Gfinity (GFIN ) has provided investors with an AGM Statement prior to its shareholder meeting to be held at 10am today.
Whilst there is no update on the Formal Sales Process (“FSP”), the Company has confirmed it was profitable during October and November and expects a strong performance in December 2020.
Neville Upton, Chairman, will address the AGM: “The fact we have achieved month-on-month operating profitability for the first time since our AIM listing in December 2014 is an impressive milestone and a pleasing testament to the hard work of the team.
I am very pleased with the way we have sharpened our operational focus. It has positioned us strongly and the full extent of the market opportunity for Gfinity is becoming apparent.
Given the project-based nature of some of our revenue streams and some seasonality in our business, it does not yet imply we will be always profitable on a monthly basis going forward, but it reflects the excellent progress made over the past nine months.
Whilst we remain mindful of the broader challenges in the operating environment, our recent performance is evidence that the strategy is starting to deliver and is driving positive momentum across the business."
Sale of holding in Esports Awards Ltd for £0.5m
Gfinity also announced the sale of its holding in Esports Awards Ltd for £500,000.
Gfinity acquired a 33% stake in Esports Awards Ltd in 2017 for £138,000, with the remaining 67% of the entity owned by Premier Team Promotions Ltd.
The investment was held at a carrying value of £nil in the company's accounts.
John Clarke, CEO, will also comment: "Since April, the team has worked incredibly hard to put in place the foundations and building blocks needed to drive profitability and I am delighted that we are now seeing positive momentum across the Company.
We have an operational mantra that is easy to understand and that is delivering - focus on what we own, what we co-own and build communities for others utilising our tech IP and our world class production expertise.
It was a major achievement for the business to deliver successive months of operational profit for the first time in its history in both October and November.
It is a sign that the changes we have made are delivering and this gives us confidence for the future.
We are alive to the risks and challenges facing our customers and markets, but we will stay focused on what we can control and will continue to deliver outstanding business results for our partners and clients.
We will also maintain the resilience which has guided us through 2020 and I am confident that Gfinity is now well positioned for growth in 2021 and beyond."
Shares in GFIN have increased over 20% during the past three months, rising from lows of 2.8p in October to close yesterday at 3.45p.
Reasons to Follow GFIN
The esports industry represents an exciting investment opportunity for Gfinity which is the only established UK listed company in the esports sector. In 2018, global esports revenue grew by 38%, with a projected esports market value of $1.5bn by 2020.
Last month, Gfinity launched a formal sales process as part of a strategic review which it said will help it continue its current pathway towards profitability forecasted for Q1 2021.
Gfinity has seen three major progressions with regards to joint ventures and partnerships, including partnerships with BT Sport, ViacomCBS and Abu Dhabi Motorsport Management.
The group said it is on track to deliver target revenues for this financial year of around £2m, leading the Company towards its maiden profit. GFIN is currently technically in an offer period post the announcement of its strategic review on 9 October 2020.
‘While the Company continues on its current pathway towards sustainable profitability, at this point in time it is important to all its stakeholders to ensure that it has explored all strategic options to capitalise on the potential market opportunity,’ GFIN noted.