Enad Global 7 Interim Report: January-June 2020

Key insights

6 takeaways

01
Enad Global 7 is executing an aggressive acquisition-led strategy to transition into a vertically integrated developer and publisher, having integrated Antimatter Games and Sold Out during H1 2020, with the subsequent addition of Big Blue Bubble.See it on page 11
02
Net revenue grew significantly to SEK 293.5 million in H1 2020, compared to SEK 28.4 million during the same period in 2019.See it on page 5
03
The company reported a net loss of SEK 41.0 million and negative operating cash flow of SEK 55.1 million, driven by financing costs and goodwill amortization from its rapid expansion.See it on page 5
04
A directed rights issue of SEK 119 million bolstered the company's liquidity, resulting in a cash position of SEK 66.2 million as of June 30, 2020.See it on page 19
05
As of June 30, 2020, the firm held total assets of SEK 723.5 million and equity of SEK 351.0 million.See it on page 17
06
The organization is prioritizing the ownership of proprietary intellectual property, with a development pipeline that includes titles such as '83, EvilvEvil, and Project I.G.I.See it on page 14

Summary

Enad Global 7 experienced a period of rapid expansion during the first half of 2020, characterized by a transition toward a vertically integrated model that encompasses both game development and publishing. The company’s primary objective is to scale its operations through an aggressive acquisition-led strategy, evidenced by the integration of the British studio Antimatter Games and the publishing subsidiary Sold Out, alongside the post-quarter purchase of the Canadian developer Big Blue Bubble. This strategic pivot aims to move the organization further up the value chain by prioritizing the creation and ownership of proprietary intellectual property, supported by a robust development pipeline that includes titles such as '83, EvilvEvil, and Project I.G.I.

Financial performance during this period reflects the heavy capital investment required for this growth trajectory. Net revenue surged to SEK 293.5 million, a substantial increase from the SEK 28.4 million reported in the same period of the previous year. However, the company recorded a net loss of SEK 41.0 million, a result primarily attributed to the amortization of goodwill and financing costs associated with its rapid acquisition activity. Despite these accounting losses and a negative operating cash flow of SEK 55.1 million, the firm maintains a solid financial foundation.

As of June 30, 2020, the company reported total assets of SEK 723.5 million and equity of SEK 351.0 million. A successful directed rights issue of SEK 119 million significantly bolstered the firm's liquidity, providing a cash position of SEK 66.2 million. By leveraging these financial resources, the organization continues to solidify its market presence within the global gaming industry, balancing short-term profitability challenges against the long-term goal of establishing a diversified and self-sustaining portfolio of gaming assets.