Codemasters has unveiled its initial financial results following its debut on the AIM. These results indicate a complex financial landscape post-IPO.
In its first report since going public, Codemasters recorded a pre-tax loss. Revenue for the six months ending 30th September was £39.7 million, a reduction from £49.4 million during the same period in 2018. A notable pre-tax loss of £7.6 million was recorded, contrasting with a £1.4 million profit in the previous year.
These financial results were significantly influenced by one-off charges, particularly share-based payments linked to the IPO. Such costs can distort the company’s apparent performance, leading to temporary financial setbacks. Despite the immediate financial impact, these are crucial for securing long-term stability and investment.
Codemasters’ adjusted EBITDA, considered their main performance metric, stood at £10 million, down from £16.9 million the prior year, illustrating the financial challenges faced during this transitional phase.
Codemasters has seen substantial growth in digital sales, which now constitute over half of the total revenue at 53.4%. This is a significant increase from the previous year’s 33.1%.
The shift towards digital sales not only aligns with industry trends but also sets Codemasters on a path for more predictable and scalable income sources.
Digital delivery is set to dominate future sales strategies as it continues to surpass traditional physical sales.
CEO Frank Sagnier expressed satisfaction with the transition, citing the quality of Codemasters’ AAA-rated games and strong fan base as pivotal for future growth. The restructuring of share capital and repayment of shareholder loans marked a successful IPO.
Sagnier highlighted that the shift to digital distribution and evolving gaming models provide significant opportunities. The development of streaming platforms and anticipated boosts from seasonal sales underpin their optimistic outlook.
With expectations of increased sales during festive periods and strategic new releases, Codemasters is positioned to leverage its renowned back catalogue for future growth.
The recent launch of F1 Mobile Racing on Apple’s iOS platform marks Codemasters’ continued innovation in mobile gaming. With an Android version on the horizon, Codemasters is expanding its reach across multiple platforms.
This move towards free-to-play models reflects broader industry trends and underscores Codemasters’ commitment to adaptive market strategies.
As digital trends evolve, Codemasters is set to capitalise on emerging opportunities, aligning its offerings with consumer expectations and technological advancements.
Despite the financial losses, the company sees opportunities in its digital transformation and service-based gaming models.
Codemasters’ strategy focuses on digital platforms, staying abreast of industry trends, and leveraging its strong IP.
These strategic directions are aimed at overcoming current challenges and seizing new market opportunities.
In summary, Codemasters faces financial challenges in the short term due to one-off charges but is strategically positioned to take advantage of digital growth and new market trends. With a robust gaming portfolio and evolving sales strategies, the company remains optimistic about its long-term prospects.
