New Risk • Jun 03
New major risk - Revenue and earnings growth Earnings have declined by 8.0% per year over the past 5 years. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are declining over an extended period, then in most cases the share price will decline over time unless the company can turn around its fortunes. A trend of falling earnings can be very difficult to turn around. If the company is well already established it may also be a sign the company has matured and is in decline. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings have declined by 8.0% per year over the past 5 years. Minor Risk Market cap is less than US$100m (€14.2m market cap, or US$16.5m). Recent Insider Transactions • May 26
Key Executive recently bought €145k worth of stock On the 20th of May, Guglielmo Marchetti bought around 235k shares on-market at roughly €0.62 per share. This transaction amounted to 1.4% of their direct individual holding at the time of the trade. This was the largest purchase by an insider in the last 3 months. Guglielmo has been a buyer over the last 12 months, purchasing a net total of €177k worth in shares. Board Change • May 20
Less than half of directors are independent No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 9 experienced directors. No highly experienced directors. 1 independent director (5 non-independent directors). was the last director to join the board, commencing their role in . The following issues are considered to be risks according to the Simply Wall St Risk Model: Minority of independent directors. Insufficient board refreshment. Reported Earnings • Oct 02
First half 2024 earnings released: €0.07 loss per share (vs €0.11 profit in 1H 2023) First half 2024 results: €0.07 loss per share (down from €0.11 profit in 1H 2023). Revenue: €16.8m (down 8.0% from 1H 2023). Net loss: €1.55m (down 162% from profit in 1H 2023). Revenue is forecast to grow 38% p.a. on average during the next 2 years, compared to a 5.2% growth forecast for the Entertainment industry in Germany. Over the last 3 years on average, earnings per share has fallen by 20% per year but the company’s share price has fallen by 27% per year, which means it is performing significantly worse than earnings. New Risk • Sep 16
New minor risk - Financial data availability The company's latest financial reports are more than 6 months old. Last reported fiscal period ended December 2023. This is considered a minor risk. If the company has not reported its earnings on time, it may have been delayed due to audit problems or it may be finding it difficult to reconcile its accounts. Currently, the following risks have been identified for the company: Major Risk Interest payments are not well covered by earnings (2.5x net interest cover). Minor Risks Latest financial reports are more than 6 months old (reported December 2023 fiscal period end). Paying a dividend despite having no free cash flows. Share price has been volatile over the past 3 months (8.0% average weekly change). Profit margins are more than 30% lower than last year (5.4% net profit margin). Market cap is less than US$100m (€18.2m market cap, or US$20.1m). New Risk • Aug 17
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of German stocks, typically moving 6.8% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk Interest payments are not well covered by earnings (2.5x net interest cover). Minor Risks Paying a dividend despite having no free cash flows. Share price has been volatile over the past 3 months (6.8% average weekly change). Profit margins are more than 30% lower than last year (5.4% net profit margin). Market cap is less than US$100m (€17.6m market cap, or US$19.4m). New Risk • Apr 16
New minor risk - Financial data availability The company's latest financial reports are more than 6 months old. Last reported fiscal period ended June 2023. This is considered a minor risk. If the company has not reported its earnings on time, it may have been delayed due to audit problems or it may be finding it difficult to reconcile its accounts. Currently, the following risks have been identified for the company: Major Risk High level of non-cash earnings (28% accrual ratio). Minor Risks High level of debt (50% net debt to equity). Latest financial reports are more than 6 months old (reported June 2023 fiscal period end). Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Market cap is less than US$100m (€23.4m market cap, or US$24.9m). New Risk • Oct 05
New major risk - Earnings quality The company has a high level of non-cash earnings. Accrual ratio: 28% This is considered a major risk. Non-cash earnings can arise from many different things. However, if a company consistently has a high level of non-cash earnings, it may be a sign that they are recognizing revenue from customers before the full value of the sales are received as cash or they are not depreciating the value of their assets appropriately. These are practices that inflate earnings, while not providing a similar increase to cash flows. Companies in some select industries naturally have a high level of non-cash earnings and it is not a major concern. However, in the worst case scenario it can be an early sign of performance manipulation by management. Currently, the following risks have been identified for the company: Major Risk High level of non-cash earnings (28% accrual ratio). Minor Risks High level of debt (50% net debt to equity). Paying a dividend despite having no free cash flows. Share price has been volatile over the past 3 months (6.7% average weekly change). Market cap is less than US$100m (€27.1m market cap, or US$28.5m). Upcoming Dividend • May 08
