TIDMGAME
GameAccount Network plc
2015 Annual Results
LSE: GANISE: GAME
London & Dublin | 28 April, 2016: GameAccount Network plc
("GameAccount Network" or the "Group"), a leading developer and
supplier of enterprise-level B2B gaming software and online gaming
content, announces results for the twelve months ended 31 December
2015.
Financial Overview
-- Net Revenue of GBP6.0m (2014: GBP7.5m)
-- Underlying Net Revenue decreased 8% to GBP6.0m (2014: GBP6.5m) excluding
system sales of GBP1.0m in 2014
-- Clean Ebitda1 loss of GBP3.0m (2014: GBP1.4m)
-- Loss before tax of GBP5.6m (2014: GBP2.6m) and loss per share of GBP0.09
(2014: GBP0.05)
-- Cash and cash equivalents at the end of the year of GBP3.8m (2014:
GBP10.8m)
-- Net Assets at the end of the year of GBP10.2m (2014: GBP15.2m)
-- Raised Gross Proceeds of GBP2.6m in 2016 positioning the Group for
further growth
Strategic & Operating Developments
-- Launched Simulated GamingT in the US for 4 new US casino clients
(2014: 2)
-- Launched Simulated GamingT in Australia with a consortium of
land-based gaming clubs
-- Signed 5 new US casino clients for Simulated GamingT (2014: 2)
-- Simulated GamingTM clients together generate in excess of
10% of the land-based US casino Industry's annual gaming
revenues2
-- Post period end signed three (3) further Simulated GamingTM
clients in the US, bringing total to 11 US casino operator
clients
representing 48 casino properties coast to coast
-- Continued delivery of Internet gaming platform for Betfair in New
Jersey
-- Continued investment in US infrastructure: Licensing, offices and
People
Dermot Smurfit, CEO of GameAccount Network commented:
"2015 has continued the period of investment for GAN, and,
performance to date in 2016 is in line with our expectations.
Following a transformational year in 2013, GAN has continued to
position its business to capture growth in emerging online gaming
markets in the US. 2015 saw significant progress with Simulated
GamingT, together with a number of significant commercial and
strategic developments.
Real-money Internet gaming in New Jersey and the pace of
regulation in the US market has remained slower than expected but
we are confident in the long-term prospects for real-money gaming.
For 2016 we believe that the opportunity for GAN with Simulated
GamingT will substantially compensate for the delays in regulating
real-money Internet gaming in the US.
The State of Pennsylvania appears to be in the process of
regulating Internet gaming with a number of legislative bills
actively considered in 2015. GAN has been selected as the exclusive
platform for both Simulated GamingT and regulated real-money
Internet gaming by Parx Casino, the leading casino operator in
Pennsylvania, and is positioned for substantial growth in regulated
real-money gaming should suitable legislation be enacted in
2016.
Throughout 2015 Simulated GamingT proved its ability to support
the core on-property gaming business of US casino clients, lending
impetus to new client signings as GAN's increasing body of evidence
provided compelling rebuttal against US casino operators' natural
concerns relating to cannibalisation of existing land-based
business. Combined with GAN's US patented ability to integrate with
land-based loyalty programs, Simulated GamingT works to reactivate
long-term lapsed patrons on-property, increase on-property
visitation by existing patrons and generate incremental income
online for GAN and the casino client to participate in.
Simulated GamingTM continues to represents a US market
opportunity estimated at $250m3 in 2015 which is immediately
addressable and not contingent on the pace of regulation nor
contingent on US casino client's investing in digital user
acquisition.
In 2015 the majority of GAN's US casino clients commenced
digital user acquisition launching strategies to bring both
existing and new clients online, principally in the latter months
of the year. As this happens, GAN's US casino clients rely heavily
on our team of marketing specialists. Marketing Services provided
to US casino clients represents a significant opportunity for GAN
not only to increase professional service fees but also to support
casino clients in scaling their Simulated GamingT business online
in the regions where their land-based gaming brands are recognised.
Supported by GAN's Marketing Services Team, GAN's US casino
operator clients have the opportunity to significantly increase
user acquisition in order to address the broader $2bn US Social
Casino market.
We contracted with Maryland Live! Casino in Maryland during the
first half of 2015, which contributed to revenues in the second
half of the year. In the second half of 2015 we contracted with San
Manuel casino in California and American Casino Entertainment
Properties (ACEP) both of which contributed to revenues in the same
half-year period. In December 2015 we contracted with a further two
US casinos including The Borgata and Isle of Capri which we
anticipate will begin to contribute to revenues in the first half
of 2016. Performance metrics for Simulated Gaming T remain
significantly ahead of initial expectations and the prospects for
this business are exciting.
Our investment in the business continues and we have grown our
team and expanded our technical expertise, US infrastructure and
gaming content portfolio throughout 2015. Consistent with earlier
statements, the iBridge FrameworkT US patent awarded to GAN in
September 2014 has served to provide material benefit to the
Simulated GamingT business as we grew in the US market in 2015.
In 2015 we actively engaged with multiple potential system
buyers and we remain confident in our ability to continue to
deliver on sales of our gaming system to casino equipment
manufacturers and/or casino operators although the timing of such
sales remains uncertain in light of continuing delays to the
regulation of online real money intra-State US Regulated
Gaming.
We remain confident in our prospects for 2016 and beyond. For
2016, we anticipate significantly increased market share in New
Jersey's Regulated Gaming market with The Borgata (subject to
certain contractual conditions being met). In Simulated GamingT we
forecast material growth from the launches of The Borgata, Isle of
Capri, Jack Entertainment and two undisclosed but material casino
clients located in the Northeast and Southwest regions of the US.
We also recently completed an additional capital raise with gross
proceeds of GBP2.6m which will enable continued expansion of
real-money Regulated Gaming and Simulated GamingT opportunities in
the US."
Finally, to consolidate our recent rebranding from GameAccount
Network to GAN we are pleased to announce, that effective
immediately, our AIM stock ticker will change from GAME to
GAN."
Notes
1. Clean EBITDA is a non GAAP company specific measure and excludes
interest, tax, depreciation, amortisation, sharebased
payment expense and other items which the directors consider
to be non-recurring and one time in nature
2. RubinBrown Gaming Stats research report covering 2014 US market
3. Internally commissioned research report
Note regarding forward-looking statements
This announcement includes forward-looking statements, including
statements concerning current expectations about future financial
performance and economic and market conditions which GameAccount
Network believes are reasonable. However, these statements are
neither promises nor guarantees, but are subject to risks and
uncertainties that could cause actual results to differ materially
from those anticipated.
