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Warthog PLC (WHOG)


Tuesday 03 July, 2001

Warthog PLC

Final Results

Warthog PLC
3 July 2001

Tuesday 3rd July 2001

                                PRESS RELEASE

                                 WARTHOG PLC

                          ('Warthog' or 'the Group')



  * Turnover increased by 58% from £2.4 million (for 2000) to £3.8 million
  * The Group has maintained its costs in line with increases in revenues
    resulting in profit before tax increasing by 47% from £214,000 (for 2000)
    to £314,000
  * 7 new games successfully published with 17 further games in the pipeline
  * Warthog also announces today its flagship project for Microsoft's Xbox,
    Bounty Hunter. The game has been developed for US publishers Crave
    Entertainment Inc. and Electronic Arts Inc.
  * The Group has seen substantial internal growth, increasing its workforce
    to 130, and is coming to the end of a major refurbishment of its freehold
  * In February 2001 Warthog successfully raised £5 million and launched
    onto the Alternative Investment Market of the London Stock Exchange
  * The Group announced in June 2001 two prestigious awards for its fast
    growth rate and entrepreneurial excellence from Growth Plus and Deloitte &

Commenting on the results, Ashley Hall, CEO of Warthog said:

'We are extremely pleased with our progress over the past year. We have been
busy, developing games for renowned publishers, for a wide demographic spread,
for PC's, consoles and now mobile phones. We have been rewarded too - our
games have won prestigious industry awards and the Group itself has been
recognised for its entrepreneurial flair. We have cemented relationships
within the industry and have made new ones. We have expanded profitably during
a difficult phase for the sector to become the 3rd largest listed games
developer in Europe. We intend to continue this expansion over the coming
years and believe that we are well placed to take advantage of the forecast
upturn in the sector.'


Ashley Hall

CEO Warthog Plc                     0161 491 5131

Andrew Gething

Warthog plc                         0161 491 5131

David Simonson/ Clare Maciocia

Merlin Financial                    0207 606 1244

Background to Bounty Hunter

Bounty Hunter is an original action game that will deliver a unique gaming
experience to Xbox audiences. Based on characters, concepts and property
created entirely in-house, the game seamlessly combines first person action
adventure with arcade space combat, creating a very realistic gaming

Bounty Hunter is set 400 years into the future and places the gamer in the
midst of a sweeping, new frontier storyline inspired by the classic Spaghetti
Westerns. The game uses Warthog's proprietary 'TUSK' technology to create a
wide variety of environments from the insides of space fighters to mammoth
star cruisers and the rolling plains of planet surfaces.

The Xbox console launch will be Microsoft's biggest product launch to date.
Merrill Lynch is expecting that the console will have shipped around five
million units by the middle of 2002.

Bounty Hunter will be distributed by both Electronic Arts Inc. and Crave
Entertainment Inc. Warthog has considerable expertise in the science fiction
genre after receiving several awards for 'Starlancer' and 'Star Trek

Chairman's Statement

These are the first full year results for Warthog plc as a listed public
company, and I am delighted to report on a highly successful year continuing
our uninterrupted growth and increasing profits.

Our Results

Turnover increased by 58% from £2.4 million to £3.8 million, with 17 games in
development during this financial year of which 7 have now been published. We
have managed to maintain our costs in-line with our increases in revenues,
resulting in profit before tax increasing by 47% from £214,000 to £314,000.
These results are particularly pleasing, because they achieved in a difficult
time for the games industry which is undergoing a major transition in gaming
technology. In line with the policy outlined in the Group's flotation
prospectus, the directors do not propose the payment of a dividend.

On 1st February 2001 we successfully launched the Group onto the AIM market of
the London Stock Exchange despite the poor prevailing conditions across the
UK's equity markets. I believe this successful flotation provides a strong
vote of confidence in our good financial record and sound business model.

Our Team

Substantial growth, office refurbishment, our AIM flotation and multiple,
tight game deadlines have, at times, stretched the resources of our team, but
their dedication has, at all times, been impressive. Our staff are everything
to us and we sincerely thank them for their hard work and continuing
commitment to Warthog. We operate a share option scheme for all our full time
employees and we will continue to invest in measures to provide an enjoyable
and conducive working environment. As a result we enjoy some of the lowest
levels of staff turnover in the games development industry.

