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Do, 26. November 2020, 8:05 Uhr

Media and Games Invest

WKN: A1JGT0 / ISIN: MT0000580101

Original-Research: Media and Games Invest plc (von GBC AG):


29.10.20 11:02
dpa-AFX

^



Original-Research: Media and Games Invest plc - von GBC AG



Einstufung von GBC AG zu Media and Games Invest plc



Unternehmen: Media and Games Invest plc


ISIN: MT0000580101



Anlass der Studie: Management Interview


Letzte Ratingänderung:


Analyst: Marcel Goldmann, Cosmin Filker



Media and Games Invest (MGI) is a fast and profitable growing company in


the digital media and games sector.

The company combines organic growth


with value-added acquisitions. In the past six years, the MGI Group has


successfully acquired more than 30 companies and assets.



A few weeks ago, MGI announced the successful completion of an extensive


private placement (gross volume: approx. EUR 29.0 million) within the


framework of a dual listing on the Stockholm Stock Exchange Nasdaq Nordic


(special segment Nasdaq First North Premier Growth Market). Against this


background, we took the opportunity to interview CFO Paul Echt about this


strategic move.



GBC AG: Mr. Echt, what were the reasons for a dual listing on the Stockholm


Stock Exchange Nasdaq Nordic and what effects do you expect in terms of


trading (liquidity) and visibility of your share? Can the first positive


effects already be seen now?



Mr Echt: The answer is a resounding yes. If we fade out the first trading


week after the listing, due to exceptionally high, transaction-related


volumes of up to 5 million euros per day, and only look at the turnover


since the beginning of the second trading week, we see that the volume


averages around 1.0 million euros per day, while the trading volume for the


whole of September (before the dual listing) was still around 163,000 euros


on average. This is due to the fact that a strong gaming cluster has


developed on Nasdaq Stockholm in recent years. This includes successful


companies such as Embracer, Stillfront and Paradox, whose share prices have


risen between 230% and 1,117% in the past three years. Gaming is one of the


hottest topics on the capital market there and many investors are very


familiar with the business models and strong growth forecasts of the


market. This is true for institutional investors as well as private


investors, and our capital increase was accordingly oversubscribed almost


three times. But also internationally, such as in the UK or the USA, the


perception of MGI is increasing significantly due to the listing on Nasdaq


Nordic. This is because many investors have recognised Nasdaq Nordic as an


international marketplace for successful gaming companies.



GBC AG: The private placement raised approximately EUR 29 million in


investor funds. According to media reports, for the first time very well-


known investors from the gaming sector also participated in the capital


measure. Are further equity-based capital measures possible in the future


to further increase the company's high 'growth rate'?



Mr. Echt: Due to the dual listing on the Nasdaq, which was implemented in


parallel, we were able to attract a number of tier-one and long only


investors, as the topic of gaming is, as already mentioned, very well known


and popular on the Swedish as well as the international capital market.


Among the subscribers are also investors who have been on board since the


capital increase of 2019, but who have now significantly expanded their


holdings, which we regard as a very strong sign of confidence. No further


equity measures are currently planned. In general, however, we will not


rule out this option for the future if it makes sense and, on balance, adds


value for shareholders.



GBC AG: Your group generally follows a growth-oriented corporate strategy.


Please briefly explain your current strategic focus and what role the most


recent capital measure plays in your growth strategy?



Mr. Echt: We are a growth company and are investing accordingly to become


as large as possible as quickly as possible - without losing sight of


profitability - and are therefore focusing on growth through M&A in


addition to organic growth. In the first years between 2014 and 2017 we


have almost exclusively focused on inorganic growth. Especially in the very


dynamic and competitive gaming market, it is important to reach a critical


mass in order to benefit from economies of scale. Multiplayer games, as the


name suggests, thrive on the fact that they are played by tens of thousands


of players simultaneously. This increases the fun of the game, attracts


more players and also extends the life span of each player. In addition,


you can also publish new games more successfully if you do this on a


platform where over five million players are active every month. As already


mentioned, it is important to us that profitability is not lost and that we


also show a positive result at the end of the day. We have managed this


balancing act very well in recent years by acquiring companies and assets


that have functioning games and player communities and, after successful


integration into our platform, can continue to operate much more profitably


through synergy effects. In the same way, we will also use a large portion


of the proceeds from the current capital increase, thus creating further


substantial value for shareholders.



