and Ireland 

- GAME

- Gamestation



444

254


423

246


443

253

Total UK and Ireland


698

669

696

France


198

187

192

Iberia


270

241

258

Scandinavia


67

62

66

Czech Republic


21

-

22

Australia


108

72

101

Total International


664

562

639

Total owned and concessions


1,362

1,231

1,335

Franchises





France


-

2

1

Iberia


5

10

5

Australia


1

2

1

Total franchises


6

14

7

Total operational outlets


1,368

1,245

1,342







The UK and Ireland


In the final quarter of last year we saw unprecedented changes to the retail landscape as some pc and video games retailers ceased to trade. We have broadened the appeal of our offer and taken our share of the market that became available. 


We have opened a net two stores across our GAME and Gamestation brands in the first half, giving us a 698 store portfolio. Our focus is on ensuring we are in the right location for each of our brands.


Following the acquisition of Gamestation in the year to January 2008, we delivered £10m of ongoing synergies in the 53 weeks ended January 2009. We have targeted a further £6m of synergy benefits for this year, giving an annualised rate of £16m going forward. We are on track to deliver these by the end of January 2010.


To achieve these synergies there will be a total non-recurring charge of approximately £6.5m this year of which £3.7m has been incurred in the year to date. In addition, capital expenditure required to integrate the acquisition this year will be in the region of £5m.


International


Our International business consists of eight countries. All of these countries have been impacted by the challenging economic conditions. We have held our market position in each of our territories. The International business now represents 33.2% of Group revenue and 29.4% of gross profit.


We have opened a net 24 stores internationally. We are actively focussed on building a platform for long term growth, opening stores in those territories where we will see the greatest return on investment and benefits of scale - Spain, where we are the market leader, and Australia where we are still building our business to the appropriate scale. We expect new stores to pay-back on the initial capital investment within two to three years.


Online Initiatives


We continue to focus on delivering a truly multi-channel proposition that allows us to be the aggregator of choice in whichever way the customer wants to shop. We are evolving our eCommerce, online and digital offer through a targeted strategy:


Ecommerce: We operate three transactional websites in the UK (www.game.co.ukwww.gamestation.co.ukwww.gameplay.co.uk) and five internationally, allowing customers to order product for delivery direct to home. In the first half, we have achieved revenues of £33.2m (2008: £29.6m) and operating profit of £1.6m (2008: £1.8m).


Online Play: Many of our customers now play games online via mediums such as pc, Xbox Live and Sony's Playstation Network. We participate in this area by selling the original boxed products, accessories and online time cards which allow customers to fully experience the online arena. 


Digital distribution: This is a pc service, and involves downloading games directly through a broadband internet connection. We offer customers a choice: either to 'Buy and Download' a specific title or to play a variety of games using a subscription service called 'Games on Demand'. We have seen good growth in these services, but to date they remain a small part of our online business. 


We are able to track progress in the market and customer trends through our Reward Card data and our leading relationships in the industry. We believe that, over the longer term, interest in these various ways of playing video games will increase. However, growth in this media is currently restricted by both customer appetite and the inherent IT and broadband infrastructure of every country in which we operate. We intend to invest up to £5m this year in our online and digital proposition.


Treasury and Capital Expenditure


Balance Sheet and Capital Expenditure

Our net assets position has remained in line with the previous year end at approximately £280m.


Fixed assets have remained relatively static as additions have been offset by the depreciation charge in the half year. We expect to open a further 50 to 60 stores in the remainder of the year. This, combined with our online, IT, infrastructure and integration spend will result in a full year capital expenditure of between £30m and £35m.


Cash flow

Our net debt as at 31 July 2009 was £80.2m (2008: £57.8m). The slight increase in cash outflow year on year is attributable to the reduced operating profit and the timing of non-stock supplier payments. In the 2009/10 financial year, average net debt is expected to be around £60m.  


During the period we refinanced our borrowing facilities, giving us available funds of £175m repayable in June 2012. This provides the financial flexibility to deliver our specialist offer without compromise. In addition, the continuing support of a syndicate of five banks reflects the strength of the GAME Group proposition.


Employees


The wider economic conditions are challenging and I have been very pleased with the way all of our employees have continued to work tirelessly to engage with our customers and provide outstanding customer service. I would like to thank them all.


Corporate Responsibility


We have developed our Corporate Responsibility strategy to best enhance our reputation and our brand. We ensure that the way we work impacts positively on the communities in which we operate and on our customers, suppliers and stakeholders. 


Current Trading and Prospects


In the 33 weeks ended 19 September 2009, total Group sales were down by 8.8%. The UK and Ireland total store sales were down by 14.8%, International store sales and total online sales were up by 2.3% and 4.2% respectively. For the same period, Group lfl sales were down by 16.6%, with the UK and Ireland lfl sales down by 18.0% and International lfl sales down by 16.4%. Overall, these results reflect a continuation of the slower hardware sales we saw in the first half and the fact that we are only just entering the period of significant software releases.


