Gfinity (AIM: GFIN), a world-leading esports solutions provider, announces its unaudited results for the six-month period ended 31 December 2021.
Financial Highlights:
- Continued improvement in financial performance through sustained strategic focus on what the Company owns, with Gfinity Digital Media (‘GDM’) driving growth in the business.
- Revenue of £3.3m, an increase of 8% year on year (H1 21: £3.0m) and 22% improvement on previous 6 months (H2 21: £2.7m).
- Adjusted operating loss[1] of £0.4m, 53% improvement year on year (H1 21: £0.9m loss) and 76% improvement on previous 6 months (H2 21: £1.8m loss) as the business continues on its path towards profitability.
- Reduction in Adjusted administrative expenses[2] of 4% to £2.4m (H1 21: £2.5m).
- Business well capitalised to continue to deliver on its objectives following successful fundraising, underlining confidence in the Company’s long-term performance.
Operational Highlights:
Strategic focus on ‘what we own’ delivering improved financial performance and growth
Gfinity Digital Media:
- Continued growth of publishing platform, with revenues up 62% year on year to £1.6m (H1 21: £1.0m) driven by increased annualised revenue per user of 23.3p (up 31% year on year) and 23% rise in Average Monthly Active Users to 13.9m.
- 43% year on year improvement in Gross profit to £1.0m. Clear profitable growth engine that is driving the continuation of the Group’s pathway to profitability.
- Successful acquisitions of SiegeGG, including technology behind leading statistical analysis of Rainbow Six Siege video game, and Stock Informer which contributed £0.4m of revenue between acquisition completion on 13 September 2021 and 31 December 2021.
- Renewed agreement to extend Gfinity’s partnership with global advertising technology platform Venatus into its third year, driving value per user growth.
- Significant progress in optimising site infrastructure and performance, utilising the Company’s proprietary manifold content management system (CMS), leading to strong user numbers in the second half, with a record 16m monthly active users across GDM platforms in February.
Technology and Esports Solutions:
- Revenue from the delivery of esports solutions for third parties remained flat at £1.6m.
- Gfinity continues to be selected by global brands to deliver esports and gaming solutions, including Nintendo, Coca Cola Hellenic Bottling Company.
- Record F1 Esports 2021 Series breaking viewership and engagement records with Gfinity retained as delivery partner of choice for 2022 season.
- In-person publisher esports events, however, have been slow to return to pre-pandemic levels.
- Within this segment, revenue directly relating to the licensing of Gfinity’s proprietary esports technology grew 75% to £0.2m (H1 21: £0.1m).
- Platform deployed across in-app the competitive programmes for three of the largest mobile game titles featuring more than 50,000 participants in multiple languages across a number of weekends during the period
- Platform utilised for the ePremier League qualification for fourth year running
- The major strategic focus within this segment is the productisation of this technology to allow it to be deployed at scale, with clients benefitting from automated integration into games and media owners’ websites. This is expected to create a high margin, recurring revenue stream through a SaaS licensing model.
Co-Owned Esports Properties
- Consolidation of the V10 R League, Gfinity’s jointly owned digital motorsport property in conjunction with Abu Dhabi Motorsports Management, into a single season in the second half of the year has impacted comparable revenue. H1 21 revenue included £0.4m of revenue from this segment. Consolidation of the programme in this way is intended to allow for the creation of a live finals event, which will facilitate unlocking sponsorship revenue from the region.
- If revenues relating to this were eliminated from the comparative period, the year on year revenue increase would be 24%.
Balance Sheet strengthened post-period end
As at 31 December 2021, Gfinity had cash reserves of £1.5m (30 June 2021: £1.4m). Post year end, the Directors took the decision to secure additional funding, believing it to be in the best interests of the Group.
On 14 March 2022, the Company successfully completed a fundraise of £2.7 million, before expenses, via a placing and direct subscription of new ordinary shares of 0.1p each in the Company at a price of 1.25 pence per share. 50% of this fundraise was within existing authorities and has completed, with the remaining 50% subject to shareholder confirmation at the General Meeting to be held on 1 April 2022. This provides the runway needed for the Company to be profitable on a month by month basis in 2023.
Outlook
- Continued delivery of strategy and focus on what we own, with sustained GDM performance and good momentum heading into the second half.
- Slower than anticipated return to live esports events will impact short term revenue and profits, but do not change the long-term prospects or future pathway to profitability in 2023.
- Investment in Gfinity Engage platform expected to create a further owned, recurring and high margin revenue stream.
John Clarke, CEO, Gfinity said:
“We have continued to improve on financial performance during the period, despite a slower than anticipated return to live events and delays in certain revenue streams. The business remains on the right path to profitability, with increased revenues, lower operating losses and reduced operating expenditure.
We have strong momentum in our owned revenue streams, in particular our GDM business, with record engagement numbers and revenue per user up 270% since its launch. This business continues to act as the growth engine for the Group, and our focus remains firmly on building our capabilities and expertise to ensure more brands choose Gfinity as their trusted partner.
Although the sector is still recovering from the impacts of Covid-19, macro trends remain in our favour and following a successful fundraise post-period, we now have the operating liquidity we need to deliver on our target of reaching profitability by 2023.”
