G5 Entertainment - A good report - ABG

A very solid report, sales and EBIT in line
A very solid report from G5 today. Sales SEK 364m (0% vs ABGSCe 364m and -1% vs cons 366m), EBIT SEK 48m (2% vs ABGSCe 47m and -2% vs cons 49m), Net profit SEK 46m (11% vs ABGSCe 41m). Sales in USD-terms was -7% y-o-y, in line with expectations and the underlying market in Q4. Trend look good with Sherlock performing well and Hidden City rebounding slightly, which we forecasted. Importantly, this trend seems to hold in January as well. Management guide that this new normal in Q4 should persist, with similar operational performance in 2023. Interestingly, it also expects to release a new hidden objects game in soft launch before summer. 106,000 shares was repurchased during Q4 (~1.2% of capital) and board proposed SEK 8.0/sh dividend (7.0).

No est revisions from cons
We think the Q4 run-rate is a good proxy for performance in 2023, which is relatively in line with consensus expectations. We therefore do not expect any significant changes to estimates.

Visibility for improved margins strengthened in Q4
The share has been relatively weak into numbers on fear of a weaker market. The trends look good to us however, and G5 delivered a good report in line with expectations. On the positive side also, 37% of staff is now relocated and sales volumes through the G5 store is really picking up which drives a higher margin. Conf call at 8.00 CET.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/g5-entertainment/Equity-research/2023/2/g5-entertainment---a-good-report/