Gfinity’s revenue for the fiscal year is down, Canaccord Genuity places shares under review
Sports business Gfinity said on Wednesday it expected to report an interim adjusted operating loss of £400,000, less than half of last year’s loss of £900,000, but warned that full-year revenue would likely fall short of expectations as the company continues to struggle on its path to profitability.
Gfinity said revenue for the period is expected to be £3.3m, an improvement of just 8% year-on-year as the decision to consolidate sports property V10 R League digital automobile jointly owned by Gfinity, in a single season is expected to take place. in the last part of the exercise. Had the related revenue been eliminated from the comparative period, the year-over-year revenue increase would have been 24%, Gfinity said.
The AIM-listed company also noted that it continued to implement its strategic focus on “what it owns” throughout the first half of the fiscal year, particularly the rapidly growing viewership in its Gfinity Digital Media segment of the business, where revenue was up 62% year-on-year in the half.
However, despite the “strong progress” made during the half-year, Gfinity now expects full-year revenue to fall below market expectations.
The analysts of Canaccord Genuity placed their rating and target price for Gfinity “under review” on Wednesday after the update, pointing out that although increased revenue and reduced costs resulted in a lower adjusted operating loss, the revelation that full-year earnings should now be below expectations had forced them to reassess their position in the stock.
The expected reduction in full-year revenue was due to a slower-than-expected return to live esports events and a major partnership that now appeared not to be delivered until next fiscal year.
The Canadian bank also pointed out that the group had announced its intention to undertake a fundraising to secure a minimum of £1.0 million of new working capital and committed to reviewing its rating and its target of price for the stock after the completion of said fundraising and the release of its full first half results.
By 13:15 GMT, Gfinity shares had fallen 49.38% to 1.22 pence.