REG - Gfinity PLC - Half-year Report
31/03/2023 07:00
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RNS Number : 8520U Gfinity PLC 31 March 2023
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constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014. Upon the publication of this announcement via the
Regulatory Information Service, this inside information is now considered to
be in the public domain.
31 March 2023
Gfinity plc
("Gfinity" or the "Company")
Half Year Results
Gfinity (AIM: GFIN), a world-leading esports solutions provider, announces its
unaudited results for the six-month period ended 31 December 2022.
Financial Highlights:
· Revenue of £4.1m (H1 FY22: £3.3m), representing a 26% increase
year on year and a 106% increase on the six-month period immediately preceding
· Investment in development of Gfinity owned intellectual property,
in particular the proprietary Athlos Gaming Technology, resulted in an
increase in adjusted operating expenditure to £2.7m in the period (FY22 H1:
£2.4m)
· Adjusted Operating Loss 1 (#_ftn1) of £0.8m (H1 FY22: £0.4m),
representing an increase of 101% year on year, but an improvement of 47% on
the previous six months
· Period-end cash of £1.7m, supplemented by a post period end
placing and subscription, raising a further £2.0m before expenses
· Restructure announced post-period expected to deliver £0.7m of
recurring overhead savings, through reduced fixed costs of central leadership
group and release of Gfinity Arena
Operational Highlights:
Athlos Gaming Technology
Significant progress made to productise Gfinity's proprietary esports
technology, allowing it to be deployed at scale. This includes:
· Successful pilot programme with one of the world's leading mobile
publishers now extended into 3(rd) year, with the platform having reached more
than 22m gamers across 3 game titles in 2022
· Two further beta clients integrated with Athlos platform, with a
significant reduction in the time taken to implement the platform
· Post-period end, deal announced with Playgendary, a top-10 mobile
game developer for Athlos to be integrated into Playgendary titles, with
Gfinity's remuneration linked to number of users of the platform each month
· Todd Sitrin, former Head of Competitive Gaming at EA, added to
Athlos leadership group as a Strategic Advisor
Gfinity Digital Media
· Average Monthly Active Users (MAUs) during the period of 13.1m,
representing a 10% year on year reduction (H1 FY22: 14.5m), following Google
algorithm changes which impacted traffic from September 2022
· Annualised revenue per MAU of 22p, representing a 2% reduction on
prior year, but relatively consistent in a global advertising market, which
has seen significant pressure on CPM rates over the past year
· Revenue of £1.4m, an 11% reduction on the equivalent period in
the prior year (H1 FY22: £1.6m), but a 20% increase on the 6 month period
immediately preceding
· New commercial partner appointed for GDM business with effect
from April 2023, expected to drive a sharp increase in advertising rates
· Rebekah Billingsley, an experienced leader in the digital media
sector, announced as Managing Director of the GDM business in September 2022
Esports Solutions
Gfinity has continued to build a leading position as a provider of esports
solutions to sports organisations, particularly within the football and
motorsports sectors, driving revenue up to £2.5m (H1 FY22: £1.5m), an
increase of 70% year on year.
· Appointed as esports strategy development partner to Saudi
Professional League
· Completed delivery of fifth season of award-winning Formula 1
Esports Series
· Delivery of an esports operating plan for a leading UK football
club
· Completed third season of V10 R League series, part of the Global
Racing Series venture co-owned together with Abu Dhabi Motorsports Management,
featuring leading motorsports teams including Mercedes, Red Bull, McLaren,
Ford and Aston Martin
Post-period, a restructure of the Esports Solutions business was announced, to
reflect the pivot towards developing solutions for clients to engage with
gamers, leveraging Gfinity's proprietary technology and experience in building
communities and away from live event delivery and production. Under this
restructure, the Gfinity Arena was released and it was agreed that the
previous CEO, John Clarke would step down from the business.
Post-Period Transaction
On 9 February 2023, it was announced that Gfinity intended to raise a minimum
of £1.5m through a placing and subscription to support working capital and to
allow for continued development of the Company's proprietary intellectual
property to facilitate future growth. On 14 February it was announced that
this placing had been oversubscribed and that, subject to General Meeting, the
Company would raise a total of £2.0m prior to expenses from a combination of
new and existing investors.
