Shares in eSports business Gfinity (GFIN:AIM) tumble 11% to 21.8p after it reports a wider pre-tax loss despite more than doubling its revenue in the last financial year.

The £19 million cap, which specialises in video gaming on a competitive level, recorded a pre-tax loss of £3.58 million in the 12 months to 30 June compared with a loss of £345,039 a year earlier.

The group says this reflects the planned investment made following its stock market listing in December 2014.

GFINITY - Comparison Line Chart (Rebased to first)

Revenue is up by 163% to £560,828 driven by a mix of sponsorship, fees from game publishers, premium subscriptions and ticket sales.

Gfinity intends to raise £1 million through a share placing to enhance its online viewing channel, develop a mobile app and stage the 2016 Gfinity Championship series. But priced at a likely 19p per share, the fund raise implies a hefty 22% discount to Friday’s 24.5p close.

Estimates suggest the global eSports market could be worth more than $1 billion in 2017 and the number of eSports tournaments has risen from 320 in 2009 to just under 2,000 in 2014.

Gfinity has an early-mover advantage but its success depends on its ability to win big sponsorship deals. So far it has announced just one major deal – a two-year agreement with The Sun newspaper for it to be the official partner and title sponsor of the 2015 and 2016 championship series.

Arden Partners forecasts a pre-tax loss of £2.8 million in FY2016 on revenue of £1.9 million.

Issue Date: 02 Nov 2015