In the second half, the installed base of third generation consoles will continue to build. The recent manufacturer price reductions on the Microsoft Xbox 360 Elite and Sony's new model Playstation 3 are helping to stimulate the market for hardware. There is a broad and exciting line up of software and accessory products scheduled for all consoles before Christmas including Call of Duty Modern Warfare 2, Assassin's Creed 2, FIFA 2010, and Mario & Sonic at the Winter Olympics.


Our well-established trade-in offer and preowned programme offers customers exceptional value for money, and an increasing number of customers are recognising this. At the half year preowned sales represented 25.7% (2008: 21.3%) of Group revenues. Consequently, we anticipate gross margin for the full year will increase by between 170 and 220 basis points.


The retail environment continues to be tough. 


In uncertain times our brand loyalty and our unique specialist proposition have never been more important. We place the customer at the heart of everything we do, delivering exceptional customer service and value through our unique Reward Card scheme, our preowned programme and leading offers in our stores and online. This, combined with our strict cost disciplines, the record console installed base and strong software line-up, means we remain optimistic for the key Christmas selling period.'



Peter Lewis

Chairman

  GAME Group Plc

Unaudited Condensed Consolidated Statement of Comprehensive Income

for the six months ended 31 July 2009








Notes



Six months

ended

31 July

2009

Unaudited


Restated

Six months

ended

31 July

2008

Unaudited


Restated

Year 

ended

31 January

2009

Unaudited*












£'000


£'000


£'000









Revenue

2


690,753


742,553


1,968,604

Cost of sales



490,785


542,386


1,454,097









Gross profit



199,968


200,167


514,507

Other operating expenses

3


186,934


164,694


390,214










Operating profit before non-recurring costs




16,718



38,518



130,881

Non-recurring costs

3


(3,684)


(3,045)


(6,588)







   


















Operating profit



13,034


35,473


124,293

Finance income

Finance costs



133

(2,393)


828

(3,490)


1,805

(8,732)

















Profit before taxation



10,774


32,811


117,366

Taxation  

4


3,050


9,903


34,173









Profit for the period attributable to equity holders of the parent



7,724


22,908


83,193










Other comprehensive income:








Exchange differences on translating foreign operations



(590)


7,419


17,550

Deferred income tax on share-based payments



-


-


(442)

Income tax on share-based payments



-


-


1,789









Other comprehensive income for the period, net of tax



(590)


7,419


18,897

















Total comprehensive income for the period attributable to equity holders of the parent



7,134


30,327


102,090









Earnings per share

- basic



6




2.23p




6.63p




  24.05p


- diluted

6


2.23p


6.61p


23.97p









* The 31 January 2009 comparative period is based on the audited financial statements for the year end as amended for a prior year adjustment due to the adoption of IFRIC 13.


  GAME Group Plc

Unaudited Condensed Consolidated Balance Sheet

at 31 July 2009






Restated


Restated



As at


As at


As at



31 July


31 July


31 January



2009


2008


2009


Notes

Unaudited


Unaudited


Unaudited*



£'000


£'000


£'000

Non current assets







Property, plant and equipment

  7

162,203


144,928


165,609

Intangible assets

  8

181,422


175,566


182,267

Deferred tax asset


2,738


-


2,738



346,363


320,494


350,614

Current assets







Inventories


166,498


184,045


181,965

Trade and other receivables

  9

55,153


61,825


55,465

Cash and cash equivalents


57,768


62,647


139,614



279,419


308,517


377,044

Total assets


625,782


629,011


727,658








Current liabilities







Trade and other payables

  10

192,416


265,340


349,182

Current portion of long-term borrowings

  11

104,328


63,439


26,325

Leasehold property incentives


1,357


713


904

Corporation tax liabilities


6,881


14,030


26,037



304,982


343,522


402,448








Non current liabilities







Long-term borrowings

  11

33,626


57,030


31,847

Leasehold property incentives


7,614


7,094


8,328

Deferred tax liabilities


-


1,929


-



41,240


66,053


40,175

Total liabilities


346,222


409,575


442,623

Net assets


279,560


219,436


285,035








Equity attributable to equity holders of the parent







Share capital

  13

17,332


17,314


17,316

Share premium account

  14

46,644


46,435


46,462

Capital redemption reserve

  15

2,248


2,249


2,248

Shares held in Trust

  15

(3,168)


(5,315)


(6,451)

Merger reserve

  15

76,907


76,907


76,907

Foreign exchange reserve

  15

22,864


13,323


23,454

Retained earnings

  15

116,733


68,523


125,099

Total Equity

  

279,560


219,436


285,035








* The 31 January 2009 comparative period is based on the audited financial statements for the year end as amended for a prior year adjustment due to the adoption of IFRIC 13.


