During the fourth quarter we completed a number of restructuring measures that completes Goodbye Kansas Group’s strategy shift to exclusively focus on the studio business. An unsustainable financial situation required a number of decisions which initially meant that we declared bankruptcy for six subsidiaries leading to sizeable write-downs of subsidiaries’ values, significant lowering of debt and costs, a quick and favorable agreement with the bankruptcy trustee for the subsidiaries that were filed for bankruptcy, as well as a capital raise that after the period generated proceeds of
In
Through these restructuring measures we complete our previously decided strategic shift to exclusively focus on the studio business, including VFX, game trailers, animation and In-Game. In these segments, we can use our creative capabilities and technology to further develop an attractive and appreciated customer offering, a strong market position and a customer list that includes several world-leading companies. At the beginning of this year we have established a new organizational structure at management level. We continue to strengthen our production organization to increase our efficiency and profitability, as well as intensify our sales efforts to achieve growth and a high capacity utilization in our production team. After the period we announced an order for In-Game cinematics from a new strategic customer and we continue our ambition to grow with both existing and new customers.
Completed preferential rights issue
After completing aforementioned restructuring measures we were able to complete a preferential rights issue of units, including shares and warrants. The first part, including newly issued shares was completed after the period and gave proceeds of
Following these restructuring measures, the Group’s debt has been significantly reduced. Together with the preferential rights issue that was completed after the period, we have secured an improved financial basis based on which we can achieve profitability and positive cash flows in our studio business.
Updated outlook
As a consequence of the strategic shift that was completed following our restructuring measures, we have presented an updated outlook for 2024 and 2025.
Completed and ongoing efficiency measures are expected to reduce costs by approximately
Based on this, we consider it possible to achieve sales of
We have a strong pipeline with both game projects of various sizes and character, as well as VFX projects, which are currently on hold but which we estimate will be started this year. At the same time, the sales prospects are more difficult to assess than in a long time and we are humbled by the challenge. Even though the prolonged strikes in the
Of other subsidiaries,
Creating a sustainable business
Through Goodbye Kansas Studios’ strong customer relationships, a well positioned business on a global market that is now normalizing as well as an adequate corporate structure, sustainable funding and a continued cost focus, I have a positive outlook on our business’s ability to prosper.
CEO
Fourth quarter, 1 October –
- Net sales decreased by 42 percent to
SEK 49.5 million (85.3) mainly due to a weak market for VFX projects which was negatively impacted by strikes in the US. - EBITDA amounted to
SEK 6.8 million (–12.3). - Adjusted EBITDA amounted to SEK –5.1 million (–5.2). Adjusted EBITDA excludes non-recurring costs of SEK –5.3 million (–7.2) and non-recurring gain of
SEK 17.2 million (0) related to write-downs of debt. - EBIT amounted to SEK –10.1 million (–30.3) and was affected by a write-down of fixed assets of SEK –15.0 million (–0.2).
- Profit before tax amounted to
SEK 93.6 million (–38.5). - Earnings per share before dilution amounted to
4.30 SEK (–19.37) and after dilution4.15 SEK (–19.37).* - Cash and cash equivalents amounted to
SEK 3.0 million (3.6) onDecember 31, 2023 .
Full-year, 1 January –
- Net sales decreased by 3 percent to
SEK 278.7 million (288.3) mainly due to a weak market for VFX-services during the year. - EBITDA amounted to SEK –21.7 million (–47.4).
- Adjusted EBITDA amounted to SEK –23.9 million (–33.1). Adjusted EBITDA excludes non-recurring costs of SEK –14.3 million (–14.3) and a non-recurring gain of
SEK 17.2 million (0) related to a write-down of debt. - EBIT amounted to SEK –220.3 million (–117.7) and was negatively affected by write-downs amounting to SEK –147.7 million (–2.0) related to values of the subsidiaries that were declared bankrupt during the fourth quarter.
- Profit before tax amounted to SEK –114.2 million (–130.8).
- Earnings per share before dilution amounted to –4.92 SEK (–64.67) and after dilution –4.92 SEK (-64.67).*
- Cash and cash equivalents amounted to
SEK 3.0 million (3.6) onDecember 31, 2023 .
* Comparative figures for earnings per share have been adjusted to reflect the reverse split 1:200 that was decided by the AGM on
Significant events during the fourth quarter
On
On
- On
October 24, 2023 , Board membersMarina Andersson andAnna Ljungdahl have requested to leave their Board assignments inGoodbye Kansas Group . They were appointed as Board members in connection with the Annual General Meeting inApril 2023 but decided to leave due to the change in circumstances compared to when they were appointed. - On
November 8, 2023 , the union for actors inHollywood ,SAG-AFTRA , reached an agreement with the large studios which ended a strike that has been ongoing this the summer of 2023. This means that the strikes inHollywood have ended since script writers entered an agreement inOctober 2023 . - On
November 14, 2023 , the company published an updated outlook. Due to the large changes being made to the business, the Board provides the following outlook:- 2024: Sales of
SEK 225 – 250 million and a positive EBITDA. - 2025: Sales of
SEK 280 – 310 million and an EBITDA-margin of 10 percent.
- 2024: Sales of
- On
November 30, 2023 , an extraordinary general meeting decided upon a preferential rights issue of units, including shares and warrants. In total, approximately 65 percent was subscribed for with and without support of unit rights and the remaining 35 percent were subscribed for with underwriting guarantees.Goodbye Kansas thereby received gross proceeds of approximatelySEK 55.4 million before set-off of receivables and transaction costs. Approximately 22 percent of the rights issue was subscribed to by way of set-off of receivables. In case all warrants of series TO3 are used to subscribe for shares (subscription period:2-16 May 2024 ), the company will receive proceeds of an additionalSEK 15.8 million before transaction costs. - In connection to the write-down of shares in subsidiaries, the Board had reason to believe that the parent company's equity was insufficient. A control balance sheet was prepared and an extraordinary general meeting was held on
November 30 . The EGM decided to continue to run the business as the Board had taken action to restore the parent company's equity within eight months. - On
November 30, 2023 ,Goodbye Kansas changed Certified Adviser toCarnegie Investment Bank AB (publ).
Significant events after the period
- Final day of trading for paid subscribed units (BTU) in the rights issue was on
January 15, 2024 . The record date for conversion wasJanuary 17, 2024 , after which paid subscribed units were converted into shares and warrants of series TO3. - Transaction of proceeds from the rights issue and set-off of receivables was completed after the period.
- An extraordinary general meeting on
January 30, 2024 decided on a reversed split of shares whereby 100 existing shares will become one new share, 1:100. The Board will decide upon a record date for the reversed split at a later date. The EGM also decided to reduce share capital by38,566,964 SEK to576,488 SEK and the amount will be converted to unrestricted equity conditional upon approval by the Swedish Companies Registration Office or a court. - At the end of
January Goodbye Kansas Studios received an order for production of In-game content for a game project. The order comes from a new, strategic, international customer and the order value amounts to approx.SEK 16 million . The project has started and will span over the first two quarters of 2024.
For more information, please contact:
E-mail: stefan.danieli@goodbyekansas.com
Tel: +46 701 981049
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