Results round-up

Shares in video games retailer Game Digital tanked on Friday after it cautioned that full-year profit will be "substantially" below previous expectations due challenging trading conditions, low supplies of the Nintendo Switch in the UK and softness in its core Xbox and PayStation markets.

The company said that while consumer demand for the Nintendo Switch has been and remains very strong, the level of supply to the UK market has been lower than expected.

"These lower levels, combined with the continued softness in our core Xbox and PlayStation markets, have impacted sales," Game said, adding that it still expects to deliver positive gross transaction value growth in the second half of around 5% to 6%, although this is below its previous expectations.

As a result, it now expects adjusted earnings before interest, tax, depreciation and amortisation for the full year to be well below previous expectations.

"Looking forward, we continue to be encouraged by the positive consumer reception of Nintendo Switch in both of our geographic markets. This demand is helping to strengthen the outlook for our next financial year and we expect to benefit from both greater Nintendo Switch hardware supply as well as the strong interest that is building for Microsoft's new Xbox One X console.

"Furthermore, we expect to see growth returning to the UK and Spanish software markets in our next financial year, benefiting from a stronger line up of new releases on Xbox, PlayStation and Nintendo."

Canaccord Genuity said: "We think the implication is for a consensus downgrade from EBITDA of circa £20m towards £8m, equating to a pre-tax loss of circa £4m."

Independent retail analyst Nick Bubb pointed out that the share price has been notably weak again of late "and so it is perhaps no great surprise to see the embattled business issue yet another profit warning": "The company makes more bullish noises about prospects for the next financial year, but the jaundiced City will no doubt take this with a large pinch of salt, particularly as the company refers to the fact that 'the group is exploring new funding arrangements to enable an acceleration of the roll-out of the new in-store gaming initiative".

Trinity Mirror boasted continued progress with its strategy of growing digital sales and said results would be in-line with expectations despite continued declines in print advertising and circulation revenues.

The latter meant that group sales were expected to fall by 9% on a like-for-like basis at the half-year stage, although its six-month and full-year results would be in-line with management's expectations, the company said in a trading update.

For the 26 weeks to 2 July, total publishing revenues were seen down by 10%, with a 5% increase in digital partially offsetting a 12% fall in print.

Digital display and transactional revenues grew by 18% due to strong growth in Trinity's digital audience, while publishing print advertising and circulation revenue fell by 21% and 6%, respectively over the period.

Management also told markets it was continuing to keep a tight rein on costs to support cash flow, with net debt having fallen during the reporting period.

It also secured a five-year print and distribution contract for the Guardian and Observer newspapers from early 2018.

On the negative side of the ledger, the lengthy process of settling civil claims related to phone hacking meant it was forced to increase its provisions for them by £7.5m.

However, the board was confident that the exposures arising from those historical events were manageable and would not undermine the delivery of the group's strategy.

Since its share buyback programme was announced in August 2016, the group also said it had bought back 6.6m shares for £6.8m and paid £7.5m to the pension schemes relating to the repurchase scheme.

Commenting on the outlook, company chief Simon Fox said: "The trading environment for print in the first half remained volatile but we remain on course to meet our expectations for the year. I anticipate that the second half will show improving revenue momentum as we benefit from initiatives implemented during the first half of the year."