REG - Gfinity PLC - Disposal and Business Update

GfinityAnnouncement

06/06/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230606:nRSF7273Ba&default-theme=true

RNS Number : 7273B  Gfinity PLC  06 June 2023

THIS ANNOUNCEMENT AND THE INFORMATION HEREIN IS RESTRICTED AND IS NOT FOR
PUBLICATION, RELEASE, TRANSMISSION, DISTRIBUTION OR FORWARDING DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH
SUCH PUBLICATION, TRANSMISSION, RELEASE, DISTRIBUTION OR FORWARDING WOULD BE
UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

06 June 2023

Gfinity PLC

 

("Gfinity", the "Company" or the "Group")

 

Disposal and Business Update

 

 

The Board of Gfinity plc (AIM:GFIN), a leading technology and media company in
the video gaming industry, today announces the divestment of 72.5% of Athlos,
a subsidiary of the Company, to Tourbillon Group UK Limited. All future
liabilities associated with Athlos will be assumed by Tourbillon, with the
buyer also providing growth capital to support the business moving forward.

Alongside the funding, Tourbillon brings an experienced management team who
have the capability to take the business to the next stage of its development.
Gfinity will retain a 27.5% shareholding in Athlos. The consideration payable
to Gfinity by Tourbillon is £1.

In the year to December 2022, Athlos generated revenue of £0.4m, with a loss
before tax of £0.5m. If capitalised development expenditure is added back,
the loss before tax was £1.2m. The net assets of Athlos as at December 2022
was £1.2m. In the 12 months to the end of May 2023, Athlos has absorbed
£1.5m of Group cash. The divestment therefore significantly reduces the cash
burn of the Company.

The Company also today announces that it is closing down its Esports division,
as the market for esports remains soft and the directors see limited
profitable growth opportunities.

The above restructuring will allow the Company to focus on digital media and
its significant position in the Gamer website industry. After a large dip in
users in 2022 due to some adverse market impacts including changes in the
Google Search Engine, the Company has performed a round of cost cuts and
improvements in it content as it streamlines the Editorial team and makes
strategic hires in SEO and tech, to increase user numbers. Part of this plan
includes the deployment of AI automation tools to reduce the cost of specific
items of content creation. This has already helped the Company deliver an
upturn in trading in May 2023.

After, a difficult period, the Stockinformer website has been rebuilt, with an
exciting future as its capabilities have increased to scale across 1000's of
products automatically and with an increased accuracy of pricing.

The Company has also made extensive cost savings across the business and the
monthly cost base in July will be £185k (annualised at £2.2m) compared to a
monthly average of £600k in H1 FY23.  The Company currently has cash
reserves of £0.4m. The Directors believe that these cost savings provide the
Directors with an organisation  that can achieve operating profitability on
an EBITDA basis in the near term.

Chairman, Neville Upton commented "This has been a difficult year for Digital
Media with the Company having losses across all verticals, however after a
significant re-structuring, we are confident that Gfinity will flourish
without the requirement to raise further working capital. By focussing on our
core web offering for Gamers, we are able to remove the capital intensive
businesses of software development and esports events, and focus on returning
to a positive return on investment. We will update the shareholders shortly on
a more detailed strategy.

 

 

 

Enquiries:

 

 Gfinity plc                                                www.gfinityplc.com (http://www.gfinityplc.com/)

 Neville Upton, Executive Chairman                          ir@gfinity.net (mailto:ir@gfinity.net)
 Canaccord Genuity Limited (Nominated Adviser and Broker)   Tel: +44 (0)207 523 8150

 Bobbie Hilliam / Patrick Dolaghan

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDEAAKSESLDEAA