REG - Gfinity PLC - Half-year Report
19/03/2025 14:30
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RNS Number : 3460B Gfinity PLC 19 March 2025
For immediate release
19 March 2025
Gfinity plc
("Gfinity" or the "Company")
Half Year Results
Gfinity (AIM: GFIN), a leading Digital Media provider, announces its unaudited
results for the six-month period ended 31 December 2024.
Operational Highlights:
The period ended December 31 2024, continued the transition of Gfinity. During
this period, we made further cost cuts through headcount reduction and
adapting to a more freelance-focused business model.
In November 2024, we signed a non-binding contract to commercialise Connected
IQ, an AI driven advertising solution for online video, with the binding
contract signed in January 2025.
Monthly costs are now at a sustainable amount and more in line with a modern
digital company. With a profit in November, we now focus the Company on
further progress in 2025, as the Digital Media team achieve consistent monthly
performance, due to our extensive cost cutting and realignment of editorial
and the web product. Gfinity is now in a period of a more disciplined approach
to our budget.
The digital media sector has experienced a very tough period, with Google
search now an unreliable partner, and session counts reduced but consistent.
Revenue per Mille ("RPM") has stayed steady, with advertisers still willing to
pay good rates for placing adverts on sites such as those run by Gfinity
digital media.
Outlook
The outlook remains uncertain for the digital media sector, as large language
models from X, Open AI and Anthropic offer different solutions for search and
interaction with the web, including the retrieval of data for gamers seeking
advice on game play. The Company addresses this through the development of new
tools, including a deck builder for www.mtgrocks.com, which creates a more
product focused and interactive website for our users.
There is still high demand for gaming information and sites, as the gaming
industry continues to perform very well, and the Gfinity sites have loyal
users and a very strong demographic. The directors believe that these sites
continue to maintain significant value for the Company.
Through our agreement with 0M Technology Solutions Ltd to commercialise
Connected IQ ("CIQ"), we have moved into the thriving AI market sector. The
marketing of artificial intelligence solutions in the Connected TV ("CTV")
sector is the fastest growing in the advertising industry and we have a
product which has been developed to be one of the most compelling commercial
use cases in the sector and with industry leading model performance for
viewing videos at scale. CIQ has the capacity to continually develop new
features, making it an attractive product for major advertising agencies.
Operational Review:
The results for the six-month period to 31 December 2024 reflect the
completion of the cost cutting period, with further staff and business cost
reductions in the six months resulting in a profitable month in November.
Revenue decreased by 52% compared with the previous year as the Company
continued to develop the digital media product, whilst IT and Subscription
costs were down 78% and staff costs down 46%.
During the six-month period to December 2024, Gfinity tested new advertising
technology systems in addition to the offering from Mediavine with regards to
programmatic advertising on the sites. These tests resulted in significantly
reduced revenue for the months of July, August and September across all sites,
whilst allowing for us to optimise our advertising technology going forward.
We have now taken these learnings and transitioned back to full use of the
Mediavine platform for programmatic income, our RPM's are now back in line
with previous periods and we expect revenue to recover in H1 2025.
Financial Review:
As planned, costs reduced significantly in the period: IT and Subscription
costs were down 78%, and staff costs down 46%; with a further double digit
reduction in salary costs expected in H1 2025, reflecting the first full
half-year of the new base, now the digital media reorganisation process is
complete. Revenue of £390,099 represented a reduction of 52% on the six
months to December 2023.
On 26 September 2024, the Company raised £30,000 through a Director
subscription and additionally raised £120,000 through a convertible loan.
On 9 February 2025, the Company announced that it had raised £260,000 through
a Company arranged subscription with third parties, and a Director
subscription, of in aggregate 416,000,000 new Ordinary Shares at a price of
0.0625 pence per new Ordinary Share to develop the commercialisation of
CIQ, new business opportunities and provide general working capital.
Other Information
A copy of this announcement is available at the Company's website:
www.gfinityplc.com (http://www.gfinityplc.com)
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR"). The person who arranged for
the release of this announcement on behalf of the Company was David Halley,
Chief Executive.
