£41.9m market cap
24.2p last close
Game Digital is the leading multichannel specialist retailer of video games in the UK and Spain, with 276 stores in the UK, 267 stores in Spain and over 30% market share.
Investment summary
Despite UK retail headwinds, GMD performed solidly over the peak seven weeks to 5 January. Like-for-like sales strengthened to +2%, driven by +4.8% in Spain, while the UK remained flat. GMD’s strong relationships with publishers, with exclusive content in software releases, helped trading margin over the peak period, as did licensed merchandise and accessories, combined with a disciplined approach to discounting. The roll-out of BELONG remains a key strategic objective. The market values GMD’s shares at less than net cash of 33p per share, while we value them at 67p.
Y/E Jul |
Revenue (£m) |
EBITDA (£m) |
PBT (£m) |
EPS (fd) (p) |
P/E (x) |
P/CF (x) |
|---|---|---|---|---|---|---|
| 2017A | 782.9 | 8.0 | (4.3) | (3.7) | N/A | 0.9 |
| 2018A | 782.3 | 10.1 | (3.5) | (3.7) | N/A | 13.8 |
| 2019E | 778.4 | 12.2 | (2.2) | (2.8) | N/A | 4.6 |
| 2020E | 813.8 | 16.6 | (1.2) | (2.1) | N/A | 5.2 |
| Last updated on 19/02/2019 | ||||||
Industry outlook
The UK and Spanish console markets (hardware, software, accessories and console digital) are worth c US$2.2bn and US$1.2bn, respectively. The traditional cycle that has peaked every six years since 2000 seems to be moving to shorter intervals. This could signal structural changes analogous to the mobile and PC markets. In addition, the global esports market, currently US$0.9bn, is forecast to grow to US$1.7bn by 2021.
Last updated on 19/02/2019
Sector |
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| Consumer |
Share price graph
Balance sheet |
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| Forecast net cash (£m) | 52.1 |
| Forecast gearing ratio (%) | N/A |
Price performance
% |
1m |
3m |
12m |
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Key management |
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| John E. Jackson | Chairman |
| Martyn Gibbs | CEO |
