Game Group is in demand after confirming speculation it is considering the future of its overseas businesses.
The struggling computer games retailer warned last month that poor Christmas trading meant it might breach the terms of its banking covenants. Now it has announced it is in talks with its lending syndicate about revising the terms of its facilities:
As part of these discussions, the lending syndicate is reviewing a strategic plan of the company which includes a review of its overseas operations.
The company - hit by competition from supermarkets and online distribution of games - currently operates from 1,274 of which 610 are in the UK and Ireland and 664 are overseas. These include outlets in France, Spain, Sweden, the Czech Republic and Australia.
Its shares, hit after the Christmas warning, have climbed 0.18p to 5.31p - a 3.5% rise. Singer Capital Markets said:
We have highlighted that management may look to do [sell international] to reduce losses and to raise cash.
Last year international sales were down 1% (down 2% like for like) and losses were £1m versus a profit of £5m a year earlier. However, at the half year stage of the current year international sales were down 10% (down 11% like for like) and losses had widened to £20m. As a consequence it will contribute a substantial proportion of the anticipated full year loss (Singer estimate £30m).