Approved and authorised for issue by the Board on 23 September 2009


Ben White

Director

  GAME Group Plc

Unaudited Condensed Consolidated Statement of Cash Flows

for the six months ended 31 July 2009






Restated


Restated



Six months


Six months


Year



ended 


ended 


ended 



31 July


31 July


31 January



2009


2008


2009


Notes

Unaudited


Unaudited


Unaudited*



£'000


£'000


£'000

Cash flows from operating activities 







Operating profit


13,034


35,473


124,293

Equity-settled share-based payment expense


1,296


828


1,968

Depreciation and amortisation


14,335


12,632


28,901

Loss/(profit) on disposal of non-current assets


1,018


(212)


146

Market value movement on financial instrument


205


205


211



29,888


48,926


155,519








Decrease/(increase) in trade and other receivables


312


(7,980)


212

Decrease/(increase) in inventories


15,467


(38,806)


(30,293)

(Decrease)/increase in trade and other payables


(154,959)


(51,428)


28,573

(Decrease)/increase in leasehold incentives


(261)


547


1,573

Cash generated from operations


(109,553)


(48,741)


155,584








Finance costs paid


(2,393)


(3,490)


(8,732)

Corporation tax paid


(21,749)


(11,735)


(28,844)

Net cash from operating activities


(133,695)


(63,966)


118,008








Cash flows from investing activities







Acquisitions

   

-


(1,595)


(6,804)

Purchase of property, plant and equipment


(11,863)


(20,475)


(48,727)

Purchase of intangible assets


(2,753)


(2,605)


(4,718)

Proceeds from sale of equipment


455


455


1,128

Finance income received


133


828


1,805

Net cash used in investing activities


(14,028)


(23,392)


(57,316)








Cash flows from financing activities 







Proceeds from issue of share capital


198


1,710


1,740

Purchase of own shares


-


(1,241)


(1,241)

Shares purchased for Trust


(1,254)


(2,692)


(3,828)

Payment of Term Loan


(55,000)


-


(25,000)

Proceeds from Term Loan


50,000


-


-

Net receipt/(payment) of other long-term borrowings


85,068


25,124


(13,765)

Payment of finance lease liabilities


(286)


(503)


(393)

Dividends paid


(12,849)


(10,292)


(16,490)

Net cash used in financing activities


65,877


12,106


(58,977)








Net (decrease)/increase in cash and cash equivalents


(81,846)


(75,252)


1,715

Cash and cash equivalents at beginning of period


139,614


137,899


137,899

Cash and cash equivalents at end of period

12

57,768


62,647


139,614

* The 31 January 2009 comparative period is based on the audited financial statements for the year end as amended for a prior year adjustment due to the adoption of IFRIC 13.

  

Notes to the interim results


1

General

The GAME Group plc is a company incorporated, domiciled and registered in England and Wales and is listed on the London Stock Exchange. The address of its registered office is Unity House, Telford Road, Basingstoke, RG21 6YJ.


Basis of preparation

The financial information presented in this Interim Report has been prepared in accordance with the accounting policies the Group expects to be applicable at 31 January 2010. The Interim Report has been prepared in accordance with those IFRS and IFRIC interpretations issued and effective as at the time of preparing the statement, and with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, Interim Financial Reporting, as adopted by the European Union. In line with this standard, the financial statements are referred to as condensed.


Accounting policies

The accounting policies used in preparing the Interim Report are as set out in the statutory accounts for the year ended 31 January 2009.  Other than noted below, there have been no changes in accounting policies and accounting estimates.


Estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  


Significant items subject to such assumptions and estimates include the useful lives of assets, the measurement and recognition of provisions, the recognition of deferred tax assets and liabilities for potential corporation tax. The most critical accounting policies in determining the financial condition and results of the Group are those requiring the greatest degree of subjective or complex judgements. These relate to inventory valuation; lease costs; the valuation of goodwill and acquired intangible assets; share-based payments and taxation. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. 


  Notes to the interim results


1

General (continued)


Adoption of new and revised Standards

The Directors have chosen to early adopt IFRS 3 'Business Combinations amendment' which is effective for financial statements commencing after 1 July 2009 although this interpretation is not yet endorsed by the EU. The impact of the adoption of this standard has not had a material impact on the results, cash flows or financial position of the Group or the Company.


Changes in accounting policies

In the current financial year, the Group has adopted IAS 1 'Presentation of Financial Statements' (Revised), IFRS 8 'Operating Segments', amendment to IFRS 2 'Share-based payments: vesting conditions and cancellations' and IFRIC 13 'Customer Loyalty Programmes'.


IAS 1 Presentation of Financial Statements (Revised) includes the requirement to present a Statement of Changes in Equity as a primary statement and introduces the possibility of either a single Statement of Comprehensive Income (combining the Income Statement and a Statement of Comprehensive Income) or to retain the Income Statement with a supplementary Statement of Comprehensive Income. The Directors have chosen the first option. As this standard is concerned with presentation only it does not have any impact on the results or net assets of the Group.


IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision-maker.  The chief operating decision-maker has been identified as the Board of Directors.  By contrast IAS 14 'Segmental Reporting' required business and geographical segments to be identified on a risks and rewards approach. The effect of applying IFRS 8 is to restate the 08/09 Comparatives according to the operating segments, UK & Ireland Stores, International Stores, Global Online.  The operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors.  The online segment is now reported separately, as the Board of Directors consider this segment to be of growing importance.  


