Ubisoft Profits Increase, Re-Iterates Independence WishUbisoft Profits Increase, Re-Iterates Independence Wish

Officials from Ubisoft have posted details of the company’s full year earnings for the period ended March 31st. During this time operating profit increased significantly, from just €1.5 million ($1.8m) in the previous year to €41.4 million ($50.0m) in 2005. As an impressive an increase as this is, it is actually at the lower end of the company’s predictions of €40 to 45 million, under French rules (which do not list internal research and development expenses as operating expenses). Net income, the final profit figure, was €27.2 million ($32.9m) under French rules, which was above the company's target and helped by a lower tax rate. The results compare with a loss of €2.7 million ($3.3m) in the same period a year ago. Sales rose a previously reported 6 percent to €538 million ($650m). These results have led the company to raise its targets for the next financial year by €2 million, to a net profit of above €30 million ($36.3m). Sales targets remained static at around €600 million ($725m) and operating income at €55+ million ($66m). Clearly buoyed by this positive financial news, Chairman and CEO Yves Guillemot confirmed again that the company wished to remain independent and had no desire to be bought out by Electronic Arts, which currently has a 20 percent stake in the company. While outlining three possible scenarios for its future, Guillemot stated that the company plans to double in size and triple net income over the next four years. The preferred scenario for the company is to remain independent, while the second best is tying up with a media company. The third, and least agreeable, scenario was to "participate in the sector's consolidation by merging with one of the sector's players." Guillemot indicated that a merger with Electronic Arts would come under the third scenario but insisted that Ubisoft would not come cheap: "We are valued at levels below those of our rivals. There is still potential upside [for the stock]," he commented in remarks reported by Reuters. Ubisoft shares have gained 141 percent since Electronic Arts took bought a stake in the company last December.