Gfinity PLC (GFIN.L) Strategic Review

Review of Strategic Partnership Options


Launch of Formal Sales Process

Gfinity plc (AIM: GFIN ), a world-leading esports solutions provider, is pleased to provide an update on its progress in the year ended 30 June 2020.

The last 12 months has been one of considerable corporate and strategic development which has left the Group exceptionally well positioned as its partners and customers sought to recalibrate their offerings during the Covid-19 pandemic. The Group appointed a new senior leadership team which has sharpened the strategic focus in three areas where the Group has competitive strength and momentum: JV’s and partnerships with an initial focus on virtual motorsports; expanding the Company’s own community franchise; and building communities for others, utilising its proprietary tech platforms and world class production expertise. The emphasis has shifted to virtual online capabilities utilising the strength of its technology and e-sports know how rather than just the delivery of physical events. In conjunction with this, the Group has rapidly created an unrivalled esports community network.

The implementation of this strategy was aided by a successful fundraising that left the Group, together with a comprehensive cost reduction programme and a disciplined approach to investment, on a firm financial footing. The Company is targeting profitability by the end of Q1 2021 calendar year.

In that light, Gfinity believes that it is now well positioned to drive significant future revenue growth across its three core areas:

Gfinity’s digital media progress

· Launched Gfinity Digital Media in July 2020 to build on the excellent growth of Gfinity’s web channels and social platforms which now have more than 10 million users and generated over £130,000 of revenues in September 2020;

· New site, focused on gamer tech added to existing sites and;

· Partnered with YaLLa Esports, one of the leading MENA esports teams, to expand its RealGaming101 offering into the Middle East-North Africa (MENA) region;

· Gfinity Plus, the reward-based product announced alongside new e-commerce platform, driving increased engagement across the sites; and

· On track to deliver target revenues from digital media for this financial year of approximately £2 million.

Establishing Joint Ventures and Partnerships

· Partnered with BT Sport to deliver a series of celebrity led gaming entertainment shows. The first show, co-produced by Gfinity and BT Sport, “The BT Sport FIFA Challenge’ aired between May and June 2020;

· Partnered with ViacomCBS to deliver Street Fighter experiential event at Vidcon London 2020; and

· Entered into a five-year agreement with Abu Dhabi Motorsport Management (ADMM) to design, develop and deliver a new virtual motorsport (esports) racing championship (ERC), to be jointly owned by Gfinity and ADMM with distribution agreements signed with 3 of the world’s leading broadcasters for the first championship in the series.

Working with brands to provide esports solutions – building communities for others

· Continued trusted partnerships with some of the world’s most recognised brands, including: F1 Esports Series, where the Group has extended its partnership to design, develop and deliver 3 new seasons; EA Sports; ePremier League; Activision Blizzard and the Forza Racing Championship;

· Chosen to deliver the new F1 Esports Virtual Grand Prix series, in response to COVID-19 to enable fans to continue watching Formula 1 races virtually, and extended relationship with F1 to deliver the main elements of the F1 Esports Series in 2020 and 2021, and the 2022 qualifying events;

· Selected by premier cricket broadcaster Willow TV (owned by the Times Group) to design and deliver “The eCricket Challenge”, in partnership with Betway;

· Appointed to operate the inaugural and follow on ePremier League (“ePL”) Invitational tournaments; and

· Partnered with BT Sport to co-produce a new entertainment based competitive gaming series, “The BT Sport FIFA Challenge”.

The Board of Gfinity remains highly confident in the prospects and position of the Company, especially as market dynamics are rapidly, and permanently, changing in favour of the Group’s offering. As gaming has become more and more mainstream, Gfinity have increasingly noticed a number of trends: global publishers at all levels are seeking to expand the life time value of their audiences; brands are looking for new and innovative ways to expand into the space; sports rights holders are increasingly looking to connect with the younger audiences, and; broadcasters are in growing need of new competitive gaming entertainment content. The board of Gfinity, as a consequence believes that with the Group’s well positioned diverse offering it now has the opportunity to significantly expand its growth projections.

Given this, while the Board believes that the Company can continue on its current pathway towards profitability it believes, at this point in time, that it is important to all its stakeholders to ensure that it has explored all strategic options to capitalise on the potential market opportunity and to deliver shareholder value, including options for making acquisitions, forming partnerships, separating the activities of the Group or a potential sale of the Company.

The Board has concluded that such a review would benefit from taking advantage of the dispensations available from certain provisions of the City Code on Takeover & Mergers (“Code”) in commencing a “formal sales process” (as described in the Code) and has appointed finnCap Limited (“finnCap”) as its financial adviser with regard to this process. Gfinity is not currently in discussions with, or is in receipt of an approach from, any potential offeror as at the date of this announcement. Parties with an interest in participating in the process should contact finnCap on the contact details set out below.

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