Investor deep dive
Gfinity's revenue growth driven by strategic client relationships says CEO Wallace
Gfinity makes strong H1 progress
Gfinity PLC (LON:GFIN) reported results for the first-half period to December 2018, on March 4, demonstrating very strong progress. Revenues grew 143% year-on-year, with 104% growth for the Managed Services business and 387% for the Owned Content business. Managed Services increased its revenues by 189% on a like-for-like basis (based on existing partners) and achieved 4.3x increase in viewership. Going forward we expect continued growth in both divisions, with Managed Services becoming the major driver.
Gross profit was +ve £0.5mln (H1 2018: £3.2mln loss), with the improvement driven by improved profitability in Managed Services and reduced investment in the Elite Series contributing to a £2.8mln improvement in gross profit for the Owned Content business. The company reported a net cash position of £6.4mln, representing a good level of resource to support further growth. Overall, we have increased confidence in our FY June 2019 forecast of 80% revenue growth and positive gross margin.
The global esports market continues to exhibit strong growth, with industry revenues to exceed $1bn in 2019. On page 2 we provide an overview of Gfinity's position within this fast-growing end-market. In the results release, Gfinity has confirmed its performance targets: break-even by 2021, gross margin between 30-40% and EBITDA margin of 15-25%. We believe that H1 results are strongly supportive of these targets and indicative of significant potential upside for shareholders.
Quick facts: Gfinity PLC
Price: 3.75 GBX
Market Cap: £17.98 m
NO INVESTMENT ADVICE
The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...
In exchange for publishing services rendered by the Company on behalf of Gfinity PLC named herein, including the promotion by the Company of Gfinity PLC in any Content on the Site, the Company receives from said...FOR OUR FULL DISCLAIMER CLICK HERE
LEGAL NOTICE – IMPORTANT – PLEASE READ:
Proactive Research is a trading name of Proactive Investors Limited which is regulated and authorised by the Financial Conduct Authority (FCA) under firm registration...FOR OUR FULL DISCLAIMER CLICK HERE