Q1 FINANCIAL RESULTS
Copyright 2001 Eidos Interactive
[ September 20th 2001 ]
plc, one of the world's leading publishers and
developers of entertainment software, announces
results for the quarter ended 30 June 2001. Turnover:
£12.2m £16.8m. Total operating loss before goodwill:
£11.1m £18.6m. EBITDA: £10.6m £17.7m. Loss per
share: 14.8p 14.8p. Loss per share before goodwill:
on these results Michael McGarvey, Chief Executive
Officer, said: "In spite of reduced first quarter
turnover, we have shown clear improvements in
both gross margins and operating expenses in the
period. The franchise titles Commandos 2: Men
of Courage and "Who Wants be A Millionaire?" 2
are shipping in September with pre order levels
in line with expectations. With the other key
releases of our year, such as Championship Manager
01/02 and the Next Generation titles Soul Reaver
II, Project Eden and Mad Dash all still to ship,
we have an excellent schedule of forthcoming releases."
STATEMENT - Review of Operations - As is traditionally
the case, the first quarter of our financial year
has been relatively quiet with three new PC titles
and the French and Junior versions of "Who Wants
To Be A Millionaire?" shipping in the period.
The resulting sales mix for the quarter led to
a reduction in turnover compared to the same period
last year. Gross margin as a percentage of turnover
has, however, increased by 12% in the quarter,
rising from 46% in the same period last year,
to 58% in the current period.
improvement is as a result of lower royalty costs
and improved channel management in the period.
The effects of the cost reduction programme initiated
at the end of the last financial year can already
be seen in the 32% reduction in operating expenses
(excluding amortisation of goodwill) in the quarter.
In total, the fixed element of operating expenses
(excluding amortisation of goodwill) has fallen
34% from £12.1m in the prior period, to £8.0m
in the current year. Pre amortisation of goodwill,
the total operating loss from continuing activities
for the quarter has fallen from £18.6m to £11.1m.
No tax credit has been provided on the loss on
ordinary activities for the quarter, based on
the availability of losses.
REPORTING TIMETABLE - Following this quarterly
announcement the Group will revert to publishing
only Interim and Preliminary results as allowed
by NASDAQ and the UK Listing Authority Rules.
The Board believes that this reporting timetable
is more appropriate given the seasonal nature
of the Group's revenue flows and will result in
a permanent reduction in administrative effort
and associated costs. The Group will continue
to announce key operational and financial developments
as and when appropriate.
TRADING AND FUTURE PROJECTS - The 1 for 3 rights
issue announced on 31 May 2001 was successfully
completed in July when 34,659,306 new ordinary
shares were issued raising £51.6m, net of costs.
Commandos 2: Men of Courage ships on PC later
this month, together with PC and PSOne versions
of "Who Wants be A Millionaire?" 2. Championship
Manager 01/02 and the Group's first PS2 releases
of the year, Project Eden and Thunderhawk: Operation
Phoenix, will ship in October.
internally developed PS2 titles such as Herdy
Gerdy , Soul Reaver 2 and Blood Omen 2 are all
due for release in the second half of the year,
when our first X-Box title, Mad Dash Racing, will
also be shipping. The Board believes that the
inherent quality of the Group's release schedule
combined with sustainable improvements in margins
and overheads will allow the Group to show further
positive progress in its operating results over
the course of the year. The entertainment software
market has been showing encouraging signs of recovery,
particularly in North America. We recognise, however,
that consumer confidence in the USA and the rest
of the world may be affected by the tragic events
of last week.