Ellie Gibson
09:59 (BST)
30/05/2007
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Ubisoft profits up more than 70 per cent
Publisher's shares "seriously undervalued", says Pachter
Ubisoft has released its financial results for the the year ending 31 March 2007, revealing net income of EUR 40.5 million - a 70 per cent increase over last year's total of EUR 11.9 million.
Operating income for the period stood at EUR 34.6 million, up from EUR 1.4 million in 2006, while gross profits rose by more than EUR 90 million to reach 452.4 million.
Ubisoft's selling, general and administrative expenses were down just over 3 per cent to reach EUR 181.1 million. However research and development expenses rose by more than 70 per cent to hit EUR 233 million.
As announced in April, Ubisoft's sales hit EUR 680 million during 2007 - an increase of almost 25 per cent. Teenage Mutant Ninja Turtles shifted more than 1 million copies, as did Ghost Recon Advanced Warfighter, while other good performers included Rainbow Six Vegas (1.7 million) and Wii exclusive Red Steel (950,000).
Ubisoft boss Yves Guillemot has previously said that he believes new brands, such as Assassin's Creed, EndWar and Haze, will ensure continuing success for the company, and the sales target for this financial year is EUR 800 million.
Following the publication of the results, financial analyst Wedbush Morgan raised its forecast even higher to EUR 825 million - also predicting sales of EUR 975 million for 2009.
WM's Michael Pachter said Ubisoft had enjoyed "another stellar period of earnings growth" during the last 12 months. He concluded, "We still believe that Ubisoft shares are seriously undervalued, as the market does not appreciate the companyâs potential to grow faster than the market and deliver contribution margins in line with its peers."
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