Results Conference Call
The GameAccount Network management team will host a conference
call for analysts & institutional investors at 14.00 BST (09.00
EDT) on April 28th and those wishing to dial in should contact FTI
Consulting on the details below:
For further information please contact:
GameAccount Network FTI Consulting
Dermot Smurfit Mark Kenny/Jonathan Neilan/Melanie Farrell
Chief Executive Officer
+44 (0) 20 7292 6262 +353 1 6633686
dsmurfit@GAN.com gameaccount@fticonsulting.com
Desmond Glass
Chief Financial Officer
+44 (0) 20 7292 6272
dglass@GAN.com
Davy
John Frain / Roland French
+353 1 679 6363
GameAccount Network Plc
Chairman's Report
Dear Fellow Shareholders
During the course of 2015 the Group expanded its market share in
the United States, our key geographic market, by securing
additional US land-based casinos as clients of either virtual
currency-based Simulated GamingTM or traditional real money
Regulated Gaming conducted on an intra-State basis. In September
2015 the Group rebranded from GameAccount Network to GAN and
launched www.GAN.com as our primary business to business sales,
marketing and investor relations portal. On 7th April 2016 the
Group announced that it had successfully raised gross proceeds of
GBP2.6m in new capital to continue expansion of real-money
Regulated Gaming and Simulated GamingTM opportunities in the US and
for working capital and general business development purposes.
(MORE TO FOLLOW) Dow Jones Newswires
April 28, 2016 02:00 ET (06:00 GMT)
As has been widely reported, regulated real money Internet
gaming in New Jersey has been slow to attract consumers for a
variety of reasons. Despite challenges, the Group has executed well
and delivered operationally for Betfair Group plc in New Jersey,
earning a well-deserved reputation in the United States for
technical competence reflecting the reputation already hard earned
in Europe's toughest regulated Internet gaming markets. This
reputation has translated into additional business secured in
December 2015 for GAN in New Jersey with the market-leading
land-based New Jersey operator The Borgata Casino nominating GAN as
their future platform for regulated real money Internet gaming in
2016, subject to certain contractual conditions being met.
Your Board of Directors believes there is a significant
opportunity for Simulated GamingT in the United States. It has
outperformed initial expectations and, in the absence of further
State-by-State real-money gaming regulation, Simulated GamingT has
become the centrepiece of the Group's growth strategy. We signed
five major land-based US casinos as new clients in 2015 with four
US casino clients commercially launched in the same period. Outside
the United States, the Group also commercially launched a
consortium of six land-based gaming clubs in Queensland, Australia
as clients of Simulated GamingT in a new geographic region for the
Group which we believe will prove lucrative over time. We are
excited about the prospects for Simulated GamingT and the
performance we have achieved since its initial launch together with
the increasingly compelling business case that Simulated GamingT,
suitably integrated with land-based casino operator's loyalty
program, greatly supports our client's core business of on-property
real money gaming. We are also confident in the long-term potential
for real money Regulated Gaming, however, we believe intra-State
regulation in the US market will continue to be slower than was
originally anticipated.
Our consistent progress in 2015 with our core products of
Simulated Gaming TM and regulated gaming in sustainable markets in
what was a year of continued investment for GAN as we developed
both our real money Regulated Gaming and Simulated GamingT
offering, would not have been possible without the dedicated and
talented staff employed by the Group in both London and throughout
the United States. I thank them for their continued efforts and
believe the Group has become established as a major Internet gaming
technology, infrastructure and services provider to land-based
casinos in the United States, consistent with the strategy set out
during the Group's Initial Public Offering completed in November
2013.
After two years building our market position we are satisfied
the Group is now recognised as a leading provider of
enterprise-level online solutions to the land-based gaming industry
in the United States and believe significant shareholder value will
develop going forwards as New Jersey's Regulated Gaming market
continues to grow and Simulated GamingTM continues to be adopted by
a portfolio of larger US casino operator clients of which some may
be capable of investing in significant user acquisition
marketing.
David O'Reilly
Chairman, GameAccount Network Plc
GameAccount Network Plc
Chief Executive Officer's report
Overview
GAN has now successfully emerged as a leading provider of
enterprise-level Internet gaming technology solutions to major US
casino operators securing significant US market share. 2015 was our
second year of continued and necessary substantial investment
opening the Group to major commercial opportunities including The
Borgata for real money regulated gaming in New Jersey and Isle of
Capri for Simulated GamingT, both expected to deliver significant
shareholder value in 2016 and beyond.
This substantial continued investment has been made in the US
operational structure to develop the Group's US presence in both
real money regulated gaming and Simulated GamingT markets. In the
UK further substantial investment has been made in the Group's
software technology and its capability to deliver both Simulated
GamingT and real money regulated gaming to US casino operators,
integrated with the US casino operators' existing land-based
loyalty program.
Intra-State regulation of real money Internet gaming remained
largely on hold in the US, although legislative action did occur in
Pennsylvania in the late stages of 2015, which suggests Internet
gaming legislation may progress further in that State during the
course of 2016. In the meantime, Simulated GamingT continued to
materially outperform initial expectations and is positioned for
significant profitable growth in 2016 and beyond as selected US
casino operator clients commenced the application of marketing
capital in late 2015 in order to scale digital user acquisition
with certain clients relying upon GAN's marketing services team and
their specialist digital marketing services.
During the year the Group launched Simulated GamingT for four
major US casinos located in Pennsylvania, California, Maryland and
Nevada, and signed additional landmark deals with The Borgata
Casino in New Jersey and multi-State US casino operator Isle of
Capri based in Illinois for delivery in 2016. Simulated GamingT has
also been launched in Australia and other International
opportunities are being developed although the Group's strategic
focus remained firmly on the US market throughout 2015 emphasised
by my relocation to the US in order to better support the Group's
activity in its key geographic market.
In New Jersey, the Group delivered strongly for Betfair's
regulated Internet casino gaming website delivering over one
hundred incremental games across desktop and mobile devices and
establishing BetfairCasino.com as a significant Internet casino
operator in New Jersey's regulated Internet gaming market. I would
like to take this opportunity to thank staff at GAN, the regulators
at the New Jersey Division of Gaming Enforcement, the management of
Betfair's New Jersey operations and the operational management of
Golden Nugget Atlantic City for all their support during 2015.
GAN's enterprise-level technology platform for Internet gaming
is a truly scarce asset, managed by an equally-scarce team of
experienced specialists managing one of a handful of fast-growing
real money Regulated Gaming businesses in New Jersey. Real money
Regulated Gaming in New Jersey has proved materially different in
both general practice and specific technical requirements when
compared with European markets. Subject to certain contractual
conditions being met, GAN's two New Jersey clients will together
represent over 40% of Internet gaming revenues in New Jersey. This
positions GAN to capture significant market share in any
incremental US intra-State markets which may regulate Internet
gaming over time, including Pennsylvania, New York and Michigan
During the year, the Group achieved strong financial growth in
net revenue derived from the United States and the regulated
Italian market driven primarily by Simulated GamingT nationwide
across the US and from regulated real money Internet gaming in New
Jersey and Italy. Notwithstanding growth in our core product
verticals of Simulated GamingT and the sustainable regulated gaming
markets of New Jersey in the US and Italy overall net revenue
declined by 20% to GBP6.0m (2014: GBP7.5m) due primarily to the
decline in game development fees and continuing delays in securing
a system sale in 2015.
Strategy
Expansion in the United States remains a continuing strategic
priority for the Group with requisite increases in US
infrastructure centred on Las Vegas comprising human resource and
licensing investment in relevant US States including New Jersey and
Pennsylvania.
