Gfinity says it is on ‘the right path’ to being profitable by 2023
(GFIN ) said it continued to improve financially in the six months to 31 December 2021 despite a slower than anticipated return to live events and delays in certain revenue streams.
The esports solutions provider saw an improvement of 3% in group revenues for 1H22 at £3.3m, up from £3m in 1H21 and a 22% improvement on previous 6 months from £2.7m.
Adjusted operating loss saw a year-on-year increase of 53% to £0.4m from a loss of £0.9m in 1H21 and was 76% up on 2H21 as it continues on its path towards profitability, Gfinity stated.
Gfinity said the business is well capitalised to continue to deliver on its objectives following successful fundraising, underlining confidence in the Company’s long-term performance.
Gfinity saw continued growth for its publishing platform, Gfinity Digital Media, with revenues up 62% year-on-year to £1.6m (1H21: £1m) driven by increased annualised revenue per user of 23.3p (up 31% year-on-year) and a 23% rise in Average Monthly Active Users to 13.9m.
The Group also reported a 43% year-on-year increase in gross profit to £1m reflective of ‘a profitable growth engine that is driving the continuation of its pathway to profitability,’ it said.
In 1H22, GDM acquired SiegeGG and Stock Informer and secured a renewed agreement to extend its partnership with global advertising technology platform Venatus into its third year.
Meanwhile, while revenue from the delivery of Gfinity’s esports solutions for third parties remained flat at £1.6m, Gfinity said it continues to be selected by global brands to deliver esports and gaming solutions, including Nintendo, Coca Cola Hellenic Bottling Company.
As at 31 December 2021, Gfinity had cash reserves of £1.5m (30 June 2021: £1.4m). Post year end, the Company successfully completed a fundraise of £2.7m. Gfinity said this provides the runway needed for it to be profitable on a month by month basis in 2023.
Shares in Gfinity were trading 7.41% higher during late morning trading at 1.45p.
Commenting, John Clarke, CEO, Gfinity told investors: “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, ‘’ said Clarke, who added that GDM continues to act as the main growth engine for the Company.
Gfinity said a sustained GDM performance and good momentum leads it into 2H and while the lower than anticipated return to live esports events will impact short term revenue and profits, this is not expected to change its long-term prospects or pathway to profitability.
Additionally, the Company further highlighted that its investment in Gfinity Engage platform is expected to create a further owned, recurring and high margin revenue stream for the Group.
Clarke added: “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.”
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