TIDMGFIN
RNS Number : 6796A
Gfinity PLC
28 March 2017
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR)
Gfinity plc
("GFIN" or the "Company")
Unaudited Half Year results for the period ended 31 December
2016
Gfinity plc (AIM: GFIN), a leading eSports business, announces
its half year results for the six-month period ended 31 December
2016.
Financial Highlights:
-- Revenue increased 45% on the same period in the prior year to
GBP0.9m (H1 2016: GBP0.6m), up 10% sequentially on the previous six
months.
-- Operating loss decreased by GBP0.2m on the same period in the
prior year to GBP1.7m, (H1 2016: loss of GBP1.9m), up GBP0.4m
sequentially on the previous six months, reflecting planned
investment in events, strengthening the quality of the Gfinity team
and advancements in technology.
-- Loss per share reduced 75% to 1p (H1 2016: 4p) reflecting the
increased number of shares in issue in the period.
-- Cash and cash equivalents, as at 31 December 2016, of GBP2.7m
(30 June 2016: GBP0.8m and 31 December 2015: GBP1.6m).
Operational highlights
-- Raised GBP3.7m in July 2016, through oversubscribed placing.
This included the introduction of a new strategic investor, Charles
Street International Holdings Ltd.
-- Appointed by development studio "The Coalition" and game
publisher Microsoft as one of two global partners for 2016/17 Gears
of War Pro-Circuit. London event delivered in December 2016, with
further events to follow in Mexico City and Paris during H1
2017.
-- Delivered events across a number of game titles and with a wide range of partners:
o HP Omen: CS:GO invitational at EGX in September 2016, the UK's
largest gaming exhibition, delivering over 10 million online views
across four days.
o Gillette: The Gillette Championship in July 2016, a
Pro-Evolution soccer event staged on line and at the Gfinity arena,
attracting players from across Europe.
o Activision Blizzard: Call of Duty Summer Masters in July 2016,
featuring Europe's top teams as part of the Call of Duty World
Championship Series.
o Microsoft Xbox/ The Coalition: Gears of War UK Open, featuring
the UK's top Gears of War teams.
o Nintendo: The Great British Splat-Off. A first partnership
with Nintendo, featuring the Splatoon game.
-- Co-staged the inaugural eSports Industry Awards event from
The Brewery in Central London, a celebration of achievements within
the fast-growing eSports sector, attended by a number of the top
players, talent and team owners, attracting sponsors including Now
TV, Twitch and Xbox.
-- Appointed by studio "343i" and Microsoft to deliver London
and Mexico City events as part of Halo Championship Series in
February 2017
-- Announced launch of the Gfinity Elite Series UK, a bedroom to
podium framework for eSports in the UK, to launch in June 2017.
Post Period Highlights:
-- Delivered Gears of War Pro Circuit and Halo Championship Series events in Mexico City
-- Contracted with Valve (Counter-Strike: Global Offensive),
Capcom (Street-Fighter V) and Rocket League (Psyonix) for those
games to form part of inaugural Elite Series.
-- Announced partnership with Mediacom to develop and value
sponsorship proposition around Elite Series.
-- Delivered first European event as part of the Call of Duty
World League, Presented by PlayStation(R)4 programme at the Gfinity
Arena in London in January 2017.
-- OMEN by HP announced as official hardware provider to the Gfinity Elite Series.
Neville Upton, Chief Executive Officer, Gfinity plc, said:
"During the six months to December 2016, we continued to build
on our strategic objective to establish Gfinity as a leading player
in the fast-growing eSports sector. I am also very pleased to be
able to report another period of strong revenue growth, 45% up on
the equivalent period in 2015. Gfinity has now built an excellent
reputation for the quality of our technology, people and service
delivery. This is evidenced by the range of companies, that
selected Gfinity as their partner during the latter half of 2016,
both in the UK and overseas.
"The eSports sector continues to grow rapidly. Market analysts
Newzoo estimate that the global eSports audience will reach 385
million during 2017, a 19% increase on the prior year, with more
and more sponsors and broadcasters seeking to enter the market.
Having established a strong reputation for quality and as the only
independent and publicly listed eSports company in Europe, Gfinity
is well positioned to take advantage of this opportunity."
