Golden chance for the games sector
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Your support makes all the difference.A WAVE of takeover and restructuring activity is sweeping through the quoted computer games sector.
Last week, shares in CentreGold, a games distributor and developer, jumped by 10p to 60p on takeover hopes. Geoff Brown, chief executive and 30 per cent shareholder, says the company is up for sale and that he is talking to a number of potential buyers.
CentreGold's share price collapsed from pounds 1 to 40p in February after a profits warning - the company was caught with huge stocks of games cassettes when demand for them collapsed and had to write off pounds 3.2m. It is believed to have lost about pounds 5m in the year to July, but Mr Brown said: "We are cautiously optimistic about this year."
Tomorrow shares in Eidos will be unfrozen on the USM, the junior stock market, following a six-week suspension while it built up its games side. Eidos, already a successful specialist in video-compression technology, has spent pounds 12m buying three games companies: Domark, Big Red Software and Simis. At the current price, Eidos is capitalised at pounds 29m. David Tabizel, multimedia analyst with Durlacher, said: "It will go on to a full listing."
This Friday, the day the powerful new Sony Playstation appears in the shops, the biggest quoted computer games company, BCE, will announce profits of about pounds 900,000 for the year to June. In an industry where most companies are still making losses, this is regarded as healthy. Mr Tabizel said BCE should make pounds 3m in pre-tax profits in the current financial year.
BCE has been transformed from a moribund snooker and amusement arcade business by its chief executive, Robin Jones. He has bought the developers Rage and Software Creations, which are working for giant publishers such as Nintendo, Sega and Electronic Arts. Rage's big hit is Striker, a football game, while Software Creations is producing some of the basic software for the Nintendo Ultra 64 machine, which is being launched next year. Mr Jones said American companies come to Britain for this sort of work "because the best writers are here". He also said that BCE might be floated on a US stock exchange, because valuations are higher there. "Compared with the US, we're still very cheap," he said.
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