Remedy Entertainment reported today very good top line growth €17,8 (Analyst expected closer to €20 million) up 63% from last year while earnings felt short too, €5,1 million against €6,3 million expected, which means 28% earnings margin.
The stock is trading down today -8,6% currently at €13,25 level, but it has run up nicely to €14,5 on yesterday’s close. The stock is up 32,5% in 3 months and YTD +15,72% and has range of €11,45 to €15,35 YTD.
The company is raising it’s dividend to €0,11 per share from €0,10 per share last year. The net cash position is healthy with €15,9 million in the end of 2019. Earnings per share was very healthy €0,43 per share. The expected turnover for the year 2020 is close to €40 million. Another 100% increase in turnover would be seen on the share price.
Its new game released last summer, Control, was a success and revenue is likely to continue in to the future. This is likely to provide new opportunities to make more successful games like Vanguard and Crossfire.
About Remedy Entertainment
Remedy Entertainment listed on the Helsinki Stock Exchange First North Growth Market in May 2017. At the time, the IPO was huge success at more than 9 times over subscribed.
The market cap of the stock is €164 million and it is expected to move to the main list of the Helsinki Stock Exchange.
The 52 week range is €6,8 to €13,55. Closing January 21st at an all time high of €13,55. What makes Remedy interesting is that it chose to list itself and build it’s own legacy and future. Many Finnish gaming companies have been sold at the outset, leaving investors no opportunity to participate in them.
The largest shareholder and founder of Remedy is Mr. Markus Mäki with 27% stake.
This stock represents an interesting opportunity with the pullbacks in the market. Mr. Mäki and current CEO Tero Virtala both sold shares after the quiet period ended in the fall 2019 at an average price of €12,50.
They have not sold any stock in the last two years and Remedy shares still represent over 90% of their wealth.
With the share price dropping today, investors may see this an an opportunity to increase their position. I am still long on the stock and 2020 looks encouraging for the company.