U.K.-based esports business Gfinity has released its results for the fiscal year (FY) 2020 for the period ending on June 30. The London-based company’s total revenue for its FY 2020 were £4.49M ($5.8M USD), down 43% year-over-year from £7.87M ($10.2M) in FY 2019. According to the company’s financial report, the gross profit of £2.77M ($3.58M) was driven by a strategic focus on the delivery of higher-margin esports solutions for key partners, up 167% from £1.04M ($1.34M) in 2019.
After taxes, the company generated a loss of £7.73M ($9.99M) for FY 2020 compared to a loss of £11.99M ($15.52M) in FY 2019. Gfinity stated in its presentation to investors that it is on track to achieve the adjusted EBITDA target breakeven in 2021.
Gfinity undertook a strategic review earlier this year and recently launched a formal sales process to look for potential strategic partners. The strategic review resulted in several efforts to reduce the company’s annual cost base by more than 60%, Garry Cook (executive chairman) and Graham Wallace (CEO) stepping down and being replaced by Neville Upton (chairman) and John Clarke (CEO), and focusing on three core areas of business: its own community, building communities for others, and motorsports.
In Gfinity’s balance sheet, its decision to discontinue products and services outside its three core areas of business was mirrored in its continuing operations row. While the company’s total operational revenues declined from £7.87M ($10.2M) to £4.49M ($5.8M), its costs of sales declined at a significantly higher rate from £6.83M ($8.84M) to £1.71M ($2.21M). This resulted in Gfinity’s gross profit margin jumping from 13% to 62%.
Note: The Esports Observer used the exchange rate in effect as of Oct. 30 at a rate of £0.77293 to $1.00 for currency conversions in this article.