LONDON, UK: Gfinity plc (AIM: GFIN), a prominent technology and media company in the gaming industry, has announced the divestment of a 72.5% stake in its subsidiary Athlos to Tourbillon Group UK Limited.

Under the agreement, Tourbillon will assume all future liabilities associated with Athlos and provide growth capital to support its future development. Gfinity will retain a 27.5% shareholding in Athlos, with the consideration payable by Tourbillon being £1.

In the fiscal year ending December 2022, Athlos generated £0.4 million in revenue but incurred a loss before tax of £0.5 million. When factoring in capitalised development expenditure, the loss before tax amounted to £1.2 million. As of December 2022, Athlos had net assets worth £1.2 million. Over the 12 months ending May 2023, Athlos utilized £1.5 million of the Group’s cash. The divestment of Athlos will significantly reduce the cash burn of Gfinity.

In addition to the divestment, Gfinity has made the decision to close down its Esports division due to a soft market and limited profitable growth opportunities. This strategic restructuring will allow the company to focus on its digital media operations and leverage its strong position in the Gamer website industry. Despite a decline in user numbers in 2022 due to market challenges, including changes in the Google Search Engine, Gfinity has implemented cost-cutting measures and improvements in content, streamlining its editorial team and making strategic hires in SEO and technology. The company has also deployed AI automation tools to reduce the cost of content creation, leading to improved trading performance in May 2023.

Following a challenging period, the Stockinformer website has been rebuilt and now boasts enhanced capabilities to scale across thousands of products with increased pricing accuracy.

To further bolster its financial position, Gfinity has achieved extensive cost savings across its operations, resulting in a monthly cost base of £185,000 (annualized at £2.2 million) starting from July. This represents a significant reduction compared to the monthly average of £600,000 in the first half of the fiscal year 2023. The company currently holds cash reserves of £0.4 million. The board believes that these cost savings position Gfinity to achieve operating profitability on an EBITDA basis in the near term.

Neville Upton, Chairman of Gfinity, acknowledged the challenging year for the company in the digital media sector, with losses incurred across all verticals. However, following the significant restructuring, Upton expressed confidence in Gfinity’s ability to flourish without the need for additional working capital. By focusing on the core web offering for gamers, the company aims to shed capital-intensive businesses such as software development and esports events and strive for a positive return on investment. Shareholders can expect a more detailed strategy update in the near future.

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