Blue Star Capital investee company Guild Esports (GILD ) announced unaudited financial results for the 6 months ended 31 March 2023 (H1 2023).
Guild saw revenues rise 241% to £3.7m compared to £1.1m in H1 2022, driven by significant growth in sponsorship income. Gross profit also rose 256% to £2.5m from £0.7m a year ago.
Its loss before tax halved to £2.3m from £4.96 in H1 2022, reflecting increased sponsorship revenue and reduced operating expenses. Net cash stood at £1.1m on 31 March 2023.
During the period, Guild entered a 4-year partnership with SCL Education to support esports careers. The company also launched a production division, Guild Studios, which has since signed contracts with Samsung Mobile and Anthony Nolan.
Guild signed an all-female roster to represent it at CS:GO international tournaments, and entered an R&D partnership with Gerford AI to improve its discovery and development of esports players.
Guild pro player Anas "Anas" El-Abd won the global Fortnite competition MrBeast's Extreme Survival Challenge with a top prize of US$1m. Anas and Guild teammate Henrik "Hen" McLean extended their contracts in February 2023 to remain with Guild until at least 2024.
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Guild's shares gained on three-fold revenue growth, driven by strong sponsorship income and growing partnerships. Simultaneously, operational expenses reduced significantly, resulting in a halved pre-tax loss compared to H1 2022. Momentum is positive into H2 2023 with a strong contracted orderbook and diversification of revenue streams. We expect H2 2023 revenues to show further growth year-on-year.
The esports company continues to trade in line with expectations. Following a 23% reduction in administrative costs, net cash used in operating activities declined 58% in H1 2022, positioning Guild for substantially lower cash burn for the full-year. Still, Guild considers availability of financing to be a "going concern", and anticipates a fundraising may be required during the year.
According to Newzoo, there are now more than 2.7 billion gamers globally, with gaming overtaking social media as the largest consumption of screen time in most developed markets. By 2023, Newzoo predicts the gaming market will be worth US$200.8 billion a year, with the number of players worldwide surpassing the three-billion mark.
With rapidly growing revenues, a growing pipeline of sponsorship deals, and a strong cash position of £1.28m on 24 April 2023, Guild Esports and Blue Star Capital - which owns 2% of Guild alongside a 13% stake in SaaS gaming platform Dynasty Media & Gaming worth £5.6m - are well-positioned to continue benefiting from esports' momentum.
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