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G5 Entertainment

G5 Entertainment

G5 Entertainment: Interim report Jan - Jun 2011

08:44 / 15 August 2011 G5 Entertainment Press release

  • Consolidated revenue for the period is 19 142 KSEK, up 133% compared to 8 206 KSEK for the same period of 2010. This is in line with previously communicated forecast of 19 MSEK. Compared to the same period of 2010, the group accelerated its year-on-year revenue growth from 75% to 133%.
  • Operating result for the period is 7 762 KSEK, up 161% compared to 2 977 KSEK for the same period of 2010. This result is in line with previously communicated forecast of 7.8 MSEK. Earnings per share for the period is 0.89 Kr. This result is in line with the previously communicated forecast of 0.88 Kr.
  • During the period, the group had a positive cash flow of 2 068 KSEK. Cash reserves on June 30th 2011 amounted to 6 960 KSEK. Negative cash flow during April-June is due to management's effort to boost production and output to one game per week. This required increasing internal development capacity, and investing in additional projects and IP rights acquisition. As the group has accumulated sufficient cash reserves during January-March, the management has decided it was time to grow investment in new products to ensure stronger growth in the second half of 2011 and in 2012. Going forward, the management is going to maintain the balance between having sufficient cash reserves and actively investing for higher growth.
  • Current assets of the group as of June 30th 2011 were 13 066 KSEK. Current liabilities: 4 647 KSEK. Working capital (CA-CL): 8 419 KSEK. Current ratio (CA divided by CL): 2.8. The group does not have any long-term liabilities, and has strong liquidity position.
  • The management forecasts the revenue of 31 MSEK with operating result of 11 MSEK for the period of January-September 2011. EPS contribution of January-September 2011 is forecasted to reach 1.26 Kr. This forecast corresponds to 132% revenue growth and 162% operating result growth compared to 14 707 KSEK revenue and 5 841 KSEK operating result in January-September 2010. The management did not announce any forecasts for the period of January-September 2011 until now. (1)
  • For the period of January-December 2011, the management keeps the previously communicated forecast of 47 MSEK revenue, 16.5 MSEK operating result, and earnings per share of 1.9 Kr. This forecast corresponds to achieving 106% revenue growth and 88% operating result growth compared to the period January-December 2010. The management will update the forecast for the full year 2011 and provide a forecast for the year 2012 after the end of the 3rd quarter - in the beginning of October.
  • May and June 2011 became record months for the group in terms of consolidated monthly revenue, only surpassed by January 2011. The management expects that the seasonality and record sales during January will continue in the following years, as January is the month when users around the world unpack their holiday gifts and create strong demand in the digital stores, lasting for about one month after the holiday period.
  • After the end of the period, July has set a new record for the group's monthly revenue, surpassing May, June, and January of 2011. The revenue of the group in August is on track to surpass the group's revenue in July.
  • On 30th June, G5 has released its first 5 games for Android: Supermarket Mania, Stand O'Food, Success Story, Mahjong Artifacts, Mahjong Artifacts 2, followed by the release of Paranormal Agency on August 4th. As 5 first games were released on the last day of Q2, the revenue generated is not included in Q2 results. G5's revenue from Android games is growing by day, and becomes comparable to the group's iOS revenue. The management is satisfied with the performance of the games on the new platform, and expects Android revenue to eventually become a significant part of the group's revenue. As G5 releases more games on the platform, it is going to build a large loyal audience of Adventure and Time Management/Strategy games fans. Going forward, the management plans to eventually release Android version for substantially all games in the company's game portfolio.
  • Jack of All Tribes for iOS was released on 9th of June. The iPad version of the game became Top 100 Grossing Game in all countries where iPad App Store is available, including #1 Top Grossing Game position in Germany, and Top 10 Grossing Game positions in 33 countries, including France, China, Russia, and Switzerland. The game was downloaded 400.000 times in two weeks after the release.
  • Supermarket Mania 2 for iOS was released on 12th of May. The iPad version of the game became Top 100 Grossing Game in all countries where iPad App Store is available, and Top 10 Grossing Game in 26 countries. The game was downloaded over 500.000 times in two weeks after the release.
  • During Q2 2011, G5 has also released a number of other games, including Stand O'Food 3 and Supermarket Management for Mac, Stand O'Food 3 for PC, Treasure Seekers 3 for iOS, Dress Up Rush for iPad.
  • During Q2, G5 has signed over 40 more games to bring to iOS and Android, and the group now has contracts with 25 best casual game development studios from around the world.
  • Starting in May, the group is releasing one or more games every week, and is on track to achieve its goal of releasing 80 games in 2011. With the release of 80 games in 2011, G5's portfolio is set to grow to over 120 games by the end of 2011.
  • G5 has opened a marketing office in San Francisco, California, USA, and hired a Director of Marketing Larissa McCleary, who previously worked for California-based iWin, Playfirst, and Leapfrog companies. This move is a part of the management's effort to make G5 a world-class game publisher with the presence in all key markets. San Francisco was chosen as the location for the company's US office because of its access to experienced human resources and the proximity to key partners like Apple and Google.
  • This interim report has not been reviewed by company's auditor.

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