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=== Most recent full-year results === For the fiscal (and calendar) year 2021, revenue decreased by 55% to £0.5 million (FY2020: £1.1 million) as the company focused on automating the inventory finance process, via the development of its platform. The net loss in the period increased by 4.3x to £12.5 million (FY2020: £2.9 million), mainly reflecting its most recent acquisition (of TradeFlow) and investment in the business. ==== Most recent half-year results ==== During the six months ended 30th June 2022, revenues decreased by 23% to £209k (H1 2021: £271k) as the company maintained its focus on the development of its inventory finance platform. The net loss in the period increased by 226% to £6.2 million (H1 2021: £1.9 million), reflecting costs related to the TradeFlow acquisition and further investment in the business. Net current liabilities and net liabilities stood at £6.3 million and £4.0 million, respectively. The company ended the period with cash of around £1 million. ==== Since its most recent half year results ==== Since its most recent results (i.e. the results for the six months ended 30th June 2022), the company raised £ccc million via equity. It also issued £ccc million in new debt and repaid £ccc million in existing debt. Accordingly, it's cash, net cash, net current liabilities and net liabilities positions are £ccc million, £ccc million, £ccc million and £ccc million, respectively. It's worth noting that Gfinity is in the 'introductory' stage of the business lifecycle (i.e. growth stage one), and in that stage, financing cash flows are positive (i.e. the business relies on external funding). ==== What are the financials? ==== {| class="wikitable" |+Financials !Year !'''1''' !'''2''' !'''3''' !'''4''' !5 !6 !7 !8 !9 !10 !11 !12 !13 !14 !15 !16 !17 !18 !19 !20 !21 !22 !23 !24 !25 !26 !27 !28 !29 !30 !31 !32 !33 !34 !35 !36 !37 !38 !39 !40 !41 !42 !43 !44 !45 !46 !47 !48 !49 !50 |- |'''Year end date''' |'''30/06/2013''' |'''30/06/2014''' |'''30/06/2015''' |'''30/06/2016''' |'''30/06/2017''' |'''30/06/2018''' |'''30/06/2019''' |'''30/06/2020''' |'''30/06/2021''' |'''30/06/2022''' |'''30/06/2023''' |'''30/06/2024''' |'''30/06/2025''' |'''30/06/2026''' |'''30/06/2027''' |'''30/06/2028''' |'''30/06/2029''' |'''30/06/2030''' |'''30/06/2031''' |'''30/06/2032''' |'''30/06/2033''' |'''30/06/2034''' |'''30/06/2035''' |'''30/06/2036''' |'''30/06/2037''' |'''30/06/2038''' |'''30/06/2039''' |'''30/06/2040''' |'''30/06/2041''' |'''30/06/2042''' |'''30/06/2043''' |'''30/06/2044''' |'''30/06/2045''' |'''30/06/2046''' |'''30/06/2047''' |'''30/06/2048''' |'''30/06/2049''' |'''30/06/2050''' |'''30/06/2051''' |'''30/06/2052''' |'''30/06/2053''' |'''30/06/2054''' |'''30/06/2055''' |'''30/06/2056''' |'''30/06/2057''' |'''30/06/2058''' |'''30/06/2059''' |'''30/06/2060''' |'''30/06/2061''' |'''30/06/2062''' |- |'''Type''' |'''Historic''' |'''Historic''' |'''Historic''' |'''Historic''' |'''Historic''' |'''Historic''' |'''Historic''' |'''Historic''' |'''Historic''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |'''Forecast''' |- | colspan="45" |'''Income statement''' | | | | | | |- |Revenues (£'000) |NA |4 |1,147 |538 |1,801 |3,534 |6,711 |12,327 |21,906 |37,665 |62,654 |100,833 |157,000 |236,506 |344,688 |486,019 |663,015 |875,059 |1,117,362 |1,380,364 |1,649,821 |1,907,756 |2,134,284 |2,310,068 |2,419,025 |2,450,751 |2,402,156 |2,277,961 |2,089,943 |1,855,094 |1,593,091 |1,323,605 |1,063,945 |827,415 |622,545 |453,170 |319,150 |217,456 |143,348 |91,423 |56,411 |33,675 |19,449 |10,868 |5,875 |3,073 |1,555 |761 |361 |165 |- |Gross profits (£'000) |NA |(763) |408 |(266) |1,351 |2,651 |5,033 |9,245 |16,430 |28,249 |46,990 |75,625 |117,750 |177,379 |224,047 |364,514 |497,262 |656,294 |726,285 |897,237 |907,401 |1,049,266 |1,173,856 |1,270,537 |1,330,464 |1,347,913 |1,321,186 |1,252,878 |1,149,469 |1,020,302 |716,891 |595,622 |478,775 |372,337 |280,145 |203,926 |143,617 |97,855 |64,506 |41,140 |25,385 |15,154 |8,752 |4,890 |2,644 |1,383 |700 |343 |162 |74 |- |Operating profits (£'000) |NA |(687) |(2,819) |(10,814) |1,081 |2,121 |4,026 |7,396 |13,144 |22,599 |37,592 |60,500 |94,200 |141,904 |172,344 |291,611 |397,809 |525,035 |558,681 |690,182 |659,928 |763,103 |853,714 |924,027 |967,610 |980,300 |960,862 |911,184 |835,977 |742,038 |477,927 |397,081 |319,184 |248,224 |186,763 |135,951 |95,745 |65,237 |43,004 |27,427 |16,923 |10,103 |5,835 |3,260 |1,763 |922 |466 |228 |108 |50 |- |Net profits (£'000) |NA |(551) |(2,964) |(12,487) |1,081 |2,121 |4,026 |7,396 |13,144 |22,599 |37,592 |60,500 |94,200 |141,904 |151,663 |256,618 |350,072 |462,031 |491,639 |607,360 |580,737 |671,530 |751,268 |813,144 |851,497 |862,664 |845,559 |801,842 |735,660 |652,993 |420,576 |349,432 |280,881 |218,437 |164,352 |119,637 |84,256 |57,408 |37,844 |24,136 |14,892 |8,890 |5,135 |2,869 |1,551 |811 |410 |201 |95 |44 |} ==== What are the assumptions used to estimate the financial forecasts? ==== {| class="wikitable" |+Key inputs !Description !Value !Commentary |- | colspan="3" |'''Revenue''' |- |What's the estimated current size of the total addressable market? |$119,000,000,000 |Here, the total addressable market (TAM) is defined as the global gaming advertising market, and based on a number of assumptions, it is estimated that the size of the market as of today (28th November 2022), in terms of revenue, is $119 billion. |- |What is the estimated company lifespan? |50 years |Research shows that the average lifespan of a large corporation is around 50 years. |- |What's the estimated annual growth rate of the total addressable market over the lifecycle of the company? |3% |Research shows that the growth rate of the gaming advertising market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022). |- |What's the estimated company peak market share? |1% |We estimate that especially given the leadership of the company, the peak market share of Gfinity is around 1%, and, therefore, suggests using the share amount here. As of 31st December 2021, Gfinity's current share of the market is negligible. |- |Which distribution function do you want to use to estimate company revenue? |Gaussian |Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped), so we suggest using that function here. |- |What's the estimated standard deviation of company revenue? |5.5 years |Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Gfinity's current revenue amount (i.e. $0.6 million) and Gfinity's estimated lifespan (i.e. 50 years) and Gfinity's estimated current stage of its lifecycle (i.e. introduction stage), the we suggest using five and a half years (i.e. 68% of all sales happen within five and a half years either side of the mean year), so that's what's used here. |- | colspan="3" |'''Growth stages''' |- |How many main stages of growth is the company expected to go through? |4 stages |Research suggests that a company typically goes through four distinct stages of cash flow growth. Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation. In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company. A summary of the economic links to cash flow patterns can be found in the appendix of this report. We estimate that with Gfinity's operating cash flows positive (+), investing cash flows negative (-) and its financing cash flows positive (+), the company is in the first stage of growth (i.e. the 'introduction' stage), and, therefore, it has a total of four main stages of growth. |- |What proportion of the company lifecycle is represented by growth stage 1? |30% |Research suggests 30%. |- |What proportion of the company lifecycle is represented by growth stage 2? |10% |Research suggests 10%. |- |What proportion of the company lifecycle is represented by growth stage 3? |20% |Research suggests 20%. |- |What proportion of the company lifecycle is represented by growth stage 4? |40% |Research suggests 40%. |- | colspan="3" |'''Growth stage 1''' |- |Cost of goods sold as a proportion of revenue (%) |25% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 1), and the margin for its peers is 25%. |- |Operating expenses