Focus Entertainment will release its annual results on Thursday. These are the prospects that will be the most scrutinized by analysts, in particular those of TP-Icap Midcap. They are very confident for the years to come.
A Confident Analyst Firm As Focus Entertainment Annuals Approach | Photo credits: Focus Home Interactive
It is not its results, but rather its growth prospects that investors are waiting for. The number two in video games in France, Focus Entertainment, will publish its annual results on Thursday. First figures have already been put forward by the company, so they should not come as a surprise. The gross operating surplus (Ebitda) has already been announced, at the end of last April, around 40 million euros, i.e. a margin of 28% compared to a turnover of 142.6 million .
According to analysts at TP-Icap Midcap, it is therefore the presentation of forecasts for the coming years that will attract more attention. The coming quarters will be busy and the company’s outlook should “enable the market to materialize the new cycle of strong growth” that they are waiting for. Several factors explain this firm’s optimism.
Result of investments
First point, the commercial dynamic, which promises to be strong. The main title of the French video game specialist AA (the second category of games in terms of budget), Requiem, is none other than the continuation of a precedent, which had been a great success. Other games in Focus Entertainment’s portfolio have also been well received by the public. The technical and commercial risks therefore appear to be limited. Side margins. TP Icap Midcap considers that the group will begin to reap the benefits of its investments: taking on projects upstream, owning brands, projects carried out 100% internally, or games in external collaboration. Elements that will promote the creation of added value and improved profitability.
In the endthe broker is counting on a scenario that it considers relatively “ conservative »: an annual growth in turnover of 37% for the next two financial years as well as a quadrupling of the operating result which will be published this week. Forecasts that remain very optimistic anyway, to which are added recurring rumors of consolidation in the sector. The video game environment is conducive to this, recalls Charles-Louis Planade, in charge of the file within the research office. Two elements caught his attention: the arrival as chairman of the board of directors of Frank Sagnier, former CEO of the British video game publisher Codemasters; the increase in the capital of the FLCP investment fund, via takeovers, which has now become the company’s majority shareholder. Two factors that suggest to the firm that the “Young Focus will gain a lot in size and maturity before his probable marriage”. In any case, it reiterates its buy recommendation and targets a target price of 79 euros.
NH