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Gfinity Plunges As 2022 Outlook Disappoints

Sam Boughedda trader
Updated 9 Mar 2022

Trade Gfinity Shares Your Capital Is At Risk

Key points:

  • Gfinity shares fall by more than half Wednesday
  • The company released an update on its first half performance and full year outlook
  • Full year revenue is expected to be below expectations
  • Best AIM Shares to Buy Right Now

Shares of Gfinity (LON: GFIN) fell more than half Wednesday after the company provided an update on the first half of the year.

The company told investors it is continuing on its path towards profitability, with Gfinity expecting to report an adjusted operating loss of £0.4m in the first half of the year, compared to a £0.9m loss in H1 2021, representing a 52% year on year improvement. In addition, revenue for the period is expected to be £3.3m compared to £3.0m in H1 2021, representing an 8% rise year on year.

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The company said its revenue figure has been impacted by the decision to consolidate the V10 R League, Gfinity's jointly owned digital motorsport property in conjunction with Abu Dhabi Motorsports Management, into a single season in the latter part the financial year. However, if revenues relating to this were eliminated from the comparative period, the year-on-year revenue increase would be 24%.

In February, Gfinity's Digital Media division has had a record month with monthly active users across its digital media platforms exceeding 15m in January 2022and rising again to over 16m in February.

However, Gfinity now expects full-year revenue to be below market expectations due to a slower than anticipated return to live esports events, which has an impact on short term revenue and profits and ongoing discussions around a material partnership in the betting sector, which the company still expects to complete, but which will now unlikely deliver the impact on FY22 revenues.

Regardless, the company doe not believe the “long-term prospects or future pathway to profitability in 2023 and beyond have changed.”

At the time of writing, Gfinity shares are down 52% to 1.15p.

Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.