Share Name Share Symbol Market Type Share ISIN Share Description
Gaming Realms LSE:GMR London Ordinary Share GB00BBHXD542 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 8.125p 7.75p 8.50p - - - 18,000 06:30:53
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Industrial Engineering 34.0 -7.0 -2.6 - 23.11

Gaming Realms PLC Interim Results

13/09/2017 7:01am

UK Regulatory (RNS & others)


Gaming Realms (LSE:GMR)
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2 Months : From Aug 2017 to Oct 2017

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TIDMGMR

RNS Number : 5674Q

Gaming Realms PLC

13 September 2017

Gaming Realms plc

(the "Company" or the "Group")

Interim results for the six months ended 30 June 2017

Group on track to deliver positive Adjusted EBITDA in full year

Adjusted EBITDA loss reduced significantly in H1

Gaming Realms plc, which creates, publishes and licenses next generation mobile games, today announces its interim results for the six months ended 30 June 2017.

Financial highlights:

 
                                      H1 2017     H1 2016  Movement 
                                     GBP'000s    GBP'000s         % 
 
 Revenue** (excluding disposals)       15,692      14,923         5 
 Marketing expense                    (6,475)     (9,524)      (32) 
 Adjusted EBITDA loss                   (894)     (3,078)      (71) 
 EPS from continuing operations 
  (pence)                              (1.37)      (2.22)      (38) 
 Loss before tax from continuing 
  operations                          (4,062)     (5,808)      (30) 
 
 

-- Like-for-like** revenue growth of 5% to GBP15.7m (H1/16: GBP14.9m) driven by the continued success from the Company's proprietary mobile platform ("Grizzly") and our own unique Slingo IP driven games, plus steady growth in social publishing, which contributed GBP4.0m (H1/16: GBP3.4m) of social gaming revenues in H1/17

-- Adjusted EBITDA loss reduced by 71% to GBP0.9m (H1/16: GBP3.1m), with Loss before Tax on continuing operations reducing by 30% to GBP4.1m (H1/17: GBP5.8m)

-- Continued execution in cost reductions, in particular marketing optimization on real money gaming, was 26% lower at GBP4.8m (H116: GBP6.5m), whilst revenues grew 5% to GBP10.7m (H1/16: GBP10.2m) and head count reduction of 28 staff through synergies in our social publishing for annualized costs saving of approximately GBP2.0m, reflecting both improved operational and marketing efficiency

Operational highlights:

   --      Launch of 'white label' real money gaming sites, dealornodealcasino.com (March 2017) and loveislandgames.com (June 2017) in partnership with Endemol and ITV respectively 

-- Continued investment in product development, in line with the Group's strategy of highly focused investment in our games (with three games launched in the period), platform and player acquisition

-- Signed four licensing partnerships for distribution of our games on our Remote Game Server ("RGS") with Caesar's Interactive, Rush Street Interactive, Resorts Digital Gaming and Pala Interactive

Post-period end:

-- The Group has gone live in New Jersey with Resorts Digital Gaming and Rush Street Interactive

-- Remote game server to be launched with Pala Interactive, Caesars Interactive, Betfair and Bwin in New Jersey and Betvictor in Europe in H2 2017

-- Newly developed technical solutions for tighter monitoring of bonus abuse will improve average lifetime values on real money gaming

   --      GBP1.1m raised from existing shareholders and management at 11p per share 

-- The Company has appointed an adviser who is in discussions with a number of lenders to finance the repayment of the deferred consideration to Real Networks in December 2017

Outlook for 2017:

-- The Group is expected to be EBITDA positive for 2017 as a whole and significantly EBITDA positive in H2 2017

-- Real money gaming average daily revenue up 11% so far in Q3 2017 compared to same period in 2016

   --      Social publishing is now EBITDA positive 

Following significant cost optimization and continued growth in real money gaming while bringing the social publishing to profitability, the Group has successfully executed its strategic deliverables within its control for H1/17. Delays in 3(rd) party integrations of our RGS to other operators, particularly New Jersey and the UK in H1, will result in a reduction in our anticipated licensing revenue for the year. This, coupled with the earlier than previously forecast timing of the new Point of Consumption tax in H2/17, is likely to impact EBITDA for 2017. However, the Board remains confident that profitable growth will continue and these are simply short term timing issues.

Patrick Southon, Chief Executive, said:

"The Group has made significant progress towards profitability in the first half of 2017, with H1 losses reduced, the Board anticipates that the Group will be EBITDA positive for the year as a whole.

Our strategy of focusing our resources and capital on real money gaming, whilst continuing to deliver content to other operators, is driving revenue growth. Additionally, our focus on synergies, cost management and reduction is driving improved profitability.

