Flotation will value Centregold at 50m pounds

CENTREGOLD, the publisher and distributor of computer games, is coming to the stock market via a placing and intermediaries offer valuing it at pounds 50.3m, writes Neil Thapar.

Smith New Court, which is sponsoring the flotation, is placing 12 million shares at 125p each with institutional investors. Another 8.6 million are being offered to the public through stockbrokers.

The company creates games concepts and buys rights to games for use on personal computers and the Sega and Nintendo entertainments systems. The development and manufacture of the games is subcontracted but controlled and monitored by its principal subsidiary, US Gold.

Taxable profits have grown from pounds 1.31m in 1991 to pounds 2.7m for the year ended 31 July on sales up from pounds 38m to almost pounds 68m.

Operating profits from the games publishing side have improved from pounds 454,000 in 1991 to pounds 2.1m, while distribution profits have fallen from pounds 988,000 to pounds 854,000 over the same period.

Although it is not making a profit forecast for the current year, the board said that trading in the first two months had been 'satisfactory' ahead of the busy Christmas trading season.

Centregold believes it is well positioned for a boom in the computer games market in US and Europe.

The shares are being priced at 22 times historic earnings. The offer closes on 22 October.