Namco posts record revenues as Bandai merger looms

Namco has logged record pretax and net profits for fiscal year 2004, with revenues up by 3.5 per cent to 178.55 billion yen (1.3 billion Euro) following healthy game sales and a series of one-time gains.

Pretax profits rose by 1.1 per cent to 14.59 billion yen, while net profit was up a record 25.4 per cent to 9.46 billion yen.

Namco cited one-time gains - such as 319 million yen in sales of securities proceeds and 515 million yen in fixed property sales - as the cause of the net profit increase.

The company was not required to book an appraisal loss on its fixed property holdings, which also shored up profits - last year, Namco faced a 747 million yen loss by writing down holdings.

But despite the increases, net profit per share dropped to 83.64 yen - down from 133 yen during the same period last year. Namco said this was due to a 2-for-1 stock split carried out last November, which increased the number of outstanding shares to 109.76 million yen.

Namco plans to merge with Bandai to form a joint holding company, NamcoBandai Holdings Inc., this September. The move is designed to bolster both firms as they face tougher competition in the Japanese entertainment market, which analysts say is the result of a fall in the number of children.