November 21st, 2019 | 20:57 CET
Media and Games Invest plc - steady growth with increasing number of users
Table of contents:
Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
Daily access to customers
Most of the consolidated revenue is attributable to gamigo's free-to-play games, where users can purchase virtual items for a more intense or successful gaming experience. Every day, the group registers the activities of more than 600,000 users. More than 50% of core game revenues are generated by users who have been on the platform for more than five years.
Therefore, gamigo video games usually have a long lifespan and customer loyalty is high. Since the first half of 2019, the Digital Media division has been further expanded through the acquisition of online advertisers ReachHero, Applift and PubNative.
Intangible assets increase
The gamigo AG brand includes titles such as Fiesta, Desert Operations and Trove, which have a long service life and a high conversion rate for customers who have to pay users. The latter is an important figure in relation to free-to-play games, in which revenues are generated from in-game sales of virtual objects and microtransactions.
In October 2018, gamigo initially acquired the assets of Trion Worlds Inc. and the casual games publisher WildTangent Inc. in order to expand its business in the high-volume and highly dynamic US market. As is customary with a technology company, the acquisitions led to a sharp increase in intangible assets, which increased from EUR 18.13 million to EUR 38.84 million by the end of 2018 compared with the previous year.
EBITDA margin increased
Integrations and synergy effects led to higher profitability for gamigo AG in the first six months of 2019. According to GBC Research, an important key figure was the EBITDA margin, which rose from 24.3% to 29.3% in the first half of 2019 compared with the previous year.
To finance growth, bonds with an outstanding volume of around EUR 55 million were issued: a) EUR 50 million at gamigo level with a coupon of 7.75% above the 3-month Euribor; b) EUR 5 million at MGI level with a coupon of 7.00%. However, the acquisition costs of the two US transactions could be financed with the clearly positive operating cash flow e.g. in 2018 of around EUR 10.5 million.
Revenue per customer increases
In the second quarter of 2019, gamigo AG recorded an increase in active users per month of 149% from 0.5 million to 1.3 million, and at the same time an increase in average monthly expenditure per player of 1.1% to EUR 46.1.
The experts at GBC forecast revenues of EUR 74.46 million for the Media and Games Group in 2019 and EUR 90.96 million for 2020. They also expect a gradual improvement in profitability. As part of their DCF valuation model, they have calculated a price target of EUR 1.90 and issued a BUY rating.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.
Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.