In its half-year results to 31 March 2021, Guild Esports (GILD ) said it remains on track to achieve its first-year sponsorship revenue targets as revenues continue to grow strongly.
The esports organisation co-owned by David Beckham hailed its position as the First esports teams organisation to list on the LSE, which executed whilst raising £20m in the process.
First half revenues amounted to £0.37 million (1H20: nil) over the year while the pre-tax loss came in at £4.28m (1H20: £0.39m loss) which the company said was principally due to the higher administrative costs as the Company scaled up its commercial operations post IPO.
The Group reported adjusted cash of £14.4m as at 31 March 2021, after its pre-payments for promotional and marketing commitments of £2.5 million, for the period to May 2022.
Guild has established esports teams to compete in FIFA, Rocket League, Valorant and Fortnite with several notable tournament placings and total prize pool winnings of £0.3m.
In addition, the Company secured a three-year maiden sponsorship deal with contracted revenues of £3.6m which will launch in 2H21 as well as a new landmark sponsorship deal with global brand, Subway, which will cover more than 50 EMEA markets over two years.
Guild, which said it is competing ‘at the highest level in its chosen esports’ with a ‘significant’ fanbase and audience, said it remains on track to achieve one million subscribed fans by the end of the fourth quarter and over 15.6m followers accessible via its network.
To date, Guild has signed four sponsorship deals with a total minimum revenue value of £7.5m which it said provides good forward visibility to achieve its first-year revenue objectives. Guild now expects to generate ‘significant sponsorship revenues’ from 2H21, arising from four partnership deals including two multi-year, multi-million-pound deals.
In particular, the Company stated that its new business pipeline ‘continues to be robust’ and that it is currently in discussions with potential new sponsors to sign further deals for its core inventory (being main shirt partners, HQ naming rights, academy sponsors and regional partners), as well as exploring opportunities for strategic partnerships and content deals.
Shares in Guild Esports have increased by nearly 25% in value since the start of April 2021. The stock was trading 0.58% lower this morning at 7.38p following the announcement.
“As Guild embeds its brand in the esports world, the loyal fanbase will scale the merchandise and digital product sales. The academy subscription model is a scalable revenue opportunity, with possibilities for global expansion,” said CEO, Kal Hourd.
To date, Guild’s audience has grown with social media followers reaching 500k in May and that number now approaching 800k. Guild’s network audience has also surpassed 15.6 million, which it said reflects its position as the world's fastest growing esports organisation.
Hourd added that Guild’s subscription-based service, the Guild Academy, which it launched back in May 2021, “has established a potentially major scalable revenue stream for Guild and will also foster a loyal fan base and source of new talent for the Company.”
“The academy is the world's most comprehensive and innovative esports online training platform and embodies the holistic nature of our approach at Guild,” he commented.
Addressing investors, Hourd said, “As the academy expands and is populated with content provided by our industry-leading coaches and players, we will be promoting it through digital and physical events, the Guild network (over 15.6m fans) and David Beckham's social channels (125m+ fans), as well as targeting non-English users in EMEA and beyond.”
“Guild's fanbase is a lucrative asset to global brands who require an authentic way to reach the younger, digitally focused audience and we continue to evaluate expansion into further game titles and countries in order to accelerate our growth,” he added.
Guild Esport’s investors include London-listed Blue Star Capital. To date, the investment company, which is focused on investing in new technologies, has invested around £0.706 million in Guild Esports, and holds around a 5.95% of the issued share capital of Guild.
Guild was admitted to the Official List and started trading on the standard segment of the London Stock Exchange in October 2020 to take advantage of the growing esports markets.
Blue Star says the esports market is experiencing significant growth. In 2020 it was estimated at c.495m viewers and is projected to reach around 646 million viewers by 2023. This is expected to result in revenues growing over the same period from $950m to $1.60bn.
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