BECKHAM CAN'T STOP ROUT AT RAGE
Copyright 2002 www.independent.co.uk

[ March 22nd 2002 ]

Rage Software, a UK games developer, yesterday stunned the market with a warning that second half sales would disappoint after turnover in the six months to December fell short of expectations. The gloomy outlook came just two days after rival games group Eidos gave its own profits alert. It knocked Rage's shares down 12 per cent to 3.75p.

Rage said that its new David Beckham computer game, launched on PlayStation last November, had made a good start but did not make up for disappointing sales of GTC Africa, OEM and Denki games. Eidos, the group behind the Lara Croft character, and fellow software maker Warthog tried to inject some confidence in the industry with plans to launch new games later this year.

Rage, which is negotiating with banks for additional credit, revealed that losses before goodwill amortisation in the first half were £5.4m, due mainly to investment in developing and marketing new games. Rage has not exhausted its £15m equity credit line but has not been able to draw more than £4m due to the poor stock market conditions over the last few months. Including £2.8m of goodwill amortisation, pre-tax losses were £8.5m.

The company also warned that while its full-year loss would be narrower than its £8.1m deficit in 2000, it would be greater than market estimates of a £3.1m loss. Paul Finnegan, managing director of Rage, said the company was still on track to return to profit next year. "Things are starting to ramp up now. We have three major titles which will be launched on new platforms and we have sold a lot of titles to America for next year," Mr Finnegan said.

Eidos, the video games maker that saw its shares hit a three-year low on Tuesday after the latest in a stream of profits warnings, finally set a date for the launch of its long-awaited new Lara Croft Tomb Raider game. The group said the new sequel, Angel of Darkness, which sees Lara swap the back streets of Paris for those of Prague, would be exclusive to Sony's PlayStation2 and personal computers. The game will hit the shops from 15 November. Eidos shares crept up 2.25p to 146p on hopes that the sixth Tomb Raider would be a hit, given that the three best-selling games control more than two-thirds of global sales.

Warthog, the Manchester-based software company, said it was set to add to its Robot Wars games offerings after it won a deal to develop a second game depicting the home-built robots that feature in the BBC TV show. Warthog will launch Robot Wars Extreme this autumn for Nintendo's Game Boy Advance.