Flexion Mobile: Strong getting stronger

Flexion Mobile today released a trading update, as revenue grows faster than expected. The rapid growth is according to the company due to the stronger game portfolio and of course a general upswing in the mobile games market. Compared to our previous estimate the initial growth took somewhat longer than expected during 2019 but now our conviction in the growth case going forward is strengthened. We raise our base case.

Estimate changes

With the communicated revenue of GBP 4.8 million (4.08) we estimate an EBITDA of GBP -0.13 million (-0.24). For the full financial year, we estimate revenue of GBP 21.22 million (18.37) with an EBITDA of GBP -0.4 million (-0.83).

At this point, we do not change our estimated growth trajectory in the following years or our gross margin assumptions. We estimate the higher revenue levels during the financial year 2021 and 2022 will generate a stronger EBITDA upswing. With our updated estimates we also project a stronger EBIT in the financial year 2022 of GBP 1.13 million (0.19).

As we previously communicated the stronger than expected gross margins and growth is of course good news for the financial case in Flexion Mobile. The even stronger than expected growth make us increase our base case to SEK 15 per share (13). No changes have been done in our fair value range.

Original Post: Redeye