As reported in the flotation prospectus, we strengthened our board of
directors with two new appointments. Steven Law joined us as Operations
Director and is already making his mark on the internal running of the Group.
Steven and I previously worked together for a software development business
over several years, and I am delighted we are continuing this relationship at
Warthog. David Robinson joined the Group as a non-executive director and
Warthog has already benefited from his input on matters of people management.
David is Group Managing Director of Richer Sounds, the UK's largest hi-fi
retailer that is highly regarded for its effective management and staff
motivation approach. They are both most welcome additions to our Board.

Our Home

In November 2000 we commenced a major refurbishment of our freehold premises,
a former printing works, in Cheadle, due for completion by September 2001. The
refurbishment includes fully networked infrastructure to provide a state-of-
the-art facility, which will accommodate our growth for the foreseeable
future. Investment in this facility is already proving fruitful, as partner
companies, who undertake development work on a sub-contract basis, are
selectively invited to locate themselves within the building, an arrangement
which is mutually beneficial.

Our Games

The last year has seen the successful release of 7 games, the result of
several years' hard work. Both 'StarLancer' and 'Star Trek Invasion' received
industry awards and several of our games received nominations and high praise
from industry analysts. These successes have established our reputation within
the industry and with our publishing customers.

In the Group's flotation prospectus, we set out our strategy to develop our
business to exploit the emerging mobile telephone and TV game playing markets
and we have made good progress in both sectors. For the mobile market we have
invested in our development capability and in establishing channels to market.
This has already resulted in a publisher awarding us a contract to develop our
first mobile game. Within the TV market we have launched a joint venture
initiative and I look forward to reporting on its progress through the
forthcoming year.


The successful launch of the next generation of game-playing consoles has
provided the foundation for the phase of dynamic growth which we are now
entering in this increasingly important sector of the entertainment industry.
Whilst believing the way in which the industry develops over the coming years
will continue to be exciting and occasionally surprising, we are confident
that it will provide an enormous range of opportunities for Warthog, and play
to our Group's unique strengths.

As part of our strategy to take advantage of this growth in the industry, our
premises are being equipped for in-house expansion and we have formed close
relationships with several other third party developers to assist us. We have
strengthened both our Board and management teams in preparation for this

Warthog raised £5million through a placing that accompanied the AIM flotation
and will use these cash resources carefully to fuel our expansion. We are
planning internally generated growth, with consideration being given to
potential acquisition opportunities, provided they fit our business model. Our
finances are in good health, having shown consistent increases in profit, in
line with our rapid increase in turnover. I am hence confident that our
enviable growth record will continue.

Iain Macdonald



for the year ended 31 March 2001
                                                           2001           2000

                                                              £              £

TURNOVER                                              3,782,386      2,406,039

Cost of sales                                         2,880,929      1,794,405

Gross profit                                            901,457        612,734

Other operating expenses (net)                          606,896        385,659

OPERATING PROFIT                                        294,561        227,075

Profit on sale of fixed asset investments                33,800              -

PROFIT ON ORDINARY ACTIVITIES BEFORE                    328,361        227,075

Investment income                                        34,135         10,435

                                                        362,496        237,510

Interest payable                                         48,346         23,298

PROFIT ON ORDINARY ACTIVITIES BEFORE                    314,150        214,212

Taxation                                                102,172         48,783

RETAINED PROFIT FOR THE YEAR                            211,978        165,429

Earnings per ordinary share - basic                       0.66p          0.55p
Earnings per ordinary share - diluted                     0.65p          0.50p

The operating profit for the year arises from the group's continuing

No separate statement of Total Recognised Gains and Losses has been presented
as all such gains and losses have been dealt with in the profit and loss


for the year ended 31 March 2001
                                                            2001         2000

                                                               £            £

Tangible assets                                        1,209,641    1,021,069
Investments                                                    -       36,200
Intangible assets                                              -            -

                                                       1,209,641    1,057,269

Stock                                                    633,813            -
Debtors                                                  937,003      429,579
Cash at bank and in hand                               3,560,409       30,958

                                                       5,131,225      460,537

CREDITORS: Amounts falling due within one year           606,209      720,330

NET CURRENT ASSETS/(LIABILITIES)                       4,525,016     (259,793)

