Toadman Interactive Interim Report: January–September 2019

Key insights

7 takeaways

01
Toadman Interactive transitioned from a development studio to a global publisher in 2019 by acquiring Petrol Advertising and the Game Sessions platform.See it on page 7
02
The company reported net revenue of 108.1 MSEK and an operating profit of 8.2 MSEK for the first nine months of 2019, largely driven by the Petrol Advertising acquisition.See it on page 2
03
Liquidity was a significant challenge, with the company ending Q3 2019 with 13.4 MSEK in cash and a negative operating cash flow of -25.5 MSEK.See it on page 17
04
To fund its expansion and vertical integration strategy, the company secured a 120 MSEK bond loan.See it on page 9
05
Total investment activities reached 106.197 MSEK during the period, while financing activities injected 138.603 MSEK to stabilize the balance sheet.See it on page 17
06
The aggressive growth strategy resulted in a workforce expansion to approximately 180 employees by the end of September 2019.See it on page 4
07
As of September 30, 2019, the company held total equity of 118.778 MSEK.See it on page 14

Summary

Toadman Interactive pursued an aggressive growth strategy throughout the first nine months of 2019, focusing on vertical integration to transform from a pure development studio into a comprehensive global publisher. By acquiring the marketing agency Petrol Advertising and the Game Sessions platform from Tangentix Ltd, the company sought to control more facets of the value chain, from production to distribution. This expansion resulted in a workforce increase to approximately 180 employees and a strengthened development pipeline, positioning the firm to capitalize on broader industry opportunities.

Financial performance during this period reflected this rapid scaling, with net revenue reaching 108.1 MSEK and an operating profit of 8.2 MSEK. The acquisition of Petrol served as a primary catalyst for these revenue gains. To facilitate these strategic investments and bolster its publishing infrastructure, the company secured a 120 MSEK bond loan. These financing activities were essential to maintaining operations, as the company faced significant pressure on its liquidity, ending the third quarter with 13.4 MSEK in cash and a negative operating cash flow of -25.5 MSEK.

The company’s financial position at the end of September 2019 was characterized by heavy capital expenditure, with investment activities totaling 106.197 MSEK and a substantial negative impact from working capital. Despite these outflows, the successful injection of 138.603 MSEK through financing activities stabilized the balance sheet, resulting in total equity of 118.778 MSEK. Moving forward, the organization remains focused on leveraging its newly acquired assets and expanded distribution capabilities to sustain its growth trajectory within the competitive global gaming market.