Fundamental Review of Two FTSE Listed Stocks: Gfinity PLC and Vistry Group PLC

Britain has increased the loan size for large businesses to GBP 200 million, while the World is waiting for the potential COVID -19 vaccine to pacify the disruption. Meanwhile, as per the British Chambers of Commerce, one-third of UK firms can fully reopen by following the government’s guidance. In other economic news, UK’s inflation rate sank lowest in April since August 2016. At the time of writing as on 20th May 2020 (GMT 2:20 PM), FTSE-100 index was trading at 6,032.05, up by 0.50 per cent.

In light of the current market conditions, we are going to discuss two FTSE listed stocks from diverse industry – a Travel & Leisure stock, Gfinity PLC (LON: GFIN) and a Household Goods stock, Vistry Group PLC (LON: VTY). Today, GFIN signed a multi-year arrangement with Formula 1, while VTY released its trading update. Following the business updates, the price of both the companies, GFIN jumped over 15.20 per cent whereas VTY fell around 5.07 (at the time of writing, 2.20 PM GMT).

Hence, it would be interesting to understand the variation in stock price following the latest updates in light of their financial and operational position.

Gfinity PLC (LON: GFIN) – Strengthening Business with Several Partnerships and Equity Placing

Gfinity PLC is a FTSE AIM All-Share listed Company which provides esports and gaming solutions. The Group operates with its proprietary platform, “Gfinity Elite Series” and connects with consumers directly. The Company has a partnership with major contributors of esports community such as Activision Blizzard, EA

(Source: Company Website)

Key Operational Highlights of FY2019

  • The Group completed the second season of Formula 1 Esports Pro Series.
  • Partnered with EA Sports for five events.
  • Developed content series for HP Omen.
  • Signed broadcast rights contract with Facebook for Season 4 of Gfinity Elite series.

Significant Actions of 2020

  • 20th May 2020: Gfinity PLC extended its relationship with Formula 1 for further two years. This multi-year arrangement will further bolster the Gfinity’s position in the esports ecosystem.
  • 11th May 2020: The Group announced the partnership with BT Sports for co-producing the new gaming series, "The BT Sport FIFA Challenge".
  • 21st April 2020: The Company announced the partnership with YaLLa Esports, to strengthen its RealGaming101 offering into the MENA (Middle East-North Africa) region.
  • 2nd April 2020: The Company placed equity offering for 225,000,000 new ordinary shares, to raise GBP 2.25 million.
  • 25th March 2020: Signed agreement with Bidstack (advertising firm) to gain more audience and further generate revenue from Gfinityesports web platforms and RealSport101.

Financial Highlights – Reflecting Significant Positive Momentum in the Business, Especially in the Areas of Motorsport

  • On 31st March 2020, the Company provided the unaudited results for the six-month period ended 31 December 2019, with gross profit increased by 300 per cent to GBP 2 million as compared with the corresponding period of the last year (H1 FY19: GBP 0.5 million).
  • Decent highlights, which reflects the financial position of the Group: the revenue tumbled 20 per cent to GBP 3.5 million against the same period last year (H1 FY19: GBP 4.4 million); adjusted operating loss for H1 FY20 of GBP 2.4 million, 45 per cent improvement versus prior year (H1 FY19: GBP 4.4 million); adjusted administrative expenses stood at GBP 4.5 million, a decrease of 9 per cent on the prior year (H1 FY19: GBP 4.9 million).
  • On 31st December 2019, the Group has cash of GBP 2.4 million.
  • The Company witnessed continued growth in Gfinity Owned Community, with Gfinity's owned websites, RealSport101.com and GfinityEsports.com and their supporting social channels reaching over 45 million gamers in February 2020.
  • Gfinity was not been able to update financial guidance at this time amid uncertainty prevailing due to covid-19 outbreak. The Company was in discussions to secure an additional GBP 2 million of funding, which if completed, will provide a further supplement to the year-end cash position.

