Codemasters Group Holdings PLC – Full Year Results

Codemasters (AIM: CDM), the award-winning British video game developer and publisher specialising in high quality racing games, announces full year results for the year ended 31 March 2019.

Financial highlights

• Revenue increased 11.9% to £71.2 million (FY 2018: £63.6m)
• Gross profit increased 16.0% to £62.4 million (FY 2018: £53.8m)
• Gross margin increased 3.0% to 87.6% (FY 2018: 84.6%) – due to a higher proportion of digital sales which now represent 59.2% of total (FY 2018: 41.3%)
• Adjusted EBITDA¹ increased 59.8% to £18.7 million (FY 2018: £11.7m)
• Adjusted earnings per share² increased by 64.1% to 13.3p (FY 2018: 8.1p)
• Net cash of £18.2 million (FY 2018: net debt of £112.9m)

Strategic and Operational highlights

• Successfully launched four titles
  –  ONRUSH (new IP) was released on 5 June 2018, introducing in-game micro transactions
  –  F1® 2018 (annual release of the F1® franchise) – released on 24 August 2018 and is the highest rated PS4 racing game of 2018
  –  F1® Mobile Racing – the official mobile game of the 2018 FIA FORMULA ONE WORLD CHAMPIONSHIP™ on iOS in October 2018 and Android in November 2018
  –  DiRT Rally 2.0 – launched in February 2019, introducing a fully fledged Games as a Service strategy
• Signed agreement with NetEase, Inc. (“NetEase”) to publish three of the Group’s key PC titles in China
• Esports partnership with Motorsport Network the world’s largest media company dedicated to motorsports
• Expansion into mobile with NetEase partnership to co-develop a new game to be published globally by NetEase
• Successfully operated the F1 Esports Series for the second year running

Outlook

• Strong schedule for games to be released in FY 2020
  –  Earlier release of F1® 2019 game in June 2019 on PlayStation 4, Xbox One and PC  – for the first time, launching ahead of the British, German, Hungarian and Austrian Grand Prix
  –  GRID franchise to return in September 2019 on PlayStation 4, Xbox One, PC and as a launch title on Google Stadia
• Increase in proportion of digital sales expected to continue
• Continued development of mobile including further updates and additional content released on F1® Mobile Racing
• Increased focus on Games-as-a-Service
• Ongoing market developments provide significant opportunities
  –  Streaming platforms
  –  Launch of Next Gen consoles (Microsoft and Sony)

Frank Sagnier, CEO of Codemasters, commented:

“I am pleased to report on a milestone year in Codemasters’ rich history, including admission to AIM in June 2018 and considerable strategic developments made across the Group. Significant progress was made against each of our key strategic objectives, as well as delivering profitability ahead of the expectations set at the time of the IPO. The Group has also put in place many of the building blocks that will underpin our future performance.

“We have continued to grow and engage our loyal consumer base through four game launches whilst also signing key strategic partnerships with leading publishers, platform holders and brands that will help us to expand our audience. We believe this is testament to our expertise in racing and history of creating AAA games.

“The structural drivers in our industry are here to stay and will propel the future growth of our business. We expect the continuing shift into digital distribution, together with the evolution of the Games as a Service model, the launch of streaming platforms and Next Gen consoles, our partnerships in China on both PC and mobile and the emergence of esports to provide further opportunities for Codemasters going forward. We look forward to continuing to be at the forefront of the evolution of our industry.”