Latest Results

Unaudited interim financial statements for the period ended 31 December 2016

Gfinity (AIM: GFIN), a leading eSports business, announces its interim financial results for the six month period ended 31 December 2016.

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Financial highlights

  • Revenue increased 45% on the same period in the prior year to £0.9m (H1 2016: £0.6m), up 10% sequentially on the previous six months.
  • Operating loss decreased by £0.2m on the same period in the prior year to £1.7m, (H1 2016: loss of £1.9m), up £0.4m sequentially on the previous six months, reflecting planned investment in events, strengthening the quality of the Gfinity team and advancements in technology.
  • Loss per share reduced 75% to 1p (H1 2016: 4p) reflecting the increased number of shares in issue in the period.
  • Cash and cash equivalents, as at 31 December 2016, of £2.7m (30 June 2016: £0.8m and 31 December 2015: £1.6m).

Operational highlights

  • Raised £3.7m in July 2016, through oversubscribed placing. This included the introduction of a new strategic investor, Charles Street International Holdings Ltd.
  • Appointed by development studio "The Coalition" and game publisher Microsoft as one of two global partners for 2016/17 Gears of War Pro-Circuit.  London event delivered in December 2016, with further events to follow in Mexico City and Paris during H1 2017.
  • Delivered events across a number of game titles and with a wide range of partners:
    • HP Omen: CS:GO invitational at EGX in September 2016,  the UK's largest gaming exhibition, delivering over 10 million online views across four days.
    • Gillette: The Gillette Championship in July 2016, a Pro-Evolution soccer event staged on line and at the Gfinity arena, attracting players from across Europe.
    • Activision Blizzard: Call of Duty Summer Masters in July 2016, featuring Europe's top teams as part of the Call of Duty World Championship Series.
    • Microsoft Xbox/ The Coalition: Gears of War UK Open, featuring the UK's top Gears of War teams.
    • Nintendo: The Great British Splat-Off.  A first partnership with Nintendo, featuring the Splatoon game.
  • Co-staged the inaugural eSports Industry Awards event from The Brewery in Central London, a celebration of achievements within the fast-growing eSports sector, attended by a number of the top players, talent and team owners, attracting sponsors including Now TV, Twitch and Xbox.
  • Appointed by studio "343i" and Microsoft to deliver London and Mexico City events as part of Halo Championship Series in February 2017
  • Announced launch of the Gfinity Elite Series UK, a bedroom to podium framework for eSports in the UK, to launch in June 2017.

Post period Highlights

  • Delivered Gears of War Pro Circuit and Halo Championship Series events in Mexico City
  • Contracted with Valve (Counter-Strike: Global Offensive), Capcom (Street-Fighter V) and Rocket League (Psyonix) for those games to form part of inaugural Elite Series.
  • Announced partnership with Mediacom to develop and value sponsorship proposition around Elite Series.
  • Delivered first European event as part of the Call of Duty World League, Presented by PlayStation®4 programme at the Gfinity Arena in London in January 2017.
  • OMEN by HP announced as official hardware provider to the Gfinity Elite Series.

Neville Upton, Chief Executive Officer, Gfinity plc, said:

"During the six months to December 2016, we continued to build on our strategic objective to establish Gfinity as a leading player in the fast-growing eSports sector. I am also very pleased to be able to report another period of strong revenue growth, 45% up on the equivalent period in 2015. Gfinity has now built an excellent reputation for the quality of our technology, people and service delivery. This is evidenced by the range of companies, that selected Gfinity as their partner during the latter half of 2016, both in the UK and overseas. 

"The eSports sector continues to grow rapidly. Market analysts Newzoo estimate that the global eSports audience will reach 385 million during 2017, a 19% increase on the prior year, with more and more sponsors and broadcasters seeking to enter the market. Having established a strong reputation for quality and as the only independent and publicly listed eSports company in Europe, Gfinity is well positioned to take advantage of this opportunity."

 

Chairman's Review

Overview
The half year to December 2016 was a period in which Gfinity continued to deliver on its strategic objective to build a leading brand within the fast-growing eSports sector. The period saw further strong revenue growth, up 45% on the equivalent period in the prior year, achieved across a wide range of clients and relating to events both in the UK and overseas.

Gfinity raised £3.7 million before costs by way of a placing in July 2016, which included the introduction of a new major shareholder, Charles Street International Holdings Limited. This provided the capital to continue to invest in the quality of its team and in its underlying technology, including a scaleable, automated tournament platform that will enable Gfinity to continue to deliver a high quality product to an ever growing number of customers. The operational capability that Gfinity has now established is reflected in the breadth of partners with whom Gfinity worked during the period,  ranging from established major games publishers to new sponsors making their first entry into the eSports market.

