Sales boost lifts Gamestop back into operating profit

Sales of the bestselling Grand Theft Auto, Call of Duty, and FIFA games helped return the Irish arm of Gamestop to operating profit last year.

The Dublin-based Gamestop Ltd recorded an operating profit of €527,502 in the 12 months to the end of February 1 last following an operating loss of €2.29m in fiscal 2013.

The return to operating profit followed revenues at the firm increasing by 12%, from €49.1m to €55m. Interest charges of €866,491 pushing the firm into a pre-tax loss of €309,829.

A major factor behind the firm returning to operating profit was the directors, Niall Lawlor, Robert Alan Lloyd, and Michael Mauler, taking zero remuneration compared to €518,544 in fiscal 2013. The figures show that €1.34m was charged in management fees from related companies last year.

According to the directors’ report for Gamestop Ireland: “Both the level of business and the end year financial position were considered satisfactory in light of the current global economic downturn and the lifecycle stage of the current generation of computer consoles.

“A focus on cost-saving initiatives, particularly in the area of labour and occupancy costs, assisted in achieving these results.”

On the group’s future developments, they state that “in 2013/2014, the company will continue to review the performance of its stores.

“We will open new stores where we can identify a profitable opportunity and we will consider closing any stores that are not performing to expectations or where the cost base, particularly occupancy costs, are out of line with the business levels in the location.”

The directors state: “We also plan to expand our offering of complimentary digital gaming products, such as point of sale activated game cards, digital downloadable content, and other such innovations. We will also continue to focus on the online market.”

The loss last year takes account of non-cash depreciation costs of €877,376.

The amount spent on operating lease rentals decreased from €4.5m to €4.09m.

Numbers employed last year reduced by 74, from 349 to 275, with staff costs reducing by 38%, from €7.32m to €4.53m. Cash reduced from €5m to €3.9m, with accumulated losses increasing from €9.8m to €10.1m.