AGM Update

Gfinity has provided an update on trading ahead of its Annual General Meeting (AGM).

Gfinity (AIM: GFIN), a world-leading esports and gaming solutions provider, today provides an update on trading ahead of its Annual General Meeting (AGM) at 10.00 a.m at the Gfinity Arena, Vue Cinema Fulham Broadway Retail Centre, Fulham Road, London SW6 1BW. 

At the AGM, Neville Upton, Chairman, will provide the following update:

“I am pleased that the positive momentum we saw at the start of the current financial year has continued. The Company was operationally profitable in October and November and is on track for another strong performance in December 2020. The fact we have achieved month-on-month operating profitability for the first time since our AIM listing in December 2014 is an impressive milestone and a pleasing testament to the hard work of the team.  Given the project-based nature of some of our revenue streams and some seasonality in our business, it does not yet imply we will be always profitable on a monthly basis going forward, but it reflects the excellent progress made over the past nine months.

I am very pleased with the way we have sharpened our operational focus. It has positioned us strongly and the full extent of the market opportunity for Gfinity is becoming apparent. This positive performance has also been achieved against a challenging economic backdrop and the need to adapt to new ways of working. I would like to thank our employees, business partners and clients for their continued hard work and support.

The Company has come a very long way over the last nine months under the leadership of CEO John Clarke. The business has been recalibrated on three core areas where the Company has competitive strength and momentum, being: products and services that we own (Gfinity Digital Media), co-own (partnerships), and building communities for others (tech IP and world class production). We have signed a multi-year deal with Formula 1, a five-year partnership with ADMM, seen strong growth in users in GDM and signed our first technology licensing contract. The business is now more efficient than ever following a rationalisation of our cost base, with further reductions expected to come in 2021. In November 2020, monthly operating costs were £385,000, a reduction of 47% since November 2019, with a further reduction expected on culmination of our office lease in March 2021.  This leaves us well capitalised to deliver on our business plan.

Whilst we remain mindful of the broader challenges in the operating environment, our recent performance is evidence that the strategy is starting to deliver and is driving positive momentum across the business.”

John Clarke, CEO, will comment as follows:

“Since April, the team has worked incredibly hard to put in place the foundations and building blocks needed to drive profitability and I am delighted that we are now seeing positive momentum across the Company. We have an operational mantra that is easy to understand and that is delivering – focus on what we own, what we co-own and build communities for others utilising our tech IP and our world class production expertise.

“It was a major achievement for the business to deliver successive months of operational profit for the first time in its history in both October and November. It is a sign that the changes we have made are delivering and this gives us confidence for the future. We are alive to the risks and challenges facing our customers and markets, but we will stay focused on what we can control and will continue to deliver outstanding business results for our partners and clients. We will also maintain the resilience which has guided us through 2020 and I am confident that Gfinity is now well positioned for growth in 2021 and beyond.”

Update on the Formal Sale Process

In October 2020, Gfinity launched a Formal Sales Process (FSP) to explore all strategic options to capitalise on the potential market opportunity and to deliver shareholder value.  This includes options for making acquisitions, forming partnerships, separating the activities of the Group of a potential sale of the Company. 

The FSP continues to progress as planned with the Company continuing to engage in conversations as the Board evaluates the best options to accelerate the growth of the business.

The Company will provide further updates as and when appropriate.

Update on strategic priorities  

Gfinity has continued to deliver against its three strategic pillars focused on products and services that it owns (Gfinity Digital Media), co-owns (partnerships), and building communities for others (tech IP and world class production).

What we own (Gfinity Digital Media – GDM)

Over the last 18 months, Gfinity has significantly grown and expanded its digital media group, GDM.  As previously announced, in November 2020, GDM delivered a record month with 14 million monthly users across all sites (12 million in October 2020) and revenues in the month exceeded £275,000 for the first time. 

In December 2020, Gfinity announced the acquisition of the trade and assets of Epicstream LLC.  Epicstream LLC is a leading online news community for fantasy and sci-fi movies, television, video games, collectible cards and comic books and it will sit within the Company’s digital media proposition. Gfinity will continue to look to complement organic growth with acquisition opportunities that will enable it to further build its own communities and deliver its own content into these communities. GDM remains on target to deliver revenue of approximately £2 million in the current financial year.

What we co-own (partnerships)

 Gfinity is focused on working with its partners to create new ideas that capture the imagination of young gamers.  This partnership model is evidenced in the five-year agreement with Abu Dhabi Motorsport Management (ADMM) announced in May 2020.  Together, Gfinity and ADMM designed and built the Global Racing Series, with the first product, the V10 R-League, launched in September 2020.  Season one featured eight of the world’s leading virtual racing teams and was viewed by more than 40 million fans on ESPN, BT Sport and STARZ ARABIA.  Season two is scheduled to begin in Spring 2021.

Building communities for others (tech IP and world class production)

Gfinity continues to deliver esports solutions for some of the world’s biggest brands and sports rights holders, using its company owned tech IP and world class production facilities.  In October 2020, the Company started the delivery of Season 4 of the Formula 1 Esports Series virtually, utilising its proprietary virtual production service.  This is part of the multi-year agreement signed with Formula 1 in May 2020.

In September 2020, Gfinity was appointed by Cadbury to deliver a new gaming tournament, the ‘Cadbury Heroes Parents League’ and in October 2020, the Company was appointed by Red Bull as the production partner for ‘Red Bull Worlds Simplified’, a new digital show focused on the League of Legend’s World Championship Final. Gfinity is currently delivering a consumer engagement programme for Trebor called ‘Give me strength’, which is linked to the V10 R-League and most recently, announced it was reappointed as the tournament operator for the third season of the ePremier League.

Sale of holding in Esports Awards Ltd

Gfinity today also announces the sale of its holding in Esports Awards Ltd for £500,000.  The proceeds from the sale will be used to accelerate further growth across Gfinity’s three strategic pillars.

Gfinity acquired a 33% stake in Esports Awards Ltd in 2017 for £138,000, with the remaining 67% of the entity owned by Premier Team Promotions Ltd.  The investment was held at a carrying value of £nil in the company’s accounts. 

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