Shareholders approved this transaction at a General Meeting on Monday 6 March
2023.
Outlook
The sector opportunity remains strong, reflecting a continued trend towards
video gaming, both playing and watching, as the entertainment pastime of a new
generation. Within this space, directors believe that the greatest
opportunity lies in creating technology and products that engage all fans of
competitive gaming, not only the elite 1% at the top of the professional
pyramid. Gfinity's expertise, audience, relationships and proprietary
technology means that it is well positioned to take advantage of this
opportunity.
By business unit, directors see the outlook as follows:
Athlos Gaming Technology:
Represents a significant opportunity to create scalable, recurring,
high-margin revenues. Work to date has validated the belief that the target
market for this product is very large and that the Athlos product has a
distinct first-mover advantage in helping publishers drive engagement and
revenue per user through quickly and seamlessly integrating competitive
functionality for players at all levels.
Fully unlocking this potential will require further investment in the
product. As a result, the company continues to engage actively with
potential investors with regards to a direct investment in the Athlos product,
so this potential can be unlocked without an ongoing requirement for group
funding.
Gfinity Digital Media:
The Gfinity Digital Media network continues to represent a valuable asset for
the group, both in its ability to generate revenues from an owned audience
through ecommerce and advertising, but also in providing Gfinity with a forum
through which to directly connect with a large network of gamers.
The trading environment in the digital media sector, however, has been more
challenging over the past 12 months than in previous years. Directors expect
this situation to continue for the next 12 months, before returning to growth
in 2024.
Esports Solutions:
While the size of the audience watching esports has continued to grow over
recent years, the provision of production and event services around esports
has become more commoditised than at the outset of the industry. There have
been several new entrants in the market, willing to deliver work at a loss,
which has impacted the economics of the industry.
As a result, directors believe the greatest opportunity lies in designing
esports solutions for key clients and leveraging the investments made by
others to facilitate the delivery of live events and productions required as
part of such programmes.
This approach allows Gfinity to own key client relationships, while reducing
its cost base from the level that would be required to maintain a market
leading events and production delivery capability.
Overall:
Gfinity remains well positioned as a business with a strong reputation, an
owned audience and proprietary technology in an industry that continues to
grow. Directors believe that the actions taken over the six months to
December 2022, and in the three month period following that date, have
positioned the business to fully capitalise on that opportunity.
ENDS
Enquiries:
Gfinity plc www.gfinityplc.com (http://www.gfinityplc.com)
Canaccord Genuity Limited (AIM Nominated Adviser & Broker) Tel: +44 (0)207 523 8150
Bobbie Hilliam / Patrick Dolaghan
About Gfinity
Gfinity is a leading media and technology company in the fast growing esports
and gaming sector. Founded in late 2012, Gfinity established itself as
esports and community engagement experts. More recently, the company's
business model has evolved to reflect the rapidly developing gaming market,
sharpening its strategic focus, based on 3 distinct areas:
Gfinity Digital Media is made up of 11 sites that reach an average of >13
million monthly unique active users, and delivers 75 million impressions per
month across its social network of over 7,000,000 followers.
Athlos Gaming Technology is a fully configurable, white-label, bespoke
solution, designed to maximise community engagement through competitive play,
and is already trusted by some of the world's biggest gaming and esports
organisations.
Esports Solutions - Designing and delivering esports programmes for partners,
building communities and deepening their engagement with gamers, both under a
fee-based model and through programmes in which Gfinity shares in the
commercial rights created.
Operational Review:
The results for the six-month period to 31 December 2022 reflect a period of
strong top line growth, with a 26% increase in revenue year on year, coupled
with a period of investment in building the intellectual property, products
and audience that the directors believe will provide a platform for profitable
future growth and long term shareholder value.
Athlos Gaming Technology:
Since Gfinity's foundation, the structure of the gaming industry has changed
significantly.
· Two-thirds of games industry revenues now come not from the day
one sale of games, but in-game revenues, both through micro-transactions and
through advertising.
· Mobile gaming has become the largest segment within the market.
Newzoo's Global Games Market Report now estimates revenue from mobile gaming
to be worth more than $100bn p.a., accounting for more than half of the annual
revenue of the games industry.
