TIDMGFIN
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 GBP0.4m
(H1 FY21: GBP0.9m 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 GBP3.3m (H1 FY21:
GBP3.0m), 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 GBP1.6m (H1 FY21: GBP1.0m), 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 GBP0.4m in the period between
acquisition completion on 13 September 2021 and 31 December
2021.
GDM revenue delivered a gross profit of GBP1.0m, a 43% year on
year improvement (H1 FY21: GBP0.7m).
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 GBP1.6m. 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:
GBP0.4m).
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 GBP0.2m to GBP2.2m (H1 FY21: GBP2.4m).
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 GBP1.5m (30
June 2021: GBP1.4m). The Company has current cash reserves of
GBP0.8m. 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 GBP1m 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
John Clarke, CEO Via Teneo
Teneo (Media) Tel: +44 7880 715975
Anthony Di Natale Gfinity@teneo.com
Canaccord Genuity Limited (AIM Nominated Tel: +44 (0)207
Adviser & Broker) 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 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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