Devolver Digital, Inc. Trading Update (0655M)
January 09 2023 - 2:00AM
UK Regulatory
TIDMDEVO
RNS Number : 0655M
Devolver Digital, Inc.
09 January 2023
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR
9 January 2023
Devolver Digital, Inc.
("Devolver Digital", "Devolver" or the "Company", and the
Company together with all of its subsidiary undertakings "the
Devolver Group")
Trading Update
Devolver Digital, an award-winning digital publisher and
developer of indie video games, announces an update for the
financial year ended 31st December 2022 ("FY2022") (1) .
We expect FY2022 revenue to be within the range of guidance set
in June 2022, with strong year-on-year revenue growth from
continuing operations of greater than 30% (2) . Trading recovered
in the second half of FY2022, with Normalised Adjusted EBITDA (3)
expected to be significantly greater than the first half. However,
the ongoing cost impact of three underperforming titles, and weaker
than forecast sales volumes in December, have resulted in lower
than expected performance in the second half of FY2022.
Subsequently, the updated Normalised Adjusted EBITDA range for
FY2022 is $20m to $22m.
In addition to the above, the Company is performing a group-wide
assessment of the carrying value of balance sheet items relating to
capitalised development costs, and acquisition IP and goodwill. It
is expected that these may be material, and that some of the
adjustments will impact upon Normalised Adjusted EBITDA. However,
these will be non-cash adjustments that are non-recurring in
nature. We will release further details regarding these non-cash
adjustments in due course.
The Company's pipeline for 2023 is healthy and diverse in terms
of titles, developers, platforms and geography. This includes
announced titles including Terra Nil, Gunbrella, Wizard With a Gun
and Anger Foot, as well as new titles yet to be revealed. The
Company's confidence in the outlook for 2023 has been reinforced by
the strong wish-list interest in the first planned release of the
year, Terra Nil, which is due for release in 1Q 2023. However,
management expects the negative global economic outlook and
reduction in consumer spending to continue into 2023, which may
affect sales volumes. We expect FY2023 profitability to be heavily
weighted towards the second half of the year, reflecting the
release schedule of new titles in FY2023.
Devolver Digital will provide further details in its FY2022 full
year results announcement, which is expected to be released in
early April 2023.
Harry Miller, Executive Chairman of Devolver Digital, said:
"Devolver Digital will have posted annual revenue growth of over
30% in 2022. Second half EBITDA was significantly higher than the
first half, although the performance for the year was constrained
by three underperforming titles and difficult market conditions in
December, which contributed to a disappointing result for
profitability for full year 2022. The second half featured the
success of Cult of the Lamb, Return to Monkey Island and other
released titles, which have re-established our record of releasing
high quality and popular Indie games. Metacritic scores have risen
to an historical high on the back of the strong slate of releases
in 2022. Moving into 2023, we believe market conditions will remain
difficult for our industry, however we believe we are well placed
to consolidate our greater scale of revenues and focus on improving
margins as we move through the year."
-ENDS-
About Devolver Digital
Devolver is an award-winning video games publisher in the indie
games space with a balanced portfolio of third-party and own-IP.
Devolver has an emphasis on premium games and has published more
than 100 titles, with more than 30 titles in the pipeline scheduled
for release over the next two years and beyond. Devolver has
in-house studios developing first-party IP titles and a
complementary publishing brand. Devolver is registered in
Wilmington, Delaware, USA.
Enquiries
Devolver Digital, Inc. ir@devolverdigital.com
Harry Miller, Executive Chairman
Douglas Morin, Chief Executive Officer
Daniel Widdicombe, Chief Financial Officer
Zeus (Nominated Adviser and Sole Broker)
Nick Cowles, Jamie Peel, Matt Hogg (Investment Banking)
Ben Robertson (Equity Capital Markets) +44 (0)20 3829 5000
FTI Consulting (Communications Adviser) devolver@fticonsulting.com
Jamie Ricketts / Dwight Burden / Valerija Cymbal / Usama Ali +44 (0)20 3727 1000
Notes
1. Financial numbers contained within this Trading Update are
based on preliminary unaudited 2022 results and will be subject to
impairments which are currently being reviewed.
2. June 2022 guidance was for revenue of US$130-140 million and
US$27-32 million of normalized adjusted EBITDA.
3. Normalised Adjusted EBITDA ("EBITDA") makes the following
adjustments: it excludes: 1) stock compensation (share-based
payment) expenses and revaluation of contingent consideration; 2)
one-time expenses and other non-recurring items; 3) amortisation of
IP (but does not exclude amortisation of capitalised software
development costs), and; 4) impairments of goodwill and acquired IP
.
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END
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