· The audience for esports has continued to grow, with 2.5bn people
now aware of esports and 261m gamers identifying themselves as esports
enthusiasts. (Source: Newzoo: Global Esports and Live Streaming Market Report
2022.)
These changes have impacted the market in a number of important ways:
· There has been a proliferation of new games coming to market,
particularly mobile games, which typically have a lower cost to develop and
launch than AAA console and PC titles
· There is a direct and significant financial benefit to publishers
of keeping players engaged in their games for longer
· Competitive gaming has proven to be one of the most effective
tools for driving this increased engagement.
Gfinity's proprietary Athlos platform allows game publishers to deploy this
competitive functionality quickly and easily into their games, delivering
esports capability without gamers having to leave the game and connect to an
external platform.
The Athlos platform solves 2 key problems for game developers in this new
eco-system, firstly, producing content for games in a live-service model is
incredibly expensive and time intensive and secondly, development resources
are incredibly constrained, and remain entirely focused on core game mechanics
that make each game unique.
In the six-month period to 31 December 2022, Gfinity successfully integrated
the technology into two new beta games, delivering significant reductions in
the integration time required on each occasion.
This period also saw the completion the second year of a major beta programme
with the Athlos technology integrated into 3 major titles of one of the
world's leading mobile game publishers. Across 2022, this resulted in more
than 22m interactions with the Athlos product during the year.
Through this beta period, all Athlos revenue has come through flat license
fees. In the six months to 31 December, this revenue showed a 2% increase to
£0.2m (H1 FY22: £0.2m). In January 2023, however, Athlos signed with a
second major mobile game publisher, Playgendary, to integrate the Athlos
platform with their games. This will be the first contract under which Gfinity
will be remunerated on a per user basis, making revenues truly scalable and
annualizied based on a player-base.
The directors believe that this technology, licensed on a SaaS basis will
become a significant part of the Group's revenue over the medium term.
Gfinity Digital Media
During the six-month period to December 2022 Gfinity's digital media platforms
had an average of 13.1m monthly active users. This represented a reduction
of 10% on the prior year (H1 FY22: 14.5m). The reduction in users across the
platform reflected the impact from September 2022 onwards of Google algorithm
changes, which resulted in a reduction in the level of Search Engine
Optimisation (SEO) driven traffic.
The six-month period to December 2022 was a tough one for the wider digital
media sector, with fears of recession having a downward impact on advertising
rates. In this context, annualised revenue per user of 22p, which reflected
a reduction of just 2% on the prior year, represented a positive performance.
Overall, the impact of these movements was that GDM revenue in the period was
£1.4m, a reduction of 11% on the prior year. This did, however, represent a
20% increase on the 6 month period immediately preceding.
In line with the strategy of recruiting sector experts to lead each of the
respective business units, in September 2022, Gfinity announced the
appointment of Rebekah Billingsley, an experienced leader in the digital media
sector, as MD of the GDM business.
In January, an agreement was reached with Mediavine, a leading provider of
digital advertising, to commercialise the advertising inventory of GDM. This
agreement takes effect from April 2023 and is expected to drive a significant
increase in revenue per advertising impression delivered.
Esports Solutions:
In the period to December 2022, Gfinity continued to build on their position
as a leader in providing esports solutions to clients in the traditional
sports sector, supporting clients particularly in the football and motorsports
sectors in finding ways to engage with a new generation of fans who are gamers
first. Revenue from this business unit for the period was up to £2.5m (H1
FY22: £1.5m), an increase of 70% year on year.
In the football sector, in November 2022, Gfinity were announced as the
exclusive esports strategy development partner to Saudi Pro League (SPL), to
lead the creation of a gaming property to support the development of the SPL
brand, connecting with a digital audience around the world. The period also
saw the completion of the second phase of work with a leading UK football
club, developing the operating plan for their own esports programme.
Within the motorsports sector, the period to December 2022 saw the completion
of the fifth year of Gfinity's partnership with Formula 1 to deliver the F1
Esports Pro Series. Gfinity managed all aspects of programme operations for
this award-winning programme, utilising its proprietary Race Control
technology to manage all aspects of race adjudication and delivering the event
and broadcast production.
