Team17 Group PLC (AIM:TM17) posted lower profits in the first half but said it was confident of continuing to hit future targets as its second half is set up to be weightier than the first.
For the first six months of the year, revenue came to £53.2mln, up 33%, with underlying profit (EBITDA) up 10% to £18.2mln.
Operating profit fell to £12.2mln from £14mln and profit before fell to £11.2mln from £14mln as admin expenses rose and gross margin fell to 48% from 50.3%.
The first half saw acquisitions add 52 people to the headcount, with the focusing being “broadening the group's geographical footprint and operational reach, alongside adding high quality first party IP”.
For existing games, there were 20 new downloadable content (DLC) packages released across 12 titles, versus 17 across nine titles this time last year.
At StoryToys, the Irish app developer acquired just over a year ago, growth in payable active subscribers saw the total exceed 250,000, versus around 130,000 a year ago, generating revenues of £4.6mln in the period.
Releases of Hulk and Iron Man content updates followed the launch of LEGO Duplo Marvel in December, StoryToys’ biggest release to date, and a contract extension was agreed with the LEGO Group for multiple apps over multiple future years.
Astragon, the developer acquired for €75mln (and up to €100mln) in January, generated £7.8mln of revenues and was said to be performing in line with expectations.
Management said it was a “solid start” to the year and that the group “entered the second half with significant traction across all parts of the business”, where two games have already been launched of the seven new titles planned before year-end, along with 10 updates for StoryToys and mobile and console launches for Astragon’s Bus Simulator and Police Simulation titles.
The first half, said broker Peel Hunt, was “more about the development and enhancement of content for the company's back catalogue” and underlying operating cash conversion remained of 111% was highlighted.