Team17 Group Plc’s share price plunged 40% after it posted a notice on the London Stock Exchange warning that several titles in its catalogue have “underperformed”.
The historic videogames firm – whose share price sits at 187p at the time of writing (9am) – also said EBITDA would almost halve.
It expects to deliver full-year adjusted EBITDA of at least £28.5 million, which compares to £48.8m in 2022 and £35.8m in 2021.
In its updated outlook for the current financial year, ending 31st December 2023, it said: “While the important trading periods of Black Friday and Christmas are not yet complete, management believes the group remains well positioned with strong traction across its new release and back catalogue titles, and currently expects FY23 revenues to be modestly ahead of current market expectations.
“Despite this overall robust revenue performance, certain titles within the Games Label are not meeting internal expectations, resulting in a less favourable mix between higher margin own-IP titles and third-party titles (with higher royalty payments) than anticipated.
“In addition, the group was too slow to address some project overspends and has faced some delays in implementing key cost initiatives at Team 17 Games Label. These are now at advanced stages and will continue to bring benefits into next year.
“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.”
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Deep cuts – affecting a reported third of its staff across several divisions – have been reported in the gaming press in recent months amid an almost company-wide restructure.
Eurogamer also reported that Team17 Digital CEO Michael Pattison, a former Capcom and PlayStation executive, had parted ways with the company after almost two years, although he still remains in the position according to LinkedIn.
Debbie Bestwick (pictured), the current group CEO credited with revitalising the company and leading to its listing on the public market, is set to step down from the position at the end of the year, with Steve Bell taking on the role.
The firm added: “The group has an exciting schedule of high-quality new releases planned across the group in 2024, while back catalogue investments will continue to support revenue growth.
“Management will provide greater clarity on FY24 at the full year results, but currently expects to see an improved underlying trading performance compared to FY23.”