DIGITAL Animations, the
computer games company which is producing special effects for US television advertisements and targeting the movie industry, broke into the black in its latest six months.
The Lanarkshire-based outfit made a pre-tax profit of #13,378 in the second half of its financial year to March 31. Its full-year loss narrowed by 8.9% to #595,310 before tax. Turnover jumped from #30,355 to #619,256.
Digital Animations was able to recognise advance royalties from games publisher Eidos, for battle game Steel Legions, in its profit and loss account during the
second half.
This had previously had to be treated as deferred income pending delivery of Steel Legions but Digital Animations has bought back the rights to this game, at a cost ''significantly less'' than the advance royalties from Eidos.
The Alternative Investment Market (AIM)-listed Digital
Animations' stockbroker, Tilney, expects it to make pre-tax profits of up to #300,000 in its current financial year.
Digital Animations has four games under development including Steel Legions, which is now the subject of talks with another publisher.
The company said it was concluding a pre-publishing agreement for one of the three newer games with a major games publisher. Tilney's Peter Gardiner said this related to a game called ''TMmy''.
Chairman Derek Douglas highlighted Digital Animations' progress in securing a regular income stream, rather than relying solely on its games being big hits.
The company said its DigiMania subsidiary, launched last summer, had a full order book for three months.
DigiMania has executed full motion video sequences for Eidos's Joint Strike Fighter and Deathtrap Dungeon computer games and for Telstar's Siege offering. Such sequences generally outline the game's plot.
Douglas said: ''We are now getting other games companies from throughout Europe coming to us and asking us to do their full motion video work.''
DigiMania has already carried out similar work for two television adverts being screened on US television and Douglas remains hopeful of securing a contract to produce computer-generated imagery and digital effects for a major movie.
Claiming Digital Animations could produce the type of computer-generated imagery seen in Star Trek and Spielberg's Jurassic Park dinosaur movie, Douglas said: ''We are in the process of chasing some film deals.''
Asked when he hoped to see a result, he replied: ''I think we are getting pretty close . . . It would be good to get it.''
The company also believes the emergence of digital television will fuel demand for animated programming.
Gardiner said of Digital
Animations: ''It is quite an interesting situation. They have had a few delays with their products in the past. They have now actually created a much more broadly-based business with this DigiMania subsidiary and they look as if things could go quite well for them in the future.''
Douglas said: ''Last year, we kept our head down. We have been developing the business. We are now beginning to see the fruits of our labour coming through.''
No dividend will be paid.
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