Galleon unlikely to achieve full year profit

Shares of aim listed entertainment media company Galleon slumped after it said delays in launching an online contract in China mean it is unlikely to deliver profit for the full year.

Galleon said it has seen a number of challenges with working with third party developers in China, and in particular, changes in personnel, technical issues, quality issues and limited resources which have resulted in unexpected delays in the delivery of games to market.

"This slippage in delivery has had a direct impact on revenues and profitability to date and compounded recently to mean it is now unlikely we can now deliver a profit for the full year," it said.

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However the group said it is confident it can return to profitability in the short term as it narrowed pre-tax losses for the six months to March 31.

Pre-tax loss narrowed to £976,000 in the six-month period from a loss of £1.78m a year earlier. Revenue rose to £4.95m from £4.89m the period in 2011. Operating loss narrowed to £895,000 from a loss of £1.76m before.

Looking ahead Galleon said the pipeline of games for the second half looks strong.

The group said it is conscious it needs to on its plans and return to profitability as soon as possible.

"We believe...we can achieve this in the short term and reduce the risk of achieving this by diversifying our revenue streams."

CJ