Game Group, the computer game retailer, has seen its share price collapse this morning after issuing a warning that revenues will be worse than it predicted back in September.
The company originally said like for like revenue in 2011 would be between 0 - 3% worse than 2010. It now says the figure "will be no better than -7%".
It also expects margins to be down 150 basis points compared to September's prediction of 100bps although operating costs may be lower than predicted, with cuts saving perhaps as much as £10m.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Game's chief executive said of the news: "The overall video games market remains very challenging, despite strong title launches, and our guidance today reflects the extraordinary economic times in which we are operating."
Game's share price stood at 11.9p at 11.16am. Someone buying shares in the company in June 2008 would now have lost 96% of their investment. Over the last five years Game is down 87%.
Brokers are clearly reassessing their positions on the company: Peel Hunt has downgraded Game from buy to hold and cuts its target from 50p to 20p. Investec has put its buy rating (and 45p target) under review.
BS
-
8 of the best houses for sale with annexesThe best houses with annexes – from a period property in the Lake District to a 13th-century house with a two-bedroom annexe in Saltwood, Kent
-
Zelenskyy moves to appease Donald Trump – what happens now?Ukraine’s president Volodymyr Zelenskyy is conceding ground to secure the least-worst deal possible, says Emily Hohler
