Gfinity PLC Trading Update (6864E)

TIDMGFIN

RNS Number : 6864E

Gfinity PLC

22 October 2018

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

22 October 2018

Gfinity plc

("Gfinity" or the "Company")

Year end trading update

Gfinity plc (AIM: GFIN), a world leading esports solutions provider, announces a trading update for the year ended 30 June 2018.

The Company has invested significantly through 2017 and 2018 in its esport technology platform, its content creation and community building expertise and in its relationships with key business partners. It is now well positioned to build on this platform for growth and take advantage of the growing popularity of esports. The Company sees increasing momentum in managed services through solutions for leading sports rights holders such as Formula 1 and Premier League and leading publishers such as EA Sports, Codemasters and Microsoft. It also sees increasing momentum in Owned and Operated properties with Gfinity Elite Series and opportunity in development of the digital "Tribe" community.

Results for the year to 30 June 2018 are expected to be announced towards the end of November. These results are expected to show turnover for the year of approximately GBP4.3 million, representing an increase of 82% year on year. The revenue growth came from both managed services and Gfinity's owned and operated properties and included the addition of two major new clients, Formula 1 and Facebook, alongside existing strong client relations.

Operating results improved significantly through fiscal 2018. Adjusted EBITDA* loss (unaudited) improved by GBP2.2 million from GBP7.4 million in the first half of fiscal 2018 to GBP5.2 million in the second half. Combined, the results are expected to show an Adjusted EBITDA loss for the year of GBP12.6 million. The improving Adjusted EBITDA loss reflects higher commercial momentum in the Gfinity Elite Series. Production of two out of three seasons of Gfinity Elite Series in the UK took place in the first half of the fiscal year, prior to the addition of the content rights deal with Facebook in March 2018. These unaudited results also do not reflect the sponsorship deal with Domino's, commencing in the 2019 financial year, which, when combined with content and franchise revenues, have significantly improved the financial performance of the Elite Series. Nor do these unaudited annual results include the significantly enlarged 2018 Formula 1 programme, or the start of the ePremier League, both of which also fall into the second calendar half of 2018.

The cash position as at 30 June 2018 was GBP3.7 million. As at today's date, the Company has cash reserves of over GBP2 million.

Financial outlook

The Company targets Adjusted EBITDA break-even operating results within the next few years. Revenue is expected to be driven by significant increased activity in managed services, both service fees and content revenue from esports solutions for sports rights holders and commercial brands in collaboration with publishers and distribution partners. The Company also expects significant contribution from its owned and operated properties, hereunder the Gfinity Elite Series and its digital "Tribe" community under development. Annual opex is expected to reach and remain relatively stable around GBP10-12 million in the medium term, as the majority of investment in the esport solutions platform, commercial delivery and content production is completed. Increasing value of esports content through a growing audience and stable opex is expected to drive material operational scalability. As such, the Company targets a long-term group gross margin of 30-40% and an Adjusted EBITDA margin in the range of 15-25% on a normalised basis.

*Earnings before interest, tax, depreciation and amortisation, excluding adjustments for share based payments.

To learn more about Gfinity, see latest company presentation here: https://cdn.gfinityplc.com/app/uploads/2018/10/19161817/Gfinity-Company-Presentation-October-2018.pdf

Enquiries:

 
 Gfinity plc                                       www.gfinityplc.com 
 Garry Cook, Executive Chairman                    Via Walbrook PR 
 
 Allenby Capital Limited - Nominated Adviser       Tel. [phone] 
  and Broker 
 Jeremy Porter / John Depasquale / Nick Chambers 
 
 Walbrook PR (Media & Investor Relations)          Tel: [phone] 
 Paul Cornelius / Sam Allen                        or [e-mail] 
 

About Gfinity

Gfinity (AIM: GFIN) is a world-leading esports solutions provider. Its business to business platform, "Powered by Gfinity", delivers managed services to game publishers, sports rights holders, commercial partners and media companies. Gfinity creates bespoke solutions, including competitions and industry leading content production, connecting its partners with the esports community in authentic and innovative ways. Partnerships include EA SPORTS, Premier League, F1 Esports Series, Halo World Championship and the Forza Racing Championship.

Gfinity connects directly with competitive gaming consumers through its owned competition platform, the "Gfinity Elite Series". The Series enables competitive gamers to be part of the Gfinity community, testing themselves and developing new skills, while providing a pathway for those who aspire to a career in esports to join a leading professional team. "Gfinity Elite Series" content is distributed through linear and digital channels and is enjoyed by tens of millions of esports fans around the world.

All Gfinity managed service solutions and owned competitions are underpinned by its proprietary technology platform delivering a level playing field for all competitors and supporting scalable multi-format leagues, ladders and knock out competitions.

More information about Gfinity is available at www.gfinityplc.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

TSTBFLLLVBFEFBV

(END) Dow Jones Newswires

October 22, 2018 02:00 ET (06:00 GMT)