The Group has been successful in agreeing new B2B content licences for the Slingo Originals portfolio of games and has launched new real money gaming sites dealornodealcasino.com and loveislandgames.com in partnership with Endemol and ITV respectively.

Further progress is expected in the second half of 2017 across the business with the RGS partnerships with Resorts Digital Gaming and Rush Street Interactive becoming fully operational, the first European partnership with BetVictor recently launched and our game portfolio expanded."

- Ends -

For more information contact

 
 Gaming Realms plc 
  Patrick Southon, CEO 
  Mark Segal, FD                 0845 123 3773 
 Peel Hunt LLP, Nomad and 
  Broker 
  Dan Webster, George Sellar    020 7418 8900 
 Instinctif 
  Matthew Smallwood             020 7457 2020 
 

About Gaming Realms

Gaming Realms creates and publishes innovative real money and social games for mobile, with operations in the UK, U.S and Canada. Through its market leading mobile platform and unique IP and brands, Gaming Realms is bringing together media, entertainment and gaming assets in new game formats. The Gaming Realms management team includes accomplished entrepreneurs and experienced executives from a wide range of leading gaming and media companies.

Business review

Overview

The Board is pleased to report that the Group has made further progress during the first half of the year during which it delivered revenues of GBP15.7m (H1/16: GBP16.6m,) and a reduction of GBP2.2m in Adjusted EBITDA loss to GBP0.9m (H1/16: GBP3.1m). The reduction in Adjusted EBITDA loss was primarily due to the Group's cost synergy execution and focused marketing strategy in the period, which included a reduction in marketing spend of GBP3.0m to GBP6.5m (H1/16: GBP9.5m).

Real money gaming

Our proprietary platform continues to be the focus of the Group's strategy with revenue growth of 5% to GBP10.7m (H1/16: GBP10.2m) despite the reduction in marketing spend and transactional costs (together representing 65% (H1/16: 86%) of revenue). The Group continues to invest heavily in platform and game development and player acquisition and engagement.

During the period, the Group have developed and launched three proprietary games on the Grizzly platform taking the Slingo Originals' portfolio of proprietary games to eleven from eight at 31 December 2016. Overall, the Group's own proprietary games have contributed 36% (H1/16: 21%) of gross gaming revenue.

Mobile content and delivery continues to drive game play on mobile devices with 87% (H1/16: 84%) of funded players using mobile devices.

Social publishing

The social publishing segment has shown improved performance with revenue up 16% to GBP4.0m (H1/16: GBP3.4m). This was led by the growth on Slingo Arcade which launched in December 2016. The Group focused marketing spend on its key apps which has also led to improved returns on investment with marketing spend as a percentage of revenue reducing to 42% from 57% in H1/16.

The Group continues to review its allocation of resources and investment. It has seen significant benefits from the integration of the social business in the period which resulted in its first EBITDA positive month in June 2017.

Licensing

During the period, the Group entered into four new licensing deals with Resorts Digital Gaming, Rush Street Interactive, Pala Interactive and Caesars Interactive. The licensing deals will allow us to expand our presence in New Jersey, where the Group will distribute its Slingo Originals proprietary games through the Group's RGS.

* EBITDA and adjusted EBITDA are non-GAAP measures. Adjusted EBITDA excludes acquisition, restructuring and other expenses, net foreign exchange gains and losses and share based payment charges.

** excludes disposed activities in the comparative period.

Consolidated statement of profit or loss and other comprehensive income

for the 6 months ended 30 June 2017

 
                                  Note        6 months        6 months       12 months 
                                                 ended           ended           ended 
                                                30 Jun          30 Jun          31 Dec 
                                                    17              16              16 
                                                   GBP             GBP             GBP 
                                             Unaudited       Unaudited         Audited 
 
 Revenue                           2        15,692,422      16,631,937      33,958,118 
 
 Marketing expenses                        (6,475,090)     (9,524,423)    (14,810,915) 
 Operating expenses                        (4,796,526)     (4,292,551)     (9,337,851) 
 Administrative expenses                   (5,314,672)     (5,892,476)    (11,100,464) 
 
 Adjusted EBITDA*                            (893,866)     (3,077,513)     (1,291,112) 
 Profit on disposal of 
  digital marketing agency 
  and third-party platform 
  driven website properties                          -         269,226         318,834 
 Restructuring costs                          (60,689)               -               - 
 Share-based payments                        (373,049)       (491,172)       (993,349) 
 Net foreign exchange 
  (loss)/gain                                (207,626)          78,749         273,695 
 
 
 EBITDA*                                   (1,535,230)     (3,220,710)     (1,691,932) 
 
 
 Amortisation of intangible 
  assets                           6       (2,487,333)     (1,772,822)     (3,979,941) 
 Depreciation of property, 
  plant and equipment                         (84,122)        (44,489)       (120,789) 
 Finance expense                   3         (125,993)       (773,044)     (1,178,154) 
 Finance income                    3           170,824           2,954           3,022 
 
