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Eidos shares take a dive after profit warning blows circuit.

Computer games group Eidos shocked the City with a stark profit warning yesterday following disappointing sales of key products.

Profits for the year at the company, Europe's biggest games maker, which brought Lara Croft into the world would be "significantly below" last year's pounds 37.9 million, it said.

Shares took a hammering, falling nearly 30 per cent to 2,628p. Eidos stock has been a favourite among the burgeoning ranks of UK private investors, who have invested heavily in technology and Internet-related stocks and many of whom have so far enjoyed breath-taking share price rises, without the pain of a fall.

Other games stocks were little affected.

Eidos, which took over Mr Geoff Brown's Birmingham-based CentreGold operations, said Ms Croft's latest adventure, Tomb Raider - The Last Revelation and football game Championship Manager 99-00 performed well over the three months to Christmas Eve.

But sales of a clutch of other releases had been "weaker than anticipated".

The main culprits were F1 World Grand Prix and action fantasies Urban Chaos, the Nomad Soul and Abomination.

Further, a number of games were delayed from coming to market due in part to the swelling numbers of projects under development.

Market conditions were weak during the Christmas quarter, especially in France and Germany - traditionally two of Eidos' strongest territories on the continent.

Despite the warnings, Wimbledon-based Eidos said it "continues to believe" in its current strategy.

It expected to release more than 25 titles over the next year including sequels to its successful UEFA Champions League and action games Commandos, Thief, Gangsters and Final Fantasy VII.

Stockbrokers rushed to slice their profit forecasts, with Beeson Gregory cutting its estimate from pounds 54.4 million to pounds 24.1 million - a 56 per cent reduction.

The Eidos statement came hot on the heels of games retailer Electronics Boutique's depressing trading update last week.

The group, which includes the Game network of shops, said like-for-like sales in the five-week December trading period were down 18 per cent on the previous year's figures.

Electronics Boutiques' shares took a further plunge yesterday as the City frowned on the whole computer games sector.
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Author:Smith, Peter
Publication:The Birmingham Post (England)
Date:Jan 19, 2000
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