Share Name Share Symbol Market Type Share ISIN Share Description
Gaming Realms LSE:GMR London Ordinary Share GB00BBHXD542 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.05p +0.60% 8.45p 8.00p 8.90p 8.90p 8.00p 8.90p 5,794,951 16:35:04
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Industrial Engineering 34.0 -7.0 -2.6 - 24.03

Gaming Realms PLC Align Research Initiation of coverage

19/09/2017 7:15am

RNS Non-Regulatory


TIDMGMR

Gaming Realms PLC

19 September 2017

Gaming Realms - Initiation of Coverage

Conviction Buy recommendation. Price Target 17.8p

Game on for profitable growth in 2017 and beyond

Gaming Realms is a developer, publisher and licensor of mobile and web based real money and social games. The business was set up by the team behind Cashcade Limited, creator of bingo brand Foxy Bingo, which was sold to PartyGaming for just under GBP96 million in 2009.

Strategy focused on exploiting valuable range of IP

Gaming Realms has developed and acquired a host of popular games, including the flagship "Slingo" brand. The focus is upon exploiting this IP across its real money, social gaming and licensing divisions, with the strategy being to allocate capital towards the more profitable real money gaming and content licensing operations.

Traction seen in trading with 2017 profitability imminent

Following a 60% rise in revenues in the 2016 financial year, followed by positive trading in the first half of 2017, the business is on the cusp of profitability. Management expect the business to be significantly EBITDA positive for FY2017 and we expect an acceleration in profits after that.

Fundraise and deferred consideration agreement reduce uncertainty

A recent GBP1.13 million subscription has provided funds for growth, with several directors taking part. Crucially, a deferred consideration payment of $4 million previously due in August this year has been deferred to December, with the company currently organising debt facilities to pay the now $4.5 million liability.

Shares undervalued on a number of metrics

Should Gaming Realms successfully meet our forecasts for 2018 and 2019 the shares would trade on very low multiples of EBITDA and, more importantly, cashflow. We set an end 2019 target price of 17.8p for the shares and initiate coverage with a Conviction Buy stance.

To read the full note visit http://www.alignresearch.co.uk/cpt-company/gaming-realms/

This information is provided by RNS

The company news service from the London Stock Exchange

END

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(END) Dow Jones Newswires

September 19, 2017 02:15 ET (06:15 GMT)

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