I am really looking forward to tomorrow. A new week and my guess is that G5 Entertainment will publish its mid-quarter update tomorrow morning before markets open (as they usually do a few days after the end of the quarter). Chances are high that we will see an upgrade of the 2011 earnings guidance. CEO Suglobov was very optimistic at a Stockholm investor presentation in early June and since then G5 published some games that have been selling rather well. The best example is “Jack of all tribes” which was the top grossing game for several days in Germany and held top-10 positions in several large countries.
The current FY 2011 guidance is from February when the company guided for 2011 revenues to reach SEK 45m, i.e. an increase of almost 100% year-on-year. Management also guided for an EPS of SEK 1.9 in 2011, up from SEK 1.01 in 2010. Already in connection with its Q1 report, however, management indicated that an upgrade was soon to come stating that “ the probability of raising the forecast in the following months increased, as the group prepared a strong line up of new games for the rest of the year.”
My guess is that G5 will continue its cautiously optimistic approach and will upgrade estimates tomorrow while at the same time leaving space for additional upgrades during H2 2011. So tomorrow’s announcement should be seen as the start of a series of upgrades to come in the coming months. Risk appetite is coming back to the markets in general and I am convinced that we will soon see a multiple expansion also for G5 Entertainment. It is simply to cheap to ignore!