Enquiries:
Gfinity plc www.gfinityplc.com
Neville Upton, Chief Executive Via Walbrook PR
Officer
Allenby Capital Limited - Nominated Tel. +44 20 3328
Adviser and Broker 5656
Jeremy Porter / John Depasquale
/ James Thomas
Walbrook PR (Media & Investor Tel: +44 (0)20
Relations) 7933 8780
Paul Cornelius / Sam Allen / Paul or gfinity@walbrookpr.com
Whittington
About Gfinity:
Founded in 2012, Gfinity has quickly established itself as one
of the world's leading eSports companies. The London-based business
enjoys strong relationships with game publishers, players and the
wider eSports community and has already built an excellent
reputation for delivering high quality competitions, both on-line
and off-line, and producing industry leading eSports
broadcasts.
Gfinity operates a market leading tournament platform, with over
700,000 registered users eligible to compete in its online
competitions across a number of leading game titles. It also stages
high profile live off-line events, which see the top players in the
world travel to the Gfinity Arena in London to take part in
competitions, which are broadcast on-line to millions of viewers
around the world.
Gfinity expects to be able to monetise its strong position in
eSports by exploiting the commercial rights relating to its own
events, including the Gfinity Elite Series, launching in 2017, and
by creating and delivering bespoke events for sponsors and game
publishers seeking to engage with the growing eSports
community.
Gfinity websites:
Investor: www.gfinityplc.com
Commercial: www.gfinity.net
About eSports:
eSports is a global term for organised multi-player video game
competitions, particularly between professional players, that are
streamed on the internet and watched by hundreds of millions of
fans around the world. Leading titles include League of Legends,
Counter Strike: Global Offensive, Defense of the Ancients 2 (DotA
2), Call of Duty and Rocket League. The industry is growing
rapidly, with new communities developing around more and more
titles.
The global eSports audience is expected to reach 385 million in
2017 (source Newzoo). With the majority of this audience being
male, under the age of 35 and relatively affluent, this is an
attractive demographic for broadcasters and sponsors, with many of
these people difficult to reach via conventional channels.
The 2015 League of Legends Championships finals in Berlin were
watched by 36 million people, with a peak concurrent viewership of
14 million viewers, while at DotA 2's flagship annual championship
'The International 2016' competitors from around the world competed
for a prize pot of over $20 million.
Commercially, the global eSports market is expected to grow 41%
to $696 million in 2017. By 2020, eSports revenues are expected to
grow to $1.49 billion.
Chairman's Review
Overview
The half year to December 2016 was a period in which Gfinity
continued to deliver on its strategic objective to build a leading
brand within the fast-growing eSports sector. The period saw
further strong revenue growth, up 45% on the equivalent period in
the prior year, achieved across a wide range of clients and
relating to events both in the UK and overseas.
Gfinity raised GBP3.7 million before costs by way of a placing
in July 2016, which included the introduction of a new major
shareholder, Charles Street International Holdings Limited. This
provided the capital to continue to invest in the quality of its
team and in its underlying technology, including a scaleable,
automated tournament platform that will enable Gfinity to continue
to deliver a high quality product to an ever growing number of
customers. The operational capability that Gfinity has now
established is reflected in the breadth of partners with whom
Gfinity worked during the period, ranging from established major
games publishers to new sponsors making their first entry into the
eSports market.
The eSports market continues to grow rapidly. The global
audience of 385 million in 2017 represents an increase of 19% on
2016, while commercial activity in the sector is starting to
increase. The past six months have seen a number of major new
sponsors enter the marketing. The competition between broadcasters
for content rights is increasing, with a number of streaming
platforms challenging Twitch's market leading position and several
leading linear broadcasters, most notably, Turner Sports in the
USA, broadcasting eSports content for the first time.
During 2016, Gfinity announced the Gfinity Elite Series, to
launch in June 2017. This new and dynamic competition format allows
gamers of any level to be able to compete for an opportunity to be
selected into professional eSports teams. We expect the national
reach of the competition and the high-quality content produced to
be an extremely attractive proposition for potential partners,
sponsors and broadcasters.
Operating Review
Partnership and Events
As a result of its strong reputation within the industry,
Gfinity has continued to develop valuable relationships with games
publishers, potential sponsors and broadcasters throughout the
period.
