Goodbye Kansas Group - New financials targets set
Annual average growth target of 20% set combined… …with 20% EBITDA margin target by 2024 Pre-released Q1’21e figures slightly above ABGSCe Growth and EBITDA margin target announced Goodbye Kansas Group today announced new financial targets and preliminary results for Q1’21e. In terms of the financial targets, the company aims to reach an average annual sales growth of 20% going forward. This is slightly above our estimates, where we had factored in a sales CAGR of 16.7% for ‘21e-‘23e. The higher growth than we anticipated will likely be driven by the Goodbye Kansas Studios subsidiary, where management expects strong growth in all the subsidiaries segments: immersive tech (XR), Film/TV, streaming and gaming.
The revenue model of Goodbye Kansas Studios, currently mainly driven by project based revenues from digital productions, has been further optimized to increase efficiency and profitability. Additionally, Goodbye Kansas Group announced they it seeks to reach an EBITDA margin of 20% by 2024. This can be put in relation to our ‘23e EBITDA margin estimate of 8.0%.
Q1’21 EBITDA SEK -10m vs. ABGSCe SEK -14m In conjunction with the new financial targets, Goodbye Kansas Group also released preliminary results for Q1’21e. Revenues are expected to amount to SEK 59m, -9% versus ABGSCe SEK 65m, and an EBITDA of SEK -10m, ~34% better than our estimate of SEK -14m.
The improvement on an EBITDA level compared to Q4’20 (SEK -15m) is driven by seasonal effects on personnel costs and reduced use of consultants. Final thoughts We think that the new Goodbye Kansas Group is well positioned to benefit from the continued rise of interactive entertainment. We also look with favor on 2021 given the increasing roll-out of COVID-19 vaccines and the company’s sales pipeline..