Team17 maintains expectations as first-half earnings slip

(Sharecast News) - Video games specialist Team17 reported a 31% increase in revenue in its half-year results on Tuesday, reaching £69.7m, up from £53.2m in the first half of 2022. The AIM-traded company said its gross profit jumped 18% year-on-year, reaching £30.2m, while profit before tax declined to £8.1m from £11.2m.

Adjusted profit before tax came in at £15.6m, slightly down from £17.3m in the first six months of last year.

Earnings per share stood at 3.9p - a decrease from 6.5p year-on-year, while adjusted earnings per share slid to 8.6p from 10.4p.

At the end of the period on 30 June, the company had net cash and cash equivalents of £45.2m, compared to £51.3m at the same point in 2022.

Meanwhile, the group said its headcount had grown to 438 from 392 at the end of last year.

Team17 said it was optimistic over the rest of the year.

The board said the firm's strong performance in the first half had laid a secure foundation for the second.

The favourable distribution of costs, efficient financial strategies, and the upcoming release of new titles and content are expected to fortify the results for the latter six months of the year.

Additionally, the board confirmed that full-year results looked set to align with current market expectations.

"We are pleased with the Group's first half performance, with strong growth delivering record revenue levels, against a backdrop of one of the most competitive years for high-quality launches and deep peer discounting that I can remember," said chief executive officer Debbie Bestwick.

"The strength of our results illustrates the success of our diverse portfolio strategy, expertise in lifecycle management and franchise building, disciplined approach to discounting, and the tireless commitment of our people across the group.

"We are mindful that the gaming environment remains highly competitive, and we continuously review cost efficiencies to ensure we have the right balance between internal and outsourced resources in our service areas."

Bestwick said that would enable the company to remain agile and cost-effective, to deliver the best results for its partners and stakeholders over future years.

"Astragon and StoryToys continue to deliver strong revenue growth, high-quality content and synergy opportunities.

"In the current environment, I believe our strong balance sheet and merger and acquisition track record puts us in an excellent position to pursue further opportunities which can support our strategy of enhancing the Group's reach across genres, platforms, and customer demographics.

"We are being presented with more new content opportunities of quality than ever before and will remain as highly disciplined in our approach as ever to ensure we maintain our track record of delivering exceptional games to our customers."

Debbie Bestwick added that she had been "impressed" with the passion, insight, and leadership that Steve Bell had already brought to the group in his role as CEO-designate and was "delighted" with Frank Sagnier's appointment as chair-designate.

"So finally, as I enter my last few months as CEO, I can confidently say I have never been more excited about the group's leadership and future."

At 1331 BST, shares in Team17 Group were down 4.55% at 315p.

Reporting by Josh White for Sharecast.com.