Devolver stock price plummets after lowering sales expectations
Shares down 47% after publisher warns investors that the first five months of the year haven't gone as expected
Devolver shares took a beating today, trading down 47% to 72.5 GBX after the company downgraded its sales expectations for the year.
"Sales from new games released in the first five months of FY22 have been slower than expected, reflecting a competitive release window and specific factors for each title which are being actively addressed for future titles," the company said.
"At the same time there has been an expected step-up in amortisation costs related to these heavier-investment games upon release, as well as increases in general operating expenses due to inflation, headcount and marketing."
The company is expected full-year 2022 revenues to be up at least 30% to between $130 million and $140 million, with EBITDA growing at least 15% to between $27 million and $32 million.
Most of the company's sales are expected to come from its catalog of more than 90 previously released titles.
"The board expects revenues and profit to be weighted towards the second half of FY22, supported by highly anticipated new title releases, strong demand from subscription platforms and continued evergreen back catalogue sales at year-end," the company said.
Devolver began trading on AIM, a sub-market of the London Stock Exchange, last November, for 185 GBX. It peaked around 222 GBX in January, and trended steadily downward before today's precipitous drop.
The publisher has released a number of titles this year, including Trek to Yomi, Weird West, and Shadow Warrior 3.