PARIS, Nov 24 (Reuters) - Europe's largest video games maker Infogrames posted a smaller-than-expected operating loss for the first half of its 2004/05 year on Wednesday and unveiled a much-awaited plan to pay back its 2005 convertible bond.
Infogrames (IFOE.PA: Quote, Profile, Research) , which banks on a strong games line-up for the second half, predicted it would post an operating profit of between 20 and 30 million euros for the full year, repeating that sales growth for the year would be moderate.
"Games like Dragon Ball Z will have strong sales for Christmas," Chief Executive Bruno Bonnell told Reuters in an interview.
Bonnell also said that Infogrames recently sold the franchise for the game "Civilization," making a capital gain of 15.5 million euros, which should help second-half accounts.
FIRST-HALF OPERATING LOSS
Infogrames posted a first-half operating loss of 3.5 million euros against a profit of 1.7 million a year-ago, as sales fell an already reported 12 percent to 277 million euros. Losses at its U.S. operations also weighed.
Its net loss widened to 42.2 million euros from 9.8 million euros, after a one-time loss of 16.7 million euros partly tied to its Nexgen Capital transaction, the statement said.
Seven analysts polled by Reuters expected on average an operating loss of 4.4 million euros. Estimates had ranged from a loss of 11 million euros to a profit of 1.3 million euros.
Estimates for less-closely watched net income were a loss of 25-35 million euros.
Infogrames fiscal year ends in March.
2005 BOND BUY-BACK PLAN
Infogrames recently announced it had obtained short-term financing from a banking pool that should help it avoid a liquidity crisis during the Christmas season.
But analysts' main concerns had been how Infogrames planned to repay 117 million euros in convertible bonds due in July 2005.
These concerns and doubts about Infogrames's ability to generate enough cash to remain a leader in an industry where development costs have soared, have been weighing on its shares that are down 65 percent so far this year.
Infogrames on Wednesday unveiled a refinancing plan for the 2005 convertible bond that Bonnell described as "complex" but "balanced for the company, its shareholders and bondholders." If approved by regulatory authorities, bond and shareholders, the plan should be implemented in January 2005.
It entails a bonus issue of warrants giving their holders the right to buy new Infogrames shares. Proceeds from the exercise of the warrants will then be used to repay the 2005 convertible bonds.
The bonds not tendered under the offer will benefit from an improved conversion ratio but their maturity will be extended and the reimbursement premium scrapped, the statement said.
If the operation is successful, the group's gearing ratio or its debt to equity ratio will fall below 1.
If 100 percent of the bonds are tendered, the dilutive impact for Infogrames shareholders will range from zero to 37 percent, depending on how many warrants are exercised.
The terms of the warrants issue are one warrant for two existing Infogrames shares.
Each warrant gives its holder the right to subscribe to a new Infogrames share at a price of 1.11 euros. Infogrames will offer to buy back the 2005 bonds at 35 euros each, paying 60 percent in cash if all the warrants are fully exercised.
Infogrames will finance the remaining 40 percent through the issue of a new bond repayable within 3 years and backed by shares in Infogrames's U.S. unit Atari Inc (ATAR.O: Quote, Profile, Research)
That new bond has a final maturity of March 15, 2008, and carries an annual coupon of 6 percent.
Most of the desktop computers in the UK's Department for Work and Pensions were paralysed for four days on Monday, when a failed upgrade took them offline. The outage, covering 75-80 per cent of the DWP's 80,000 PCs, is one of the largest in the UK Government's not entirely impressive IT history.
And possibly one of the most costly. According to staff reports the outage occurred on Monday afternoon, disconnecting staff email, benefits processing and Internet and intranet connectivity. According to one, a limited network upgrade from Windows 2000 to Windows XP was taking place, but instead of this taking place on only a small number of the target machines, all the clients connected to the network received a partial, but fatal, 'upgrade.'
Another source says that the DWP was trialing Windows XP on a small number ("about seven") of machines. "EDS were going to apply a patch to these, unfortunately the request was made to apply it live and it was rolled out across the estate, which hit around 80 per cent of the Win2k desktops. This patch caused the desktops to BSOD and made recovery rather tricky as they couldn't boot to pick any further patches or recalls. I gather that MS consultants have been flown in from the US to clear up the mess." EDS is also thought to be flying in fire brigades.
If these claims are true the DWP could face grave difficulties in rolling all of its machines back to their previous, working state. Staff from Microsoft and EDS are reported to have been working around the clock to dig the Department out of the pit, while speaking on the Today programme this morning a spokeswoman amusingly insisted that the Department's systems had not in fact fallen over. They were working, it was merely the case that "80 per cent of desktop computers are not connecting through to the mainframe systems."
So that's cleared that up then. She added that the emergency payments system was "working perfectly." The emergency system appears to have kicked in on Wednesday, and the Department was preparing a press release on the matter yesterday. No sign of it this morning, yet.