The period also saw the finals of the third season of the V10 R-League
programme, a race series co-owned by Gfinity in conjunction with Abu Dhabi
Motorsports Management. This season featured 10 of the leading motorsports
teams, including Mercedes, Red Bull, McLaren, Aston Martin and Ford and for
the first time featured live finals in Abu Dhabi, supported by event sponsors
Miral.
Over the past two years, Gfinity has moved higher up the value chain, acting
as a strategic advisor to partners with regards to esports solutions and
utilising partners to deliver certain aspects of live event and operations
services. During FY21 and FY22, this has enabled Gfinity to deliver a
significant reduction in its operating expenditure. This process continued
following the period end, with the decision to relinquish the Gfinity Arena.
This, aligned to savings in staff costs and related overheads, will release a
further £0.7m p.a. from the company's cost base.
Financial Review:
Revenue of £4.1m represented growth of 26% on the prior year (H1 FY22:
£3.3m) and growth of 106% on the six-month period immediately preceding this.
Despite this growth however, an increased investment in resource attached to
development and marketing of the Athlos platform and in the content and
technology for Gfinity's Digital Media network meant that the Adjusted
Operating Loss actually increased to £0.8m for the period.
As a result, on 9 February 2023, directors announced their intention to raise
a minimum of a further £1.5m, through a placing and subscription, to
supplement the £1.7m of cash the company held at 31 December 2022. On 14
February, the Company announced that this placing had been oversubscribed and
that, subject to General Meeting, the Company would raise a total of £2.0m
prior to expenses from a combination of new and existing investors.
Shareholders approved this transaction at a General Meeting on Monday 6 March
2023.
Directors have noted the impact this has had on the market capitalisation of
the Company. It is directors belief that this movement reflects short term
market pressures and the requirement to raise cash in a challenging capital
markets environment. They do not believe it is a true reflection of a change
to the underlying value of the business. On that basis, directors will
undertake a full review for indications of impairment to goodwill and
intangible assets as part of the full year audit process.
Group Statement of Profit or Loss
6 months to 31 December 2022 Unaudited 6 months to 31 December 2021 Unaudited Year to 30 June 2022 Audited
£ £ £
CONTINUING
OPERATIONS Note
Revenue 4,107,938 3,261,361 5,258,977
5
Cost of sales (2,250,835) (1,320,260) (2,546,508)
Gross profit 1,857,103 1,941,101 2,712,469
Other Income - 697 1,529
Administrative expenses (3,755,214) (3,511,533) (6,950,105)
Operating loss (1,898,111) (1,569,735) (4,236,107)
Gain on disposal of associate - 45,090 45,090
Finance income 373 2 77
Finance Costs - - -
Loss on ordinary activities before tax (1,897,738) (1,524,643) (4,190,940)
Taxation 123,459 117,685 209,968
Retained loss for the period (1,774,279) (1,406,958) (3,980,972)
Loss and total comprehensive loss for the period (1,774,279) (1,406,958) (3,980,972)
Earnings per Share (Basic and Diluted in pence) (0.001) (0.001) (0.004)
Group statement of comprehensive income
6 months to 31 December 2022 Unaudited 6 months to 31 December 2021 Unaudited Year to 30 June 2022 Audited
£ £ £
Items which may subsequently be reclassified to profit or loss
Foreign exchange gain / (loss) on retranslation of foreign operations 3,501 (5,510) (3,458)
Other Comprehensive Income for the period 3,501 (5,510) (3,458)
Loss and total comprehensive loss for the period (1,770,778) (1,412,468) (3,984,430)
Group Statement of Financial Position
As at 31 December 2022 Unaudited As at 30 June 2022 Audited
£ £
NON CURRENT ASSETS
Property, plant and equipment 104,975 148,510