In August 2016, Gfinity announced that it was to be one of only
two global partners for the 2016/17 Gears of War 4 Pro-Circuit
eSports tournament alongside Major League Gaming. This agreement,
signed with the video game developer The Coalition and Xbox, means
that Gfinity will host live events in London, Paris and Mexico City
as part of the international circuit, with a cumulative prize pool
for all events on the circuit reaching $1 million (GBP760,000).
In the same month, Gfinity also signed a partnership agreement
with OMEN by HP, the high-performance gaming laptop, desktop and
accessory range, to deliver the Counter Strike: Global Offensive
invitational competition. The OMEN and Gfinity branded tournament
was held at the NEC in Birmingham in September as part of the EGX,
the UK's largest gaming exhibition and delivered over 10 million
online views across four days. The winner took home a prize pot of
$100,000 ( GBP76,000).
Gfinity hosted other notable events during the period. The
Gillette Championship was a football based eSports competition that
took place in the Gfinity Arena in July in association with the
popular gaming title Pro-Evolution Soccer by Konami. Other events
staged on behalf of publishers included the Call of Duty Summer
Masters on behalf of Activision Blizzard, forming part of the World
Championship series for that game and the Great British Splat-Off,
which represented a first partnership with the game publisher
Nintendo.
In November 2016, Gfinity co-staged the inaugural eSports
Industry Awards event from The Brewery in Central London. This
event was a celebration of the achievements within the fast-growing
eSports sector and was attended by a number of top players, talent
and team owners, attracting sponsors including Now TV, an Internet
television service owned by Sky plc, Twitch, the world's leading
video platform and community for gamers and Xbox, a video gaming
brand created and owned by Microsoft.
Also in November 2016, the Company announced the launch of the
Gfinity Elite Series UK, a dynamic new eSports league format,
featuring three of the world's most popular gaming titles, giving
gamers of all competencies a chance to be drafted into professional
teams in 2017. Launching first in the UK, the Gfinity Elite Series
will provide regular, year-round high quality eSports content and
will have a national reach, offering a target audience attractive
to potential sponsors.
Financial Review:
Revenue for the six months to 31 December increased to GBP0.9m
(H1 2016: GBP0.6m), up 45% on the equivalent period in 2015 and 10%
on the previous six months to June 2016, resulting from a mix of
sponsorship fees from game publishers, premium subscriptions and
ticket sales.
The operating loss of GBP1.7 million decreased by GBP0.2 million
(H1 2016 (GBP1.9m), but is up GBP0.4 million on the previous
six-month period, reflecting planned investment in events and in
further strengthening the quality of the Gfinity team and
technology platform.
In July 2016, the Company raised GBP3.7million through an
oversubscribed placing. This included introduction of new strategic
investor, Charles Street International Holdings Limited, which has
strong sector experience. Loss per share reduced 75% to 1p (H1
2016: 4p), while cash and cash equivalents as at 31 December 2016
were GBP2.7m (30 June 2016: GBP0.83m and 31 December 2015:
GBP1.55m).
Post-period
In January 2017, Gfinity announced that it had been appointed by
Activision Blizzard to stage two events as part of the Call of Duty
World League programme, the first of which took place from 26(th)
to 29(th) January.
Since the period end, Gfinity has also delivered a number of
other previously announced events, including the Gears of War Pro
Circuit event in Mexico City and Halo Championship Series events in
both London and Mexico City.
In January 2017, Gfinity entered into a strategic partnership
with MediaCom, one of the world's leading media agencies, to
develop and value the sponsorship proposition around Gfinity Elite
Series UK.
Finally, in March 2017, the Company contracted with Valve,
publisher of CS:GO, Capcom, publisher of Street-Fighter V, and
Psyonix, publisher of Rocket League, for those games to form part
of the inaugural Gfinity Elite Series. Also in March, HP Omen was
announced as the first sponsor for the series.
Outlook
This has been a strong period for Gfinity, during which time we
have continued to establish ourselves as a leading eSports business
with an excellent reputation, further illustrated by the quality
and range of partners signed up in the latter half of 2016. We are
experiencing significant ongoing growth of the eSports market and
an increasing in commercial activity in the sector, leaving Gfinity
very well positioned as the only independent and publicly listed
eSports company in Europe. Gfinity will continue to invest in the
quality of its people, technology and its own tournaments,
including the launch of the Gfinity Elite Series in June 2017, in
order to leverage this position.
