GFIN Gfinity Plc

TIDMGFIN

RNS Number : 7273B

Gfinity PLC

06 June 2023

THIS ANNOUNCEMENT AND THE INFORMATION HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE, TRANSMISSION, DISTRIBUTION OR FORWARDING DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, TRANSMISSION, RELEASE, DISTRIBUTION OR FORWARDING WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

06 June 2023

Gfinity PLC

("Gfinity", the "Company" or the "Group")

Disposal and Business Update

The Board of Gfinity plc (AIM:GFIN), a leading technology and media company in the video gaming industry, today announces the divestment of 72.5% of Athlos, a subsidiary of the Company, to Tourbillon Group UK Limited. All future liabilities associated with Athlos will be assumed by Tourbillon, with the buyer also providing growth capital to support the business moving forward.

Alongside the funding, Tourbillon brings an experienced management team who have the capability to take the business to the next stage of its development. Gfinity will retain a 27.5% shareholding in Athlos. The consideration payable to Gfinity by Tourbillon is GBP1.

In the year to December 2022, Athlos generated revenue of GBP0.4m, with a loss before tax o f GBP0.5m. If capitalised development expenditure is added back, the loss before tax was GBP1.2m. The net assets of Athlos as at December 2022 was GBP1.2m. In the 12 months to the end of May 2023, Athlos has absorbed GBP1.5m of Group cash. The divestment therefore significantly reduces the cash burn of the Company.

The Company also today announces that it is closing down its Esports division, as the market for esports remains soft and the directors see limited profitable growth opportunities.

The above restructuring will allow the Company to focus on digital media and its significant position in the Gamer website industry. After a large dip in users in 2022 due to some adverse market impacts including changes in the Google Search Engine, the Company has performed a round of cost cuts and improvements in it content as it streamlines the Editorial team and makes strategic hires in SEO and tech, to increase user numbers. Part of this plan includes the deployment of AI automation tools to reduce the cost of specific items of content creation. This has already helped the Company deliver an upturn in trading in May 2023.

After, a difficult period, the Stockinformer website has been rebuilt, with an exciting future as its capabilities have increased to scale across 1000's of products automatically and with an increased accuracy of pricing.

The Company has also made extensive cost savings across the business and the monthly cost base in July will be GBP185k (annualised at GBP2.2m) compared to a monthly average of GBP600k in H1 FY23. The Company currently has cash reserves of GBP0.4m. The Directors believe that these cost savings provide the Directors with an organisation that can achieve operating profitability on an EBITDA basis in the near term.

Chairman, Neville Upton commented "This has been a difficult year for Digital Media with the Company having losses across all verticals, however after a significant re-structuring, we are confident that Gfinity will flourish without the requirement to raise further working capital. By focussing on our core web offering for Gamers, we are able to remove the capital intensive businesses of software development and esports events, and focus on returning to a positive return on investment. We will update the shareholders shortly on a more detailed strategy.

Enquiries :

 
 Gfinity plc                                    www.gfinityplc.com 
  Neville Upton, Executive Chairman              ir@gfinity.net 
 Canaccord Genuity Limited (Nominated Adviser   Tel: +44 (0)207 523 
  and Broker)                                    8150 
  Bobbie Hilliam / Patrick Dolaghan 
 

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June 06, 2023 02:00 ET (06:00 GMT)

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