PARIS, June 16 (Reuters) - Europe's second-largest video games publisher, Ubisoft, posted a sharp rise in 2004/05 full year operating profit on Thursday, helped by higher sales and cost control.
Ubisoft, known for hit games like the "Splinter Cell" action games and "Prince of Persia", kept its sales and operating profit goals for the current 2005/06 year unchanged and said it wanted to double in size and triple its net income over the next four years.
Ubisoft has been the target of intense speculation since Electronic Arts, the world's largest video game maker, bought a near-20 percent stake in December, sparking talk it could launch a bid for Ubisoft.
Operating profit under French accounting rules -- which do not list internal R&D expenses as operating expenses -- for the 12 months ended March 31, 2005, leapt to 41.4 million euros ($49.90 million) against 1.5 million a year ago, the statement said.
This was at the low end of the company's guidance for an operating profit of 40 million to 45 million euros under French rules.
On a pro-forma basis, which includes R&D as part of operating expenses, operating profit was 41.1 million euros against company guidance of 38 million to 43 million euros.
NET INCOME ABOVE TARGET
Net income before goodwill amortisation was 27.2 million euros under French rules, above the company's target and helped by a lower tax rate.
It compared with a loss of 2.7 million euros in the same period a year ago.
This led Ubisoft to slightly raise its target for 2005/06 net profit before exceptionals and goodwill to above 30 million euros from an initial target of above 28 million euros.
"These are a good set of figures, with net income topping forecasts," said Fideuram Wargny analyst Jean-Michel Salvador.
By 0625 GMT, Ubisoft shares were indicated 2.5 percent higher.
Sales rose an already reported 6 percent to 538 million euros, helped by hit games like "Brother in Arms to Hill 30".
Excluding currency effects, sales rose 8 percent.
Free cash flow came in at 50.6 million euros, driven by a 33.4 million euro decline in working capital requirements.
With net debt at end-March at 81.2 million euros, the gearing ratio fell to 25 percent from 41 percent at end-March 2004.
For 2005/06, Ubisoft said it still banked on sales of around 600 million euros, a 12 percent increase at constant exchange rates, and forecast an operating income exceeding 55 million euros under French rules.
