GAME DIGITAL PLC – 2018/19 INTERIM RESULTS GAME CHANGING GAME DIGITAL PLC | 2018/19 INTERIM RESULTS 21 ST MARCH 2019
GAME DIGITAL PLC – 2018/19 INTERIM RESULTS FORWARD LOOKING STATEMENTS This presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will”, or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts and include statements regarding the Company’s intentions, beliefs or current expectations. Any forward-looking statements in this presentation reflect the Company’s current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. You should not place undue reliance on forward- looking statements, which speak only as of the date of this presentation. No representations or warranties are made as to the accuracy of such statements, estimates or projections. Please note that the Directors of the Company are, in making this presentation, not seeking to encourage shareholders to either buy or sell shares in the Company. Shareholders in any doubt about what action to take are recommended to seek financial advice from an independent financial advisor authorised by the Financial Services and Markets Act 2000. 2
MARTYN GIBBS CHIEF EXECUTIVE OFFICER 3
GAME DIGITAL PLC – 2018/19 INTERIM RESULTS H1 GROUP HEADLINES SOLID GTV AND GROSS PROFIT RATE PERFORMANCE ACHIEVED IN A CHALLENGING RETAIL ENVIRONMENT Group GTV broadly flat on a like-for-like basis • • GTV improvement of 5.8% in Content (physical and digital) GTV increased by 9.2% in Accessories & Other • GTV in Hardware down (9.3)% and Preowned down (20.9)% • • Group gross profit rate maintained at 21.0% Group Adjusted EBITDA up 21.7% to £25.8 million (2018: £21.2 million) • DRIVING OPERATIONAL EFFICIENCIES Strong Core UK Retail performance with Adjusted EBITDA growth of 49.5% to £14.8 million from • improved gross profit rate and the delivery of £4.9 million of operational efficiencies and cost savings Average length to break on leases in the UK and Spain under 1 year and average savings on rents • renegotiated in the period of 59% Further strategic progress achieved towards repositioning and right sizing the retail business in • the UK with savings in distribution, head office, store payroll and store rent Continued strong liquidity with Group cash of £95.5 million as at 26 January 2019 (2018: £84.9 • million) and access to aggregated facilities as at today’s date of up to £110 million across the UK and Spain STRATEGY PROGRESSION TOWARDS REPOSITIONING THE BUSINESS • 20% increase in station count this period, and 44% increase in stations YoY 2 new arenas opened, Stratford and West Thurrock Lakeside • • 52% Increase in pay-to-play revenue in H1 FY19 vs H1 FY18, driven by new arenas and enlargement of existing arenas 4
GAME DIGITAL PLC – 2018/19 INTERIM RESULTS 5
GAME DIGITAL PLC – 2018/19 INTERIM RESULTS BELONG IS A SOCIAL GAMING NETWORK 1 2 3 4 Our arenas provide a physical Each arena can support more The community talks to each Arena Clash and CRM retain home for the community community members than other generating content for and continuously engage the number of stations. A BELONG that reaches new BELONG gamers in the network of gamers forms potential community network, further building around the arena members customer value 6