Upcoming dividend of €0.12 per share at 6.6% yield Eligible shareholders must have bought the stock before 15 May 2023. Payment date: 17 May 2023. Payout ratio is a comfortable 57% but the company is not cash flow positive. Trailing yield: 6.6%. Within top quartile of German dividend payers (4.7%). Higher than average of industry peers (2.1%). Board Change • Nov 16
Less than half of directors are independent No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 9 experienced directors. No highly experienced directors. 1 independent director (5 non-independent directors). was the last director to join the board, commencing their role in . The following issues are considered to be risks according to the Simply Wall St Risk Model: Minority of independent directors. Insufficient board refreshment. Reported Earnings • Oct 02
First half 2022 earnings released: EPS: €0.10 (vs €0.05 in 1H 2021) First half 2022 results: EPS: €0.10 (up from €0.05 in 1H 2021). Revenue: €17.6m (up 132% from 1H 2021). Net income: €2.22m (up 100% from 1H 2021). Profit margin: 13% (down from 15% in 1H 2021). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has fallen by 12% per year but the company’s share price has fallen by 21% per year, which means it is performing significantly worse than earnings. Upcoming Dividend • May 02
Upcoming dividend of €0.082 per share Eligible shareholders must have bought the stock before 09 May 2022. Payment date: 11 May 2022. Trailing yield: 5.1%. Within top quartile of German dividend payers (4.1%). Higher than average of industry peers (1.8%). Board Change • Apr 27
Less than half of directors are independent No new directors have joined the board in the last 3 years. The company's board is composed of: No new directors. 8 experienced directors. No highly experienced directors. 1 independent director (4 non-independent directors). was the last director to join the board, commencing their role in . The following issues are considered to be risks according to the Simply Wall St Risk Model: Minority of independent directors. Insufficient board refreshment. Reported Earnings • Oct 03
First half 2021 earnings released: EPS €0.05 (vs €0.04 loss in 1H 2020) The company reported a strong first half result with improved earnings, revenues and profit margins. First half 2021 results: Revenue: €9.64m (up 72% from 1H 2020). Net income: €1.11m (up €1.95m from 1H 2020). Profit margin: 12% (up from net loss in 1H 2020). The move to profitability was driven by higher revenue. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 55 percentage points per year, which is a significant difference in performance. Valuation Update With 7 Day Price Move • Dec 03
Market bids up stock over the past week After last week's 15% share price gain to €1.79, the stock is trading at a trailing P/E ratio of 22.1x, up from the previous P/E ratio of 19.1x. This compares to an average P/E of 34x in the Entertainment industry in Europe. Total return to shareholders over the past year is a loss of 27%. Is New 90 Day High Low • Dec 01
New 90-day high: €1.82 The company is up 19% from its price of €1.53 on 02 September 2020. The German market is up 3.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Entertainment industry, which is up 18% over the same period. Valuation Update With 7 Day Price Move • Dec 01
Market bids up stock over the past week After last week's 18% share price gain to €1.82, the stock is trading at a trailing P/E ratio of 22.7x, up from the previous P/E ratio of 19.2x. This compares to an average P/E of 34x in the Entertainment industry in Europe. Total return to shareholders over the past year is a loss of 25%. Valuation Update With 7 Day Price Move • Nov 17
Market bids up stock over the past week After last week's 16% share price gain to €1.40, the stock is trading at a trailing P/E ratio of 17.2x, up from the previous P/E ratio of 14.8x. This compares to an average P/E of 31x in the Entertainment industry in Europe. Total return to shareholders over the past year is a loss of 45%. Is New 90 Day High Low • Oct 30
New 90-day low: €1.10 The company is down 38% from its price of €1.79 on 31 July 2020. The German market is down 4.0% over the last 90 days, indicating the company underperformed over that time. It also underperformed the Entertainment industry, which is up 6.0% over the same period. Is New 90 Day High Low • Oct 12
New 90-day low: €1.39 The company is down 25% from its price of €1.85 on 14 July 2020. The German market is up 2.0% over the last 90 days, indicating the company underperformed over that time. It also underperformed the Entertainment industry, which is up 13% over the same period. Reported Earnings • Sep 28
First half earnings released Over the last 12 months the company has reported total profits of €1.73m, down 55% from the prior year. Total revenue was €24.9m over the last 12 months, down 8.8% from the prior year.