Tony Collyer
Chairman
28 March 2017
Statement of Comprehensive Income
6 months 6 Months 6 Months
to 31 December to 31 December to 30
2016 2015 June 2016
Unaudited Unaudited Unaudited
GBP GBP GBP
CONTINUING OPERATIONS
Revenue 902,212 624,292 822,227
Cost of sales (993,174) (957,190) (648,846)
Gross profit/(loss) (90,962) (332,898) 173,381
Administrative expenses (1,623,952) (1,550,279) (1,442,148)
Operating loss (1,714,914) (1,883,177) (1,268,767)
Finance income 4,038 5,272 9,921
Loss on ordinary activities
before tax (1,710,876) (1,877,905) (1,258,846)
Taxation 0 97,176 4
---------------- ---------------- ------------
Retained loss for
the year (1,710,876) (1,780,729) (1,258,842)
Loss and total comprehensive
income for the period (1,710,876) (1,780,729) (1,258,842)
Loss per share (basic -GBP0.01 -GBP0.02 -GBP0.04
and diluted)
Statement of Financial Position
As at As at
31 December 30 June
2016 2016
Unaudited Audited
GBP GBP
NON CURRENT ASSETS
Property, plant
and equipment 237,274 294,219
Intangible fixed
assets 97,979 122,974
CURRENT ASSETS
Inventories 9,749 9,707
Trade and other
receivables 727,984 439,270
Cash and cash equivalents 2,713,212 830,403
3,450,945 1,279,380
TOTAL ASSETS 3,786,198 1,696,573
EQUITY AND LIABILITIES
Equity
Ordinary shares 157,414 83,414
Share premium account 9,202,990 5,640,233
Other reserves 84,935 55,458
Retained earnings (6,646,548) (4,935,672)
Total equity 2,798,791 843,433
Non-current liabilities
Borrowings 0 0
Current liabilities
Trade and other
payables 987,407 853,140
Total liabilities 987,407 853,140
TOTAL EQUITY AND
LIABILITIES 3,786,198 1,696,573
Cash Flow Statement
6 months 6 Months 6 Months
to 31 to 31 to 30
December December June 2016
2016 2015 Unaudited
Unaudited Unaudited
GBP GBP GBP
Cash flow used in operating
activities
Net cash used in operating
activities (1,723,043) (1,936,349) (564,901)
Cash flow from/(used
in) investing activities
Interest received 4,038 5,272 9,921
Additions to property,
plant and equipment (34,943) (215,833) (17,784)
Additions to intangible
fixed assets 0 0 (148,750)
Net cash used in investing
activities (30,905) (210,561) (156,613)
Cash flow from/(used
in) financing activities
Issue of equity share
capital 3,636,757 968,767 (2,501)
Net cash from financing
activities 3,636,757 968,767 (2,501)
Net increase in cash
and cash equivalents 1,882,809 (1,178,143) (724,015)
Opening cash and cash
equivalents 830,403 2,732,561 0
Closing cash and cash
equivalents 2,713,212 1,554,418 (724,015)
Statement of Changes in Equity
Ordinary Share Share Retained Total
shares premium option earnings equity
reserve
GBP GBP GBP GBP GBP
At 30 June 2015 77,845 4,679,536 62,447 (1,896,101) 2,923,727
Loss for the
period 0 0 0 (1,780,729) (1,780,729)
Total comprehensive
income 0 0 0 (1,780,729) (1,780,729)
Reduction in
capital 0 0 0 0 0
New shares issued 5,569 1,052,431 0 0 1,058,000
Share issue cost 0 (89,233) 0 0 (89,233)
Share options
expensed 48,178
Total transactions
with owners,
recognised directly
in equity 5,569 963,198 48,178 0 1,016,945
At 31 December
2015 83,414 5,642,734 110,625 (3,676,830) 2,159,943
Loss for the
period 0 0 0 (1,258,842) (1,258,842)
Total comprehensive
income 0 0 0 (1,258,842) (1,258,842)
New shares issued 0 0 0 0 0
Share issue cost 0 (2,501) 0 0 (2,501)
Share options
expensed 0 0 (55,167) 0 (55,167)
Total transactions
with owners,
recognised directly
in equity 0 (2,501) (55,167) 0 (57,668)
At 30 June 2016 83,414 5,640,233 55,458 (4,935,672) 843,433
Loss for the
period 0 0 0 (1,710,876) (1,710,876)
Total comprehensive
income 0 0 0 (1,710,876) (1,710,876)
New shares issued 74,000 3,626,000 0 0 3,700,000
Share issue cost (63,243) 0 0 (63,244)
Share options
expensed - 0 29,477 0 29,477
Total transactions
with owners,
recognised directly
in equity 74,000 3,562,757 29,477 0 3,666,233
At 31 December
2016 157,414 9,202,990 84,935 (6,646,548) 2,798,790
Notes to the interim financial statements
1. Accounting Policies and Basis of Preparation
Basis of Preparation
The interim financial statements for the six months ended 31
December 2016 have been prepared using accounting policies that are
consistent with those of the audited financial statements for the
period ended 30 June 2016 and in accordance with IAS 34, "Interim
Financial Reporting" as adopted by the European Union. The interim
financial information should be read in conjunction with the
Group's Annual Report and Accounts for the year ended 30 June 2016,
which has been prepared in accordance with IFRSs as adopted by the
European Union.
