News
06/08/04 Full year results for FY04
Kuju's results for the year to 31/03/04 showed a marked sales downturn and increased losses as the Company carried out major internal restructuring. Turnover fell 22% to £4.87m whilst losses before tax nearly tripled to £1.4m from £0.5m in FY03. The Company attributed the poor results to both the restructuring process and the difficult market conditions which pre-empted the restructuring. The Company ended the year with £1.3m in cash and no long-term debt. With FY04 producing a net cash inflow from operating activities of £0.3m, the Company appears to be on stable financial ground for the time being.
The Company's strategic restructuring appears to be paying dividends with a number of contracts signed with some major global publishers during the year including Nintendo (a real coup considering Nintendo's sales clout and its historic aversion to dealing with European developers), Activision and Sony Computer Entertainment Europe. The latter project is at present only a prototype agreement and is being conducted by the Company's Brighton studio, formed from the acquisition of Wide Games earlier in the year. Kuju also won a number of mobile games development contracts (for a total of 18 Java games). This all contributed to a much improved second half of FY04 which saw the Company return to profit (albeit to the tune of just £0.1m) on substantially improved sales of £3m. With all 4 of its divisions full occupied, the immediate prospects for Kuju look good, especially when compared to the fates befalling many of its larger peers within the UK development market.

22/12/04 Interims

 Kuju enjoyed a vastly improved start to its FY05 following its complete restructuring during FY04 with sales up 69% and losses slashed by nearly 90% to under £0.2m. The Company enjoyed an extremely busy period securing a large number of new contracts and completing a variety of products and projects, most interesting of which was the restructuring of the Company's mobile games division into a separate (but still wholly owned) entity. The European mobile games market has seen a number of company acquisitions, most at premium valuations and Kuju's move makes either a trade sale or a separate listing of the mobile division an easier step to take should it opt for that strategy. The Company would have returned to profitability during this interim period but suffered delays in certain product signings. As these products have since been signed, the Company remains confident of hitting full-year profitability. Kuju's cash position remains a concern with just £0.1m on the balance sheet at 30th Sept 2004 although it does have £0.8m in unspecified investments and debtors of £1.2m so it is by no means in any danger.

23/06/05 EAP contract signed
Kuju has revealed that it has secured a contract with EA Partners, Electronic Arts' third party funded publishing and distribution division, for a new train simulation title. The title, currently called Rail Simulator, is being developed by the same team that did the 1m unit-selling Microsoft Train Simulator and began work on Microsoft Train Simulator 2. MSTS2 was transferred to an internal Microsoft development team half-way through its development and is understood to have since been cancelled. Kuju's portion of the project therefore appears to have been resurrected and is being funded by Fund4Games, an external games funding organisation. Interestingly, this funding route also allows Kuju to retain control of the Rail Simulator IP, a move which could produce significant upside with future iterations of the product should the first prove commercially successful.

05/08/05 Hip replacement sought, new Ubisoft contract
Following the appointment of administrators at Canadian publisher Hip Interactive, Kuju has begun to seek an alternative publisher for its George A Romero Presents: City of the Dead game, a title that was originally being funded by Hip. The Company has revealed that it has already sourced several interested parties although following the success of several zombie films in 2004, the zombie game market has become intensely crowded with over half a dozen zombie games in production so Kuju could face an uphill struggle. Better news has come in the form of a new publishing contract with French publisher Ubisoft. No details of the project were revealed other than its development at Kuju's Surrey studio, a division specialising in action and racing titles. Interestingly, the Surrey studio is also the home of the Romero product although with the studio comprising three teams, there is only a limited chance of personnel cross-over.

