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Third party research

Flexion Mobile: Opening up for buybacks - ABG

Flexion Mobile

This is a third party research report and does not necessarily reflect our views or values

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Slightly softer sales and outlook (-5% vs. ABGSCe in Q4)
We cut '25e-'26e sales by 9-8%, EBIT 24-15%
Strong net cash position and positive FCF; 32-11x P/E in '25e'-'26e


Q4 results

Flexion delivered Q4 results that were slightly below our expectations but still within the company's guidance. Sales were GBP 22m (-5% vs. ABGSCe), corresponding to a 10% decline y-o-y. The gross margin declined to 17% (20%) as a natural result of its game distribution contract with Scopley moving over to a new revenue share model after Flexion has recouped its initial investment. We understand that Flexion had a higher initial gross margin until it recouped, after which the gross margin will be more normal (i.e. ~15%). Even if the gross margin does remain at a lower level, so will the game right depreciations, meaning that the effect on EBIT is relatively immaterial. As such, Q4 EBIT was relatively in line with our expectations, GBP 0.3m (ABGSCe GBP 0.3m).
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