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  • Writer's pictureValeria Martinez

Manston Technologies PLC's Alien World set to boost sales after a £5.2m drop in annual revenue

Updated: Dec 23, 2020

Note: This is a sample company news report that was part of an assignment of my Business Journalism class. Manston Technologies PLC is not a real company.

Oxford-based video games developer and publisher Manston Technologies PLC has reported a 60% decrease in pre-tax profit in its 2019 full-year preliminary results. Despite a weak overall performance, shareholders remain hopeful over company prospects as the share price at the LSE rose 3.6% to £12.30 following the release of the results.

In the 12 months to 31 December 2019, pre-tax profit dropped to £2.9m from £7.8m on revenue of £34.2m, down from £37.4m in the previous year. Earnings per share also fell to 9.6p, down from 22.7p last year.

The company says these results were anticipated given no new franchise was launched for the first three-quarters of FY19, while pre-tax profits were cut due to planned investments in development and marketing.

Despite lower sales, the company benefited from a £17.7m cash injection by TFZ, a Hong Kong-based Internet and interactive entertainment company, which helped bring cash balances up by £11.5m during the year to £24.1m (FY18: £12.6m). The strategy behind this deal was to support Manston’s growth in the Chinese market.

The release of Manston’s third franchise launch in September, Alien World, saw shares pushed up to £12.91 in November, lifting hopes for a promising 2020 financial year. On 1 January 2020, the company announced cumulative sales on all formats had passed 1.5 million units.

Victor Davies, chief executive, said: “Alien World has achieved our biggest launch to date, and are now very well positioned with three successful revenue-generating franchises.”

Analysts have projected the company’s newest franchise, released just before the film Alien World: Terror Flight, to achieve £70m to £84m in revenue for the year ending 31 December 2020.

The performance of its first two franchises Jungle Spirit and Red Planet, which launched in 2015 and 2017, is supported by ongoing development. The release of new features such as chargeable themed expansion packs and free updates continue to engage new and existing players, generating additional sales for each franchise.

Manston aims to continue expanding its franchise portfolio, with franchise four now in full development and targeted for release in 2020. The company also announced two more new franchises are in earlier stages of development to be out in 2021 and 2022.

The worldwide games market is worth $112 billion a year and increasing in size at a rate of about 10 per cent a year. According to analyst Joel Ishakar from InterBank, Manston is “well placed to take advantage of this upswing”, predicting shares will be worth £13.00 in the coming year.

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