As is traditionally the case, the first quarter of our financial year has been relatively quiet with three new PC titles and the French and Junior versions of Who Wants To Be A Millionaire? shipping in the period. The resulting sales mix for the quarter led to a reduction in turnover compared to the same period last year. Gross margin as a percentage of turnover has, however, increased by 12% in the quarter, rising from 46% in the same period last year, to 58% in the current period. This improvement is as a result of lower royalty costs and improved channel management in the period.
The effects of the cost reduction programme initiated at the end of the last financial year can already be seen in the 32% reduction in operating expenses (excluding amortisation of goodwill) in the quarter. In total, the fixed element of operating expenses (excluding amortisation of goodwill) has fallen 34% from £12.1m in the prior period, to £8.0m in the current year.
Pre amortisation of goodwill, the total operating loss from continuing activities for the quarter has fallen from £18.6m to £11.1m.
No tax credit has been provided on the loss on ordinary activities for the quarter, based on the availability of losses accumulated in prior years.