With the significant slowdown in regulation of real money
intra-State Regulated Gaming the Group has increased its focus on
delivering Simulated GamingT to land-based US casinos in advance of
further regulation. The successful launch of Simulated GamingTM in
2014 and net revenue growth in 2015 support the Group's internal
focus on
GameAccount Network Plc
Chief Executive Officer's report (continued)
delivering Simulated GamingT to as many major US casino
properties as possible during the now extended period prior to
regulation of real money Regulated Gaming. Furthermore, the Group
has received comprehensive evidence from collaborating clients that
GAN's unique Simulated GamingT model has materially increased
patrons' visitation on-property, reactivated significant numbers of
long-term inactive patrons and generally proved highly supportive
of on-property real money land-based gaming.
The Group continues to pursue further Internet gaming platform
sales with casino equipment manufacturers in order to enable land
based casino slots manufacturers to manage the distribution of
their content online. The slow pace of incremental regulation of
Internet gaming in the United States has materially contributed to
on-going delays in securing an Internet gaming platform sale.
Investment in the Group's technical capability in key areas such
as back office, mobile and convergence with land-based casino
management systems continued throughout 2015 with significant
growth of the Group's mobile gaming portfolio in HTML5 and native
iOS and Android applications.
In Europe, the Group extended its market position in Italy with
new clients launched including Star Vegas and William Hill Italia
and Internet gaming content from NET Entertainment was delivered
via the Group's technical platform located in Rome. Italy remains a
crucial market for GAN as a comprehensively regulated Internet
gaming market exhibiting continued growth throughout 2015
consequent to the regulation of Internet casino gaming in 2013.
Products
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The Group's back office system iSight Back OfficeT received
major upgrades released throughout 2015 delivering a
state-of-the-art back office player management capability with
unique convergence features designed to complement a land-based
casino's existing gaming operations.
The product related capabilities of Simulated GamingT took major
strides in 2015 with a focus on monetisation of players and the
introduction of gaming activity accelerants designed to extend
player lifetimes, increase frequency of purchases and drive
increased visitation to the US casino operators' land-based
properties. Frictionless conversion funnels for mobile, real-time
slot tournament capability and multi-user (player-with-player)
casino games such Multiplayer EZ BACCARAT® launched in 2015
resulting in a significant increase in both monetisation and
stickiness.
The Group's HTML5 casino gaming-specific framework was
substantially revised with the first new look and feel HTML5 casino
slot and casino table games released in early 2015 together with a
materially upgraded native casino gaming application consolidating
games developed in both native application and HTML5 format within
a single gaming App logically branded the single "Online Casino"
App for land-based operator clients. This major evolutionary step
for the Group's SENSE3T mobile gaming proposition will support the
Group's growth opportunity in mobile in 2016.
A wide portfolio of new casino games were developed throughout
2015 with over 40 individual game client applications developed and
delivered online in 2015 (2014: 40) bringing the Group's
in-platform gaming content portfolio to 200 comprising simple
casino slots and table games, complex multiplayer bingo and poker,
multi-user casino games and a wide range of specialist games such
as blackjack tournaments and region-specific card or dice
games.
GameAccount Network Plc
Chief Executive Officer's report (continued)
In 2015 the Group's research & development function
developed a comprehensive framework for delivering 'freemium'
mobile casual games to land-based casino operator clients
exploiting the deep skill and expertise in the Group for developing
skill-based games. The first product, a mobile casual game based on
solitaire with over 300 levels to explore and complete was released
for a US casino operator client in 2015 and relied entirely on
in-App purchases to generate revenues from a minority of players
who download the game for free and proceed to purchase in-game
items designed to extend time-on-device. Variants of these mobile
casual games, which can be played online or offline, will be
released to the Group's selected US casino operator clients in
2016. The Group's research & development function in 2015 also
developed the US casino Industry's first virtual reality casino
application offering end user players of Simulated GamingT with
Oculus Rift PC VR headsets the ability to navigate a virtual casino
environment, explore themed worlds and play existing casino table
games and casino slot games within these themed environments. The
first virtual reality casino was released in early 2016 for a US
casino operator client.
Marketing & Support Services
Throughout 2015, the Group continued to invest in establishing a
wide range of secondary and tertiary services for US land-based
casino clients designed to support the land-based casino operator
in managing customers and growing through external user acquisition
marketing and internal cross-sell marketing to existing patron
databases and on-property human traffic. In 2015, GAN secured four
US casino clients of marketing services conducted in support of
Simulated GamingT in the second half-year period.
Marketing and support services remain a crucial component of the
Group's service portfolio, ensuring any land-based casino operator
can cost-effectively launch a turnkey managed Internet gaming
service and, should they choose to, invest significant capital to
grow profitably beyond its existing audience of casino patrons.
GameAccount Network Plc
FINANCIAL AND OPERATIONAL REVIEW
Summary
2015 has been a year of focus and investment for GAN. The Group
has focussed on driving additional revenue growth with our
Simulated GamingT product in the US and Australian markets and in
the sustainable real money gaming markets of New Jersey in the USA
and in Italy.
The Group has established a significant coast to coast presence
in the US market from which to drive additional growth. Following
the successful launch of Simulated GamingT in 2014 with two US
Casino operators, the Group added five additional customers during
2015; Parx Casino, San Manuel Digital, Maryland Live! Casino and
American Casino & Entertainment Properties in the US (ACEP) and
Club8 Casino in Australia. The Group has experienced further
recurring revenue growth in Italy where two new operators launched
during the period and in New Jersey which benefitted from an
expanded content offering and a growing macro market. Recurring
revenues now account for 79% of the overall Net Revenue compared to
48% in 2014. The Group has also worked to consolidate its cost base
and believes that the current fixed operational cost base is
sufficient to support planned growth over the next twelve
months.
The Group reports gross income of GBP25.8m, a 1% decrease from
2014. Net revenue for the year was GBP6.0m compared to GBP7.5m in
the same period last year. Clean EBITDA loss of GBP3.0m compares to
a Clean EBITDA loss in 2014 of GBP1.4m and loss before taxation of
GBP5.6m compares to a loss before taxation in the prior period of
GBP2.6m. Loss after taxation of GBP5.0m reflects the successful
claim for research and development tax credits in respect of prior
years, received in 2016, of GBP0.6m. The 2014 financial year
benefited from the recognition of the final payment of a material
system sale which generated GBP1.0m in gross income and net
revenue.
The Group continued to invest heavily in the underlying Internet
gaming system capability in order to both strengthen its delivery
capability and enhance its core Simulated GamingT and regulated
real money gaming product offerings. The Group believes this
investment will enable the Group to continue to capitalise on the
immediate Simulated GamingTM opportunity primarily in the core US
market and to drive incremental growth in the regulated real money
gaming markets of New Jersey in the US and in Italy. The Group
remains focussed on the US market which now represents 50% of
overall Group net revenues.