Goodwill 4,714,399 4,714,399
Intangible fixed assets 4,191,523 4,575,141
9,010,897 9,438,050
CURRENT ASSETS
Trade and other receivables 1,591,621 1,968,893
Cash and cash equivalents 1,686,497 2,141,361
3,278,118 4,110,254
TOTAL ASSETS 12,289,015 13,548,304
EQUITY AND LIABILITIES
Equity
Share capital 1,315,697 1,315,697
Share premium 54,856,008 54,858,008
Other reserves 4,030,635 3,876,676
Retained earnings (53,057,948) (51,283,669)
Non controlling interest 3 3
Total equity 7,144,395 8,766,715
Non-current liabilities
Other Payables 582,882 840,742
Deferred Tax Liabilities 732,984 897,575
1,315,866 1,738,317
Current liabilities
Trade and other payables 3,828,754 3,043,272
Total liabilities 5,144,620 4,781,589
TOTAL EQUITY AND LIABILITIES 12,289,015 13,548,304
Group Cash Flow Statement
6 months to 31 December 2022 Unaudited 6 months to 31 December 2021 Unaudited Year to 30 June 2022 Audited
£ £ £
Cash flow used in operating activities
Net cash used in operating activities 23,960 (592,836) (2,573,719)
Cash flow from/(used in) investing activities
Interest 373 2 77
received
Additions to property, plant and equipment (3,558) (68,850) (74,137)
Additions to intangible assets (477,140) (351,103) (685,951)
Net outflow on business combination - (2,155,630) (1,774,020)
Gain on disposal of associate - 45,090
45,090
Issue of shares to non controlling interest - - 3
Net cash used in investing activities (480,325) (2,530,491) (2,488,938)
Cash flow from/(used in) financing activities
Issue of equity share capital (2,000) 3,246,513 5,831,603
Net cash from financing activities (2,000) 3,246,513 5,831,603
Net (decrease) /increase in cash and cash equivalents (458,365) 123,186 768,946
Effect of currency translation on cash 3,501 (5,510) (3,458)
Opening cash and cash equivalents 2,141,361 1,375,873 1,375,873
Closing cash and cash equivalents 1,686,497 1,493,549 2,141,361
Statement of Changes in Equity
Share Capital Share premium Share option reserve Retained earnings NCI Foreign currency translation reserve Total equity
£ £ £ £ £ £ £
At 30 June 2021 930,513 46,511,089 3,403,414 (47,302,697) - (18,500) 3,523,819
Loss for the period - - - (1,406,958) - - (1,406,958)
Other comprehensive income - - - - - (5,510) (5,510)
Total comprehensive income - - - (1,406,958) - (5,510) (1,412,468)
Shares issued 169,184 6,183,150 - - - - 6,352,334
Share Issue Costs - (205,321) - - - - (205,321)
Share options issued - - 463,608 - - - 463,608
Total transactions with owners, recognised directly in equity 169,184 5,977,829 463,608 - - - 6,610,621
At 31 Dec 2021 1,099,697 52,488,918 3,867,022 (48,709,655) - (24,010) 8,721,972
Loss for the period - - - (2,574,014) - - (2,574,014)
Other comprehensive income - - - - - 2,052 2,052
Total comprehensive income (2,571,962)
- - - (2,574,014) - 2,052
Shares issued 216,000 2,484,000 - - - - 2,700,000
Share Issue Costs - (114,910) - - - - (114,910)
Share options issued - - 31,612 - - - 31,612
Addition of NCI - - - - 3 - 3
Total transactions with owners, recognised directly in equity 216,000 2,369,090 31,612 - 3 - 2,616,705
At 30 June 2022 1,315,697 54,858,008 3,898,634 (51,283,669) 3 (21,958) 8,766,715
Loss for the period - - - (1,774,279) - - (1,733,718)
Other comprehensive income - - - - - 3,501 3,501
Total comprehensive income - - - (1,774,279) - 3,501 (1,730,217)
Shares issued - - - - - - -
Share Issue Costs - (2,000) - - - - (2,000)
Share options issued - - 150,458 - - - 150,458
Total transactions with owners, recognised directly in equity - (2,000) 150,458 - - - 148,458
At 31 Dec 2022 1,315,697 54,856,008 4,049,092 (53,057,948) 3 (18,457) 7,144,395
Notes to the interim financial statements
1. General Information
Gfinity plc is a company limited by shares, incorporated and domiciled in
England and Wales under the Companies Act 2006. Its registered office is 16
Great Queen Street, London, England, WC2B 5AH. Its shares are quoted on the
AIM market of London Stock Exchange.
