Flexion reported net sales of GBP 2.3m (1.6m) corresponding to y-o-y growth of 46% (20% behind ABGSCe). The deviation is due to the firm’s new mobile game taking longer to build a user base than we had anticipated.
Our view of Flexion’s long-term potential, however, remains intact. Gross margin amounted to 12.1% (16.2%), up 0.5pp q-o-q and 0.4pp ahead of our forecast of 11.7%. Lower operating expenditures on capitalized personnel exceeding expectations, together with the stronger gross margin, led to a small deviation on the EBIT level.
The report raises no real issues concerning revenue potential save that it has taken slightly longer than we originally anticipated. On a positive note, the stronger gross margin increases our confidence in its future development.
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