Share Price Performance

(Source: Refinitiv, Thomson Reuters) - Daily Chart as of May 20th, 2020, before the market close

GFIN’s shares were trading at GBX 1.7195 on 20th May 2020 (before the market close at 2:30 PM GMT+1). Stock's 52 weeks High is GBX 7.00 and Low is GBX 0.3025. Total outstanding market capitalization stood at around GBP 10.51 million.

Outlook

With the outbreak of COVID-19, various esports and live sporting events have been postponed, which impacted the company’s operations. The Company is focussed on working closely with the partners to deliver distinctive esports solutions and to assist them in connecting with young gamers around the globe. The three-year strategic plan is set, and the company has a robust financial position. Especially in the areas of motorsport, there has been a substantial positive momentum through the relationship with F1, the online tournament platform and the fast-growing Own Community franchise that effectively delivered the ePremier League. During the period, the business also encountered substantial headwinds with strategic partnership conversations and commercial contracts.

Vistry Group PLC (LON: VTY) – Experiencing an Improved Sales Rate with Lockdown Easing

Vistry Group PLC is a FTSE 250 housebuilding Company. It operates through three brands, namely, Bovis Homes, Linden Homes and Vistry Partnerships. The Company is involved in designing, building and selling of houses in the United Kingdom. Vistry Partnership is housing division of Vistry Group and operating as one of the leading providers of affordable houses in the UK.

The Group will release its half-yearly results of 8th September 2020.

(Source: Company Website)

Recent Developments - Reflecting Proactive Measures to Contain COVID-19 Disruption

  • 25th March 2020: The Group announced the postponement of second-quarter dividend and therefore, conserve GBP 60 million in cash to fight with the evolving uncertainties presented by the Coronavirus outbreak.
  • 23rd April 2020: The Group appointed a joint corporate broker to HSBC Bank PLC alongside the pre-existing broker, Numis Securities Limited.
  • 23rd April 2020: The Company announced the reopening of 90 per cent of its partnership sites from 27th April 2020, with required safety measures.
  • 7th April 2020: The Group announced that Vistry Partnerships had received a contract (worth GBP 108 million) to build 810 new affordable homes.

Trading Update – Increase in the average sales rate per site per week, Despite these Unprecedented Times

  • On 20th May 2020, the Group provided the trading update for the period from 1 January 2020 to date, along with the Group's ongoing response to COVID-19. Vistry Partnerships had a robust start to the year, progressing its strategy of accelerating revenue growth and margin expansion through an increase in mixed tenure development and land-led contracting.
  • In the average sales rate per site per week, the Group witnessed a robust increase in the first 11 weeks of trading in 2020, accompanied by some positive momentum on pricing.
  • VTY has a robust forward sales position, with GBP 1.5 billion (including joint ventures) of housebuilding reservations (including Vistry Partnerships development activity).
  • On 18 May 2020, the Group had committed banking facilities totalling of GBP 770 million and net debt of GBP 476 million (21 April 2020: GBP 440 million), with well-spread maturities out to 2027.

Share Price Performance

(Source: Refinitiv, Thomson Reuters) - Daily Chart as of May 20th, 2020, before the market close

VTY’s shares were trading at GBX 733 on 20th May 2020 (before the market close at 2:35 PM GMT+1). Stock's 52 weeks High is GBX 1,491.80 and Low is GBX 503.50. Total outstanding market capitalization stood at around GBP 1.65 billion.

Outlook

In the challenging environment, the Group's performance in lockdown has been better than initially anticipated in respect of completions, cash management and reservations. Currently, the Company has over 5,600 operators working safely across the developments. Lately, the Group’s partnerships has shown resilience to combat uncertainties as prevailing currently. Vistry aims to expand business operations, which are underpinned by substantial demand for affordable homes. Vistry Group is eligible in principle to access funding under the CCFF (Covid Corporate Financing Facility).

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