Last close As at 05/08/2026
PLN2.58
▲ 0.08 (3.20%)
Market capitalisation
PLN472m
Research: TMT
CI Games’ Q123 results were robust, given that revenue continues to be driven by its back catalogue as we await the release of its next headline game, Lords of the Fallen (LotF), which has now been confirmed for 13 October 2023. The group continues to generate positive EBITDA, despite a significant increase in marketing costs related to LotF and other operating expenses tied to its strategic pillars. Lead indicators are encouraging for LotF and momentum could continue to build with five to six major marketing beats planned before its launch. The group’s cash runway remains well supported following a PLN15.6m debt increase in the quarter.
Written by
CI Games |
Encouraging lead indicators and a robust Q1 |
Q123 results |
TMT |
6 June 2023 |
Share price performance
Business description
Analysts
CI Games is a research client of Edison Investment Research Limited |
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CI Games’ Q123 results were robust, given that revenue continues to be driven by its back catalogue as we await the release of its next headline game, Lords of the Fallen (LotF), which has now been confirmed for 13 October 2023. The group continues to generate positive EBITDA, despite a significant increase in marketing costs related to LotF and other operating expenses tied to its strategic pillars. Lead indicators are encouraging for LotF and momentum could continue to build with five to six major marketing beats planned before its launch. The group’s cash runway remains well supported following a PLN15.6m debt increase in the quarter.
Year end |
Revenue* (PLNm) |
EBITDA* (PLNm) |
PBT** |
EPS** |
EV/EBITDA |
P/E |
12/20 |
46.0 |
27.8 |
8.5 |
0.03 |
37.9 |
161.0 |
12/21 |
105.5 |
62.5 |
44.9 |
0.16 |
16.9 |
34.3 |
12/22 |
56.7 |
16.1 |
11.4 |
0.05 |
65.5 |
112.0 |
12/23e |
270.0 |
206.9 |
131.5 |
0.57 |
5.1 |
9.8 |
Note: *Estimates based on sales forecasts in US dollars and therefore vary with exchange rate movements to the Polish zloty. **Normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
CI Games reported a 24% y-o-y decline in net revenue to PLN9.8m. With no new releases in the quarter or in 2022, revenue continues to be driven by its back catalogue. The group’s last release was Sniper Ghost Warrior Contracts 2 in June 2021, as well as two releases from its indie publisher United Label in Q321.
EBITDA remained positive at PLN1.2m at a margin of 12.3%, down 36.3pp y-o-y, despite the decrease in revenue and a significant growth in its selling, general and administrative costs. These cost increases primarily relate to the marketing push for LotF, which continues to drive improvements in the game’s lead indicators. LotF is now 15th in the Steam Global Wishlist chart, up three places from its FY22 results, and now eighth on the Epic Store Wishlist.
On 18 May, management announced that the game will be released on 13 October, with the disclosure coinciding with the latest extended gameplay trailer, showcasing the capabilities of UE5 and some highly anticipated ‘boss battles’. The group has stated that it is planning a further five to six marketing campaigns prior to the game’s release, which we believe will act as catalysts for the stock.
The group reported a PLN15.6m increase in its current borrowings, which will help fund the final polishes to LotF, as well as support the additional marketing campaigns management has planned for the game. We believe that the release of LotF later in the year should drive a swing back to a strong net cash position, with the marketing costs incurred helping to build operating leverage later in the year.
On 24 April, the company secured a distribution agreement with Plaion and management expects more to follow, ensuring wider availability of the game across key geographies.
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Research: Investment Companies
Round Hill Music Royalty Fund’s (RHMRF’s) Q123 trading update showed a strong revenue performance building on the good FY22 results. Combined net publishers’ share (NPS) and net label share (NLS) was up 91% over Q122, a gain of 20% on a like-for-like basis. RHMRF’s economic end FY22 NAV per share had increased 13% over the prior year to US$1.27, with revenue up 32%, reflecting the high quality of the catalogue and the added value from active management of portfolio assets. This is despite a market over-shadowed by a backdrop of rising interest rates and constrained household budgets. We view the size of the discount to NAV as overstated.