The functional and presentational currency is £ sterling because that is the
currency of the primary economic environment in which the group operates.
Foreign operations are included in accordance with the policies set out in
note 2.
These condensed interim financial statements were approved for issue on 31
March 2023.
2. Accounting Policies and Basis of Preparation
Basis of Preparation
The interim financial statements for the six months ended 31 December 2022
have been prepared using accounting policies that are consistent with those of
the audited financial statements for the period ended 30 June 2022 and in
accordance with IAS 34, "Interim Financial Reporting" as adopted by the United
Kingdom. The interim financial information should be read in conjunction with
the Group's Annual Report and Accounts for the year ended 30 June 2022, which
has been prepared in accordance with IFRS as adopted by the United Kingdom.
The interim financial information contained in this report does not constitute
statutory accounts within the meaning of section 434 of the Companies Act
2006.
The Annual Report and Accounts for the year ended 30 June 2022 has been filed
with the Registrar of Companies. The auditors' report on those accounts was
unqualified, however, did not a material uncertainty with regards to going
concern, relating to the fact that the going concern basis of preparation was
linked to a need to raise funding within 12 months from the date of signature
of the Annual Report.
Significant Accounting Policies
The critical accounting policies and presentation followed in the preparation
of this interim report have been
consistently applied to all periods in these financial statements and are the
same as those applied in the company's annual accounts for the year ended 30
June 2022.
A copy of the accounts to 30 June 2022 can be obtained from the company's
website: www.gfinityplc.com (http://www.gfinityplc.com) .
Critical Accounting Judgements
The preparation of financial statements in conforming with adopted IFRS
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets, liabilities,
income and expenses. The estimates and assumptions are based on historical
experience and other factors considered reasonable at the time, but actual
results may differ from those estimates. Revisions to these estimates are made
in the period in which they are recognised.
The critical accounting judgements made in preparing this interim report are
the same as those in preparing the annual accounts for the Company for the
year ended 30 June 2022 which can be obtained from the company's website:
www.gfinityplc.com (http://www.gfinityplc.com) .
Going Concern
At 31 December 2022 the group had cash of £1.7m. This figure was
supplemented through the raising of a further £2.0m, which was approved by
shareholders on 6 March 2023.
This sum was intended to provide directors with the headroom to:
· Restructure the Esports Solutions business, delivering £0.7m of
annualised cost reductions;
· Bring in a new commercial partner for the Gfinity Digital Media
business, driving revenues back up in this business unit; and
· Provide a runway to bring a separate external investor into the
business to invest directly into the Athlos Gaming Technology platform,
leaving Gfinity with a significant holding, but ensuring that the platform had
sufficient funds to bring the final version of the product to market and
support a successful launch.
The group is making strong progress against each of these objectives and on
that basis, directors believe that the going concern basis of preparation is
appropriate. In forming this assessment, directors also note the capital
value that has been created through the development of both Gfinity's
technology and its owned audience. In the event that further funding were to
be required, it could be realised through the sale of one or more of these
assets, rather than requiring any further recourse to new investment.
3. Loss per share
Basic earnings per share is calculated by dividing the loss attributable to
shareholders by the weighted average number of ordinary shares in issue during
the period.
IAS 33 requires presentation of diluted EPS when a company could be called
upon to issue shares that would decrease earnings per share or increase the
loss per share. For a loss-making company with outstanding share options, net
loss per share would be decreased by the exercise of options and therefore the
effect of options has been disregarded in the calculation of diluted EPS.
