(BFM Bourse) – The market is sanctioning the creator of the digital entertainment platform NetgemTV, while the gross margin has increased significantly (+11%) but less than what the group had anticipated. Netgem, however, shows its confidence for 2022.
If Netgem’s 2020 activity point had been warmly applauded by the market, the 2021 vintage received a much more cautious reception on Tuesday. In very slight decline in the morning, the title of the digital TV service provider fell sharply at the start of the afternoon in Paris (-7.9%), at 1.34 euros, i.e. an unprecedented level for nearly 3 month.
Gross margin growth has certainly reached 11% over the last twelve months to 17.5 million euros, of which 90% is recurring revenue, but this figure is slightly below the objective of growth “close to 15% “announced at the end of the first half – and also below the target revised downwards at the end of a 3rd quarter (+12%). The slowdown was therefore particularly noticeable in the last quarter, when this gross margin was still progressing at the rate of 17% at the end of September.
The general manager of the Mathias Hautefort group nevertheless believes that we should not dwell on this slowdown, which he attributes mainly to an unfavorable base effect with the delivery of a customer from December to January (for 200,000 euros) and the provisioning of a customer in the 3rd quarter, whose unpaid bills arrived later. The English operator Origin had in fact placed itself under the protection of an ad hoc agent, which had led Netgem not to recognize 500,000 euros in turnover corresponding to unpaid invoices related to income from the TV client base. and associated services until the end of September. “Origin’s customer base having been acquired by TalkTalk in October, former NetgemTV Origin subscribers will be billed in the future by Netgem to TalkTalk” specified the group in its quarterly activity update.
Objective 500,000 subscribers by the end of 2022
On the positive side, Netgem cites first the 30% growth in the total number of subscribers to its services, to 336,000, thanks to development in its main markets. In the Nordic countries (mainly in Finland), where the group supported the growth of the Elisa Viihde Premium offer, but especially in the United Kingdom with the launch of the TalkTalkTV by NetgemTV offer. The benefits of this contract obtained with one of the main British operators should generate recurring revenues, especially visible in the full year 2022, estimated the group when it signed last October.
Mathias Hautefort welcomes this. “What matters is the future growth rate of the subscriber base,” he recalls. And in this respect, Netgem wants to be particularly ambitious with a target set at more than 500,000 subscribers by the end of 2022, which would represent an increase of more than 40% in one year.
“The year 2022 promises to be growth, profitable and balanced between our different markets, due to our current portfolio of customer contracts” advances the manager. “The outsourcing of all or part of TV and video services by telecom operators is a strong and lasting trend, because it improves their financial indicators and customer satisfaction” he adds, echoing the strategic repositioning carried out by the group, from equipment vendor to service provider. “We show every day that Netgem is a credible partner in this market. We still have to accelerate commercially, endogenously and exogenously if opportunities arise” he concludes.
Quentin Soubranne – ©2022 BFM Bourse
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