Share price crashes at indie games developer
The share price at Wakefield- and Nottingham-based games developer Team17 crashed by over 40% on Friday (November 24) on the back of a gloomy London Stock Exchange announcement earlier in the day.
At close of trading on Friday, shares in the indie games developer were changing hands for 185p – down 129p on the day – after it said some of its titles were “not meeting internal expectations”.
Team17 earlier released a trading update and revised outlook for the current financial year ending 31 December.
While it said forecasts for FY23 revenues are modestly ahead of current market expectations, the under performance of certain titles within the Games Label have resulted in a less favourable mix between higher margin own-IP titles and third-party titles – with higher royalty payments – than anticipated.
Team17 said it was too slow to address some project overspends and has faced some delays in implementing key cost initiatives at Team 17 Games Label.
In a statement, the firm said: “Management continues to be pleased with the performance of astragon and StoryToys.
“However, since the H1 results, and in the light of the post Covid-19 dynamics, management has re-evaluated the cost structure within Team17 Games Label to align with its core competencies as an indie game developer and publisher.
“In addition, it is also reviewing a number of titles, both under development and already launched, to assess the revenue potential in the current market environment, which is expected to result in impairments recognised in FY23.
“Consequently, the group now expects to deliver full year adjusted EBITDA of at least £28.5m, which includes non-cash title impairments of up to £11.5m.”