MGI - Media and Games Invest - Sharpening focus in digital advertising

MGI – Media and Games Invest (MGI) is increasingly focused on its vertically integrated multichannel advertising platform, retaining a core of games that serve to generate first-party data and provide an efficient sandpit for developing new services. FY22 results were at the top end of guidance (as revised upwards at Q322), despite the headwind of lower market advertising rates. This scenario has continued in Q123, and we have taken a cautionary approach to our revised FY23 forecasts, which will

Media and Games Invest - Ad tech credentials boosted by Google partnership

Media and Games Invest’s (MGI’s) media operation, Verve Group, has been made a partner on Google’s Open Bidding platform. This gives it far wider reach on both the demand (advertiser) side and supply (publisher) side, accessing inventory (advertising opportunities) via real-time auctions. MGI’s Q3 revenue growth was strong at 39% (23% organic) and FY22 guidance was lifted, with margin pressure from market conditions resulting in unchanged EBITDA guidance. We have adjusted our forecasts according

Media and Games Invest - Swedish re-domicile going ahead

Media and Games Invest’s (MGI’s) recent EGM confirmed that the group can now proceed with its relocation to Sweden, set for January 2023, and the associated improvements to corporate governance, which should remove potential barriers to investment. Q322 results are scheduled for 15 November and, as with Q222, we would expect there to be a benefit from new publishers coming on board with an offset from a more testing economic backdrop. The inclusion of recent acquisition Dataseat from July will b

Media and Games Invest - Focus on ad software platform

Media and Games Invest (MGI) is grasping an opportunity to leverage its extensive first-party data resource, generated through its games content, to build out a full stack advertising software platform that can offer good returns to both advertisers and publishers. Changes to the advertising ecosystem to protect user privacy are prompting a strategic shift to first-party data, with added benefits of improved targeting and transparency. MGI has already assembled a strong offering on the supply si

Media and Games Invest - Acquisition of AxesInMotion

MGI has announced the acquisition of AxesInMotion, a Spanish free-to-play mobile games developer of racing games for €55m in cash up-front, plus up to €110m in earn-out over the three years to 2024. The up-front consideration represents an EV/EBITDA multiple of 9.1x and based on the earn-out, the final EV/EBITDA multiple will fall between 6.8 and 9.1x. Through its integrated games and adtech business, MGI has identified significant synergies from the acquisition, with the potential to triple rev

Media and Games Invest - Adtech player with first-party content

MGI continued to perform strongly in FY21, beating initial guidance and ending up at the top end of the revised guidance. FY21 results showed revenue growth of 80% y-o-y to €252m, with 38% organic growth. Adjusted EBITDA increased 144% y-o-y to €71m, with margins of 28%. In June 2021, the acquisition of Smaato marked the group’s shift to become media led, with MGI evolving to become a content-owning, games-focused adtech platform, with closest peers including Applovin, Azerion and IronSource. Fu

Media and Games Invest - Q321 results, 41% y-o-y organic growth

Media and Games Invest (MGI) showed continued strong growth in Q321, with improving margins as the business scaled. Q321 net revenues rose by 80% to €62.9m, with 41% year-on-year organic revenue growth. Benefiting from operating leverage, adjusted EBITDA tripled to €19.0m as margins rose to 30% (Q320: 18%). In Q321, MGI placed a further €80m bond and, at 30 September 2021, had net interest-bearing debt of €172.8m, with leverage of 3.0x (2.5x on a pro forma basis). Management guidance is for FY21

Media and Games Invest - Focus moves from games to media

Both organic and M&A-driven growth were evident in H121, as net revenues rose 93% to €109.0m, with 36% organic revenue growth year-on-year in Q221, and adjusted EBITDA increased by 127% to €28.7m. Having completed the KingsIsle transaction, in January 2021, to bolster the games division, Media and Games Invest (MGI) announced a second major deal in June 2021, the €140m acquisition of Smaato, a mobile-first adtech platform to drive the growth of MGI’s synergistic media business. This deal marks t

Media and Games Invest - Acquisition of Smaato and updated guidance

Following the KingsIsle transaction in January 2021, Media and Games Invest (MGI) has announced a second transformational deal – the cash acquisition of Smaato (a mobile-first adtech platform) for €140m, 10.7x FY21e EBITDA. The transaction adds scale to MGI’s existing adtech platform, Verve, and brings new capabilities, particularly in mobile web and web programmatic advertising. Smaato’s adj. EBITDA margin (FY20: 25%) will significantly strengthen Verve’s margins (FY20: 9%). Management has rais

Media and Games Invest - Full steam ahead, with two M&A deals in Q121

MGI’s Q121 results showed an increasing benefit from the combination of media and games despite the easing impact of lockdown (higher margins, 38% organic growth), together with a significant contribution from the acquisitions of KingsIsle and LKQD (58% M&A-driven growth), delivering revenue growth of 96% y-o-y. Net interest-bearing debt increased to €97.6m at 31 March 2021 after MGI completed a €40m bond tap issue in March, sustainable as Q121 adj. EBITDA rose 127% y-o-y to €13.5m. Net debt/adj

