Team17 revenue surges as company expands

UK-based video game developer and publisher Team17 reported a 52% increase in revenue in its 2022 results on Tuesday, to £137.4m, and a 53% increase in gross profit to £69.6m, with gross profit margins expanding by one percentage point to 51%.

The AIM-traded company said its adjusted EBITDA increased 36% to £48.8m, while adjusted profit before tax rose 35% to £47.1m.

However, statutory profit before tax fell 1% to £28.7m, while basic earnings per share declined 10% to 16.5p.

Adjusted basic earnings per share jumped 26% to 27.8p.

Team17 reported a seven percentage point expansion in operating cash conversion to 108%, and an 8% decrease in cash and cash equivalents, to £50.8m at year-end on 31 December.

The company said it had incurred one-off acquisition-related adjustments and fees of £9.2m, compared to £1.6m in 2021, including elevated earnout-related payments as a result of strong results in acquired businesses in 2022.

Looking ahead, Team17 said that despite the current global macroeconomic pressures affecting businesses, it was “well-positioned” to continue delivering growth through the delivery of new titles from its expanded games pipeline, and ongoing lifecycle management of its broadened catalogue.

The company said it would also continue to review and assess potential acquisition opportunities.

Its board said it was mindful of current economic pressures, but remained focussed on the areas that could be controlled, and was committed to delivering gaming experiences for customers, in turn increasing shareholder value.

“2022 was unquestionably a transformational year with a strong performance for the group,” said chief executive officer Debbie Bestwick.

“Personally, I feel it was characterised by the delivery of our highly selective merger and acquisition strategy, alongside our team's successful lifecycle management across our portfolio.”

Bestwick said the company “collectively focused” on its long-term strategy on a division-by-division basis in 2022, and doubled down on future pipeline roadmaps.

“Team17 now has its most diverse range of owned, third-party, and licensed intellectual property yet, targeting the broadest audiences across multiple platforms with a clear, deliverable roadmap ahead and we look forward to updating our shareholders on our progress throughout 2023.”

At 1252 BST, shares in Team17 Group were down 7.66% at 410p.

Reporting by Josh White for Sharecast.com.