Team17 Group delivers 'solid' revenue performance in challenging market

Steve Bell, chief executive of Team17, said: "While 2023 presented some challenges for the games label, the speed and tenacity with which the teams have responded has demonstrated the exceptional talent we have at Team17.

"The games label is now realigned to its proven low-risk Indie model, tighter cost controls have been enforced and one-off actions taken to clean up the balance sheet.

"We are back on form in 2024, with a solid slate of games and apps, our exceptional back catalogue and a clear plan for growth across the games label, astragon and StoryToys. The year has started well."

In his review of the year, Mr Bell said the market backdrop had been immensely challenging, with “exceptional competition” in the sector throughout the year.

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He added: “Profits came in below our initial expectations, with gross profit of £57.5m and adjusted EBITDA (earnings before interest taxation depreciation and amortisation) of £29.9m, driven by certain games within the games label not meeting internal expectations.

"In the second half of the year, we undertook a comprehensive review of our cost base within the games label, which was completed in November 2023. Whilst this unfortunately resulted in redundancies, we believe our cost base is now aligned to our core Indie strategy, and the business is now even better placed to capitalise on future opportunities while continuing to optimise our existing pipeline.”

Commenting on outlook, the group said: “The group has made a pleasing start to FY (full year) 2024, although we remain mindful of the challenging competitive landscape, the ongoing cost of living pressures affecting discretionary spending and geopolitical uncertainty weighing on global markets more broadly.

"We have a solid pipeline of at least 10 new games and apps expected to launch in FY 2024 and beyond, and we will continue to use our exceptional lifecycle management capabilities to drive sales growth across our back catalogue.”

Following the restructuring of the games label, including its “strategic refocus on Indie titles and the impairment of the development costs of certain titles” ,Team17 said it entered 2024 on a more appropriate cost base with stricter cost controls in place.

The statement added: “In addition, an action plan is in place to accelerate revenue and profit growth..more innovative marketing and publishing models, while pursuing an active M&A (mergers and acquisition) agenda. We remain confident that the group can deliver an improved underlying trading performance in FY 2024, in line with current market expectations, and remains well positioned for continued growth over the mid to long term.”