The eSports market continues to grow rapidly. The global audience of 385 million in 2017 represents an increase of 19% on 2016, while commercial activity in the sector is starting to increase. The past six months have seen a number of major new sponsors enter the marketing. The  competition between broadcasters for content rights is increasing, with a number of streaming platforms challenging Twitch's market leading position and several leading linear broadcasters, most notably, Turner Sports in the USA, broadcasting eSports content for the first time.

During 2016, Gfinity announced the Gfinity Elite Series, to launch in June 2017. This new and dynamic competition format allows gamers of any level to be able to compete for an opportunity to be selected into professional eSports teams. We expect the national reach of the competition and the high-quality content produced to be an extremely attractive proposition for potential partners, sponsors and broadcasters. 

Operating Review

Partnership and Events

As a result of its strong reputation within the industry, Gfinity has continued to develop valuable relationships with games publishers, potential sponsors and broadcasters throughout the period.

In August 2016, Gfinity announced that it was to be one of only two global partners for the 2016/17 Gears of War 4 Pro-Circuit eSports tournament alongside Major League Gaming. This agreement, signed with the video game developer The Coalition and Xbox, means that Gfinity will host live events in London, Paris and Mexico City as part of the international circuit, with a cumulative prize pool for all events on the circuit reaching $1 million (~£760,000). 

In the same month, Gfinity also signed a partnership agreement with OMEN by HP, the high-performance gaming laptop, desktop and accessory range, to deliver the Counter Strike: Global Offensive invitational competition. The OMEN and Gfinity branded tournament was held at the NEC in Birmingham in September as part of the EGX, the UK's largest gaming exhibition and delivered over 10 million online views across four days. The winner took home a prize pot of $100,000 (~ £76,000).

Gfinity hosted other notable events during the period. The Gillette Championship was a football based eSports competition that took place in the Gfinity Arena in July in association with the popular gaming title Pro-Evolution Soccer by Konami. Other events staged on behalf of publishers included the Call of Duty Summer Masters on behalf of Activision Blizzard, forming part of the World Championship series for that game and the Great British Splat-Off, which represented a first partnership with the game publisher Nintendo.

In November 2016, Gfinity co-staged the inaugural eSports Industry Awards event from The Brewery in Central London. This event was a celebration of the achievements within the fast-growing eSports sector and was attended by a number of top players, talent and team owners, attracting sponsors including Now TV, an Internet television service owned by Sky plc, Twitch, the world's leading video platform and community for gamers and Xbox, a video gaming brand created and owned by Microsoft.

Also in November 2016, the Company announced the launch of the Gfinity Elite Series UK, a dynamic new eSports league format, featuring three of the world's most popular gaming titles, giving gamers of all competencies a chance to be drafted into professional teams in 2017. Launching first in the UK, the Gfinity Elite Series will provide regular, year-round high quality eSports content and will have a national reach, offering a target audience attractive to potential sponsors.

Financial Review:
Revenue for the six months to 31 December increased to £0.9m (H1 2016: £0.6m), up 45% on the equivalent period in 2015 and 10% on the previous six months to June 2016, resulting from a mix of sponsorship fees from game publishers, premium subscriptions and ticket sales.

The operating loss of £1.7 million decreased by £0.2 million (H1 2016 (£1.9m), but is up £0.4 million on the previous six-month period, reflecting planned investment in events and in further strengthening the quality of the Gfinity team and technology platform.

In July 2016, the Company raised £3.7million through an oversubscribed placing. This included introduction of new strategic investor, Charles Street International Holdings Limited, which has strong sector experience. Loss per share reduced 75% to 1p (H1 2016: 4p), while cash and cash equivalents as at 31 December 2016 were £2.7m (30 June 2016: £0.83m and 31 December 2015: £1.55m).

Post-period

In January 2017, Gfinity announced that it had been appointed by Activision Blizzard to stage two events as part of the Call of Duty World League programme, the first of which took place from 26th to 29th January.

Since the period end, Gfinity has also delivered a number of other previously announced events, including the Gears of War Pro Circuit event in Mexico City and Halo Championship Series events in both London and Mexico City.

In January 2017, Gfinity entered into a strategic partnership with MediaCom, one of the world's leading media agencies, to develop and value the sponsorship proposition around Gfinity Elite Series UK.

Finally, in March 2017, the Company contracted with Valve, publisher of CS:GO, Capcom, publisher of Street-Fighter V, and Psyonix, publisher of Rocket League, for those games to form part of the inaugural Gfinity Elite Series.  Also in March, HP Omen was announced as the first sponsor for the series.

Outlook
This has been a strong period for Gfinity, during which time we have continued to establish ourselves as a leading eSports business with an excellent reputation, further illustrated by the quality and range of partners signed up in the latter half of 2016. We are experiencing significant ongoing growth of the eSports market and an increasing in commercial activity in the sector, leaving Gfinity very well positioned as the only independent and publicly listed eSports company in Europe. Gfinity will continue to invest in the quality of its people, technology and its own tournaments, including the launch of the Gfinity Elite Series in June 2017, in order to leverage this position. 

