Team17 Group PLC on Tuesday backed annual guidance after first-half revenue increased, though rising costs kept a lid on profit.
The Wakefield, England-based developer of video games, educational entertainment apps for children, and working simulation games also cautioned on a competitive environment in the gaming space.
In the six months ended June 30, revenue rose 31% to £69.7 million from £53.2 million a year earlier. However, Team17 reported its pretax profit fell 27% on-year to £8.1 million, from £11.2 million.
Hurting profit, administrative expenses rose 59% to £21.7 million.
‘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. 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,’ Chief Executive Debbie Bestwick said.
‘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. We believe that this will enable us to remain agile and cost effective to deliver the best results for our partners and stakeholders over future years.’
Team17’s adjusted earnings before interest, tax, depreciation, and amortisation fell 9.7% in the first-half to £16.5 million from £18.2 million, a year earlier. However, it predicts its second half Ebitda outturn will ‘benefit from more favourable phasing of costs, planned cost efficiencies and controls’.
A ‘second half pipeline of new title releases and content updates’ will also mean its results are weighted towards the final six months of the year.
Team17 added: ‘The board therefore expects to deliver full year results in line with current market expectations.’
Team17 shares fell 3.3% to 319.00 pence each in London on Tuesday morning.
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