7th Nov 2019. 9.00am
Regency View:
Update
Regency View:
Update
Codemasters Extends Formula 1 Contract
Gaming developer Codemasters (CDM) announced last week that it had extended its exclusive rights contract with the Formula 1 racing franchise to at least 2025.
This is very welcome news as it provides investors with a heightened level of certainty over future revenue growth of one of its most successful products.
F1’s popularity has experienced significant growth since Liberty Media’s acquisition in 2017. Social media followers have grown 193% during this period to 23.8 million making it the fasting growing major sport across social media channels.
Under the terms of the new deal, Codemasters will pay a higher minimum guarantee to F1 in respect of F1 2020, which will then increase each year during the term of the deal. In return, Codemasters will receive advertising inventory and marketing support across F1 channels, including via trackside advertising at Grands Prix and a stronger presence on F1’s fast-growing digital channels.
Codemasters CEO Frank Sagnier, commented:
“The increased size and scope of the deal reflects our common ambitions to take the business to the next level. The growing number of addressable platforms combined with increased marketing support from FOM and the continued shift to more profitable digital sales and services give us full confidence we can not only continue to thrive as the no.1 sports racing game but also as one of the top global sport gaming franchises.”
The shares have performed well since our entry at the start of the year and while recent price action has seen the shares track sideways, we believe this contract extension will see the shares kick higher once again.
CDM 1-Year Chart
Dart Continues to Fly Following Thomas Cook’s Demise
Dart Group (DTG), the package holiday provider and owner of Jet2 airlines, is now up over 90% from its September lows and the shares are on course to deliver a ninth consecutive week of gains.
In an unscheduled statement, released last month, management said:
“We have seen stronger demand for some of its products since Thomas Cook entered into compulsory liquidation last month, and expects full-year pretax-profit to exceed market expectations”.
The firm also said that it had received good levels of later season bookings with strong demand for its Flight-Only offering and Package Holiday products.
Whilst its increasingly likely that the shares will undergo some form of pullback within the next few weeks, we are more than happy to continue to hold Dart within our AIM Investor portfolio.
DTG 1-Year Chart
SDI Break Above Key Resistance
Scientific Digital Imaging (SDI), now officially called SDI Group have had a pretty stellar last month…
After management released a brief but upbeat statement in October, the shares have bounced from the area of key support that we’ve previously highlighted at 49p.
During the last week, prices have broken through key resistance at 61.5p, taking the shares to new highs.
The fact that prices are holding above resistance indicates that demand remains strong. And given the six months of consolidation which preceded this breakout, there’s plenty of scope for upside continuation.
SDI 1-Year Chart
