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Codemasters revs up for new launches

The games developer has four major launches set for 2021
June 22, 2020

Codemasters (CDM) posted a 4.5 per cent increase in gross profit in 2020, with an 8.5 per cent growth in digital sales as more gamers bought products from home during lockdown. The developer is continuing to push its nascent ‘games as a service’ (‘GaaS’) strategy, which it said is driving player engagement as well as extending a game’s lifecycle. 

IC TIP: Buy at 327.5p

All of its employees have moved to remote working and despite the notoriously tough deadlines in the industry, management said that it does not expect to see any material disruption. 

The group acquired Slightly Mad Studios (SMS) in November 2019 for £0.9m, which pulled back adjusted cash profits to £18.2m from £18.7m last year. But SMS strengthens the group's position in Mobile, where it expects to launch its first title, Project CARS GO, in the second of half of this calendar year. 

The developer has four major scheduled launches for its 2021 financial year: F1® 2020, Fast & Furious Crossroads, DiRT 5 and Project CARS 3

Broker Jefferies forecasts adjusted pre-tax profits of £16.3m and EPS of 16.3 pence for the March 2021 year-end, compared to £17.5m and 11.6 pence in FY2020. 

CODEMASTERS (CDM)   
ORD PRICE:328pMARKET VALUE:£ 496m
TOUCH:327-340p12-MONTH HIGH:359pLOW: 192.5p
DIVIDEND YIELD:NILPE RATIO:40
NET ASSET VALUE:57p*NET CASH:£24.8m
Year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2016**31.0-10.6nana
2017**50.112.0nana
2018**63.6-1.5-70.1nil
201971.22.93.0nil
202076.012.28.1nil
% change+7+321+170-
Ex-div:na   
Payment:na   
*Includes intangible assets of £94m, or 62p a share **Codemasters floated in June 2018