The group ended the year with a cash balance of GBP3.8m compared
to GBP10.8m for the year ended 31 December 2014 and net assets at
31 December 2015 of GBP10.2m compared to GBP15.2m in the previous
year. On 7th April 2016 the Group raised an additional GBP2.6m
(before associated transaction expenses) in new capital to continue
expansion of real-money regulated gaming and Simulated GamingTM
opportunities in the US as well as for working capital and general
business development purposes.
Revenue
Net revenue for the year of GBP6.0m is GBP1.5m less than the net
revenue generated in the previous year of GBP7.5m. Revenue for 2014
benefited from the final payment related to a material Internet
gaming system sale that accounted for GBP1.0m of the GBP7.5m. On an
underlying basis, net revenue excluding the impact of this system
sale decreased by 8% from GBP6.5m to GBP6.0m.
B2B revenue share and other revenues increased by 45% from
GBP2.9m to GBP4.2m The increase recorded in B2B revenue share and
other revenues of GBP1.3m is offset by declines in game and
platform development fees of GBP1.7m (excluding system sale) a
decrease driven primarily by reduced game development fees for the
conversion of existing offline slots titles to the online market.
The increase in B2B revenue share and other revenues has been
driven by the regulated gaming markets in New Jersey and Italy and
by Simulated GamingT where we now have seven casinos operational,
three of which launched in Q4. B2C net revenue decreased from
GBP0.7m to GBP0.6m.
GameAccount Network Plc
FINANCIAL AND OPERATIONAL REVIEW (continued)
Expenses
Distribution costs include royalties payable to third parties,
B2B and B2C direct marketing expenditure and the direct costs of
operating the hardware platforms deployed across the business which
in total increased from GBP3.7m to GBP5.4m for the year ended 31
December 2015. The increase is due primarily to increased
amortisation of intangible assets of GBP1.0m and increased
royalties payable to providers of third party games content in
Europe for real money gaming and in the US for both Simulated
GamingT and real money gaming in New Jersey. B2B marketing
expenditure has also increased to support the roll out of Simulated
GamingT across the US and other International markets.
Administration expenses include the costs of personnel and
related expenditure for both the London and Nevada offices. The
Group reports total administrative expenses for the year ended 31
December 2015 of GBP6.3m, GBP0.2m less than those incurred in 2014.
For the year ended 31 December 2015, the group continued to invest
in the underlying Internet gaming system, enhanced platform and
games team capability in the UK and expanded sales presence in the
US. This strategy has enhanced the delivery capability of the Group
and enabled the Group to launch additional Simulated GamingT casino
properties in the US and Australia.
CLEAN EBITDA
Clean EBITDA is a non GAAP company specific measure and excludes
interest, tax, depreciation, amortisation, share based payment
expense and other items which the directors consider to be
non-recurring and one time in nature as disclosed in note 6. The
Directors regard Clean EBITDA as a reliable measure of profits that
is not unduly subjective.
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Clean EBITDA loss of GBP3.0m compares to an EBITDA loss of
GBP1.4m in 2014 reflecting both the impact of continuing to invest
in the underlying delivery and product capability and the
recognition of GBP1.0m in system sale revenue in the year ended 31
December 2014.
Cashflow
During the year the Group has continued to invest in the
underlying Internet Gaming System deployment and product
capability. The cash balance at 31 December 2015 was GBP3.8m
compared to GBP10.8m in 2014. In addition to operating cash outflow
before movements in working capital and taxation of GBP3.4m, cash
outflows during the year include GBP4.8m in incremental investment
in intangible fixed assets primarily related to the capitalisation
of internal development time and GBP0.5m invested in fixed assets
including the cost of moving and refurbishing suitable head office
space in London.
KEY PERFORMANCE INDICATORS
The directors regard Clean EBITDA as a reliable measure of
profits and the Group's key performance indicators are set out
below:
2015 2014
GBP000 GBP000
Gross income from gaming operations and services 25,837 26,123
Net revenue 6,011 7,528
Clean EBITDA (3,018) (1,425)
Net assets 10,184 15,176
Cash and cash equivalents 3,779 10,776
The Board also monitor customer related KPIs, including number
of active players, revenue by customer, average revenue per daily
active user for Simulated GamingT, business segment profitability
and geographic split of turnover.
GameAccount Network Plc
For the year ended 31 December 2015
Consolidated statement of comprehensive income
Notes Year ended Year ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Continuing Operations
Gross income from gaming 25,837 26,123
operations and services
Net revenues 4 6,011 7,528
Distribution costs (5,384) (3,728)
Administrative expenses (6,250) (6,469)
Total operating costs (11,634) (10,197)
Clean EBITDA (3,018) (1,425)
Depreciation 10 (438) (360)
Amortisation of intangible assets 9 (1,801) (777)
Exceptional costs 6 (355) (67)
Employee share-based payment charge (11) (40)
Operating (loss) 6 (5,623) (2,669)
Finance income 7 19 67
(Loss) before taxation (5,604) (2,602)
Tax credit 8 582 -
(Loss) for the year attributable (5,022) (2,602)
to owners of the Group
and total comprehensive
income for the year
Earnings per share attributable
to owners
of the parent during the year
Basic (pence) 15 (8.99) (4.66)
Diluted (pence) 15 (8.99) (4.66)
Clean EBITDA is a non GAAP company specific measure and excludes
interest, tax, depreciation, amortisation, share based payment
expenses and other items which the directors consider to be
non-recurring and one time in nature. Where not explicitly
mentioned, EBITDA refers to EBITDA from continuing operations.