Amendment to IFRS 2 'Share-based payments: vesting conditions and cancellations' results in an immediate acceleration of the IFRS 2 expense that would otherwise have been recognised in future periods should an employee decide to stop contributing to the savings plan as well as in a potential revision to the fair value of the awards granted to factor in the probability of employees withdrawing from such a plan. Management has concluded that so far there has been no impact on the results of the Group as a result of this amendment.


IFRIC 13 'Customer Loyalty Programmes' requires the deferral of revenue for the fair value of Loyalty Card points until these points are redeemed. Previously only the estimated cost of these points was accrued with the associated charge being recognised in cost of sales. The effect of this change is to decrease profit in the period by £0.3million (£0.5million reduction in profit for the 08/09 Interim period and £2.2m reduction in profit for the 08/09 year end). Additionally, the effect of this change has been to reduce the retained earnings at 1 February 2008 by £3.1million.


The table set out below demonstrates the impact of this upon Operating Profit to show the re-statement to the figures previously disclosed.




Six months ended
31 

July

2009

£'000

Six months ended
31 
July

2008

£'000

Year
 ended

31 
January

2009

£'000





Operating profit before non- recurring costs and IFRIC 13

17,038

39,016

133,128

IFRIC 13 impact

(320)

(498)

(2,247)

Operating profit before non-recurring costs

16,718

38,518

130,881

  

1

General (continued)



Standards and Interpretations in issue not yet adopted

The International Accounting Standards Board and the International Financial Reporting Interpretations Committee have issued the following standards and interpretations to be applied to financial statements with periods commencing on or after the following dates:


International Accounting Standards (IAS/IFRS)

Effective Date

IFRS* Improving Disclosures about Financial Instruments amendment

01/01/2009

IFRS 3* Business Combinations amendment and complementary
 amendments to IAS 27 Consolidated and Separate Financial Statements

01/07/2009

IAS 39* Financial Instruments: Recognition and

 measurement: Eligible Hedged Items amendment

01/07/2009

IFRS 5 Non-current assets held for sale and discontinued operations

 amendment

01/01/2010

IAS 7 Statement of cash flows amendment

01/01/2010

IAS 18 Revenue amendment

01/01/2010

IAS 36 Impairment of assets amendment

01/01/2010

IAS 38 Intangible assets amendment

01/01/2010

IFRS 1* Additional exemptions for First Time Adopters amendments 01/01/2010
IFRS 2* Group Cash-settled Share-based payment Transactions amendments 01/01/2010

Improvements to IFRSs*

Various

International Financial Reporting Interpretations Committee (IFRIC)

Effective Date

IFRIC 16* Hedges of a Net Investment in a Foreign Operation

01/01/2009

IFRIC 9* and IAS 39* Embeded derivatives amendments 30/06/2009

IFRIC 15* Agreements for the Construction of Real Estate

01/01/2009

IFRIC 17* Distributions of Non-cash assets to owners

01/07/2009

IFRIC 18* Transfers of assets from customers

01/07/2009


 

 

*These standards and interpretations are not endorsed by the EU at present. 


The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the Group's financial statements in the period of initial application.




  Notes to the interim results 


2

Revenue and operating profit 


Revenue, pre-tax profits and net assets all relate to the retail of pc and video game products and the Group's operations are organised and managed by geographic location of distribution to customer. Management consider the reportable operating segments in accordance with IFRS 8 to be split between the UK and Ireland Stores, International Stores, and Global Online.  


 




United

Kingdom & 
Ireland

Stores

Six

months

ended

31 July

2009

Inter-

national

Stores
Six

months

Ended

 31 July

2009

Global

Online
Six

months

Ended

31 July

 2009

Total

Six

months

 ended

 31 July

2009

United

Kingdom & 
Ireland

Stores

Six

Months

Ended

 31 July

2008

Inter-

national

Stores

Six

months

ended

31 July

2008

Global

Online

Six

months ended

 31 July

2008

Total

Six
months
ended

 31 July

2008


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000










Revenue

428,307

229,236

33,210

690,753

499,318

213,600

29,635

742,553

Cost of sales

293,332

170,395

27,058

490,785

360,640

158,697

23,049

542,386










Gross profit

134,975

58,841

6,152

199,968

138,678

54,903

6,586

200,167

Other operating expenses

109,945

68,738

4,567

183,250

104,785

52,046

4,818

161,649

Operating profit/(loss) before non-recurring costs

25,030

(9,897)

1,585

16,718

33,893

2,857

1,768

38,518

Non-recurring costs

3,684

-

-

3,684

3,045

-

-

3,045

Operating profit/(loss)

21,346

(9,897)

1,585

13,034

30,848

2,857

1,768

35,473










Goodwill and other intangibles

153,680

27,026

716

181,422

152,928

21,904

734

175,566

Other assets

199,382

232,405

12,573

444,360

248,558

199,803

5,084

453,445

Assets

353,062

259,431

13,289

625,782

401,486

221,707

5,818

629,011

Liabilities

137,252

199,398

9,572

346,222

220,544

181,624

7,407

409,575

Net assets

215,810

60,033

3,717

279,560

180,942

40,083

(1,589)

