Gfinity PLC (AIM:GFIN) reported a profit after spending the first six months of its financial year laying the groundwork for growth as a pure-play digital media network, having sold off its Athlos business and divested most of its esports division.
New chief executive David Halley, who was appointed last summer, has now completed a budget reduction process that included cutting monthly costs by over 70%.
Having reduced the management and editorial staff headcount to a size it says is appropriate for a modern digital company, the publisher said it is confident about further improving profitability and cash flow in the second half of its fiscal year.
Group revenue for the six months to 31 December was reduced to £805,741 from £1.4 million but operating losses were slashed to £19,205 from £937,911.
A retained post-tax profit of £175,273 was reported, versus a £1.8 million loss a year earlier.
The digital media business, now operating 12 websites, including Epicstream.com, RacingGames.gg, realsport101.com (pictured), MTGRocks.com and StockInformer.co.uk, saw revenues increase as monthly session numbers rebounded to over 10 million, while AI has been incorporated into work processes to increase efficiency.
One new website was launched in the period and a second is planned in the second half.
“As a gaming and entertainment network, we continue to be highly attractive to advertisers, which is reflected in our healthy income per user,” the company said.
With the restructuring groundwork laid during the period including taking more control of advertising and sponsorship sales in-house, Gfinity said it is “now well placed to drive improved yields, and volumes”.
While the digital media sector was under pressure during the period from several Google algorithm changes creating uncertainty and headwinds, the gaming vertical was said to have continued generating interest “and remains an exciting part of the sector into the future”.
On the outlook, the AIM-listed company said: “The directors believe that the actions taken over the six months to December 2023 have positioned the business to fully capitalise on that opportunity.
“In 2024, we believe there will be consolidation in our market, with distressed players for sale; and big opportunities will arise in the monetisation of publishers and the attached technology which Gfinity can own and leverage to create large, scalable opportunities.”