Company Registration No. 3883658
GameAccount Network Plc
For the year ended 31 December 2015
Consolidated statement of financial position
Notes At 31 December At 31 December
2015GBP'000 2014GBP'000
Non-current assets
Intangible assets 9 5,570 3,026
Property, plant and equipment 10 884 805
Lease deposits 170 -
Deferred tax asset 510 510
7,134 4,341
Current assets
Trade and other receivables 11 2,851 2,823
Cash and cash equivalents 12 3,779 10,776
6,630 13,599
Total assets 13,765 17,940
Current liabilities
Trade and other payables 13 3,231 2,764
Total current liabilities 3,231 2,764
Non-current liabilities
Other payables 13 350 -
Total non-current liabilities 350 -
Equity attributable to equity
holders of parent
Share capital 14 560 559
Share premium account 14,592 14,574
Retained (deficit)/ earnings (4,968) 43
10,184 15,176
Total equity and liabilities 13,765 17,940
GameAccount Network Plc
For the year ended 31 December 2015
Consolidated statement of changes in equity
Share Share Retained(deficit)/ Total
capital premium earningsGBP'000 equity
GBP'000 GBP'000 GBP'000
At 31 December 2013 557 14,528 2,605 17,690
Loss and total - - (2,602) (2,602)
comprehensive
income for the year
Employee share-based - - 40 40
payment charge
Issue of equity 2 46 - 48
share capital
At 31 December 2014 559 14,574 43 15,176
Loss and total - - (5,022) (5,022)
comprehensive
income for the year
Employee share-based - - 11 11
payment charge
Issue of equity 1 18 - 19
share capital
At 31 December 2015 560 14,592 (4,968) 10,184
The following describes the nature and purpose of each reserve
within equity:
Share capital Represents the nominal value of shares
allotted, called up and fully paid
Share premium Represents the amount subscribed for share
capital in excess of nominal value
Retained earnings Represents the cumulative net
gains and losses recognised
in the consolidated statement
ofcomprehensive income
GameAccount Network Plc
For the year ended 31 December 2015
Consolidated statement of cash flows
Notes Year ended 31 Year ended 31 December
December 2014GBP'000
2015GBP'000
Cash flow from
operating
activities
(Loss) for the year (5,604) (2,602)
before taxation
Adjustments for:
Amortisation of 9 1,801 777
intangible
assets
Depreciation 10 438 360
of property,
plant and equipment
Share based payment 11 40
expense
Finance income 7 (19) (67)
Foreign exchange 23 41
Operating cash flow (3,350) (1,451)
before movement
in working capital
and taxation
Decrease/(increase) 398 (187)
in trade
and
other receivables
Increase/(decrease) 657 (1,214)
in trade
and other payables
Taxation - 85
Net cash flows (2,295) (2,767)
from operating
activities
Cash flow from
investing
activities
Interest received 19 67
Purchase of 9 (4,175) (2,892)
intangible
fixed assets
Purchases of 10 (517) (568)
property,
plant and equipment
Net cash used (4,673) (3,393)
in investing
activities
Cash flow from
financing
activities
Net proceeds 14 19 48
on issue
of shares
Net cash generated 19 48
from
financing
activities
Net (decrease) (6,949) (6,112)
in cash
and
cash equivalents
Cash and cash 12 10,776 16,895
equivalents
at beginning
of year
Effect of foreign (48) (7)
exchange
rate changes
Cash and cash 12 3,779 10,776
equivalents
at end of year
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements
1.Basis of preparation
The financial information in this document has been prepared in
accordance with the recognition and measurement requirements of
International Financial Reporting Standards, International
Accounting Standards and interpretations (collectively, "IFRS")
issued by the International Accounting Standards Board (IASB) as
adopted by the European Union ("adopted IFRSs").
The financial information set out in this document does not
constitute the Group's statutory accounts for the year ended 31
December 2014 or 31 December 2015.
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Statutory accounts for the year ended 31 December 2014 have been
filed with the Registrar of Companies and those for the year ended
31 December 2015 will be delivered to the Registrar in due course;
both have been reported on by independent auditors. The independent
auditors' reports on the Annual Report and Accounts for the year
ended 31 December 2014 and 31 December 2015 were unqualified, did
not draw attention to any matters by way of emphasis, and did not
contain a statement under 498(2) or 498(3) of the Companies Act
2006.
Going concern
The directors consider that the Group has adequate resources to
continue in operational existence for the foreseeable future. For
this reason, they continue to adopt the going concern basis in
preparing the consolidated financial statements.
Adoption of new and revised standards
In the current year the Group has adopted all of the new and
revised standards and interpretations issued by the IASB and the
International Financial Reporting Interpretations Committee (IFRIC)
of the IASB, as they have been adopted by the European Union, that
are relevant to its operations and effective for accounting years
beginning on 1 January 2015. None of the new standards adopted had
a material impact on the Financial Statements of the Group.
New standards, amendments to standards and interpretations have
been issued but are not effective (and in some cases had not yet
been adopted by the EU) for the financial year beginning 1 January
2015. These have not been early adopted and the Directors are still
considering the potential impact of IFRS15: Revenue from Contracts
with customers and IFRS 16: Leases but do not expect that the
adoption of other standards will have a material impact on the
Financial Statements of the Group in future years.
2.Summary of significant accounting policies
The principal accounting policies adopted are set out below.
2.1Basis of Consolidation
Where the company has control over an investee, it is classified
as a subsidiary. The company controls an investee if all three of
the following elements are present: power over the investee,
exposure to variable returns from investee and the ability of the
investor to use its power to affect those variable returns. Control
is reassessed whenever facts and circumstances indicate that there
may be a change in any of these elements of control.
De-facto control exists in situations where the company has the
practical ability to direct the relevant activities of the investee
without holding the majority of the voting rights. In determining
whether de-facto control exits the company considers all relevant
facts and circumstances, including:
-- The size of the company's voting rights relative to both the size and
dispersion of other parties who hold voting rights
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements
2.Summary of significant accounting policies (continued)
2.1Basis of Consolidation (continued)
-- Substantive potential voting rights held by the company and by other
parties
-- Other contractual arrangements
-- Historical patterns in voting attendance.
The consolidated financial statements present the results of the
company and its subsidiaries ("the Group") as if they formed a
single entity. Intercompany transactions and balances between group
companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of
business combinations using the acquisition method. In the
statement of financial position, the acquiree's identifiable
assets, liabilities and contingent liabilities are initially
recognised at their fair values at the acquisition date. The
results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is
obtained. They are deconsolidated from the date on which control
ceases.
Foreign currencies
(a)Functional and presentational currency
Items included in the financial statements are measured using
the currency of the primary economic environment in which the
Company operates ('the functional currency') which is UK Pound
Sterling (GBP). The financial statements are presented in UK Pound
Sterling (GBP), which is the Group's presentational currency.
(b)Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in net profit or
loss in the statement of comprehensive income.
Non-monetary items carried at fair value that are denominated in
foreign currencies are translated at the rates prevailing at the
date when the fair value was determined.
(c)Group companies
On consolidation the results of overseas operations are
translated at rates approximating to those ruling when the
transactions took place. All assets and liabilities of overseas
operations, including goodwill arising on the acquisition of those
operations, are translated at the rate ruling at the reporting
date. Exchange differences arising on translating the opening net
assets at opening rate and the results of overseas operations at
actual rate are recognised in other comprehensive income and
accumulated in the foreign exchange reserve.
Exchange differences recognised profit or loss in Group
entities' separate financial statements on the translation of
long-term monetary items forming part of the Group's net investment
in the overseas operation concerned are reclassified to other
comprehensive income and accumulated in the foreign exchange
reserve on consolidation.
On disposal of a foreign operation, the cumulative exchange
differences recognised in the foreign exchange reserve relating to
that operation up to the date of disposal are transferred to the
consolidated statement of comprehensive income as part of the
profit or loss on disposal.
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
2.Summary of significant accounting policies (continued)
2.2Revenue recognition
Net revenues comprise amounts earned from B2C and B2B
activities. B2B activities include revenues derived from the use of
the Group's intellectual property in online gaming activities and
revenues derived from the game and platform development and related
services.
(a)B2C
Net revenue from 'business to consumer' ('B2C') activities
represents the net house win, commission charged or tournament
entry fees where the player has concluded his participation in a
tournament. Net revenue is recognised in the accounting years in
which the gaming transactions occur and is measured at the fair
value of the consideration received or receivable, net of certain
promotion bonuses and customer incentives.