The interim financial information contained in this report has
been reviewed but not audited and 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 2016
has been filed with the Registrar of Companies. The auditors'
report on those accounts was unqualified, did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying the report and did not contain
statements under s498(2) or s498(3) of the Companies Act 2006.
The interim financial statements are unaudited and were approved
by the Board of Directors on 28 March 2017.
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 2016. A copy of these accounts can be obtained from
the company's website 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 2016 which can be obtained from the company's website
www.gfinityplc.com.
2. 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 6 months Year
ended ended ended
31 December 31 December 30 June
2016 2015 2016
GBP GBP GBP
Profit/ (Loss)
attributable
to shareholders (1,710,876) (1,863,329) (3,039,571)
Number Number Number
000's 000's 000's
Weighted average
number of ordinary
shares 149,326 79,404 81,504
GBP GBP GBP
Loss per ordinary -GBP0.01 -GBP0.02 -GBP0.04
share
3. Notes to the Cash Flow Statement
6 months 6 Months 6 months
to 31 to 31 to 30
December December
2016 2015 June 2016
Cash flows from operating
activities
Loss before taxation (1,710,876) (1,780,729) (1,356,022)
Depreciation 116,883 67,874 82,317
Amortisation of intangible
fixed assets
Interest received (4,038) (5,272) (9,921)
Share based payments 29,477 48,178 (55,167)
(Increase) in Inventories (42) (4,628) (1,861)
(Increase) in trade
and other receivables (288,714) (220,216) 351,296
Increase in trade
and other payables 134,267 (41,556) 292,446
Disposal of fixed
assets 0 0 9,055
Corporation tax paid/
received 0 0 97,180
Cash used by operating
activities (1,723,043) (1,936,349) (590,677)
Interest paid - - -
Net cash used by
operating activities (1,723,043) (1,936,349) (590,677)
4. Remuneration of Key Management Personnel
During the period a total of 12,145,670 options over Ordinary
shares in the Company were granted. No options lapsed or were
exercised during the period.
The total number of outstanding options in issue as at 31
December 2016 was 16,966,711 (30 June 2016: 4,821,041).
Of the options granted in the period, a total of 8,570,670 were
granted to directors, as summarised in the table below:
Director Date of Exercise Number Total options
Option Price of Options held following
Grant granted the grant
---------------------- --------- ------------ ------------ ----------------
21 July
Neville Upton 2016 GBP0.11875 7,870,670 7,870,670
---------------------- --------- ------------ ------------ ----------------
21 July
Jonathan Hall 2016 GBP0.11875 500,000 1,548,571
---------------------- --------- ------------ ------------ ----------------
21 July
Philip Shuldham-Legh 2016 GBP0.11875 100,000 643,000
---------------------- --------- ------------ ------------ ----------------
21 July
Paul Kent 2016 GBP0.11875 100,000 200,000
---------------------- --------- ------------ ------------ ----------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZMGZFGNVGNZZ
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March 28, 2017 02:01 ET (06:01 GMT)
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