The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014, as retained as part of the law of England and Wales. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

Press release

30 June 2022

Guild Esports PLC

("Guild Esports", "Guild" or "the Company")

Interim results

Board change

Guild Esports, (LSE: GILD; OTCQB: GULDF), a global teams organisation and lifestyle brand, is pleased to announce its unaudited financial results for the six months ended 31 March 2022.

Financial highlights

·    Revenues increased by 195% to £1.09m (H1 2021: £0.37m), reflecting strong growth in sponsorship income

·    Gross profit rose more than 6-fold to £0.71m (£0.11m)

·    Loss before tax amounted to £4.96m (H1 2022: £4.28m) reflecting investment in teams and operational staff, corporate infrastructure, Guild Academy and content creation

·    Net cash of £6.1m as at 31 March 2022

Operating highlights

·    Signed £4.5m three-year sponsorship deal with Bitstamp, Guild's largest sponsorship deal to date

·    Launched an all-female roster for Valorant

·    Commenced share trading on the US OTCQB Venture Market

·    Won two major esports trophies, including Fortnite Champion Series Grand Royale in November and Fortnite Champion Series EU Final in March

Post-period highlights

·    Opened global headquarters and Guild Academy in London's Shoreditch on 29 June 2022

·    Won sixth major esports trophy in the EA Sports FIFA eChampions League in May 2022

·    Qualified for Valorant Masters Tournament in Copenhagen this July

Outlook

·    On track to deliver further strong revenue growth in the second half compared with H1, driven by contracted sponsorship deals signed previously

·    Annualised operational cost base to decrease by approximately 20% as a result of cost-cutting and greater efficiencies being achieved as Guild gains scale

·    New business pipeline remains robust with more than 30 prospective sponsorship deals in various stages of development, of which several potential deals are in advanced discussions with a range of brand owners and advertisers from multiple sectors

Commenting on the results, Kal Hourd, Chief Executive Officer, said: "Guild has achieved strong revenue growth in the first half as we benefitted from the hard work and investment made in the business during our maiden year of operations in 2021. Our pipeline of potential partners and sponsors continues to strengthen, and the momentum gained in the first half has positioned Guild for an even stronger second half.

We have also crossed another significant milestone with the opening of our new global HQ and Academy, which will provide further commercial opportunities to drive growth and create shareholder value. Our esports teams remain at the top of their game and consistently qualify for major competitions, thereby gaining the attention and interest of fans and brands across the esports universe, and we look to the future with confidence."

For further information, please contact:

About Guild Esports:

Guild Esports PLC is a global fan-focused team organisation and lifestyle brand that fields professional players in gaming competitions under the Guild banner. Our in-house training academy aims to attract and nurture the best esports talent, and our goal is to provide the ultimate entertainment experience alongside a distinctive lifestyle brand authentic to the esports community worldwide. Guild is led by an experienced management team of esports veterans and co-owned by David Beckham. The Company is headquartered in the UK and its shares are listed on the main market of the London Stock Exchange (ticker: GILD) and on the OTCQB Venture Market in the United States (ticker: GULDF). Please visit www.guildesports.com for more information.

Interim Management Report

Overview

Good progress was made in the first half to 31 March 2022 as Guild Esports gained increasing momentum following the launch of its commercial operations and the scaling up of the business last year.

Group revenues tripled to £1.1m in the period under review, reflecting a strong contribution from contracted sponsorship deals signed last year and in January 2022. The growth in revenues is particularly pleasing as the Company terminated a £3.6m three-year sponsorship deal in October 2022, potentially impacting its expected revenues for the current year.

However, the aborted deal was more than offset with a new and significantly larger contract win in January 2022, which will generate a total of £4.5m revenues over three years. The first half result included a first-time contribution from this contract as well as from other sponsorship deals signed previously.

The loss before tax increased to £4.96m from £4.28m, attributable to a significant ongoing investment across the business to support growth and establish Guild as a leading global esports teams organisation, in line with its stated strategy.

While the Company's long-term prospects are underpinned by favourable industry fundamentals, the Board is mindful of the continuing cash requirements of the business in the light of growing global economic uncertainty and challenging capital market conditions. As a result, significant action was taken in the first half to streamline the Company's cost base. These measures include a rationalisation of suppliers and right-sizing staff numbers from an average of 45 as at 31 March 2022 to 30 at present. In addition, the Company is also generating greater efficiencies as it gains operational scale following its transition from start-up phase to becoming an established esports organisation. As a result, the Company expects to reduce its cost base by approximately 20% from the second half of 2022, without jeopardising the value offered to its sponsors and partners.

