Original-Research: Media and Games Invest SE (von GBC AG): BUY
Source: EQSClassification of
Company
Reason for the research: Research study (Anno)
Recommendation: BUY
Target price:
Last rating change:
Analyst:
Financial year 2023 with solid operating performance finalised; Return to
organic growth is expected for the 2024 financial year; Expansion of the
digital advertising platform business should enable significantly
profitable growth in future; Target price: € 4.50 (previously: € 4.50);
Rating: BUY
According to its published business figures, the
MGI achieved growth at all earnings levels, primarily due to the
revaluation of the AxesInMotion earn-out payment liability (positive
one-off effect of € 62.76 million). Accordingly, EBITDA increased
dynamically by 51.6% to € 128.46 million (PY: € 84.75 million) compared to
the previous year. Adjusted for special effects (e.g. M&A and restructuring
costs or revaluations of balance sheet items), adjusted EBITDA (Adj.
EBITDA) totalled € 95.20 million, which was slightly above the previous
year's level (PY: € 93.20 million). The adjusted EBITDA margin (Adj. EBITDA
margin) also increased to 29.6% (PY: 28.7%). This increase in profitability
reflected the first positive effects of the cost-cutting programme
initiated last year, which should enable annual cost savings of around €
10.0 million once successfully implemented. Accordingly, the adjusted
earnings guidance (adjusted EBITDA: € 93.0 million) and our earnings
estimate (adjusted EBITDA: € 93.07 million) were exceeded.
In view of a strong fourth quarter (organic growth Q4 2023: 16.0%) and an
even stronger performance in the first quarter (organic growth Q1 2024:
21.0%), MGI's management is positive about the current financial year 2024
and expects double-digit growth and an improvement in the earnings
situation. Based on the recent concretisation of the guidance with the
publication of the Q1 business figures, MGI now expects sales revenues in a
range of € 350.0 million to € 370.0 million and an adjusted EBITDA (Adj.
EBITDA) of between € 100.0 million and € 110.0 million.
As part of the publication of our research study on the preliminary annual
results for 2023, we adjusted our previous sales and earnings forecasts
upwards due to the positive outlook, the increased (organic) growth
momentum and the expected recovery of the advertising market. In view of
their strong Q1 performance, their sustained high growth momentum and the
confirmation of the positive outlook, we are confirming our previous sales
and earnings estimates for the current financial year and subsequent years.
Accordingly, we continue to expect sales of € 352.18 million and EBITDA of
€ 100.08 million for the current financial year 2024. For the subsequent
financial years 2025 and 2026, we expect sales (EBITDA) of € 389.51 million
(€ 113.35 million) and € 437.03 million (€ 130.67 million) respectively.
MGI recently announced its intention to change the company name to Verve.
The media business is already operating under this name. The name change
marks the successful completion of MGI's transformation into a leading
digital media company. At the same time, plans were announced to expand the
Board by one person and to appoint two new Board members with proven media
expertise.
Overall, the
Based on our unchanged forecasts for the current financial year 2024 and
the following years, we have maintained our previous price target of € 4.50
(previously: € 4.50). In view of the current share price level, we
therefore continue to assign a 'BUY' rating and see significant upside
potential in the MGI share. The results of our peer group analysis (see p.
20) also support our assessment of the attractiveness and upside potential
of MGI shares.
You can download the research here:
http://www.more-ir.de/d/29777.pdf
Contact for questions
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Date (time) of completion:
-------------------transmitted by EQS Group AG.-------------------
The issuer is solely responsible for the content of this research. The result of this research does not constitute investment advice or an invitation to conclude certain stock exchange transactions.