as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 1), and the margin for its peers is 15%. |- |Tax rate (%) |0% |Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 1), and the rate for its peers is 0%. |- |Depreciation and amortisation as a proportion of fixed capital (%) |10% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 1), and the margin for its peers is 10%. |- |Fixed capital as a proportion of revenue (%) |10% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 1), and the amount for its peers is 10%. |- |Working capital as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 1), and the amount for its peers is 15%. |- |Net borrowing ($000) |Zero |We suggest that for simplicity, the net borrowing figure is zero. |- |Interest amount ($000) |Zero |We suggest that for simplicity, the interest amount figure is zero. |- | colspan="3" |'''Growth stage 2''' |- |Cost of goods sold as a proportion of revenue (%) |35% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2), and the margin for its peers is 35%. |- |Operating expenses as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2), and the margin for its peers is 15%. |- |Tax rate (%) |12% |Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 2), and the rate for its peers is 12%. |- |Depreciation and amortisation as a proportion of fixed capital (%) |10% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2), and the margin for its peers is 10%. |- |Fixed capital as a proportion of revenue (%) |10% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2), and the amount for its peers is 10%. |- |Working capital as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2), and the amount for its peers is 15%. |- |Net borrowing ($000) |Zero |We suggest that for simplicity, the net borrowing figure is zero. |- |Interest amount ($000) |Zero |We suggest that for simplicity, the interest amount figure is zero. |- | colspan="3" |'''Growth stage 3''' |- |Cost of goods sold as a proportion of revenue (%) |45% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3), and the margin for its peers is 45%. |- |Operating expenses as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3), and the margin for its peers is 15%. |- |Tax rate (%) |12% |Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 3), and the rate for its peers is 12%. |- |Depreciation and amortisation as a proportion of fixed capital (%) |10% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3), and the amount for its peers is 10%. |- |Fixed capital as a proportion of revenue (%) |10% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3), and the amount for its peers is 10%. |- |Working capital as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4), and the amount for its peers is 15%. |- |Net borrowing ($000) |Zero |We suggest that for simplicity, the net borrowing figure is zero. |- |Interest amount ($000) |Zero |We suggest that for simplicity, the interest amount figure is zero. |- | colspan="3" |'''Growth stage 4''' |- |Cost of goods sold as a proportion of revenue (%) |55% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4), and the margin for its peers is 55%. |- |Operating expenses as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4), and the margin for its peers is 15%. |- |Tax rate (%) |12% |Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 4), and the rate for its peers is 12%. |- |Depreciation and amortisation as a proportion of fixed capital (%) |10% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4), and the amount for its peers is 10%. |- |Fixed capital as a proportion of revenue (%) |10% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4), and the amount for its peers is 10%. |- |Working capital as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4), and the amount for its peers is 15%. |- |Net borrowing ($000) |Zero |We suggest that for simplicity, the net borrowing figure is zero. |- |Interest amount ($000) |Zero |We suggest that for simplicity, the interest amount figure is zero. |}
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