(b)B2B
Revenue share and other services
Net revenue receivable from 'business to business' ('B2B')
activities in respect of revenue share and other services comprises
a percentage of the revenue generated by the contracting party from
use of the Group's intellectual property in online gaming
activities and from fees charged for services rendered. Net revenue
is recognised in the accounting years in which the gaming
transactions occur or the services are rendered.
Game and platform development
Net revenue receivable from B2B activities in respect of game
and platform development comprises fees earned from development of
games for customers for use on GameAccount Network's platforms and
from the sale of platform software and related services.
Revenue in respect of game development and the sale of platform
software is recognised when certification for the game has been
obtained or delivery has occurred and the fee is fixed, contractual
or determinable and collectability is probable.
Services revenue principally relates to implementation services.
Such services are generally separable from the other elements of
arrangements. Revenue for such services is recognised over the
period of the delivery of these services. Where an element of the
fee is contingent on the successful delivery of the implementation
project the revenue is not recognised until such time that it is
probable that the requirements under that specific contract will be
met.
Simulated Gaming
Net revenue in respect of Simulated Gaming is recognised upon
completion of purchase. Simulated gaming involves customers
purchasing virtual credits at fixed price levels in order to
experience established casino games in an online environment.
Players are unable to monetise their virtual balances and revenues
are recognised at the point of purchase and are non-refundable.
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
2.Summary of significant accounting policies (continued)
2.3Gross income from gaming operations and services
In order to provide further information to readers of the
financial statements and in particular to give an indication of the
extent of transactions that have passed through the Group's
systems, the statement of comprehensive income discloses gross
income from gaming operations and services arising through the use
of the Group's intellectual property in online gaming activities,
which represents the total income of the Group, together with that
derived by its contracting parties where the Group supplies its
software directly to the online operator. This line item does not
represent the Group's revenue for the purposes of IFRS income
recognition.
2.4Distribution costs
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Distribution costs represent the costs of delivering the service
to the customer and primarily consist of technology infrastructure,
promotional and advertising together with gaming and regulatory
testing all of which are recognised on an accruals basis, and
depreciation and amortisation.
2.5Administrative expenses
Sales and administrative expenses consist primarily of staff
costs, corporate and professional expenses, all of which are
recognised on an accruals basis, and impairment charges.
Exceptional items are disclosed separately in the financial
statements where it is necessary to do so to provide further
understanding of the financial performance of the group. They are
material items of income or expense that have been shown separately
due to the significance of their nature or amount.
2.6Intangible assets
Externally acquired intangible assets
Externally acquired intangible assets are initially recognised
at cost and subsequently amortised on a straight-line basis over
their useful economic lives.
The significant intangibles recognised by the Group with their
useful economic lives are as follows:
Licences and trademarks Shorter of licence term or 10 years
Brand Assets 3 years
Internally generated intangible assets (development costs)
Expenditure incurred on development activities including the
Group's software development and related overheads is capitalised
only where the expenditure will lead to new or substantially
improved products, the products are technically and commercially
feasible and the Group has sufficient resources to complete
development.
Capitalised development costs are amortised over the years the
Group expects to benefit from selling the products developed which
is typically three to five years. The amortisation expense is
included within the distribution cost line in the consolidated
statement of comprehensive income.
Development expenditure not satisfying the above criteria and
expenditure on the research phase of internal projects are
recognised in the consolidated statement of comprehensive income as
incurred.
Subsequent expenditure on capitalised intangible assets is
capitalised only where it clearly increases the economic benefits
to be derived from the asset to which it relates. All other
expenditure, including that incurred in order to maintain an
intangible assets current level of performance, is expensed as
incurred.
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
2.Summary of significant accounting policies (continued)
2.7Property, plant and equipment
Depreciation is calculated to write off the cost of fixed assets
on a straight line basis over the expected useful lives of the
assets concerned. The principal annual rates used for this purpose
are:
Fixtures, fittings, equipment 20% - 33% straight line
andleasehold improvements
Subsequent expenditures are included in the assets carrying
amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits will flow to the Group
and the cost of the item can be measured reliably. All repairs and
maintenance are charged to the consolidated statement of
comprehensive income during the financial period in which they are
incurred.
Gains and losses on disposals are determined by comparing
proceeds with carrying amount and are included in the consolidated
statement of comprehensive income.
2.8Impairment of property, plant and equipment and intangible
assets
At each statement of financial position date, the Group reviews
the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where the asset does
not generate cash flows that are independent from other assets, the
Group estimates the recoverable amount of the cash-generating unit
to which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately.
2.9Financial instruments
Financial assets and financial liabilities are recognised on the
Group's statement of financial position when the Group becomes
party to the contractual provisions of the instrument. Financial
assets are de-recognised when the contractual rights to the cash
flows from the financial asset expire or when the contractual
rights to those assets are transferred. Financial liabilities are
de-recognised when the obligation specified in the contract is
discharged, cancelled or expired.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value and subsequently measured at amortised cost using the
effective interest method less provision for impairment.
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that
the Group will be unable to collect all of the amounts due under
the net carrying amount and the present value of the future
expected cash flows associated with the impaired receivable. For
trade receivables, which are reported net; such provisions are
recorded in a separate allowance account with the loss being
recognised within administrative expenses in the statement of
comprehensive income. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
2.Summary of significant accounting policies (continued)
2.9Financial instruments (continued)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand
deposits, and other short-term highly liquid investments that have
maturities of three months or less from inception, are readily
convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
Classification of shares as debt or equity instruments
Financial instruments issued by the Group are classified as
equity only to the extent that they do not meet the definition of a
financial liability. An equity instrument is a contract that
evidences a residual interest in assets or an entity after
deducting all of its liabilities. Accordingly, a financial
instrument is treated as equity if:
-- There is no contractual obligation to deliver cash or other financial
asset or to exchange financial assets or liabilities on terms
that
maybe unfavourable, and
-- The instrument is a non-derivative that contains no contractual
obligation to deliver a variable number of shares or is a
derivative
will be settled only by the Company exchanging a fixed amount of
cash
or other assets for a fixed number of the Company's own
equity
instruments.
Equity instruments issued by the Group are recorded at the time
the proceeds are received, net of direct issue costs.
Trade and other payables
Trade payables are initially measured at their fair value and
are subsequently measured at their amortised cost using the
effective interest rate method; this method allocates interest
expense over the relevant period by applying the 'effective
interest rate' to the carrying amount of the liability.
2.10Current and deferred tax
Taxation represents the sum of the tax currently payable and
deferred tax.
Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit reported in the
statement of comprehensive income because it excludes items of
income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the statement of
financial position date.
Research and development tax
Research and development taxation relief is recognised once
management considers it probable that any amount claimable will be
received.
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
2.Summary of significant accounting policies (continued)
2.10Current and deferred tax (continued)
Deferred tax
Deferred tax is calculated at the tax rates that are expected to
apply to the period when the asset is realised or the liability is
settled based upon tax rates that have been enacted or
substantively enacted by the statement of financial position date.
Deferred tax is charged or credited in the statement of
comprehensive income, except when it relates to items credited or
charged directly to equity, in which case the deferred tax is also
dealt with in equity.
