Playside was listed on the ASX back in December, since then the company has signed landmark deals with major games developer 2K Interactive. We take a look Is Playside a Good Investment 2022?

About Playside Shares – PLY ASX

PlaySide is one of Australia’s largest independent video game developers, with titles across a range of categories including self-published games based on original intellectual property (IP) and games developed in conjunction with the worlds’ largest studios such as Disney, Warner Bros and Nickelodeon.

Example of Some of the Names Playside has Worked On
Example of Some of the Names Playside has Worked On

Playside Shares Price

Shares in Playside are up around 150% over the last twelve months to trade at the current share price of $0.87 per share or a market capitalisation of around $319.8million.

PLY ASX has a 52-week range of $0.255 – $0.935 and is currently trading just 5% from the high.

Playside IPO

What was the Playside IPO? Playside studios went public on the ASX, listing on December 17 at $0.20 per share. The

What was the Playside IPO Price? Playside went public with a market cap of around $73.5million and a price of $0.20 per share. There were 366.5million shares on issue at IPO.

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Is Playside a Good Investment – Sentiment

You may ask yourself, what do other investors think of Playside shares? After surveying 117 Investors about their current PLY shares sentiment: BUY-HOLD SELL, as well as their target price over the next 12-months here are the results;

Investor Sentiment PLY ASX
Investor Sentiment PLY ASX

The results from this survey show there seems to be an undecided investor sentiment on PLY shares. So let’s take a look to see Is Playside a Good Investment?

Is Playside a Good Investment – Financials

Playside Studio’s announced its FY21 results to the market on the 27th of August 2021. The headline results from the announcement were as follows:

  • Sales revenue increased 55.3% to $10.88 million
  • Loss from operations decreased significatnly to -$5.87million
  • Underlying EBITDA of -$4.56 million
Playside FY2021 Revenue
Playside FY2021 Revenue
Playside Deal with 2K Games (TTWO)

Just recently Playside released an announcement regarding work for hire agreement with US$21 billion juggernaut TTWO and 2K Games! The deal is said to be worth at least 8 figures (>10million) over the period of 23months and a 12 month maintenance period post-completion.

This in theory if split over the next 36 months may have the potential to contribute an additional 30% to revenue (assumed ~3.3million per year). The deal means that the group would potentially be able to commit resources to the development and bring new people into the team.

As part of the deal, the company has entered a trading halt seeking to raise capital which is said to be around $25million worth and a potential sure purchase plan for retail.

PLY ASX Income Statement

As mentioned above PLY ASX generated total sales revenue of $10.883million for the FY21 financial year, this is a 55% increase on the prior corresponding period.

Underlying Basic EPS for the year was -$1.83 per share meaning that the company reported a negative earnings result. The major change here seems to be that expenses have typically increased with the major movement being selling expenses.

Selling expenses are likely to reduce over time as this figure was inflated due to the company IPO back in December.

Is Playside a Good Investment 2022?
Playside Shares Income Statement
PLY ASX Balance Sheet

As of 31st June 2021, Playside Studio’s held $12.98million in total current assets vs a total current liabilities of only $3.63million. Cash and Cash equivalents seem to be sufficient to support the future short term operations of the business.

Cash and Equivalents make up around 4% of the market capitalisation of the company. This is a little lower than typical as expected for a group of the size and nature of business. We would expect the company may look to raise funds in the future.

PLY.ASX Balance Sheet for FY21
PLY.ASX Balance Sheet for FY21

A factor that we always like to see in companies is the use of debt. In this case, Playside does not currently carry and debt on their balance sheet and hence has a debt to equity ratio of 0.

Should I Buy Playside – Insiders and Ownership

Playside Ownership – Top 5 Holders

The top 5 shareholders in the business are all individual insiders with the exception of Eley Griffiths Group.

Gerry, Aaron and Mark are all co-founders of the business and have greater than 20% ownership in the business each. This shows significant skin in the game here. Business Development Manager Tejesh also holds around 3.4% of the companies shares.

OwnershipNameSharesCurrent Value
21.67%Gerry Sakkas79,659,417A$69.3m
21.54%Aaron Pasias79,166,667A$68.9m
21.54%Mark Goulopoulos79,166,667A$68.9m
3.4%Tejesh Munusamy12,500,001A$10.9m
1.61%Eley Griffiths Group Pty Limited5,903,655A$5.1m
Top 5 Shareholders In Playside Shares
Playside – Ownership Breakdown

The company has a high proportion of individual insider ownership for a company of a $360 million market cap. As mentioned above the three co-founders still retain a significant portion of company ownership.

Playside - Recent Insider Transactions

There have been no recent insider transactions on the market since the company has IPO'd. It will be very interesting to see how the three co-founders hold onto their shares. As they have a large ownership portion of the business we will be interested if they conduct any selling activities.

Is Playside a Good Investment - Prophets Take

The company seems to be priced with investors expecting substantial future growth, currently, the company is trading on a price to sales ratio of greater than 30. ASX.PLY also has a price to book ratio of 25x which is significantly high.

One factor that really stands out to us here is the substantially high proportion of insider ownership in the company. Insiders hold around 71% of the shares on issue. We will also look to closely monitor insider sales of this company due to the high proportion of individual insiders on the register.

Whilst the company seems to be gaining an impressive foothold in the gaming world with work for hire deals with Facebook for their VR platform Horizon Worlds which seems to be very similar to the platform which Facebook used to demo their META platform. The group also managed to sign their largest pay for service deal yet with a large deal with 2K games (a $21b US-Listed company).

We will be watching from the sidelines on Playside Studio's shares, there are a few exciting developments on the companies radar and we will be monitoring these as the company matures. We would like to start to see less reliance on work for hire over the next proceeding quarters.

We are looking more keenly at DraftKings Stock at the moment due to a recent decrease in stock price!

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