UK 07:26 Monday, 5 October 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Gfinity (GFIN) is a company that I covered at the start of the year and at first glance its final results don’t look very good. This AIM-listed e-sports company made a loss of £3.6 million for the year up to June 30 2015. But this is the type of business that needs a lot of upfront investment if it is to have a chance of growing into something potentially very big.
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Comments
Davecandle
Steve – not sure why you are backing this particular horse, considering it is a poor set of results, and is an illiquid stock with limited earnings visibility but then I remembered that a friend of Shareprophets, none other than Britain’s Buffett (sic), Nigel Wray, was a significant shareholder and it all made sense.
My concerns:
The gross loss is far too big, I could invite people to a tournament in which they pay £5 to enter and I hand them £20 for coming and it’s the same result
The registered user base is not seeing rapid growth – 43,000 at 30 June 2014, 300,000 at 31 Dec 2014, 350,000 at interims on 17 March and 400,000 at 30 June 2015 and no reference to current level. Growth is declining and there will be churn too. In absolute terms these aren’t big numbers.
Raising further funds within 12 months of an IPO is a red flag for me – see also NKTN and FFX for recent examples.
Raising £1.2m isn’t going to get them far through 2016 at current run-rate then what they do as there is no visibility on how they monetise.
I do accept that e-sports is quite a big market and I do like Neville Upton. Also, there could be say a 10% chance of being an M&A target but in my view, there is a 90% chance of needing to raise further funds at a much lower valuation before next year-end so take a look then.
wildrides
Flip me Gazza me ole hedge hog . Thought you had hibernated for the winter …….. what happened ……… warm spell wake you up again ? Any way very good to read your output again . Toms been kicking chunks out of Fishing Republic while you’ve been hibernating ( Ooh I am such a bitch ) but just let it all wash over you …… dont take the bait or he will reel you in and stitch you up like a kipper . Most of us fall for it hook line and sinker but I know you will rise above it .
Gary Newman
Dave,
Unfortunately losses in the earlier stages are the nature of this type of business and I have also flagged that some of these companies never actually manage to make a profit, which is one of the risks, and mentioned the size of the loss right at the start of the piece.
For most of these media companies the early years are all about building a customer base, and monitising that usually comes at a later time (if at all in some cases, but that is the risk with early stage companies in this sector – there will be lots of examples of ones that have failed or are failing).
I did also mention the low volumes and that for people interested it is one to just buy and hold as not a lot happens on a daily basis.
I’d certainly be prepared to give them another couple of years and see what sponsorship deals they can secure (that is where the money is, certainly in the US) and what further growth is achieved both on their online gaming site, and also the reach they achieve via their live tournaments – if no progress has been made by then, then you’d have to conclude that it is unlikely to be.
I do see e-sports as a huge growth area though and one where we are lagging behind still in the UK – even if gaming isn’t something that I’m into myself.
I would agree with you that future funding will be needed, but viewed it as positive that the company was able to raise at above the IPO price (17p) as for small companies in the current market so many seem to drop like a stone after IPO!
Just my view of course and why I have this as a speculative buy.
Gary Newman
Wildrides,
Just back from nearly 6 weeks in the jungles of Suriname – funnily enough i was fishing! – and have had no internet or phone for most of that time.
I hadn’t spotted Tom’s stuff on Fishing Republic, I’ll have to have a read – my interest in that one is mainly to do with the number of smaller independent fishing tackle retailers that are going bust (think we’ve lost close to 20% of them in the past 12-24 months – I’ve got some figures somewhere!) which should benefit the larger stores, plus so much has switched to online buying in the last few years.
I hope you’ve been winning, AIM in general certainly doesn’t look great at the moment and most of the decent rises seem to be in hyped-up junk with tiny market caps that is totally illiquid!
Davecandle
Thanks for the response Gary and apologies for calling you Steve; I must be going loopy or the byline changed.
Despite my negativity, this is on my watch list as it ticks too things for me – market and management; however I won’t get involved until I see greater monetisation visibility.
Gary Newman
Dave,
Same for me in terms of putting any more serious amount in – I don’t have a position currently – but i know that a lot of readers here do like the more highly speculative ones as well as those that are considered ‘safer’. I can see potential here and anyone buying now would be doing so at a similar price to the placees and not after some crazily ramped up spike, like on so many of the AIM companies these days.
Totally agree with you about both the market (one that many still seem not to realise the potential of) and also the management (Neville Upton, plus some of the rest of his team which include people very well known and regarded in the gaming world).