219,436

Capital expenditure

5,559

7,934

1,123

14,616

8,663

14,072

345

23,080

Depreciation and amortisation

7,345

5,974

1,016

14,335

7,604

4,721

307

12,632


  Notes to the interim results 


 2

Revenue and operating profit (continued)





United

Kingdom & Ireland

Stores

Year ended

31

January

2009


Inter-

national

Stores

Year ended

31

January

2009



Global

Online

Year ended

31

January

2009




Total

Year ended

31

January

2009


£'000

£'000

£'000

£'000






Revenue

1,286,642

575,172

106,790

1,968,604

Cost of sales

932,434

434,914

86,749

1,454,097






Gross profit

354,208

140,258

20,041

514,507

Other operating expenses

247,627

122,037

13,962

383,626

Operating profit before non-recurring costs

106,581

18,221


6,079


130,881

Non-recurring costs

6,588

-

-

6,588

Operating profit

99,993

18,221

6,079

124,293






Goodwill and other intangibles

154,362

27,134

771

182,267

Other assets

279,721

258,154

7,516

545,391

Assets

434,083

285,288

8,287

727,658

Liabilities

271,113

164,674

6,836

442,623

Net assets

162,970

120,614

1,451

285,035

Capital expenditure

20,152

28,805

4,488

53,445

Depreciation and amortisation

15,451

12,059

1,391

28,901


  Notes to the interim results 


2

Revenue and operating profit (continued)


Information about products and services 



Six months ended
31 July 2009


Six months
ended

31 July 2008


£'000


£'000



Total

% of Total

Total

% of Total

Revenue





Hardware

146,657

21.2

187,910

25.3

Software

282,829

40.9

318,542

42.9

New hardware and software

429,486

62.1

506,452

68.2

Preowned

177,268

25.7

157,844

21.3

Other

83,999

12.2

78,257

10.5






Total

690,753

100.0

742,553

100.0


 


 





Six months ended 
31 July 2009


Six months
ended

31 July 2008


£'000


£'000



Total

% of Total

Total

% of Total 

Gross Margin





New hardware and software

102,459

51.2

120,383

60.1

Preowned

72,664

36.3

60,110

30.0

Other

24,845

12.5

19,674

9.9






Total

199,968

100.0

200,167

100.0


 


 






Six months
 ended 

31 July 2009


Six months
ended

31 July 2008



%


%



Total


Total

Gross Margin





New hardware and software


23.9


23.8

Preowned


41.0


38.1

Other


29.6


25.1






Total Group


28.9


27.0






  Notes to the interim results 


2

Revenue and operating profit (continued)






Six months

ended

31 July 

2009

Unaudited


Six months

ended

31 July 

2008

Unaudited


Year

 ended

31 January

2009

Audited




£'000


£'000


£'000

Revenue by territory








United Kingdom and Ireland



428,307


499,318


1,286,642

France



76,938


78,302


194,855

Iberia



105,836


97,081


260,389

Scandinavia



19,501


19,713


52,631

Australia



24,460


18,504


62,751

Czech Republic



2,501


-


4,546

Total Stores



657,543


712,918


1,861,814

Total Online



33,210


29,635


106,790

Total Turnover



690,753


742,553


1,968,604

Stores by territory








United Kingdom and Ireland



698


669


696

France



198


187


192

Iberia 



270


241


258

Scandinavia



67


62


66

Australia



108


72


101

Czech Republic



21


-


22




1,362


1,231


1,335

Franchises








France



-


2


1

Iberia 



5


10


5

Australia



1


2


1




6


14


7









Trading square footage by territory








United Kingdom and Ireland



812,325


781,294


808,322

France



181,621


173,548


177,729

Iberia 



225,690


199,921


218,395

Scandinavia



63,906


59,729


62,367

Australia



121,153


81,566


113,417

Czech Republic



12,342


-


12,611




1,417,037


1,296,058


1,392,841


3

Other operating expenses





Six months

ended

31 July 

2009

Unaudited


Six months

ended

31 July 

2008

Unaudited


Year

 ended

31 January

2009

Audited




£'000


£'000


£'000









Selling and distribution



156,940


137,768


304,428

Administrative expenses



29,994


26,926


85,786




186,934


164,694


390,214


In the current year administrative expenses include non-recurring costs of £3,684,383 (2008 interim: £3,044,635; full year: £6,587,603) in relation to integration fees following the acquisition of Gamestation.


Notes to the interim results 


4

Taxation


The UK corporation tax charge has been included at an underlying corporation tax rate in line with the previous year.





