Gfinity plc (AIM: GFIN), a world-leading esports and gaming solutions provider, today provides an update on first half performance for the financial year ended 30 June 2021.
Half-Year trading update
Gfinity has continued to build on the positive performance announced at its AGM update on 18 December 2020. The Company delivered a strong performance in December, building on the month-on-month profitability reported in October and November. As a result, on an adjusted EBITDA basis, Gfinity was profitable for the final quarter of the 2020 calendar year. Whilst this is a strong performance, the Company notes that due to the project-based nature of the Company’s revenue streams and some seasonality in the business in the short term it does not imply the Company will always be profitable on a monthly basis going forward.
At the half year (31 December 2020), the Company’s cash position was £1.7m, slightly ahead of the cash position of £1.6m as at the end of the financial year (30 June 2020).
Business update
Building communities for others
A key pillar of Gfinity’s strategy is building communities for others, using its owned tech IP and world class production expertise to design, develop and deliver commercially viable programmes for its partners.
In January 2021, the Company was appointed by Formula 1 Esports to deliver the Formula 1 Esports Virtual Grand Prix 2021, building on the success of the 2020 series. The Virtual Grand Prix returned on Sunday 31 January 2021 for three events on consecutive weekends. The F1 teams are being represented by a combination of their drivers past and present, celebrities and F1 Esports Series gamers, who will compete for a charity prize fund.
Gfinity has also been selected by BAT and McLaren Racing to deliver a new celebrity esports series in partnership with Velo. The ‘Velo Eseries’ sees celebrities go head-to-head at the official Formula One gaming title, with all content available on Velo’s social channels, including the livestream of each virtual race on the brand’s YouTube channel. The four-part series takes place over consecutive months from January 2021, concluding in April 2021.
In addition, as part of the delivery of the ePremier League competition, Gfinity has been appointed by four Premier league teams to deliver broadcasts for their play-off competitions.
The Gfinity Esports Platform, Company owned technical IP, has also been licensed on a white label basis by leading organisations.
What we co-own (partnerships)
The Company has continued to leverage its owned technical IP to create compelling entertainment programmes for its partners.
This is evidenced through the success of the V10 R-League, the virtual racing competition launched as part of the Global Racing Series partnership between Gfinity and Abu Dhabi Motorsport Management. Season 1, which ran between September 2020 and October 2020, generated an aggregate 35 million broadcast and 9 million digital views, with 200 million minutes of racing watched. The peak concurrent views on ESPN3 was 240,000.
The second series of the league begins in April 2021, with a planned increase in the number of teams and broader distribution across both linear and digital channels.
What we own (Gfinity Digital Media – GDM)
Gfinity has continued to see positive traction across its digital media group, GDM, with significant growth in monthly users across all sites, reaching close to 40 million users between October and December 2020. In the same period, GDM delivered revenues of £750,000 (compared to £44,000 between October and December 2019). GDM remains on track to deliver target revenues of approximately £2 million for this financial year.
GDM’s new organic site, Racinggames.gg, launched in November 2020 and attracted 75,000 users in its first month.
Following the acquisition of EpicStream, a leading online news community for fantasy and sci-fi movies, television, video games, collectible cards and comic books, the team has begun the process of integrating EpicStream into the GDM network which is delivering instant results. In December 2020, the site had 600,000 visitors, which increased to more than 1 million in January 2021. The site is being redesigned and will move to Gfinity’s CMS, allowing for an improved reader experience and optimised revenue generation via video and display ad units.
This week GDM will launch a new site based on the hugely popular game Magic the Gathering (MTG) – MTG Rocks. EpicStream possesses one of the fastest growing MTG communities on Facebook with 280,000 likes and over half a million engagements in the past 28 days. It will use this audience, combined with Gfinity’s SEO and technology expertise, in order to deliver against Gfinity’s strategy to make MTG Rocks one of the most visited MTG sites over the next 12 months.
The optimisation of GDM sites continues with the launch in January 2021 of a unified platform, Manifold. This unified platform will allow the GDM team to deliver content anywhere at any time, whilst also enabling Gfinity to deploy new features across its entire network seamlessly. All future GDM sites, organic or acquired, will benefit from the addition of the Manifold platform.
Update on the Formal Sale Process (FSP)
The FSP, that was launched in October 2020, continues to progress as planned. The Company is continuing to engage in conversations as the Board evaluates the best options to accelerate the growth of the business. The guiding principle for the Board has always been to ensure Gfinity can best capitalise on the potential market opportunity and can deliver shareholder value. The Company will provide further updates as and when appropriate.
Notice of Half Year Results
Gfinity expects to publish its half year results for the six months to 31 December 2020 in March 2021.
John Clarke, Chief Executive of Gfinity said: “Since March 2020 the focus has been on transforming the financial performance of the business. The positive results in the last quarter of the 2020 calendar year demonstrates that the strategy we have implemented is starting to deliver. We recorded the first quarter of adjusted EBITDA profitability in the Company’s history, a significant milestone.
In GDM, we now have a fast growing and highly profitable revenue stream. At the same time, we have identified significant opportunities to maximise licensed based revenues for our technical platforms, both tournament play and virtual production. The commercial pipeline is strong and there is a better understanding in the marketplace of the value that Gfinity brings.
“The overall market environment, caused by COVID-19 and recurring lockdowns, is naturally having an impact across all sectors. Whilst we are confident as to the prospects for the Company, we will continue to ensure Gfinity can navigate any potential challenges created by the current situation. We are well positioned to reap the rewards of being a leading player in one of the most exciting industry sectors in the world. The team is working hard and smartly to build value for shareholders. The fundamentals are strong and the foundations are now in place to enter a period of solid growth.”