Enquiries:
Gfinity Plc David Halley +44 (0)7516 948427
Beaumont Cornish Limited Roland Cornish +44 (0)207 628 3396
Nominated Adviser and Broker Michael Cornish www.beaumontcornish.co.uk (http://www.beaumontcornish.co.uk/)
Further Information
Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is
acting as nominated adviser to the Company in connection with this
announcement and will not regard any other person as its client and will not
be responsible to anyone else for providing the protections afforded to the
clients of Beaumont Cornish or for providing advice in relation to such
proposals. Beaumont Cornish has not authorised the contents of, or any part
of, this document and no liability whatsoever is accepted by Beaumont Cornish
for the accuracy of any information, or opinions contained in this document or
for the omission of any information. Beaumont Cornish as nominated adviser to
the Company owes certain responsibilities to the London Stock Exchange which
are not owed to the Company, the Directors, Shareholders, or any other person.
Group Statement of Profit or Loss
6 months to 31 December 2024 Unaudited 6 months to 31 December 2023 Unaudited Year to 30 June 2024 Audited
£ £ £
CONTINUING
OPERATIONS
Note
Revenue 390,099 805,741 1,895,029
4
Cost of sales (260,164) (238,207) (844,951)
Gross profit 129,935 567,534 1,050,078
Administrative expenses (401,220) (586,739) (2,054,057)
Operating loss (271,285) (19,205) (1,003,979)
Impairment charge - - (284,408)
Re-assessment of Deferred Consideration - - 24,541
Finance income 1 152 275,011
Finance costs - (590) (438)
Loss on ordinary activities before tax (271,284) (19,643) (989,273)
Taxation (1,273) 194,916 394,831
(Loss)/Profit for the period (272,557) 175,273 (594,442)
(Loss)/Profit for the period (272,557) 175,273 (594,442)
Earnings per Share (Basic) 3 (0.077) 0.006 (0.02)
Group statement of comprehensive income
6 months to 31 December 2024 Unaudited 6 months to 31 December 2023 Unaudited Year to 30 June 2024 Audited
£ £ £
(Loss)/Profit for the period (272,557) 175,273 (594,442)
Items which may subsequently be reclassified to profit or loss
Foreign exchange (loss)/gain on retranslation of foreign operations (494) 2,326 8,916
Other Comprehensive (loss)/Income for the period (494) 2,326 8,916
(Loss)/profit and total comprehensive (loss)/profit for the period (273,051) 177,599 (585,526)
Group Statement of Financial Position
As at 31 December 2024 Unaudited As at 30 June 2024 Audited
£ £
NON CURRENT ASSETS
Property, plant and equipment - 400
Goodwill 310,943 310,943
310,943 311,343
CURRENT ASSETS
Trade and other receivables 164,733 363,484
Cash and cash equivalents 60,602 23,155
225,335 386,640
TOTAL ASSETS 536,278 697,983
EQUITY AND LIABILITIES
Equity
Share capital 2,754,030 2,724,030
Share premium 55,661,077 55,661,077
Other reserves 396,682 398,985
Retained earnings (58,626,549) (58,419,049)
Total equity 185,240 364,953
Current liabilities
Short term debt 50,000 -
Trade and other payables 301,038 240,390
Provisions - 92,640
Total liabilities 443,678 333,030
TOTAL EQUITY AND LIABILITIES 536,278 697,983
Group Cash Flow Statement
6 months to 31 December 2024 Unaudited 6 months to 31 December 2023 Unaudited Year to 30 June 2024 Audited
£ £ £
Cash flow used in operating activities
(Loss)/profit for the period (272,557) 175,273 (585,525)
Adjustments for
Depreciation 400 14,757 14,357
Amortisation - - 315,091
Impairment of assets - - 284,408
Interest paid - 591 591
Interest received (1) (152) (153)
Share based payments 63,339 - 70,800
Increase in credit loss provision - - (48,000)
Re-evaluation of contingent consideration - - (24,451)
Profit on disposal of associate - (260,000) (275,000)
