tinyBuild (LON: TBLD), the video games publisher, saw its shares fall on Thursday despite an 18% rise in first-half revenue and a reiterated pledge that full-year results will be ahead of expectations.
The unaudited half-year results, published this morning, were described by the board as ahead of expectations.
TBLD shares traded at 14.5p on Thursday, down from Wednesday’s closing price of 15p, a fall of about 3.3%. The move followed release of the results before markets opened, as investors weighed weaker profitability against the revenue increase. No published analyst consensus figure was available, so the results cannot be measured against forecasts.
Revenue for the six months to 30 June rose to $20.0m from $17.0m a year earlier, up 18%, driven by new title launches including Hozy, ALL WILL FALL and SAND, with back-catalogue’s share of own-IP gaming revenue falling to 68% from 100% as the new titles took over. The board said it remains confident tinyBuild is on track to deliver full-year results ahead of expectations, though it flagged much uncertainty for the second half in what it called a crowded market, citing the conflicts in Ukraine and the Middle East as risks to watch.
Despite the revenue growth, gross profit fell to $9.8m from $10.4m as tinyBuild paid higher royalties to its second-party title partners, games it publishes but does not own outright. Adjusted EBITDA, a measure of underlying profit before interest, tax and non-cash items, dropped to $3.2m from $4.2m, reflecting the revenue mix and higher marketing and staff costs. Operating profit fell to $1.1m from $3.6m, or $1.4m stripping out a one-off $2.2m gain booked in the prior year. Cash rose slightly to $4.7m from $4.6m, with no debt on the balance sheet.
Chief executive Alex Nichiporchik struck a cautiously optimistic note on the results.
In a slowly-improving environment, our strategy to invest cautiously in new own-IP with a diversified approach of higher and lower budget is showing good results. We can look to the future with cautious optimism.
Alex Nichiporchik, tinyBuild
The board’s own caution about the second half, a crowded market and the continuing conflicts in Ukraine and the Middle East, remains the swing factor for the shares after Thursday’s fall.