Gaming Innovation Group: Solid start to the year - ABG

Q1 key items are largely in line with expectations
Expect limited total cons '23e adj. EBITDA revisions
Share is trading at 8x '23e EV/EBITA


Q1 adj. EBITDA largely in line with cons expectations

GiG delivered normalised revenue of EUR 28m which is 0% vs ABGSCe 28m (3% vs cons 28m), +9% q-o-q and +49 y-o-y driven by 19% organic growth (ABGSCe 19%), coupled with contribution from the acquisitions of SportnCo and AskGamblers. For comparison, recall the trading update in the Q4’22 report which showed January revenues up 29% y-o-y, whereof 15% organic growth, hence the latter part of the quarter looks strong. On product mix, we note that Media was slightly below our expectations, as it seems like we have underestimated the World Cup contribution in the exceptionally strong Q4 Media performance when we estimated the sequential growth. However, great performance in the Platform division completely offsets it, growing 22% sequentially. Adj. EBITDA reached EUR 11.7m (-4% vs ABGSCe 12.2m and -1% vs cons 11.8m), for a normalised margin of 41.2%. However, we note that opex included EUR 0.5m in costs related to the strategic review, hence the underlying figure should be in line with our estimated EUR 12.2m, i.e., a small beat vs cons. Finally, we note that FCF ex. M&A came in at a solid EUR 8.2m, corresponding to a 70% cash conversion from adj. EBITDA.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/gaming-innovation-group/Equity-research/2023/5/gaming-innovation-group---solid-start-to-the-year/