Reports coming in this morning however suggest that at least some of the DWP's systems are coming back online. ®
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PARIS, Nov 24 (Reuters) - Europe's largest video games maker Infogrames posted a smaller-than-expected operating loss for the first half of its 2004/05 year on Wednesday and unveiled a much-awaited plan to pay back its 2005 convertible bond. Infogrames (IFOE.PA: Quote, Profile, Research) , which banks on a strong games line-up for the second half, predicted it would post an operating profit of between 20 and 30 million euros for the full year, repeating that sales growth for the year would be moderate. "Games like Dragon Ball Z will have strong sales for Christmas," Chief Executive Bruno Bonnell told Reuters in an interview. Bonnell also said that Infogrames recently sold the franchise for the game "Civilization," making a capital gain of 15.5 million euros, which should help second-half accounts. FIRST-HALF OPERATING LOSS Infogrames posted a first-half operating loss of 3.5 million euros against a profit of 1.7 million a year-ago, as sales fell an already reported 12 percent to 277 million euros. Losses at its U.S. operations also weighed. Its net loss widened to 42.2 million euros from 9.8 million euros, after a one-time loss of 16.7 million euros partly tied to its Nexgen Capital transaction, the statement said. Seven analysts polled by Reuters expected on average an operating loss of 4.4 million euros. Estimates had ranged from a loss of 11 million euros to a profit of 1.3 million euros. Estimates for less-closely watched net income were a loss of 25-35 million euros. Infogrames fiscal year ends in March. 2005 BOND BUY-BACK PLAN Infogrames recently announced it had obtained short-term financing from a banking pool that should help it avoid a liquidity crisis during the Christmas season. But analysts' main concerns had been how Infogrames planned to repay 117 million euros in convertible bonds due in July 2005. These concerns and doubts about Infogrames's ability to generate enough cash to remain a leader in an industry where development costs have soared, have been weighing on its shares that are down 65 percent so far this year. Infogrames on Wednesday unveiled a refinancing plan for the 2005 convertible bond that Bonnell described as "complex" but "balanced for the company, its shareholders and bondholders." If approved by regulatory authorities, bond and shareholders, the plan should be implemented in January 2005. It entails a bonus issue of warrants giving their holders the right to buy new Infogrames shares. Proceeds from the exercise of the warrants will then be used to repay the 2005 convertible bonds. The bonds not tendered under the offer will benefit from an improved conversion ratio but their maturity will be extended and the reimbursement premium scrapped, the statement said. If the operation is successful, the group's gearing ratio or its debt to equity ratio will fall below 1. If 100 percent of the bonds are tendered, the dilutive impact for Infogrames shareholders will range from zero to 37 percent, depending on how many warrants are exercised. The terms of the warrants issue are one warrant for two existing Infogrames shares. Each warrant gives its holder the right to subscribe to a new Infogrames share at a price of 1.11 euros. Infogrames will offer to buy back the 2005 bonds at 35 euros each, paying 60 percent in cash if all the warrants are fully exercised. Infogrames will finance the remaining 40 percent through the issue of a new bond repayable within 3 years and backed by shares in Infogrames's U.S. unit Atari Inc (ATAR.O: Quote, Profile, Research) That new bond has a final maturity of March 15, 2008, and carries an annual coupon of 6 percent.
Most of the desktop computers in the UK's Department for Work and Pensions were paralysed for four days on Monday, when a failed upgrade took them offline. The outage, covering 75-80 per cent of the DWP's 80,000 PCs, is one of the largest in the UK Government's not entirely impressive IT history.
And possibly one of the most costly. According to staff reports the outage occurred on Monday afternoon, disconnecting staff email, benefits processing and Internet and intranet connectivity. According to one, a limited network upgrade from Windows 2000 to Windows XP was taking place, but instead of this taking place on only a small number of the target machines, all the clients connected to the network received a partial, but fatal, 'upgrade.'
Another source says that the DWP was trialing Windows XP on a small number ("about seven") of machines. "EDS were going to apply a patch to these, unfortunately the request was made to apply it live and it was rolled out across the estate, which hit around 80 per cent of the Win2k desktops. This patch caused the desktops to BSOD and made recovery rather tricky as they couldn't boot to pick any further patches or recalls. I gather that MS consultants have been flown in from the US to clear up the mess." EDS is also thought to be flying in fire brigades.
If these claims are true the DWP could face grave difficulties in rolling all of its machines back to their previous, working state. Staff from Microsoft and EDS are reported to have been working around the clock to dig the Department out of the pit, while speaking on the Today programme this morning a spokeswoman amusingly insisted that the Department's systems had not in fact fallen over. They were working, it was merely the case that "80 per cent of desktop computers are not connecting through to the mainframe systems."
So that's cleared that up then. She added that the emergency payments system was "working perfectly." The emergency system appears to have kicked in on Wednesday, and the Department was preparing a press release on the matter yesterday. No sign of it this morning, yet.
Reports coming in this morning however suggest that at least some of the DWP's systems are coming back online. ®
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World Of Warcraft Open Beta to Start Next Week -Millions slated to lose G/Fs
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