GBC AG: In August MGI announced convincing half-year figures for the first


six months of the 2020 financial year and at the same time raised its


previous corporate guidance. In the course of their business development so


far, the company even benefited from the Corona crisis, especially thanks


to its strong traditional business (online games). With its strong focus on


gaming and its complementary media business, will the Group also be among


the long-term beneficiaries of the corona problem?



Mr Echt: Again, a resounding yes. The containment measures in spring have


led to a significant increase in new players of up to 75% within our games.


There were many who asked us whether this was a one-off effect that did not


have a long-term impact. However, initial figures indicate a long-term


effect, as a large proportion of these players are still active today. This


is because the core of our game portfolio consists of multiplayer games.


These games are mostly free and, as already mentioned, are played by many


thousands of players at the same time. In the game the players then join


together and form guilds or clans and take part in competitions, through


which they improve their character's skills, and can also individualise


their character by purchasing so-called in-game items. The games are


therefore also a social platform in a certain way and have a very high


customer loyalty. Some of our games are over 10 years old and generate more


than 50% of their sales with players who have been in the game for more


than 5 years. So if a user decides to play one of our games, the


probability is correspondingly high that they will do so over a very long


period of time.



GBC AG: What can investors and investors expect from the MGI Group in the


current business year (outlook)?



Mr. Echt: The third quarter went well, despite the hot summer months, and


we have also made a good start in the fourth quarter. We are relaxed about


possible tightening of containment measures from an economic perspective,


as the gaming industry in general is very crisis-resistant, both in the


case of Corona and in the event of economic downturns. In the media


segment, we have learned from the experience of the spring. Here it became


clear that customers from the offline sector have reduced their budgets


considerably as a result of Corona, while customers from the online sector


have increased their budgets. Thanks to our customer base, which is


strongly focused on the online sector, we were able to come through the


crisis very well in the spring compared to many of our competitors and


continue to grow. We have taken advantage of this aspect in recent months


to focus our customer base even more strongly on the online sector and have


been able to win over some major customers and partners, such as Zynga from


the gaming industry.



GBC AG: GBC: Where do you see the MGI Group in the next three to five


years, especially in terms of business volume, major business areas and


business regions?



Mr. Echt: We want to continue to grow at an annual rate of 25%-30% in sales


over this period and achieve an EBITDA margin of 25-30%. In order to


achieve this, we will focus more on increasing the share of our organic


growth in the future. In concrete terms, this means that we will launch


more games per year, increasingly sublicense our own game IPs to partners


outside our core markets, such as Asia, and further expand our mobile


gaming business. This last point in particular holds great potential, as we


have a clear competitive advantage in user acquisition through the


development of the Media segment. However, it is clear that, in addition to


our focus on organic growth, we also want to continue to grow via M&A.



GBC: Mr Echt, thank you very much for the interview.



CONCLUSION GBC: Overall, we believe that MGI is well positioned to continue


its dynamic growth course in both growth areas gaming and media


successfully in the future. The newly acquired prominent investors from the


gaming sector also support our positive assessment of the company and the


business prospects. The financial resources raised by the company within


the scope of the dual listing form a good foundation for further growth and


also open up the opportunity to significantly increase the pace of growth


once again through targeted M&As.



Die vollständige Analyse können Sie hier downloaden:


http://www.more-ir.de/d/21775.pdf



Kontakt für Rückfragen


Jörg Grunwald


Vorstand


GBC AG


Halderstrasse 27


86150 Augsburg


0821 / 241133 0


research@gbc-ag.de


++++++++++++++++


Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:


http://www.gbc-ag.de/de/Offenlegung.htm


+++++++++++++++


Date (time) of completion of german version: 29/10/2020 (10:09 am)


Date (time) of first distribution of german version: 29/10/2020 (11:00 am)


Date (time) of completion of English version: 29/10/2020 (10:11 am)


Date (time) of first distribution of English version: 29/10/2020 (11:00 am)



-------------------übermittelt durch die EQS Group AG.-------------------




Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw.


Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung


oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.



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