16/09/05 Final results for FY05
Despite an impressive 58% increase in turnover, Kuju failed to record a profit for its year to 31/03/05 although the loss recorded of £0.1m was a significant improvement on the £1.4m loss before tax in FY04. As explained previously, Kuju's restructuring over the last few years has resulted in a surge of new contracts, many with major publishers such as Nintendo, Sony, EA and Ubisoft which not only justifies the Company's strategic decision to radically alter its approach to development and development sales but also gives the Company an ideal base from which to achieve growth with the next console generation. Kuju will need to remain focused on these larger, more financially stable, publishers having now confirmed that its first half results will be negatively impacted by the collapse of Hip Interactive and the subsequent difficulties in finding an alternative publisher for its Romero-licensed zombie game. The Company's cash position looks precarious having fallen from £1.3m to £0.3m although it attributes this, in part, to the later than expected signing of the EA deal (achieved post year-end) and the resultant need to self-finance the development whilst negotiations continued. Since then the cash position is understood to have improved. With several new contracts signed after the year-end, the prospects appear good although with six teams to look after, Kuju will need to maintain a more or less continual sales process. Potential upside from post-advance royalties appears also to be at the highest point in the Company's history with two major products, Battalion Wars (for Nintendo) and EyeToy Play 3 (for Sony) offering the potential for high volume sales this Christmas.

02/11/05 New contracts announced
Kuju has announced three new contract wins in as many days (one wonders whether this was done for PR purposes more than anything else). Kuju has been contracted to develop a new version of football game Sensible Soccer (a hit from the early 90s) for Codemasters and new title for Vivendi Universal Games (no other details were released expect that the title will be developed alongside a Ubi Soft product at the Company's Surrey Studio (see 05/08 news above)). Kuju also revealed that it had entered into a major pre-production agreement with an unnamed "major" publisher. The project is being fully-funded by the publisher and should (but is not guaranteed to) lead to a full production agreement once the prototype is completed. Pre-production agreements are increasingly being used by publishers to control their development risk allowing promising titles with higher than normal technology or gameplay risk to be developed to a stage where these risks can be more easily assessed and controlled. They are particularly useful for developers creating their first game for a next-generation console platform.

05/12/05 Mobile publishing division disposal
Kuju has disposed of its loss-making wireless publishing (i.e. mobile games publishing) division. Kevin Holloway, who ran the division for Kuju, has set up a new vehicle to handle the business. Kuju will retain its mobile games development activities.

28/12/05 Interims

Kuju's interim results showed impressive turnover growth but also increased losses. Whilst the Company has continued to sign new development contracts with major publishers on a more frequent basis than it ever has in the past, the Company has failed to break even from this increased business. The interim loss before tax was exacerbated by the exceptional loss of £0.3m generated following the collapse of publisher partner HIP Interactive and the Company's subsequent failure to find a new publisher for its George A Romero presents City of the Dead product. However, even taking this into account the Company's underlying development business remains unprofitable at present and with less than £0.1m cash, Kuju's financial status remains precarious as a result. With limited profitability being derived from development advances, Kuju's short-term upside potential lies in post-advance royalties from its Christmas products, Battalion Wars and EyeToy Play 3. It is too early to tell how either of these products fared over the holiday period and although neither topped their respective format charts (GameCube and PS2), both were top ten sellers in various territories and EyeToy Play 3, at least, should continue to sell well into 2006.  The future for Kuju, therefore, continues to remain cloudy: the Company has limited cash resources and is still highly susceptible to product cancellation although the upside potential from its Christmas releases as well as the longer-term potential of its train simulation product give those clouds a potentially silver lining.

19/05/06 Convertible loan notes issued
The Company has decided to conduct a modest fund-raising amongst key directors and "an unconnected third party" using convertible loan notes. The amount raised, £200k, was deemed too small to be suitable for either a formal placing or rights issue (both of which could easily have cost as much as was being raised). The notes have a 10% interest rate, a one year duration and conversion at a price of 10p per share so appear attractive instruments. However, that the Company should need this new capital suggests that the Company's finances are precarious at present and the share price (at an all-time low) reflects this. 

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