CentreGold picks up Core

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CentreGold, the computer game distributor and publisher, is buying Core, a game developer, for pounds 5.34m, writes Gail Counsell.

The deal will allow CentreGold to originate its own games. Until now it has concentrated on publishing games developed by other companies.

Derby-based Core employs 34 programmers and designers, and produces games for arcades, personal computers and game machines.

CentreGold, which yesterday announced pre-tax profits for the year ended July up 48 per cent to pounds 4m, is paying pounds 2.94m in cash plus 2.7 million shares, a multiple of about 18 times post-tax earnings.

In the year to July Core had sales of pounds 4.7m and made pre- tax profits of pounds 330,130 - down from pounds 569,444 the year before, partly because of a pounds 105,000 one-off pension contribution.

Geoff Brown, CentreGold's chief executive, said the group would be able to exploit Core's products and brand name more effectively and that Core should be a significant contributor to profits next year.

'They have nine products they are developing, but only for a limited number of formats. We will expand the formats. Also they license product into the US; we will publish it ourself, which is much more profitable.'

CentreGold has had a rough ride since coming to the market a year ago. It was floated at 125p in October 1993 and the price peaked at 169p at the end of November. It has since fallen steadily, underperforming the smaller companies index by 28 per cent. The shares closed up 16p at 105p.