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Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial information and the corresponding tax bases used
in the computation of taxable profit, and is accounted for using
the balance sheet liability method. Deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at each
statement of financial position date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax is measured using tax rates that have been enacted
or substantively enacted by the statement of financial position
date and are expected to apply when the related deferred tax asset
or liability is realised or settled.
2.11Operating leases
All leases held by the Group are operating leases and, as such,
are charged to the statement of comprehensive income on a
straight-line basis over the lease term. Rent free periods or other
incentives received for entering into a lease are accounted for
over the lease term, so as to spread the benefit received.
2.12Share-based payments
The Group issues equity settled share-based payments to certain
employees (including Directors).
Equity settled share-based payments are measured at fair value
at the date of grant and expensed on a straight-line basis over the
vesting period, based upon the Group's estimate of equity
instruments that will eventually vest, along with a corresponding
increase in equity. At each statement of financial position date,
the Group revises its estimate of the number of equity instruments
expected to vest as a result of the effect of non market based
vesting conditions. The impact of the revision of the original
estimates, if any, is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a
corresponding adjustment to equity reserves.
The fair value of share options is determined using a Black
Scholes model, taking into consideration management's best estimate
of the expected life of the option and the estimated number of
shares that will eventually vest. The expected life used in the
model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions and
behavioural considerations.
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
3.Financial risk management (see also note 15)
3.1Financial risk factors
The Group's activities expose it to a variety of financial
risks: market risk, credit risk and liquidity risk. The Group's
overall risk management programme focuses on the unpredictability
of financial markets and seeks to minimise potential adverse
effects on the Group's financial performance.
Risk Management is carried out by management under policies
approved by the Board of Directors. Management identifies and
evaluates financial risks in close co-operation with the Group's
operating segments. The Board provides principles for overall risk
management, as well as policies covering specific areas, such as,
interest rate risk, non-derivative financial instruments and
investment of excess liquidity.
3.2Market risk
Market risk is the risk of loss that may arise from changes in
market factors such as interest rates and foreign exchange
rates.
3.3Contractual risk
In the ordinary course of business the Group contracts with
various parties. These contracts may include performance
obligations, indemnities and contractual commitments. Management
monitors the performance of the Group and any relevant
counterparties against such contractual conditions to mitigate the
risk of material, adverse non-compliance.
3.4Credit risk
Credit risk is the financial loss to the Group if a customer or
counterparty to financial instruments fails to meet its contractual
obligation. Credit risk arises from the Group's cash and cash
equivalents and receivables balances.
3.5Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. This risk relates
to the Group's prudent liquidity risk management and implies
maintaining sufficient cash. Management monitors rolling forecasts
of the Group's liquidity and cash and cash equivalents on the basis
of expected cash flow.
3.6Capital risk management
The Group's capital structure is comprised entirely of the share
capital and accumulated reserves.
The Group's objective when managing capital is to maintain
adequate financial flexibility to preserve its ability to meet
financial obligations, both current and long term. The capital
structure of the Group is managed and adjusted to reflect changes
in economic conditions.
The Group funds its expenditures on commitments from existing
cash and cash equivalent balances. There are no externally imposed
capital requirements.
Financing decisions are made by the Board of Directors based on
forecasts of the expected timing and level of capital and operating
expenditure required to meet the Group's commitments and
development plans.
3.7Fair value estimation
The carrying value less impairment provision of trade and other
receivables and payables are assumed to approximate their fair
values because of the short term nature of such assets and the
effect of discounting liabilities is negligible.
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
3.Financial risk management (see also note 15) (continued)
3.8Critical accounting estimates and judgements
The preparation of consolidated financial statements under IFRS
as adopted by the EU requires the Group to make estimates and
judgments that affect the application of policies and reported
amounts. Estimates and judgments are continually evaluated and are
based on historical experience and other factors including
expectations of future events that are believed to be reasonable
under the circumstances. Actual results may differ from these
estimates.
Reference is made in this note to accounting policies which
cover areas that the Directors consider require estimates and
assumptions which have a significant risk of causing a material
adjustment to the carrying amount of assets and liabilities within
the next financial year. These policies together with references to
the related notes to the financial statements can be found
below:
Note
Revenue recognition 4
Capitalisation and impairment of internally 9
generated intangible assets
Deferred taxation 8
4. Net revenue
Year Year ended31 December2014
ended31 GBP'000
December2015GBP'000
B2C 592 678
B2B
-Game and platform 1,241 3,946
development
-Revenue share and 4,178 2,904
other revenue
Total B2B 5,419 6,850
6,011 7,528
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
5.Segmental information
Information reported to the Group's Chief Executive, the
strategic chief operating decision-maker, for the purposes of
resource allocation and assessment of the Group's segmental
performance is primarily focused on the origination of the revenue
stream. The Group's operating segments under IFRS 8 are therefore
as follows:
-- Business to business ("B2B")
-- Business to consumer ("B2C")
Segment revenues and results
The following is an analysis of the Group's revenue and results
by reportable segment.
Year ended 31 December 2015 B2C B2B Total
GBP'000 GBP'000 GBP'000
Net revenue 592 5,419 6,011
Distribution costs (excluding depreciation (461) (2,684) (3,145)
and amortisation)
Segment result 131 2,735 2,866
Administration expenses (6,250)
Depreciation on property, plant and equipment (444)
Amortisation of intangible assets (1,795)
Finance income 19
Loss before taxation (5,604)
Tax credit/ (charge) 582
Loss for the year after taxation (5,022)
Year ended 31 December 2014 B2C B2B Total
GBP'000 GBP'000 GBP'000
Net revenue 678 6,850 7,528
Distribution costs (excluding (1,051) (1,540) (2,591)
depreciation
and amortisation)
Segment result (373) 5,310 4,937
Administration expenses (6,469)
Depreciation on property, (360)
plant and equipment
Amortisation of intangible assets (777)
Finance income 67
Loss before taxation (2,602)
Tax credit/(charge) -
Loss for the year after taxation (2,602)
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The accounting policies of the reportable segments follow the
same policies as described in note 2. Segment result represents the
gross profit earned by each segment without allocation of the share
of administration costs including Directors' salaries, finance
costs and income tax expense. This is the measure reported to the
Group's Chief Executive for the purpose of resource allocation and
assessment of segment performance.
Administration expenses comprise principally the employment and
office costs incurred by the Group.
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
5.Segmental information (continued)
Segment assets and liabilities
Assets and liabilities are not separately analysed or reported
to the Group's Chief Executive and are not used to assist in
decisions surrounding resource allocation and assessment of segment
performance. As such, an analysis of segment and liabilities has
not been included in this financial information.
Geographical analysis of revenues
This analysis is determined based upon the location of the legal
entity of the customer.
Year Year
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
UK and Channel Islands 1,080 1,622
Italy 1,340 1,150
Netherlands 60 490
USA 2,991 2,780
Australia 420 1,162
Rest of the World 120 324
6,011 7,528
Information about major customers
During the year ended 31 December 2015 the Group had two
customers which generated revenue greater than 10% of total net
revenue. These customers generated revenue of GBP2,001,000
representing 33% of net revenue (of which the largest customer
generated GBP1,069,000), all of which was within the B2B
segment.
