Gfinity PLC (LON:GFIN) has conducted a strategic review into its operations and updated on its performance amid the ongoing coronavirus outbreak.
The esports firm said that its results for the six months ended 31 December remain unchanged with revenues of £3.5mln and an adjusted operating loss of £2.4mln.
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However, the company said since the second half of its financial year had not seen commercial opportunities materialise as expected and discussions around strategic partnerships had also not progressed as quickly as anticipated.
Gfinity added that challenging market conditions had been exacerbated by the “unprecedented impact” of the coronavirus, with two major events that the company had designed for clients, due to take place in July, having now been suspended as a result of the outbreak.
Consequently, the company said it now expects that for the year ended 30 June 2020 revenues will be lower and the adjusted loss before tax will be higher than current market expectations.
In light of all this, the company said it is pursuing other options for financing in the short term and was continuing discussions with several potential strategic investors.
Strategic review
Following its strategic review, Gfinity said it will implement “a significant cost reduction programme” and adopt a flexible variable cost operating model to reduce its cost base going forward.
The company also says it will be “sharpening focus” on three core areas of existing success and competitive strength: its own community, building community for others, and motorsports with Formula 1 as the anchor client.
Gfinity also said as part of broader cost reduction its executive chairman, Garry Cook, and its chief executive, Graham Wallace, will stand down effective immediately.
Wallace has been succeeded as CEO by global commercial and brand officer John Clarke, while the chairman’s position has been filled by Neville Upton, president and co-founder of Gfinity.
Cook and Wallace will maintain a relationship with the company as they continue to work on several “significant investment and commercial opportunities”, the group said.
“Having taken steps to significantly reduce the cost base and realign the operating model, the Board is confident that Gfinity remains well positioned for growth when the trading environment rebounds”, the company added.
Gfinity shares fell 48.2% to 0.4p in late-morning trading on Monday.
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