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Argonaut warns of financial difficulties

Existing cash resources will only last a short time if new deals cannot be struck, developer warns.

Shares in British developer Argonaut Games have been suspended from trading on the London Stock Exchange this morning after the company issued a short notice to the markets indicating that it may be facing serious financial difficulties.

The brief statement indicated that Argonaut has experienced additional delays in the signing of a number of key development contracts, and can survive for only an "extremely limited period" on its existing cash reserves if the deals are not signed immediately.

The company had originally hoped to sign the contracts in question before it issued its annual results during the summer, but failed to do so, resulting in the reporting of weak financials for the period, and has now been dealt an additional blow by this continued delay.

Shares in the firm (traded under the AGT ticker) have been suspended from trading this morning, pending clarification of the financial position of the group - which is also looking into the possibility of a capital reconstruction.

"In the absence of these development agreements being immediately secured, the Group's existing cash resources will provide funding for only an extremely limited period and Argonaut may not be able to continue to trade," this morning's statement warns.

Argonaut is one of the UK's largest independent developers, and along with its headquarters in North London, operates studios in Oxford (LTStudios), Cambridge (Just Add Monsters) and Sheffield (Particle Systems) as well as the Morpheme mobile games developer.

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