MARKET REPORT: UK games pair continue to hit all the right buttons

British video game developers already punch above their weight in an industry that often flies under the radar for UK investors.

Gaming has been revolutionised by the same move to online streaming services that has changed how people watch TV.

And updates from two AIM-listed companies, Frontier Developments and Team 17, showed the sector is doing better than ever. 

Game on: Ppdates from two AIM-listed video game makers, Frontier Developments and Team 17, showed the sector is doing better than ever

Frontier clinched an exclusive deal with Formula 1 to make management-style games for the racing series, which lets players run their own F1 teams.

Frontier’s game should debut in 2022 and will run for four seasons to 2025 if it hits targets.

Cambridge-based Frontier, which is led by British game designer pioneer David Braben, has also bagged two further deals with unnamed groups.

And Team 17, the maker of the popular Worms franchise and collaborative cooking game Overcooked, reported record sales that ballooned 43 per cent to £62million in 2019. 

Profits rose from £8.7million in 2018 to £19million last year – and it has a pipeline of 10 new titles for 2020.

Stock Watch – Brand Architekts

Sales and profits sank at beauty brands business Brand Architekts as the US-China trade war hit its international arm and Britons spent less.

Half-year profits fell by almost three-quarters to £302,000, sending shares 23.1 per cent or 37.5p, lower to 125p yesterday. The Dirty Works and Real Shave Company-owner now expects annual profits to fall sharply.

It could have trouble stocking Christmas gifts, most of it sourced from China, following the Covid-19 outbreak.

Shares in both made gains, with Frontier closing 7.6 per cent higher, up 86p, to 1216p, while Team 17 reached 540p before ending up 1.8 per cent, or 9p, at 524p.

Technology and defence group Ultra Electronics jumped 8.5 per cent, or 162p, to 2068p, as annual profits more than doubled to £91million on a slew of new contract wins.

It added that trading has not yet been hit by the coronavirus.

But rival defence and aerospace group Meggitt was in the red, down 4.2 per cent, or 20.3p, to 463.5p, as bearish Berenberg analysts bumped its rating from ‘buy’ to ‘hold’ in the wake of the Covid-19-induced fall in air traffic. 

Chairman Sir Nigel Rudd spent £496,000 buying 100,000 Meggitt shares.

Elsewhere, Plus 500 co-founder Shlomi Weizmann bought 100,000 shares in the online trading group, setting him back £942,000. Its shares fell 2.6 per cent, or 23.8p, to 890p.

Traders kept a watchful eye on oil after prices dropped as much as 35 per cent on Monday, but rose 8 per cent yesterday in a modest gain, to around $37 a barrel.

It was a mixed bag for London-listed firms. Shell, the largest company on the London Stock Exchange, rose 3.3 per cent, or 43.2p, to 1348p, as UBS analysts said it has the ability to defend its all-important dividend despite the crash.

And after shedding almost a fifth of its value the day before, BP rose 3.4 per cent, or 10.7p, to 328.9p.

The FTSE 100 fell 0.1 per cent, or 5.54 points, to 5960.23 while the FTSE 250 was virtually flat, down just 0.1 point, to 17,547.05, as Premier Oil plunged by a further 12.3 per cent, or 3.21p, to 23p, after losing more than half of its value on Monday. 

Cairn Energy shed another 15.9 per cent, or 13.6p, to 71.75p, while Mediterranean-focused Energean fell 7.8 per cent, or 34.5p, to 406p.

Mid-cap engineering and oilfield services firm Wood Group, which was also knocked by the sell-off, said it was ‘too early’ to forecast the impact that might come from the coronavirus outbreak and oil price drops. 

Shares fell 1.2 per cent, or 3.2p, to 268.6p, even as it revealed profits jumped to £115million in 2019 from £41million in 2018.

Small oil producers including Jadestone Energy (up 8.7 per cent, or 4p, to 50p), Petrotal (up 18.2 per cent, or 2p, to 13p) and Trinity Exploration (up 16.1 per cent, or 0.95p, to 6.85p) sought to reassure investors that they were strong enough to withstand a hit.

Junior-market listed financial services and pawnbroking group H&T surged 16.9 per cent, or 51.5p, to 357p, as turmoil on markets last year and the subsequent rise in gold prices boosted its pawnbroking. Profits jumped 45 per cent to £20.1million as revenues rose 15 per cent to £101million.


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