Six months

ended

31 July 

2009

Unaudited


Six months

ended

31 July 

2008

Unaudited


Year

 Ended

31 January

2009

Audited




£'000


£'000


£'000

Current tax:








UK corporation tax



2,344


8,701


34,235

Adjustments in respect of prior periods



-


-


190

Overseas tax payable



706


1,202


4,903









Total current tax



3,050


9,903


39,328









Deferred tax:








Current year movement



-


-


(5,194)

Prior year movement



-


-


39












3,050


9,903


34,173


Disclosure of tax effects relating to each component of other comprehensive income






Six months ended 31 July 2009

Unaudited




Six months ended 31 July 2008

Unaudited


 


Before- tax

amount 

Tax (expense)

benefit 

Net-of-tax

amount 


Before-tax

amount 

Tax (expense)

benefit 

Net-of-tax

amount 

Exchange differences on 

translating foreign operations 


(590)

-

(590)


7,419

-

7,419

Gains on property revaluation 



-

-

-


-

-

-

Other comprehensive income 


(590)

-

(590)


7,419

-

7,419



5

Dividends



Six months

ended

31 July 

2009

Unaudited


Six months

 ended

31 July 

2008

Unaudited


Year

 ended

31 January

2009

Audited


£'000


£'000


£'000

Ordinary dividends






Final Paid

12,849


10,292


10,292

Interim Paid

-


-


6,198


12,849


10,292


16,490


The interim dividend in relation to the period ended 31 July 2009 was declared on 23 September 2009 and is payable on 19 November 2009 to shareholders on the register on 23 October 2009. This dividend is therefore not included above.




Notes to the interim results



6

Earnings per share


The calculation of earnings per share for the six months ended 31 July 2009 is based on the profit after taxation of £7,724,000 (2008 interim: £22,908,000; full year: £83,193,000). The calculation of the earnings per share before non-recurring costs is based on a profit of £11,408,000 (2008 interim: £25,953,000; full year: £89,781,000). The calculation of basic earnings per share is based on a weighted average number of shares in issue during the period of 346,369,840 (2008 interim: 345,472,823; full year: 345,895,311). The calculation of diluted earnings per share is based on a weighted average number of shares in issue during the period of 347,113,425 (2008 interim: 346,734,921; full year: 347,024,028).


Reconciliation of denominators used for basic and diluted loss per share calculations:







Basic


Effect of

share options




Diluted




Number


Number


Number









31 July 2009



346,369,840


743,585


347,113,425

31 July 2008



345,472,823


1,262,098


346,734,921

31 January 2009



345,895,311


1,128,717


347,024,028


There are no anti-dilutive share options in the current or prior periods.







As at

31 July 

2009

Unaudited


As at

31 July

 2008

Unaudited


As at

31 January

2009

Audited




Pence


Pence


Pence









Basic earnings per share



2.23


6.63


24.05

Non-recurring costs



1.06


0.88


1.91

Basic earnings per share before non-recurring costs



3.29


7.51


25.96


  Notes to the interim results



7

Property, plant and equipment





As at

31 July 

2009

Unaudited


As at

31 July

 2008

Unaudited


As at

31 January

2009

Audited




£'000


£'000


£'000

Cost








Balance brought forward



279,744


219,236


219,236

Additions



11,863


20,475


48,727

Acquisitions 



-


149


606

Disposals



(2,725)


(1,016)


(4,677)

Foreign exchange adjustment



(3,303)


5,936


15,852









Balance carried forward



285,579


244,780


279,744









Depreciation








Balance brought forward



114,135


88,574


88,574

Charge for the period



11,229


10,749


25,264

Acquisitions



-


-


163

Disposals



(1,130)


(854)


(3,509)

Foreign exchange adjustment



(858)


1,383


3,643









Balance carried forward



123,376


99,852


114,135









Carrying amount



162,203


144,928


165,609






8

Intangible fixed assets





As at

31 July 

2009

Unaudited


As at

31 July

 2008

Unaudited


As at

31 January

2009

Audited




£'000


£'000


£'000

Cost








Balance brought forward 



192,436


179,080


179,080

Acquisitions



-


1,211


6,542

Additions



2,753


2,605


4,764

Foreign exchange adjustment



(626)


958


2,157

Disposals



(281)


(102)


(107)

Balance carried forward



194,282


183,752


192,436









Amortisation








Balance brought forward



10,169


6,209


6,209

Acquisitions



-


-


73

Charge for the period



3,106


1,883


3,637

Foreign exchange adjustment



(13)


115


250

Disposals



(402)


(21)


-

Balance carried forward



12,860


8,186


10,169

Carrying amount



181,422


175,566


182,267


  Notes to the interim results


9

Trade and other receivables





As at

31 July 

2009

Unaudited


As at

31 July

 2008

Unaudited


As at

31 January

2009

Audited




£'000


£'000


£'000

Amounts falling due within one year:
















Trade receivables



5,929


10,739


16,197

Other receivables



13,712


16,205


22,066

VAT recoverable



-


804


64

Total trade and other receivables



19,641


27,748


38,327

Prepayments and accrued income 



35,512


34,077


17,138




55,153


61,825


55,465


10

Trade and other payables






As at

31 July 

2009

Unaudited


Restated

As at

31 July 

2008

Unaudited


Restated

As at

31 January

2009

Unaudited




£'000


£'000


£'000

Amounts falling due within one year:
















