REG - Gfinity PLC - Update on first half performance

GfinityAnnouncement

09/03/2022 07:00

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RNS Number : 1550E  Gfinity PLC  09 March 2022

The information contained within this announcement is deemed by the Company to
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.

 

 

 

9 March 2022

Gfinity plc

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

 

Update on first half performance and full year outlook

 

Gfinity plc (AIM: GFIN), a world-leading video game media and technology
business, announces an update on half year performance and outlook for the
full year, ahead of the publication of unaudited interim results for the
six-month period ended 31 December 2021, expected to be announced in March
2022.

H1 performance

Through the first half of the financial year, the Company has continued to
implement its strategic focus on 'what it owns', in particular its fast
growing owned audience in the Gfinity Digital Media (GDM) segment of the
business.

Gfinity expects to report an adjusted operating loss of £0.4m (H1 FY21:
£0.9m loss). This represents a 52 per cent. year on year improvement,
building on a 71 per cent. improvement in the prior year, as the business
continues on its path towards profitability.

Revenue for the period is expected to be £3.3m (H1 FY21: £3.0m),
representing an improvement of 8% year on year.  This figure has been
impacted by the decision to consolidate the V10 R League, Gfinity's jointly
owned digital motorsport property in conjunction with Abu Dhabi Motorsports
Management, into a single season taking place in the latter part of the
financial year.  If revenues relating to this were eliminated from the
comparative period, the year on year revenue increase would be 24%.

Gfinity Digital Media:

GDM revenues in H1 were £1.6m (H1 FY21: £1.0m), a 62 per cent. improvement
year on year. This is a result of:

·    Increased annualised revenue per user of 23.3p, which represents 31
per cent. YoY improvement and a 270 per cent. improvement on the rate at the
launch of the GDM in May 2020; and

·    A rise in Average Monthly Active Users to 13.9m, which represents a
23 per cent. YoY increase.

These figures benefit from the successful integration of the Stock Informer
business into the broader GDM network. Stock Informer delivered revenue of
£0.4m in the period between acquisition completion on 13 September 2021 and
31 December 2021.

GDM revenue delivered a gross profit of £1.0m, a 43% year on year improvement
(H1 FY21: £0.7m).

During the period, there was also significant work undertaken to continue to
optimise site infrastructure and performance, utilising the Company's
proprietary Manifold content management system (CMS).

As a result, contrary to trends seen in previous year, Gfinity has been able
to sustain its strong user numbers into the second half of its financial year.
Monthly active users across GDM platforms exceeded 15m in January 2022
(January 2021: 11.3m) and rose again to over 16m in February (February 2021:
9.9m). This was a record month for GDM, despite it being the shortest month of
the year in a traditionally quiet period. Including related social channels,
this means Gfinity is now connecting with over 100m gamers each month.

Technology and Esports Solutions:

Revenues from licensing of Gfinity's proprietary esports technology and
delivery of esports solutions for clients remained flat year on year at
£1.6m.  Within this segment, Gfinity continued to be the delivery partner
for the F1 Esports Series, which broke viewership and engagement records in
2021, achieving over 23 million views across digital platforms, a 103 per
cent. year on year increase.

The key strategic focus in this division has been the productisation of
Gfinity's technology platform, so that it can be integrated directly into
publisher's games and media owners' websites and licensed under a SaaS model.
This is achieved without the need for extensive integration each time it is
deployed.

During the period, the platform was utilised in this way to deliver in-app the
competitive programme for three of the largest mobile game titles, which
featured more than 50,000 participants around the world.  This represented an
important proof of concept for the platform, which was also deployed for the
fourth year to run the qualification for the ePremier League programme.

The beta version of this updated product will be launched in the second
quarter of 2022. The Company expects this to create a significant new revenue
stream in the future.

Co-Owned Esports Properties:

As set out above, following the decision to consolidate the V10 R League
programme into a single season, in the second half of the year, there was no
revenue from this segment in H1 (H1 FY21: £0.4m).

Consolidation of the two seasons into one will allow for the creation of a
live finals event taking place in Abu Dhabi, which is seen as an important
step to unlocking sponsorship revenue from the region.

Operating Expenditure:

The growth in the period has been achieved with a reduction in operating
expenditure of £0.2m to £2.2m (H1 FY21: £2.4m).

Full year outlook

Notwithstanding the strong progress made during H1 in the areas of greatest
strategic value, the Directors now expect full year revenue to be below market
expectations.  This is influenced by a number of factors including:

-    A slower than anticipated return to live esports events, which while
not the long-term strategic focus of the business, still has an impact on
short term revenue and profits

 

-    Ongoing discussions around a material partnership in the betting
sector, which the Directors still expect to complete, but which is now
unlikely to deliver the impact on FY22 revenues that originally been
anticipated

The Directors do not believe the long-term prospects or future pathway to
profitability in 2023 and beyond have changed.

Cash position:

As at 31 December 2021, Gfinity had cash reserves of £1.5m (30 June 2021:
£1.4m). The Company has current cash reserves of £0.8m. Following the delay
in delivery of certain revenue streams, the directors believe it is in the
best interests of the Group to secure additional funding. The Directors have
therefore taken the decision to undertake a fundraise over the next few weeks
in order to secure a minimum of £1m in new working capital. The Directors
have held discussions with certain key shareholders who are supportive of the
fundraise. Certain Directors have also committed to invest in the Group as
part of the fundraise.

The Directors currently expect the placing to be accompanied by the issue of
one warrant for one new ordinary share subscribed for. The exercise price for
the warrant will be the same as the placing price and will need to be
subscribed for within 1 year.  In the event that the Company does not raise
new working capital, the Directors of the Company will have to revise its
intended growth strategy.

The Company will make a further update on the fundraise as and when
appropriate.

 

ENDS

 

Enquiries:

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

 John Clarke, CEO                                                  Via Teneo

 Teneo (Media)                                                     Tel: +44 7880 715975
 Anthony Di Natale                                                 Gfinity@teneo.com (mailto:Gfinity@teneo.com)

 Canaccord Genuity Limited (AIM Nominated Adviser & Broker)        Tel: +44 (0)207 523 8150
 Bobbie Hilliam / Georgina McCooke

About Gfinity

Gfinity (AIM: GFIN) is a market-leading digital media publisher and
technology company in the rapidly growing esports and competitive gaming
sector. Created by gamers for the world's three billion gamers, Gfinity has
a unique understanding of this fast-growing global community. It uses this
expertise both to provide advisory services and to design, develop and deliver
unparalleled experiences and winning strategies for game publishers, sports
rights holders, commercial partners and media companies.

Gfinity connects its partners with the esports community in authentic and
innovative ways. This consists of on‑and-off-line competitions and
industry‑leading content production. Relationships include Activision
Blizzard, EA SPORTS, F1 Esports Series Red Bull, Abu Dhabi Motorsport
Management and Coca Cola.

Gfinity connects directly with tens of millions of gamers each month through
its digital media group, Gfinity Digital Media. Gfinity Digital Media includes
websites such as: Gfinityesports, RealSport101, Epicstream, Stock Informer,
StealthOptional, RacingGames.gg, MTGRocks.com (http://mtgrocks.com/)  and
their respective social channels.

All Gfinity services are underpinned by the Company's proprietary technology
platform, delivering a level playing field for all competitors and supporting
scalable multi-format leagues, ladders and knockout competitions.

 

 

 

 

 

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