Gfinity PLC (AIM:GFIN) continued on its path towards profitability in the six months to the end of December 2021, more than halving losses.
The e-sports company expects to report an adjusted operating loss of £0.4mln, compared to a loss of £0.9mln in the second half of 2020.
Revenue is expected to rise 8% year-on-year to £3.3mln from £3.0mln the year before, with the figure affected by the decision to consolidate the V10 R League, Gfinity's jointly owned digital motorsport property, into a single season taking place in the latter part of the financial year. If revenues relating to this were eliminated from the comparative period, the year-on-year revenue increase would be 24%.
The company’s Gfinity Digital Media (GDM) offering had a record month in February, with monthly active users across the platforms topping 16mln, up from 15mln-plus in January and a sharp increase on the 9.9mln users in February 2021.
The company revealed that there has been a slower than anticipated return to live e-sports events which has had an impact on short term revenue and profits while ongoing discussions around a material partnership in the betting sector, which the directors still expect to complete, is now unlikely to deliver the impact on current fiscal year revenues that originally been anticipated.
As a result, the company now expects full-year revenue will be below market expectations but the directors remain confident the long-term prospects and the future pathway to profitability in 2023 and beyond remain unchanged.
As at the end of 2021, the company had cash reserves of £1.5mln, up from £1.4mln at the end of June, and currently has cash reserves of £0.8mln.
Given the delay of certain revenue streams alluded to above, the directors believe it would be wise for the company to raise at least £1mln in fresh capital.
The directors have held discussions with certain key shareholders who are supportive of the fundraise while certain directors have also committed to investing in the group as part of the fundraise.