(Decrease)/Increase in provisions (92,640) (145,647) (145,647)
Current and deferred tax credit - - (211,390)
Total (301,459) (215,178) (605,008)
(increase)/decrease in receivables 198,766 251,293 233,055
(decrease)/Increase in payables excluding contingent consideration (59,367) (852,498) (813,518)
Tax credit recovered - 202,276 139,000
Net operating cash (outflow) (162,060) (614,107) (950,471)
Cash flow from/(used in) investing activities
Interest 1 152 152
received
Additions to intangible assets - - (15)
Payment of deferred/contingent consideration - (118,642) -
Net proceeds on disposal of fixed assets - - 275,000
Proceeds on disposal of associate - 260,000 -
Investment in associate - (15) -
Cash generated from investing activities 1 141,495 275,137
Group Cash Flow Statement (continued)
Cash flow from financing activities
Issue of equity share capital (net of costs) 30,000 415,927 428,604
Proceeds from issue of loan note 120,000 - -
Loan received 50,000 - -
Interest paid - (591) (591)
Cash generated by financing activities 200,000 415,336 428,013
Increase/(decrease) in cash and cash equivalents 37,941 (57,276) (247,321)
Effect of currency translation on cash (494) 2,325 -
Net increase/(decrease) in cash 37,447 (54,951) (247,321)
Opening cash and cash equivalents 23,155 270,476 270,476
Closing cash and cash equivalents 60,602 215,525 23,155
Net increase/(decrease) in cash 37,447 (54,951) (247,321)
Statement of Changes in Equity
Share Capital Share premium Share option reserve Retained earnings NCI Foreign currency translation reserve Total equity
£ £ £ £ £ £ £
At 30 June 2023 2,649,030 55,367,959 423,613 (57,967,571) 3 (21,958) 451,076
,
Profit for the period - - - 175,273 - - 175,273
Other comprehensive income - - - - - 2,327 2,327
Total comprehensive income - - - 175,273 - 2,327 177,600
Shares issued 75,000 375,000 - - - - 450,000
Share Issue Costs - (81,882) 60,488 - - - (21,394)
Share options issued - - - - - - -
Total transactions with owners, recognised directly in equity 75,000 293,118 - - - - 428,606
At 31 December 2023 2,724,030 55,661,077 484,031 (57,792,298) 3 (19,631) 1,057,282
Loss for the period - - - (769,645) - (769,645)
Other comprehensive income - - - - - 6,588 6,588
Total comprehensive income - - - (769,645) - 6,588 (763,057)
Shares issued - - - - - - -
Share Issue Costs - - - - - - -
Share options issued - - 70,800 - - - 70,800
Release to retained earnings - - (142,894) 142,894 - - -
Total transactions with owners, recognised directly in equity - - (72,094) (626,751) - - (698,845)
At 30 June 2024 2,724,030 55,661,077 411,937 (58,419,049) - (13,042) 364,953
Statement of Changes in Equity (continued)
Share Capital Share premium Share option reserve Retained earnings Foreign currency translation reserve Total equity
£ £ £ £ £ £
At 30 June 2024 2,724,030 55,661,077 411,937 (58,419,049) (13,042) 364,953
,
Loss for the period - - - (272,558) - (272,558)
Other comprehensive loss - - - - (494) (494)
Total comprehensive income - - - (272,558) (494) (273,052)
Shares issued 30,000 - - - - 30,000
Share Issue Costs - - - - - -
Share options issued - - 63,339 - - 63,339
Release to retained earnings - - (65,058) 65,058 - -
Total transactions with owners, recognised directly in equity 30,000 - (1,719) 65,058 - 93,339
At 31 December 2024 2,754,030 55,661,077 410,218 (58,626,549) (13,536) 185,240
Notes to the interim financial statements
1. General Information
Gfinity plc is a public limited company limited by shares, incorporated and
domiciled in England and Wales under the Companies Act 2006. Its registered
office is 128 City Road, London, England, EC1V 2NX. Its shares are quoted on
the AIM market of the 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.
