It’s been a couple of barnstorming years for the video games industry, including record-breaking deal activity. Most notably, Microsoft swept up Activision Blizzard, a prolific developer behind Call of Duty in a deal worth $75 billion, making it the largest takeover yet by one of America’s tech giants.
Analysts at Shore Capital said that even though gaming activity had eased as consumers returned to other entertainment activities, they expected some habits developed over the past two years will be hard to break. Revenues in the sector are expected to exceed $220 billion by 2024, having generated $180 billion last year.
The boom has lasted longer than expected for Team17, the video games studio for games including Worms and Overcooked. The group is confident that adjusted underlying earnings on Wednesday will be ahead of management’s expectations following a “solid performance” in the autumn and winter. Analysts at Berenberg, its house broker, have forecast underlying full-year profit of £33.5 million.
On the same day, Keywords Studios, which provides services to computer games developers, is expected to announce an underlying annual pre-tax profit of €86 million. This would be slightly higher than the estimated figure given when guidance was raised in December. Berenberg predicts net cash growing to nearly €160 million this year.
Tomorrow
Bellway has already given a taster of its half-year results in a trading update last month. The developer confirmed that it built more homes in the first half of its financial year than ever before. The expectation is that it will sell over 11,000 houses this year while operating margins are trending towards 18 per cent. That would lead to an operating profit of more than £600 million for its full financial year.
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Interims Bellway, Genedrive.
Finals AG Barr, Animalcare, Aquis Exchange, Burford Capital, Central Asia Metals, CPP Group, EKF Diagnostics, Ergomed, Flowtech Fluidpower, Good Energy, IQE, NAHL Group, Personal Group, RBG Holdings Regional Reit, S&U, Ten Entertainment, The Mission Group, XLMedia
Wednesday
Gulf Keystone Petroleum, the oil group that operates in the Kurdistan region of Iraq, will report annual profits that stand to benefit from last year’s recovery in crude prices. The
company has already reported gross average production of 43,440 barrels of oil per day for 2021 from its giant Shaikan field and is looking to grow: it expects to deliver between 44,000 and 50,000 barrels per day in 2022 and has submitted plans to further develop the field.
Analysts at Stifel forecast that the group should deliver earnings before interest, taxation, depreciation, amortisation and exploration costs of $230 million, up from $56.2 million in 2020. That should help it deliver adjusted pre-tax profits of $162.7 million, compared with a $47 million loss a year earlier.
The group returned $100 million to shareholders last year and announced a $50 million interim dividend in January, when it said that “with continuing strong oil prices and cash flow generation, there may be opportunities to consider further distributions to shareholders and to optimise the capital structure”.
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Interims Bowleven
Finals Anglo Pacific, Ebiquity, Gulf Keystone Petroleum, Keywords Studios, Michelmersh Brick, Strix, Team17
Thursday
There are hopes that Provident Financial will announce the resumption of dividends alongside its full-year results. It has been a bumpy few years for the subprime lender, which last year pulled out of its traditional doorstep lending business in the face of a regulatory crackdown. It scrapped its 2019 final dividend because of Covid and paid out nothing in respect of 2020. Now focused on its Vanquis credit card business and Moneybarn car loans division, it is in recovery mode, though analysts will be poring over its impairment numbers. Shore Capital is forecasting pre-tax profits for 2021 of £36.5 million, a recovery from losses of £113.5 million last time, and a dividend of 13p.
Sir Martin Sorrell has been very open regarding the performance of S4 Capital, with the shares having fallen more than 20 per cent this year. The advertising and marketing services group raised its 25 per cent like-for-like gross profit growth guidance for 2021 to 40 per cent, but analysts reckon that its full-year results will show a 43 per cent rise.
Interims Aptamer, Gattaca, James Halstead
Finals BBGI Global Infrastructure, Chesnara, Hostelworld, Provident Financial, Mears, RTW Venture Fund, S4 Capital, Sportech
Friday
Finals Medica
Trading updates Pennon, Renew