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Zattikka

  • BY: Andrew Hore |
  • POSTED: 09/07/2013 |

Social internet games developer Zattikka says that trading was weak in June and its 2013 figures will be well below expectations leaving the company with a lack of financial resources to move the group forward.

The subscriber numbers for Hattrick are lower than hoped. There has been a delay to the release of game Arena of Heroes and a need to update the content of Legacy of a Thousand Suns. This has hampered cash flow for a business that is already short of cash.

Last month, the loss-making company’s loan note holders agreed to extend the maturity date to 16 October 2014. These loan notes total $11.9m. The loan notes relate to three acquisitions. If Zattika redeems 50% of certain loan notes by November then one-quarter will convert into shares and the remaining one-quarter into new loan notes. A third set of loan notes in issue have different terms. If one-fifth are redeemed than the rest convert into shares. Zattikka also secured a £1m ($1.6m) working capital facility, secured on the company’s assets, from Barclays.

Management is trying to negotiate with the loan note holders so that it can reduce this liability. It also wants to write-off £275,000 of interest that is owed on the loan notes.

There was $950,000 in the bank at the end of June 2013.

At 29p, the share price did not have time to react to the trading statement. Zattikka is valued at £6.44m. Zattikka raised £9.5m net at 100p a share when it joined Aim on 16 April and most of that cash went on acquisitions.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFJune2013_45.pdf

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