Trade payables



135,521


169,792


216,156

Other payables



5,994


10,814


6,895

Tax and social security costs



3,215


4,293


8,930

VAT payable



11,099


21,531


45,359

Accruals and deferred income



36,587


58,910


71,842




192,416


265,340


349,182













  Notes to the interim results


11

Long-term borrowings





As at

31 July

2009

Unaudited


As at

31 July 

2008

Unaudited


As at

31 January

2009

Audited




£'000


£'000


£'000









Current portion








Bank loans



103,866


62,963


25,948

Obligations under finance leases and hire purchase contracts



462


476


377




104,328


63,439


26,325

















Non-current portion








Bank loans



33,333


56,573


31,183

Obligations under finance leases and hire purchase contracts



293


457


664




33,626


57,030


31,847










12

Analysis of net (debt)/funds




As at

31 July 

2009

Unaudited


As at

31 July 

2008

Unaudited


As at

31 January

2009

Audited




£'000


£'000


£'000









Cash and cash equivalents



57,768


62,647


139,614

Net cash and cash equivalents



57,768


62,647


139,614

Current portion of long-term borrowings



(104,328)


(63,439)


(26,325)

Long-term borrowings



(33,626)


(57,030)


(31,847)

Net (debt)/funds



(80,186)


(57,822)


81,442


  Notes to the interim results



13

Called-up share capital




2009


2008



£'000 


Number


£'000 


Number









Authorised








Ordinary shares of 5p

24,000


480,000,000


24,000


480,000,000









Allotted, called-up and fully paid








Ordinary shares of 5p

17,332


346,633,895


17,314


346,282,946










Shares issued

During the half year 310,238 shares (2008 interim: 2,938,380; full year: 3,479,091) were issued to employees exercising share options granted under various option schemes. The total consideration received on the exercise of these options was £198,068 (2008 interim: £1,732,846; full year: £1,740,436).


Share purchased

During the half year no shares (2008 interim: 500,000; full year: 500,000) were repurchased for cancellation by the Company.


Trust shares

During the half year 800,000 shares (2008 interim: 1,000,000; full year: 1,800,000) were purchased at a cost of £1,254,252 (2008 interim: £2,692,310; full year: £3,828,470). These shares are to be used wholly and exclusively to pay LTIP awards when they become due for payment.



14

Share Premium account






As at

31 July 

2009

Unaudited


As at

31 July 

2008

Unaudited


As at

31 January

2009

Audited




£'000


£'000


£'000









Amount subscribed for share capital in excess of nominal value








At 1 February



46,462


44,848


44,848

Arising on issue of shares during the year (net of expenses)



182


1,587


1,614




46,644


46,435


46,462










  

Notes to the interim results


15

Statement of changes in equity



Share

Capital

Share

Premium

Capital

Redemption

Reserve

Shares

held in

Trust

Merger

Reserve

Retained

Earnings

Foreign

Exchange

Reserve

Total












At 1 February 2008 before restatement

17,167

44,848

2,223

(4,403)

76,907

61,276

5,904

203,922

Restatement

-

-

-

-

-

(3,126)

-

(3,126)

At 1 February 2008 after restatement

17,167

44,848

2,223

(4,403)

76,907

58,150

5,904

200,796










Exchange differences

-

-

-

-

-

-

7,419

7,419

on translation of foreign









currency net investment









in subsidiaries










_____

______

_______

______

___

_____

______

______










Net income recognised









directly in equity

-

-

-

-

-

-

7,419

7,419

Net income recognised









in income statement

-

-

-

-

-

22,908

-

22,908


_____

______

_______

______

______

________

______

_____

Total recognised income









and expense

-

-

-

-

-

22,908

7,419

30,327

Issue of shares

123

1,587

-

-

-

-

-

1,710

Purchase of shares

-

-

-

(2,692)

-

-

-

(2,692)

Exercise of options

-

-

-

1,830

-

(1,830)

-

-

Dividends paid

-

-

-

-

-

(10,292)

-

(10,292)

Share based payments

-

-

-

-

-

828

-

828

Share buyback

(26)

-

26

-

-

(1,241)

-

(1,241)

Net settled options

50

-

-

(50)

-

-

-

-


_____

______

______

_____

_____

____

____

______

At 31 July 2008

17,314

46,435

2,249

(5,315)

76,907

68,523

13,323

219,436


_____

______

_______

______

______

____

______

______



















At 1 February 2009 before restatement

17,316

46,462

2,248

(6,451)

76,907

130,472

23,454

290,408

Restatement

-

-

-

-

-

(5,373)

-

(5,373)

At 1 February 2009 after restatement

17,316

46,462

2,248

(6,451)

76,907

125,099

23,454

285,035










Exchange differences

-

-

-

-

-

-

(590)

(590)

on translation of foreign









currency net investment









in subsidiaries










_____

______

_______

______

___

_____

______

______










Net income recognised









directly in equity

-

-

-

-

-

-

(590)

(590)

Net income recognised









in income statement

-

-

-

-

-

7,724

-

7,724


_____

______

_______

______

______

________

______

_____

Total recognised income









and expense

-

-

-

-

-

7,724

(590)

7,134

Issue of shares

16

182

-

-

-

-

-

198

Purchase of shares

-

-

-

(1,254)

-

-

-

(1,254)

Exercise of options

-

-

-

4,537

-

(4,537)

-

-

Dividends paid

-

-

-

-

-

(12,849)

-

(12,849)

Share based payments

-

-

-

-

-

1,296

-

1,296


_____

______

______

_____

_____

____

____

______

At 31 July 2009

17,332

46,644

2,248

(3,168)

76,907

116,733

22,864

279,560


_____

______

_______

______

______

____

______

______













  

Notes to the interim results


16

Related party transactions


There were no related party transactions within the period.



