Shares in Codemasters Group Holdings PLC (LON:CDM) ticked up in late-morning trading Tuesday despite a swing to loss in its maiden interims as the group readied to launch two new racing games in the second half.
The AIM 100 video game developer reported a pre-tax loss for the first half of around £7.6mln, from a £1.4mln profit the year before while revenues fell to £39.7mln from £49.4mln.
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However, the group noted that the first half of the current financial year had included two new game releases as opposed to three releases in the year-ago period, and gross margins had expanded to 88.5% from 83.6% in the first half of last year.
The firm added that it would launch two new racing games, DiRT Rally 2.0 and F1 Mobile Racing, in the second half, with F1 already having hit the market on 18 October.
Codemasters added that it had ended the period with a net cash balance of £16.7mln, up from a net debt of £113.5mln a year ago.
In its outlook, the company said it was confident that its full-year results would be in line with expectations, adding that gross margins were expected to remain “ahead of previous periods”, driven by an ongoing shift to digital sales which comprised 53.4% of its revenues in the period.
The results are the company’s first set of half-year figures since it floated on AIM in June, raising £15mln through its initial public offering (IPO).
In a note to clients, analysts at City broker Liberum said the investment case for Codemasters was based around” three established franchises, with large fan bases and the potential to double revenues”, adding that there were “additional upside opportunities” from distribution deals and success in mobile and in-game transactions.
Given the positive factors, Liberum said the recent share price weakness was “a major buying opportunity”, having pegged the stock with a 310p target price.
Shares were up 1.1% at 173.5p.