GAME DIGITAL PLC – 2018/19 INTERIM RESULTS BELONG GAMER SEGMENTATION Five BELONG gamer segments established and profiled: • 1. Competitive & community – Strong interest in esports 2. Fun with friends – Enjoy playing together in one location 3. Private player – Solo gamers playing to unwind in their downtime 4. Time together – Parents & children who like to game together 5. Grateful guardians – Parents not interested in gaming, but children are Establishing programmes to target different segments that increases • utilisation Segmentations inform decision making when planning new arena locations • Primary focus is segment one, competitive gamers, with a tailored programme • of activities such as Arena Clash and Arena Cups (multi-arena), as well as community cups and leader board competitions (individual arenas) Subscription trials target segment one gamers, offering them better value • pricing per hour and incentivising them to visit BELONG more frequently Other four segments continue to be important, with tailored experiences such • as parties and casual play which drives utilisation within these segments 7
GAME DIGITAL PLC – 2018/19 INTERIM RESULTS BELONG’S ESPORTS PROGRAMME IN 2019 APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER ARENA ARENA CLASH SUMMER ARENA CLASH WINTER CLASH MINIMUM OF FIVE TITLES MINIMUM OF FIVE TITLES SPRING ARENA RIVALS ARENA RIVALS JUNIOR ARENA CLASH ACADEMY BOOT CAMPS ESPORTS TEAMS ACADEMY ACADEMY CLASSES ESPORTS TEAMS MEET & GREETS RELATIONSHIPS FORMALISED CLASSES TOURNAMENT TOURNAMENT ZONE AT I64 ZONE AT I65 ARENA CLASH ARENA CLASH FINALS AT I65 FINALS AT I64 8
GAME DIGITAL PLC – 2018/19 INTERIM RESULTS CREATING VALUE THROUGH BELONG 52% 20% 44% 72% £4.71 Increase in pay-to-play Increase in pay-to-play Increase in H1 FY19 Average Increase in revenue in arenas with revenue in H1 FY19 stations this FY Price Per Hour vs stations YoY at Jan 19 an increased station H1 FY 18 £4.43 count for H1 FY19 28% 740 47% 224k 54% Utilisation rate for the H1 Increase in average Parties hosted Total gaming hours More spent by FY19 vs 28.5% H1 FY18 customer value in H1 FY19, a 64% in H1 FY19, a 25% subscription customer Jan 19 vs Jan 18 increase vs H1 FY18 (179k) on arena play time than increase vs H1 FY18 (450) (Rolling 12 months) segment 1 gamer 9
GAME DIGITAL PLC – 2018/19 INTERIM RESULTS BELONG LOCATIONS Total number of stations increased by 44% to 440 1 by • Station Count CURRENT BELONG GAMING unchanged January 2019 vs 305 1 in January 2018 ARENA LOCATIONS Station Count Increased New Arena Location FY18/19 Two new arenas opened in the half – Stratford and West • Thurrock (Lakeside Sports Direct Concession), catering to • Bradford two different gaming communities • Bristol Cribbs Causeway • Bristol City Centre Ongoing focus to drive hours played in existing arenas by • • Cardiff • Colchester increasing station count, with seven arenas increased • Craigavon Arenas with an increased station count have seen a slight • Gateshead • • Glasgow decline in utilisation that is more than compensated for by • Hull • Kingston the total increased revenue • London Wardour Street • London Stratford Top 50 locations identified across the UK, with the key • • Manchester requirement being larger locations to accommodate • Milton Keynes • Norwich higher station counts • Portsmouth • Preston Establishing larger premises for higher station count • • Plymouth Defining the best possible rent deals based on current • Teesside • • West Thurrock property landscape • York 1 EXCLUDING ALT GAMING LOUNGE 10
GAME DIGITAL PLC – 2018/19 INTERIM RESULTS VENUE IMPROVEMENTS FOR THE COMPETITIVE GAMER HIGH-SPEC KIT DESIGNED FOR COMPETITIVE PLAY LARGER 100-SEATER LOCATIONS ESPORTS TRIBE JERSEYS LOCAL COMMUNITY AREAS & COMPETITIVE LEADER BOARDS 11
GAME DIGITAL PLC – 2018/19 INTERIM RESULTS THE VALUE WE DELIVER FOR OUR SUPPLIER PARTNERS BELONG Gaming Arenas social Supplier partners and publishers Partners and/or BELONG utilise channels and programmes Lapsed, existing and new gamers seek ways to promote their this content to sell/promote provide authentic engagement generate content by engaging products or brand brands and products mechanics to reach gamers OUR PARTNERS & BRANDS WE WORK WITH 12
RAY KAVANAGH CHIEF FINANCIAL OFFICER 13
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