Tony Collyer
Chairman

28 March 2017

 

Statement of Comprehensive Income
Six months ended 31 December 2016

6 months to 31 December 2016
Unaudited
6 Months to 31 December 2015
Unaudited
6 Months to 30 June 2016
Unaudited
£ £ £
CONTINUING OPERATIONS
Revenue 902,212 624,292 822,227
Cost of sales (993,174) (957,190) (648,846)
    
Gross profit/(loss) (90,962) (332,898) 173,381
Administrative expenses (1,623,952) (1,550,279) (1,442,148)
Operating loss (1,714,914) (1,883,177) (1,268,767)
Finance income 4,038 5,272 9,921
Loss on ordinary activities before tax (1,710,876) (1,877,905) (1,258,846)
Taxation 0 97,176 4
Retained loss for the year (1,710,876) (1,780,729) (1,258,842)
Loss and total comprehensive income for the period (1,710,876) (1,780,729) (1,258,842)
Loss per share (basic and diluted) -£0.01 -£0.02 -£0.04

 

Statement of Financial Position
As at 31 December 2016

As at
31 December 2016
Unaudited
As at
30 June 2016
Audited
£ £
NON CURRENT ASSETS
Property, plant and equipment 237,274 294,219
Intangible fixed assets 97,979 122,974
CURRENT ASSETS
Inventories 9,749 9,707
Trade and other receivables 727,984 439,270
Cash and cash equivalents 2,713,212 830,403
3,450,945 1,279,380
TOTAL ASSETS 3,786,198 1,696,573
EQUITY AND LIABILITIES
Equity
Ordinary shares 157,414 83,414
Share premium account 9,202,990 5,640,233
Other reserves 84,935 55,458
Retained earnings (6,646,548) (4,935,672)
Total equity 2,798,791 843,433
Non-current liabilities
Borrowings 0 0
Current liabilities
Trade and other payables 987,407 853,140
Total liabilities 987,407 853,140
TOTAL EQUITY AND LIABILITIES 3,786,198 1,696,573

 

Cash Flow Statement
Six months ended 31 December 2016

6 months to 31 6 Months to 31 6 Months to 30
December 2016
Unaudited
December 2015
Unaudited
June 2016
Unaudited
£ £ £
Cash flow used in operating activities
Net cash used in operating activities (1,723,043) (1,936,349) (564,901)
Cash flow from/(used in) investing activities
Interest received                                                        4,038 5,272 9,921
Additions to property, plant and equipment (34,943) (215,833) (17,784)
Additions to intangible fixed assets 0 0 (148,750)
Net cash used in investing activities (30,905) (210,561) (156,613)
Cash flow from/(used in) financing activities
Issue of equity share capital 3,636,757 968,767 (2,501)
Net cash from financing activities 3,636,757 968,767 (2,501)
Net increase in cash and cash equivalents 1,882,809 (1,178,143) (724,015)
Opening cash and cash equivalents 830,403 2,732,561 0
Closing cash and cash equivalents 2,713,212 1,554,418 (724,015)

 

Statement of Changes in Equity
Six months ended 31 December 2016

Ordinary shares Share premium Share option reserve Retained earnings Total equity
£ £ £ £ £
At 30 June 2015 77,845 4,679,536 62,447 (1,896,101) 2,923,727
Loss for the period 0 0 0 (1,780,729) (1,780,729)
Total comprehensive income 0 0 0 (1,780,729) (1,780,729)
Reduction in capital 0 0 0 0 0
New shares issued 5,569 1,052,431 0 0 1,058,000
Share issue cost 0 (89,233) 0 0 (89,233)
Share options expensed 48,178
Total transactions with owners, recognised directly in equity 5,569 963,198 48,178 0 1,016,945
At 31 December 2015 83,414 5,642,734 110,625 (3,676,830) 2,159,943
Loss for the period 0 0 0 (1,258,842) (1,258,842)
Total comprehensive income 0 0 0 (1,258,842) (1,258,842)
New shares issued 0 0 0 0 0
Share issue cost 0 (2,501) 0 0 (2,501)
Share options expensed 0 0 (55,167) 0 (55,167)
Total transactions with owners, recognised directly in equity 0 (2,501) (55,167) 0 (57,668)
At 30 June 2016 83,414 5,640,233 55,458 (4,935,672) 843,433
Loss for the period 0 0 0 (1,710,876) (1,710,876)
Total comprehensive income 0 0 0 (1,710,876) (1,710,876)

New shares issued

74,000 3,626,000 0 0 3,700,000

Share issue cost

(63,243) 0 0 (63,244)

Share options expensed

- 0 29,477 0 29,477

Total transactions with owners, recognised directly in equity

74,000 3,562,757 29,477 0 3,666,233

At 31 December 2016

157,414 9,202,990 84,935 (6,646,548) 2,798,790

 

Notes

The notes are available in the PDF download.

Page last up-dated: 28 March 2017