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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Gameaccount | LSE:GAME | London | Ordinary Share | GB00BGCC6189 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 29.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
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
Hot Features
Premium
-- 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.
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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
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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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