The AIM-listed group also announced the sale of its holding in Esports Awards for GBP500,000, after acquiring it in 2017 for GBP138,000, with the proceeds to be used to boost growth in its strategy.
In an update, Gfinity chairman Neville Upton will tell investors at the group’s annual general meeting on Friday that the positive momentum seen at the start of the current financial year has continued, and the esports media firm is also on track for a strong performance in December 2020.
“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,” Upton said in the update.
“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. This positive performance has also been achieved against a challenging economic backdrop and the need to adapt to new ways of working.”
Upton will also tell shareholders that the business has been recalibrated on three core areas where the company has competitive strength and momentum, being owned products and services, such as Gfinity Digital Media, co-owned partnerships and building communities for others, such as tech IP, and world-class production.
“We have signed a multi-year deal with Formula 1, a five-year partnership with ADMM, seen strong growth in users in GDM and signed our first technology licensing contract,” he added.
“The business is now more efficient than ever following a rationalisation of our cost base, with further reductions expected to come in 2021. In November 2020, monthly operating costs were GBP385,000, a reduction of 47% since November 2019, with a further reduction expected on culmination of our office lease in March 2021.”
Chief executive John Clarke will tell shareholders that achieving first profits “was a major achievement” and “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,” Clarke added.
In the update, the firm also noted that having launched a formal sales process in October to explore all strategic options to capitalise on the group’s potential market opportunity, it continues to engage in conversations.
Gfinity shares jumped 8% higher to 3.72p on Friday morning.
Apple man joins board
In a later separate statement, Gfinity also announced the appointment of Len Rinaldi as a non-executive director with immediate effect.
The group noted that Rinaldi spent the last twelve years with tech giant Apple, most recently as general manager for Apple Western Europe, a role he held for seven years. In this role, he was responsible for all partner relationships across all Apple products, software and services with $20bn portfolio under management.
Rinaldi joined Apple in 2007, and served as Apple’s CFO EMEIA for five years, during which time he oversaw significant revenue growth at the division from $7bn to $40bn. He has held previous senior leadership roles at Alcatel Lucent SA and Lucent Technologies.
Neville Upton commented: “The Board and I are delighted to welcome Len to Gfinity. He is a respected global operator with a proven track record of growing businesses. Len brings a wealth of insight and experience that will be invaluable to the company as it looks accelerate its growth strategy over the next two to three years. CEO John Clarke and his senior team will benefit greatly from Len’s leadership experience.”
Rinaldi added: “I am excited to join a rapidly growing and ambitious business that has clear strategic priorities in place. Gfinity has a strong business model that can take it to the next level, and I look forward to working with John and the leadership team to help the business fully realise its ambitions.”
Gfinity also announced that, at its annual general meeting, all resolutions were duly passed.
— Adds non-executive director appointment —