(Alliance News) - Gfinity PLC on Monday said its annual results are expected to come in below market expectations as major e-sports events are postponed due to coronavirus.
In addition, the AIM-listed e-sports operator said it has undertaken a strategic review of the business and will begin a series of broader cost-reduction initiatives with immediate effect.
Gfinity said its results for the six months to the end of 2019 "remain unchanged", with revenue expected to total GBP3.5 million and an adjusted operating loss to come in at GBP2.4 million.
In the first half of its financial 2019, Gfinity reported revenue of GBP1.8 million and operating loss of GBP7.6 million.
However, the company warned that the start of the second financial half has not seen commercial opportunities materialise as expected, and discussions around strategic partnerships have also not progressed as quickly as anticipated.
Gfinity highlighted that Covid-19 is forcing the postponement of all live sporting and e-sports events. Two major events that Gfinity designs and delivers for clients, which were due to take place before July 2020, have now been postponed.
As a result, the company said it now expects that for the year to June 30, revenue will be lower and adjusted pretax loss will be higher than current market expectations.
Turning back to its strategic review, Gfinity said it intends to reduce the cost base to reflect the change in expected revenue for the year and outlook. Part of this proposal includes the Executive Chair Garry Cook and Chief Executive Officer Graham Wallace standing down from their positions with immediate effect.
Global Commercial & Brand Officer John Clarke has been appointed CEO with immediate effect, while Neville Upton, president & co-founder of Gfinity will succeed Cook as chair, also with immediate effect.
Following the restructuring programme the annual cost base is expected to reduce by more than 60% from the current level of GBP8.5 million over the next few months.
Looking forward, Gfinity said it has taken the decision to exit areas that are having a negative impact on cash, to ensure it remains well positioned to drive profitable growth.
The company said it will publish its first-half results on Monday next week.
Gfinity shares were trading 53% lower in London on Monday at 0.40 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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