TOTAL ASSETS LESS CURRENT LIABILITIES                  5,734,657      797,476

CREDITORS: Amounts falling due after more than          (550,034)    (562,034)
one year

                                                       5,184,623      235,442

Called up share capital                                  417,891        1,775
Share premium account                                  4,309,661       41,037
Merger reserve                                            52,463       -
Profit and loss account                                  404,608      192,630

SHAREHOLDERS' FUNDS                                    5,184,623      235,442


for the year ended 31 March 2001
                                                            2001          2000

                                                               £             £

Cash flow from operating activities                     (821,265)      302,257

Returns on investments and servicing of                  (14,211)      (12,863)

Taxation                                                 (49,765)       (4,776)

Capital expenditure and servicing of finance            (307,954)   (1,063,390)

CASH OUTFLOW BEFORE FINANCING                         (1,193,195)     (778,772)

Financing                                              4,722,646       574,122

INCREASE/(DECREASE) IN CASH IN THE PERIOD              3,529,451      (204,650)

                                                           2001           2000

                                                              £              £

Increase/(decrease) in cash in the period             3,529,451       (204,650)

Change in net debt resulting from cash                   12,000       (574,034)

MOVEMENT IN NET DEBT IN YEAR                          3,541,451       (778,684)

NET (DEBT)/FUNDS AT 1 APRIL 2000                       (543,076)       235,608

NET FUNDS/(DEBT) AT 31 MARCH 2001                     2,998,375       (543,076)

Notes to the Results

1. Publication of non-statutory accounts

The financial information contained in this preliminary statement does not
constitute statutory accounts as defined in Section 240 of Companies Act 1985.
The financial information for the year ended 31 March 2001 has been extracted
from the audited group financial statements on which the auditors report was
signed on 22 June 2001.

The following are extracts from the notes to the audited group financial
statements for the year ended 31 March 2001.

2. Earnings per share

Earnings and the number of shares used in the calculations of earnings per
share are set out below:
                                                    2001                  2000

                                                       £                     £
      Profit after tax                            211,978              165,429
      Weighted average number of shares        31,913,249           29,994,400
      EPS (pence)                                    0.66                 0.55

      Fully diluted:
      Profit after tax                            211,978              165,429
      Weighted average number of shares        32,812,290           33,403,450
      EPS (pence)                                    0.65                 0.50

3     CASH FLOWS                                              2001        2000

                                                                 £           £
a     Reconciliation of operating profit to net cash
      inflow from operating activities
      Operating profit                                      294,561    227,075
      Depreciation and amortisation                         191,939    125,965
      Increase in stocks                                  (633,813)          -
      Increase in debtors                                 (550,797)  (311,550)
      (Decrease)/increase in creditors                    (123,155)    260,767

      Net cash flow from operating activities             (821,265)    302,257

                                                               2001        2000

                                                                  £           £
3     CASH FLOWS (continued)
      Analysis of cash flows for headings netted in
      the cash flow
      Returns on investments and servicing of finance
      Interest received                                       34,135      10,435

      Interest paid                                         (48,346)    (23,298)

      Net cash outflow from returns on investments          (14,211)    (12,863)
      and servicing of finance

      Capital expenditure and financial investment
      Purchase of tangible fixed assets                    (377,954) (1,028,390)
      Payments to acquire investments                              -    (35,000)
      Disposal of fixed asset investment                      70,000           -

      Net cash outflow from capital expenditure and        (307,954) (1,063,390)
      financial investment

      Issue of ordinary share capital                      5,308,706          88
      Issue costs                                          (574,060)           -
      Other new long term loans                                    -     568,000

      Other new short term loans                                   -      12,000

      Repayment of other long term loans                    (12,000)     (5,966)

      Net cash outflow from financing                      4,722,646     574,122

3                                              At                            At
                                          1 April                      31 March 
                                             2000      Cash flow           2001
                                                £              £              £

c     Analysis of net debt

      Cash in hand and at                 30,958       3,529,451     3,560,409

      Debt due within 1 year             (12,000)              -       (12,000)
      Debt due after 1 year             (562,034)         12,000      (550,034)

                                        (574,034)         12,000      (562,034)

      Total                             (543,076)      3,541,451      2,998,375

4. Annual Report

The annual report for the year ended 31 March 2001 will be mailed to
shareholders in due course.


a d v e r t i s e m e n t