6 months to 31 December 2022 6 months to 31 December 2021 Year to 30 June 2022
£ £ £
Loss attributable to shareholders from continuing operations (1,774,279) (1,412,468) (3,984,430)
Number Number Number
000's 000's 000's
Weighted average number of ordinary shares 1,315,697 963,463 1,122,821
Loss per ordinary share for continuing operations -0.001 -0.001 -0.004
4. Notes to the Cash Flow Statement
6 months to 31 December 2022 Unaudited 6 months to 31 December 2021 Unaudited Year to 30 June 2022 Audited
£ £ £
Cash flows from operating activities
Loss for the financial year (1,774,279) (1,406,958) (3,980,972)
Depreciation of property, plant and equipment 47,093 56,109 112,993
Depreciation on right of use assets - - -
Amortisation of intangible fixed assets 860,758 631,608 1,554,745
Impairment of intangible fixed assets - - 76,989
Interest Received (373) (2) (77)
Share based payments 150,458 463,608 495,220
(Increase) in Inventories - - -
(Increase)/ decrease in trade and other receivables 377,272 (509,217) (524,205)
Increase in trade and other payables 527,622 334,791 (110,916)
Gain on disposal of Associate - (45,090) (45,090)
Movement on deferred tax liabilities (164,591) - (294,568)
Corporation tax (paid)/ R&D credits received - (117,685) 142,162
Cash used by operating activities 23,960 (592,836) (2,573,719)
Net cash generated by/ (used in) operating activities 23,960 (592,836) (2,573,719)
5. Revenue
The Group's policy on revenue recognition is as outlined in note 2 of the
financial statements for the year ending June 2022. The period ending December
2022 included £58,359 in the contract liability balance and at the beginning
of the period (December 2021: £0.36m and year ending June 2022: £0.2m).
The Group's revenue disaggregated by primary geographical markets is as
follows:
6 months to 31 December 2022
Esports Digital Media Athlos Total
£ £ £ £
United Kingdom 2,451,456 384,029 - 2,835,485
North America - 659,846 168,452 828,298
ROW 39,200 404,955 - 444,155
Total 2,490,656 1,448,830 168,452 4,107,938
6 months to 31 December 2021
Esports Digital Media Athlos Total
£ £ £ £
United Kingdom 1,337,794 620,549 - 1,958,343
North America - 625,522 164,829 790,351
ROW 126,000 386,668 - 512,668
Total 1,463,794 1,632,739 164,829 3,261,361
Year to 30 June 2022
Esports Digital Media Athlos Total
£ £ £ £
United Kingdom 1,927,951 853,907 47,232 2,829,090
North America - 1,248,627 315,356 1,563,982
ROW 126,000 739,904 - 865,904
Total 2,053,951 2,842,438 362,588 5,258,977
The Group's revenue disaggregated by pattern of revenue of revenue recognition
is as follows:
6 months to 31 December 2022
Gfinity Cevo Megit Total
£ £ £ £
Services transferred at 2,017,395 50,171 249,128 2,316,694
a point in time
Services transferred over time 1,791,244 - - 1,791,244
Total 3,808,639 50,171 249,128 4,107,938
6 months to 31 December 2021
Gfinity Cevo Megit Total
£ £ £ £
Services transferred at 1,568,313 166,797 425,547 2,160,657
a point in time
Services transferred over time 1,207,226 - - 1,207,226
Total 2,775,539 166,797 425,547 3,367,883
Year to 30 June 2022
Gfinity Cevo Megit Total
£ £ £ £
Services transferred at 2,913,332 108,485 541,755 3,563,572
a point in time
Services transferred over time 1,695,405 - - 1,695,405
Total 4,608,737 108,485 541,755 5,258,977
As at 31 December 2022 the Group had the amounts shown below held on the
consolidated statement of financial position in relation to contracts either
performed in full during the year or ongoing as at the year end. All amounts
were either due within one year or, in the case of contract liabilities, the
work was to be performed within one year of the balance sheet date.
Dec-22 Jun-22
£ £
Trade Receivables 989,325 928,446
Contract Assets 359,688 246,428
Contract Liabilities 58,359 208,715
Trade receivables are non-interest bearing and are generally on 30 day terms.
Credit risk of customers is low with many being large multinational
corporations.
Contract assets are initially recognised for revenue earned while the services
are delivered over time or when billing is subject to final agreement on
completion of the milestone. Once the amounts are billed the contract asset is
transferred to trade receivables.
Contract liabilities arise when amounts are paid in advance of the delivery of
the service. These are then transferred to the statement of comprehensive
income as either milestones are completed or work is completed overtime.
6. Intangible fixed assets
During the development phase of Gfinity's proprietary Athlos Gaming
Technology, a total of £477,140 has been invested and capitalised in the
company's intellectual property in the period.
1 (#_ftnref1) Adjusted operating loss is before interest, tax, depreciation,
amortisation, impairment and the share-based payment expense.
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