GMD provided a trading update for 2H18/YE18*. The group’s gross transaction value (GTV) grew 1.8% y/y to £907.2m in YE18. The group’s revenue is expected to decline slightly to £780m (2017: £782.9m). 2H18 GTV declined 1.6% y/y to £320.4m.
In YE18, UK’s GTV declined 1.0% y/y, while Spain’s GTV grew 7.0% y/y (Mint retail market grew 11.8% y/y in the UK and 13.1% y/y in Spain). The company noted that 1H trends were continuing in 2H – strong sales of lower-margin Digital and Hardware, challenges in Preowned business, and impact on the overall gross profit rate. YE cash position (net of overdrafts) is expected to increase to approximately £58m (2017: £47.2m) owing to a highly disciplined approach to working capital and cash management. The group expects to offset the gross margin impact due to sales mix through cost savings in the UK (renegotiation of leases, reorganisation of the Head Office and Distribution Centre, etc.). The company opened its first new BELONG arena (collaboration with Sports Direct) on 17 August 2018. The second arena is expected in September.
Martyn Gibbs, CEO, said: “The UK and Spanish mint retail markets continue to show growth and we expect that this momentum will continue into our new financial year and the peak trading period, driven by a strong line-up of new software releases.”
*2H18/YE18 – 26/52 weeks ending 28 July 2018, 2H17/YE17 – 26/52 weeks ending 29 July 2017