Media and Games Invest - Strong momentum carrying into FY21

Media and Games Invest (MGI) reported FY20 revenues of €140.2m and adjusted EBITDA of €29.1m, ending the year strongly to deliver 67% y o y revenue growth. In H220, MGI completed a dual listing and share placing (for €29m) on Nasdaq First North Premier and issued an €80m bond. MGI has carried its momentum into FY21, with the transformational acquisition of KingsIsle Entertainment (Wizard101, Pirate101) for US$126m in cash upfront, up to US$210m including earn-out. The acquisition was funded by t

Media and Games Invest - Acquisition of KingsIsle Entertainment

Media and Games Invest (MGI) has announced the acquisition of US-based KingsIsle (online PC games Pirate101, Wizard101) for a cash consideration of US$126m plus a cash earn-out of up to US$84m (up to US$210m in total). FY21 guidance for KingsIsle is for revenues of US$32m and adj. EBITDA of US$21m (68% adj. EBITDA margin). The fixed cash consideration represents an EV/adj. EBITDA multiple of 6.0x, with a range of 5.8–7.3x including the earn-out. This is a major, transformative acquisition for MG

Media and Games Invest - Equity+bond placings, FY20 guidance raised

Since listing on Scale in July 2020, Media and Games Invest (MGI) has completed a dual listing and share placing on Nasdaq First North and issued a €80m bond. In Q320, it reported 29% l-f-l revenue growth with revenues of €35.0m and adjusted EBITDA of €6.4m, supported by 16% organic growth year to date in the games portfolio. Adjusted EBITDA margins fell from 22% in H120 to 18% in Q320, reflecting a changed business mix (with increased digital media and ad tech revenues). Due to the strong growt

Media and Games Invest - Placing and dual listing in Stockholm

Media and Games Invest (MGI) has successfully completed its placing, announced on 29 September 2020, issuing 25m new shares at a price per share of SEK12.00 (€1.14/share) raising proceeds of SEK300m (c €29m). The placing price represents a c 10% discount to the two-day volume weighted average price. It increases the number of shares in issue by c 21% to 117.1m. Gross proceeds from the placing will be used to finance acquisitions of new franchises, game publishers and development studios, as well

Hybridan Small Cap Feast - 21 Feb 23

21 February 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objec

Hybridan Small Cap Feast - 06 Mar 23

6 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objective

New Forecasts: breaking through

With FY22 in line and no changes to our existing FY23 forecasts, our focus is on the introduction of new forecasts for FY24 and FY25. We model Clareti recurring revenue growth of 17% and 18% resp. With Clareti having broken through to positive cash EBITDA for the first time in its history in FY22, we expect operating leverage to drive significant margin expansion over the next three years and beyond (Gresham guides to 40% of ARR dropping through to cash EBITDA). We model cash EBITDA margins of 1

Morning Note – 7 March 2023

Hybridan Small Cap Feast 08/03/22

What’s cooking in the IPO kitchen?** Fadel Partners, a developer of cloud based brand compliance and rights and royalty management software, working with some of the world's leading licensors and licensees across media, entertainment, publishing, consumer brands and hi-tech/gaming companies intends to join the AIM market. FADEL has two solutions, being IPM Suite and Brand Vision. Expected Admission date is late March 2023. Onward Opportunities Limited intends to join the AIM market. The Company'

Accretive bolt-on M&A

Microlise is making its first deployment of funds raised at IPO with the £2.1m cash acquisition of UK Transportation Management System vendor Vita Software. Vita offers complementary upstream SaaS software with strengths in the area of order management, which feeds into Microlises best-in-class journey execution solutions. Vita has a long history of uninterrupted profits and cash growth and is being acquired on approximately 4x revenues and 8x EBITDA. As such the acquisition will be immediately

NTU update and change of reporting date

We learn today that Tribal has received notification that NTU has terminated its contract and reserved its rights to claim damages. Tribal meanwhile rejects this right to terminate and is considering its next steps. Furthermore - to accommodate this update, the company now expects to report results on 24th March. We therefore consider it is most appropriate to temporarily withdraw forecasts until we regain clarity over this situation and the most likely financial impact.

SHORE CAPITAL - FDM (FDM) - House Stock at 854p - Impressive again, and planning ahead

Hybridan Small Cap Feast - 21 Mar 23

21 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 13 Mar 23

13 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 20 Mar 23

20 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

SHORE CAPITAL - FireAngel Safety Technology Group (FA, House Stock at 10p)

Morning Note – 26 January 2023

Hybridan Small Cap Feast - 16 Mar 23

16 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Cordel Group plc (CRDL LN) - Game changing contract award

Cordel has been awarded a significant contract with Amtrak, the national passenger rail company of the USA. The Group will provide its Artificial Intelligence and data analytics services in a six-and-a-half-year contract, valued at $6.7m, with $3m of revenue expected to be recorded in the first twelve months. This contract was won in competition with high profile rivals, and we understand the award was made on technical competence rather than price. Much of the cost to support the early-stage ra