During the year ended 31 December 2014 the Group had two
customers which generated revenue greater than 10% of total net
revenue. These customers generated revenue of GBP2,391,000
representing 32% of net revenue (of which the largest customer
generated GBP1,325,900), all of which was within the B2B
segment.
Geographical analysis of non-current assets
At At
31 December 31 December
2015 2014
GBP'000 GBP'000
UK and Channel Islands 6,308 3,583
USA 298 220
Italy 18 28
6,624 3,831
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
6.Operating (loss)
6.1 Operating (loss) has been arrived at after charging:
Year Year
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Staff costs (note 7) 3,646 3,829
Auditor's remuneration:
Audit 55 60
Taxation - 15
Others 5 5
Amortisation of intangibles 1,801 777
Depreciation on property, plant and equipment 438 360
Foreign exchange losses 23 41
Rent payable under operating leases 325 203
Employee share-based payment charge (note 17) 11 40
Staff costs and Rent payable under operating leases charged to
the income statement, as shown in the table above are less amounts
capitalised in the year of GBP3,681,165 (2014: GBP2,635,702) as
part of capitalised development costs reflected within note 10 of
the financial statements.
Total wages and salaries related to research and development was
GBP3,535,163 (2014: GBP3,234,748) of which GBP2,849,623 (2014:
GBP2,048,044) was capitalised.
6.2 Exceptional costs
Year Year
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Compensation for loss of office, 213 67
redundancy and compromise
costs, together withassociated
legal expenses
Key management relocation costs 131 -
Other exceptional costs 11 -
355 67
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
7.Finance income
Year Year
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Interest receivable 19 67
8.Taxation
Year Year
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Current tax (credit) (582) -
Deferred tax charge - -
Tax (credit) on loss on ordinary activities (582) -
Details of the deferred tax asset recognised are as set out
below:
At At
31 December 31 December
2015 2014
GBP'000 GBP'000
At the beginning and end of the year 510 510
The deferred tax asset for the Group at 31 December 2015
comprises GBP510,000 (2014: GBP510,000) in respect of tax losses
carried forward. Tax losses are recognised as a deferred tax asset
by the Group when there is sufficient evidence that the amount will
be recovered against foreseeable profits taking into account the
loss for the period and sensitised forecast profits.
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
9.Intangible assets
Brand Development Licence Total Brand
AssetsGBP'000 costsGBP'000 costsGBP'000 Assets,
Development
and Licence
costsGBP'000
Cost
At 31 December - 1,680 118 1,798
2013
Additions - 2,751 141 2,892
At 31 December - 4,431 259 4,690
2014
Additions 252 3,931 161 4,344
At 31 December 252 8,362 420 9,034
2015
Accumulated
amortisation
At 31 December - 881 5 886
2013
Charge for - 750 27 777
the year
At 31 December - 1,631 32 1,663
2014
Charge for 6 1,729 66 1,801
the year
At 31 December 6 3,360 98 3,464
2015
Net book value
At 31 December - 799 113 912
2013
At 31 December - 2,800 226 3,026
2014
At 31 December 246 5,002 322 5,570
2015
10.Property, plant and equipment
Fixtures,fittings,equipment and
leasehold improvementsGBP'000
Cost
At 31 December 2013 1,886
Additions 568
At 31 December 2014 2,454
Additions 517
At 31 December 2015 2,971
Accumulated depreciation:
At 31 December 2013 1,289
Charge for the year 360
At 31 December 2014 1,649
Charge for the year 438
At 31 December 2015 2,087
Net book value
At 31 December 2013 597
At 31 December 2014 805
At 31 December 2015 884
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
11.Trade and other receivables
At At
31 December 31 December
2015 2014
GBP'000 GBP'000
Trade receivables 1,318 1,501
Other receivables 246 700
Amounts owed by group undertakings - -
Prepayments and accrued income 705 622
Corporation tax receivable 582 -
2,851 2,823
Other receivables include amounts due from payment service
providers and VAT recoverable.
12.Cash and cash equivalents
At 31 December At 31 December 2014GBP'000
2015GBP'000
Cash in bank accounts 3,779 10,776
(MORE TO FOLLOW) Dow Jones Newswires
April 28, 2016 02:00 ET (06:00 GMT)
13.Trade and other payables
At 31 December At 31 December 2014GBP'000
2015GBP'000
Amounts falling due
within one year
Trade payables 1,880 1,295
Other taxation and 157 188
social security
Other payables 238 369
Accruals and deferred 956 912
income
3,231 2,764
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
13.Trade and other payables (continued)
Non-current liabilities
At 31 December At 31 December 2014GBP'000
2015GBP'000
Accruals 231 -
Deferred consideration 119 -
350 -
Accruals relate to the rent free period on the Group's leased
properties and are spread over the term of the lease. The deferred
consideration relates to amounts payable to acquire brand assets
included in note 9. Final payment of the deferred consideration is
after one year but not later than five years.
14.Share capital
Ordinary
shares
No.
Allotted, issued and fully paid
At 31 December 2013 55,666,058
Issued during the year (i) 216,478
At 31 December 2014 55,882,536
Issued during the year (ii) 87,500
At 31 December 2015 55,970,036
At At
31 December 31 December
2015 2014
GBP'000 GBP'000
Ordinary shares 560 559
Issue of shares
(i) 216,478 ordinary shares of 1p each were issued at a premium
of 21p during the year ended 31 December 2014 to settle vested
options.
(ii) 87,500 ordinary shares of 1p each were issued at a premium
of 21p during the year ended 31 December 2015 to settle vested
options.
GameAccount Network Plc
For the year ended 31 December 2015
Notes to the financial statements (continued)
15.Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity shareholders of the company by the weighted
average number of ordinary shares in issue during the year.
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The company
has share options and a calculation is done to determine the number
of shares that could have been acquired at fair value (determined
as the average market share price for the period) based on the
monetary value of the subscription rights attached to the
outstanding share options. The number of shares calculated as above
is compared with the number of shares that would have been issued
assuming the exercise of the share options.
Year Year
ended ended
31 December 31 December
2015 2014
Pence Pence
Basic (8.99) (4.66)
Diluted (8.99) (4.66)
Earnings Year Year
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
(Loss) for the year (5,022) (2,602)
Denominator-basic Year Year
ended ended
31 December 31 December
2015 2014
Number Number
Weighted average number of equity shares 55,886,105 55,864,119
Weighted average number of equity 55,886,105 55,864,119
shares for diluted EPS
16.Subsequent events
On 7th April 2016, the Company successfully completed a total of
9,331,888 Share placing which raised gross proceeds of GBP2.6m. The
Company plans to use the net proceeds from the Placing to continue
expansion of real-money Regulated Gaming and Simulated GamingTM
opportunities in the US and for working capital and general
business development purposes.
View source version on businesswire.com:
http://www.businesswire.com/news/home/20160427006873/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
April 28, 2016 02:00 ET (06:00 GMT)
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