These condensed interim financial statements were approved for issue on 19
March 2024.
2. Accounting Policies and Basis of Preparation
Basis of Preparation
The interim financial statements for the six months ended 31 December 2024
have been prepared using accounting policies that are consistent with those of
the audited financial statements for the year ended 30 June 2024. The interim
financial information should be read in conjunction with the Group's Annual
Report and Accounts for the year ended 30 June 2024, 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 2024 has been filed
with the Registrar of Companies. The auditors' report on those accounts was
unqualified, however, they did note a material uncertainty with regards to
going concern, relating to the fact that the going concern basis of
preparation was dependent on certain growth targets being met 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
Report and Accounts for the year ended 30 June 2024.
A copy of the Annual Report and Accounts to 30 June 2024 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 Report and Accounts of the Company
for the year ended 30 June 2024 which can be obtained from the Company's
website: www.gfinityplc.com (http://www.gfinityplc.com) .
Going Concern
At 31 December 2024 the group had cash of £60,602.
The Company focuses on investing in and developing websites and advertising
technology. Capital will be deployed in the following year to further develop
our technologies.
As also fully set out in the 2024 Annual Report:
The Directors have prepared a base case cashflow forecast, which assumes
certain growth targets are met; and
The Directors consider that the growth targets are reasonable and attainable,
and in view of this, believe that the going concern basis of preparation
continues to be appropriate.
3. Earnings per share
Basic earnings per share is calculated by dividing the profit (previous
periods - loss) attributable to shareholders by the weighted average number of
ordinary shares in issue during the period.
For the 6 months to 31 December 2024, diluted EPS is shown below. For previous
periods, 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 for
those previous periods.
6 months to 31 December 2024 6 months to 31 December 2023 Year to 30 June 2024
All operations £ £ £
Earnings (272,557) 175,273 (594,442)
Number Number Number
000's 000's 000's
Weighted average number of ordinary shares 3,504,030 3,139,024 3,280,945
Earnings per share (0.077) 0.006 (0.02)
Continuing operations
Earnings (272,557) 175,273 (594,442)
Weighted average number of ordinary shares 3,504,030 3,139,024 3,280,945
Earnings per share (0.077) 0.006 (0.02)
Diluted earnings per share
Earnings (272,557) 175,273 (594,442)
Weighted average number of ordinary shares 3,833,056 3,556,412 3,280,945
Loss per ordinary share for continuing operations (0.071) 0.005 (0.02)
4. Revenue
The Group's policy on revenue recognition is as outlined in note 2 of the
financial statements for the year ending June 2024. The period ending December
2024 included £Nil in the contract liability balance and at the beginning of
the period (December 2024: £Nil and year ending June 2024: £Nil).
The Group's revenue disaggregated by primary geographical markets is as
follows:
6 months to 31 December 2024 6 months to 31 December 2023 Year to 30 June 2024
£ £ £
United Kingdom 8,073 26,009 410,561
North America 314,102 679,559 1,284,392
ROW 67,923 100,713 200,076
Total 390,098 805,741 1,895,029
The Group's revenue disaggregated by pattern of revenue of revenue recognition
is as follows:
6 months to 31 December 2024 6 months to 31 December 2023 Year to 30 June 2024
£
Services transferred at 252,572 805,741 1,817,731
a point in time
Services transferred over time 136,776 - 77,298
Total 390,098 805,741 1,895,029
5. Goodwill and Intangible Fixed Assets
The Group holds goodwill in respect of the acquisitions of the trade and
assets of EpicStream and RealSport in earlier periods.
A comprehensive impairment review was performed for the purposes of assessing
the carrying value of goodwill as at 30 June 2024, using a fair value method,
on the basis of a multiple of revenue achieved for the respective brands in
the year ended 30 June 2024.
As a result of the close proximity of the assessment of the carrying values
undertaken as at 30 June 2024, and now, the Directors do not consider any
further impairment provisions are required.
A full review of the carrying values for goodwill and intangible fixed assets
will be undertaken at the time of reporting on the full year results to 30
June 2025.
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