(Boursier.com) — In copious volumes, Xilam soared 14% to 4.45 euros at the start of the session, sought after its annual accounts. Despite a sharp drop in 2024 turnover forecast, the group maintains its forecast for current operating income close to balance.
The landing of the 2023 financial year is better than expected, particularly in terms of cash generation induced by a mix largely oriented towards service, explains TP ICAP Midcap. The broker does not currently have any constitutive elements for the reconstruction of the Xilam pipe but the group is working to materialize its cost saving plan and to refocus its strategy on the major European chains, the conquest of teen-adult segment and the production of pre-financed feature film formats.
The short & medium-term warning issued in 2023 leads to questions about Xilam’s future growth profile for reasons of mix, new productions having represented around 50-60% of turnover these three recent years, 70% generated by American platforms and catalog revenues also being dependent on the platforms.
Achieving positive profitability and rebuilding the order book in 2024 will be divisive for the future issue. The net book value of the catalog of around 48 ME at the end of the 2023 financial year, generating around 10 ME in revenue/year on cycle average, supports the valuation and confers possible speculative interest to the file. Following the integration of 2023 results and the updating of its model, the analyst reiterates its ‘keep’ recommendation with a target reduced from 3.8 to 3.4 euros.
Oddo BHF does not expect any specific catalyst in the short term, with 2024 being a year of transition for Xilam (refocusing TV channels, teen-adult segment) in a context where platform investments in kids entertainment will remain sluggish . The negative newsflow of recent months seems well integrated into the price but it will undoubtedly need much better momentum before Xilam regains investor interest. The analyst maintains his ‘neutral’ opinion on the stock and reduces his target price from 5.5 to 4.3 euros following the update of his model.
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