17

Risks


Global Economic Conditions


There is a high degree of uncertainty in the global economy, with issues around government and bank liquidity, business failures, and rising unemployment rates. We recognise that all of these factors may have an impact on our customers' willingness or ability to spend.


Our trading performance to date suggests that compared to some sectors of retailing we are not being as significantly impacted by these wider economic issues. We will continue to put forward compelling product offers to meet the more value conscious demands of our consumers.


Technology


As with music and DVD entertainment, the opportunity exists for pc and video games to be distributed digitally via the internet.  Pc games which tend to have smaller file sizes are available from a number of websites whereas video games digital content is offered in a limited way via official format channels, e.g. Microsoft's Xbox Live service.


As broadband technology improves there is a risk that more gamers start playing their games online. This will reduce the number of people buying boxed product from retailers such as ourselves.  


Given the ever increasing size of pc and video games (up to 50Gb), the existing broadband infrastructure in all of the countries in which we operate is not currently sufficient to allow total online play. Additionally, we have recognised the increasing prominence of eCommerce and digital downloading and we have invested in state-of-the-art eCommerce websites.


Competition


The pc and video games market has become an increasingly attractive proposition for retailers. We have seen new entrants to the market place, including specialists, existing generalists and supermarkets and online players.


We believe that the specialist has all of the attributes to succeed in the pc and video games market place. We measure our stores' performance against specific KPIs to ensure our proposition is always appealing and relevant to consumers.


Seasonality


The Group's business is seasonal with the key trading period being the Christmas season. Turnover, operating profit and cash flow may be adversely impacted by variations in demand during this period.


The Group works closely with suppliers to secure stock and implement high profile preorder campaigns in advance of all major releases. The Group also undertakes extensive marketing campaigns to drive consumer awareness, and flexes headcount in store to maximise the sales potential.


Reputation


As a specialist retailer our customers demand that we stock the broadest range of product. This means that we deal with a variety of video games, for example age restricted products. Mis-selling such titles is illegal.  

To mitigate any issues that may arise through the mis-selling of these games we employ the very highest levels of training throughout our organisation.

  

Notes to the interim results



18

This Interim Report was approved by the Board of Directors on 23 September 2009


The results for the six months ended 31 July 2009 are unaudited.  The financial information for the year ended 31 January 2009 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for 31 January 2009 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for the year ended 31 January 2009 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 237(2) or 237(3) of the Companies Act 1985.


Copies of this Interim Report are being posted to shareholders and are available from the Company's office at Unity House, Telford Road, Basingstoke, Hampshire RG21 6YJ.



Statement of Directors' Responsibilities


The Directors confirm, to the best of their knowledge and belief, that this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8. The Directors of GAME Group plc are listed in the Company's 2009 Annual Report and Accounts.


By order of the Board




Ben White

Director

23 September 2009


  INDEPENDENT REVIEW REPORT TO THE GAME GROUP PLC 


Introduction


We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2009 which comprises the unaudited condensed consolidated statement of comprehensive income, balance sheet, and statement of cash flows and the related explanatory notes.


We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.


Directors' responsibilities


The half-yearly financial report is the responsibility of and has been approved by the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, ''Interim Financial Reporting'', as adopted by the European Union.


Our responsibility


Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.


Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting its responsibilities in respect to half-yearly financial reporting in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.


Scope of review


We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.


Conclusion


Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34, as adopted by the European Union, and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.



Mr David Eagle (Senior Statutory Auditor)

For and on behalf of BDO Stoy Hayward LLP, Statutory Auditor
London

23 September 2009




DIRECTORS AND ADVISERS


Directors

Peter Lewis non-executive Chairman

Lisa Morgan chief executive

Ben White ACA group finance director 

Terry Scicluna chief operating officer for the UK and Ireland

Christopher Bell senior non-executive director

Jean-Paul Giraud non-executive director

Ishbel Macpherson non-executive director

Dennis Woodside non-executive director


Secretary

Vivienne Hemming ACIS


Registered office

Unity House, Telford Road, Basingstoke, RG21 6YJ


Stockbrokers

Deutsche Bank AG London, Winchester House, 1 Great Winchester Street, London EC2N 2NT

Oriel Securities Limited, 125 Wood Street, London EC2V 7AN


Principal Bankers

The Royal Bank of Scotland plc, Thames Valley Corporate Banking Centre, Abbey Gardens, 4 Abbey Street, Reading RG1 3BA


Independent auditors

BDO Stoy Hayward LLP, 55 Baker Street, London, W1U 7EU


Registrars and transfer office

Capita Registrars, Northern House, Woodsome Park, Fenay Bridge, Huddersfield HD8 0GA


Corporate website

www.gamegroup.plc.uk


Registered number

875835





This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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