Net cash as at 29 June 2022 amounted to £3.5m, net of accruals.

Operating review

The Company signed two new sponsorship agreements in the first half, increasing the total complement of international brands backing Guild's esports teams to five. In January 2022, the Company clinched its single biggest sponsorship deal with a £4.5m three-year agreement with Bitstamp, the blue-chip crypto exchange.

This was followed by a two-year deal with Razer Gaming Chairs, the world's leading lifestyle brand for gamers.

These two sponsors joined Subway, Samsung and Hyper X, who became Guild partners last year. The Company worked closely with all five brands to help them reach esports fans worldwide with targeted content as well as compelling performances by Guild's esports teams competing in Valorant, FIFA, Fortnite and Rocket League. We decided to exit Apex Legends after evaluating that it did not offer sufficiently attractive commercial options at present.

The total contracted sponsorship revenue currently stands at £8.56m, up from £8.4m as at 31 January 2022, spread over the lifetime of contracts signed to date. Guild's pipeline of new business has also continued to expand due to keen interest from potential new sponsors and partners from many different sectors including beverages, media and telecoms, consumer electronics as well as other consumer brands. These prospects range from global brand advertisers to endemic esports companies.

As a result, the pipeline remains robust with several potential deals currently in the advanced stages of discussions, some of which have been under negotiations for several months. While there is no certainty when these prospects may get signed, the Company remains confident of its new business prospects for this year and beyond.

Audience

Guild's own audience for the period peaked at 22 million, averaging approximately 16 million during the period. The Company is broadly on track to achieve an audience network of between 25-30 million as previously announced by the end of 2022.

New head offices and Academy

The creation of a physical site for the Guild Academy and global HQ in London's trendy hi-tech area of Shoreditch became reality on 29 June 2022. A 10-year lease for the premises was announced in January 2022 and sparked much interest from fans and commercial partners alike. While the premises are now fully operational with staff due to complete their move-in by 30 June, Guild plans to hold a grand opening of the site later this year, pending the conclusion of discussions over the naming rights to the HQ and Academy with potential sponsors. A further announcement will be made in due course.

Guild has also formed partnerships with local schools and colleges, to work with talented students and demonstrate the benefits of the professional world of esports through its Academy system, including in-person sessions with Guild's professional coaches. Alongside in-game coaching, the schools Academy will also educate children on all of the factors that go into becoming a professional esports athlete, including proper nutrition and physical fitness. The digital sessions will also teach children how to stay safe online.

Esports teams

The Company's esports athletes and teams continue to delight fans and esports followers with their exciting game play and victories. Two major trophies were won in the period, including Fortnite Champion Series Grand Royale in November and Fortnite Champion Series EU Final in March.

As at 31 March 2022, the Company's total pro player roster was 21 compared with 17 at the same time last year.

Board change

The Company today also announces that David Gardner has stepped down as a non-executive director with immediate effect to pursue his other business interests. The Board would like to thank him for his wise counsel and support during the Company's formative years.

Outlook

The Company is benefitting from strong momentum driven by increasing revenue contribution from sponsorship deals signed previously. As a result, second half revenues are expected to show further strong growth compared with the first half.

Operating expenses are expected to fall significantly from the second half due to a cost reduction programme and greater efficiencies that will lower Guild's cost base by approximately 20% on an annualised basis.

The Company's pipeline of potential new sponsorship deals continues to strengthen, with approximately 30 prospective deals in various stages of development including several in advanced negotiations. Given the strong pipeline and esports industry fundamentals, the Board looks to the future with cautious optimism.

Kal Hourd

Chief Executive Officer

29 June 2022

Key risks to business

Responsibility Statement

We confirm that to the best of our knowledge:

·    the Interim Report has been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, as adopted by the EU; and

·    gives a true and fair view of the assets, liabilities, financial position and profit/loss of the Company; and

·    the Interim Report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the set of interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year.

·    the Interim Report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.

The Interim Report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by Kal Hourd (CEO), on 29 June 2022.

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

The unaudited condensed statement of comprehensive income of the Company for the six months ended 31 March 2022 is set out below.

CONDENSED STATEMENT OF FINANCIAL POSITION

The unaudited condensed statement of financial position of the Company as at 31 March 2022 is set out below.

CONDENSED STATEMENT OF CHANGES IN EQUITY

The unaudited condensed statement of changes in equity of the Company for the six months ended 31 March 2022 is set out below.