 
 Loss before tax on continuing 
  operations                               (4,061,854)     (5,808,111)     (6,967,794) 
 
 Tax credit                        4           305,405         146,456         272,451 
 
 
 Loss for the financial 
  period attributable to 
  owners of the parent                     (3,756,449)     (5,661,655)     (6,695,343) 
 
 Other comprehensive income 
 Exchange (loss)/gain 
  arising on translation 
  of foreign operations                      (456,058)       1,076,941       1,836,352 
                                        --------------  --------------  -------------- 
 
   Total other comprehensive 
   (loss)/income                             (456,058)       1,076,941       1,836,352 
 
 
   Total comprehensive loss                (4,212,507)     (4,584,714)     (4,858,991) 
                                        --------------  --------------  -------------- 
 
 
 Loss attributable to: 
 Owners of the parent                     (3,738,614)   (5,661,655)   (6,685,120) 
 Non-controlling interest                    (17,835)             -      (10,223) 
                                         ------------  ------------  ------------ 
                                          (3,756,449)   (5,661,655)   (6,695,343) 
 
 Total comprehensive (loss)/income 
  attributable to: 
 Owners of the parent                     (4,167,966)   (4,584,714)   (4,882,234) 
 Non-controlling interest                    (44,541)             -        23,243 
                                         ------------  ------------  ------------ 
                                          (4,212,507)   (4,584,714)   (4,858,991) 
 Loss per share 
 Basic and diluted (pence)            5        (1.37)        (2.22)        (2.55) 
 
 

* EBITDA and adjusted EBITDA are non-GAAP measures. Adjusted EBITDA excludes acquisition, restructuring and other expenses, net foreign exchange gains and losses and share based payment charges.

Consolidated statement of financial position

as at 30 June 2017

 
                                Note         30 Jun         30 Jun         31 Dec 
                                                 17             16             16 
                                                GBP            GBP            GBP 
 Assets                                   Unaudited      Unaudited        Audited 
 Non-current assets 
 Property, plant and 
  equipment                                 337,154        208,144        373,307 
 Goodwill                        6       16,251,518     16,074,077     16,545,864 
 Intangible assets               6       11,001,921     11,456,659     12,115,973 
 Available-for-sale 
  investment                     7          540,000        540,000        540,000 
 Other assets                    8          164,303        152,000        152,000 
 
 
                                         28,294,896     28,430,880     29,727,144 
 
 
 Current assets 
 Trade and other receivables     9        3,376,555      5,176,983      3,347,595 
 Cash and cash equivalents       10       1,103,373      2,999,358      2,616,267 
 
 
                                          4,479,928      8,176,341      5,963,862 
 
 
 Total assets                            32,774,824     36,607,221     35,691,006 
 
 
 Current liabilities 
 Trade and other payables        11       8,433,493      8,119,071      7,058,781 
 Deferred consideration                   3,051,557      2,992,028      3,135,356 
 
 
                                         11,485,050     11,111,099     10,194,137 
 
 
 Non-current liabilities 
 Deferred tax liability          4          835,252      1,240,228      1,202,889 
 Deferred consideration                           -      2,826,572              - 
 
 
                                            835,252      4,066,800      1,202,889 
 
 
 Total liabilities                       12,320,302     15,177,899     11,397,026 
 
 
 Net assets                              20,454,522     21,429,322     24,293,980 
 
 
 Equity 
 Share capital                   12      27,413,329     26,163,329     27,413,329 
 Share premium reserve                   87,095,455     85,890,455     87,095,455 
 Merger reserve                        (67,673,657)   (67,673,657)   (67,673,657) 
 Foreign exchange 
  reserve                                 1,979,080      1,682,487      2,408,432 
 Retained earnings                     (28,520,145)   (24,633,292)   (25,154,580) 
 
 Total equity attributable 
  to owners of the 
  parent                                 20,294,062     21,429,322     24,088,979 
 Non-controlling interest                   160,460              -        205,001 
 
 
 Total equity                            20,454,522     21,429,322     24,293,980 
 
 
 

Consolidated statement of cash flows

for the 6 months ended 30 June 2017

 
                                    Note      6 months      6 months     12 months 
                                                 ended         ended         ended 
                                                30 Jun        30 Jun        31 Dec 
                                                    17            16            16 
                                                   GBP           GBP           GBP 
                                             Unaudited     Unaudited       Audited 
 Cash flows from operating 
  activities 
 Loss for the period                       (3,756,449)   (5,661,655)   (6,695,343) 
 Adjustments for: 
 Depreciation of property, 
  plant and equipment                           84,122        44,489       120,789 
 Amortisation of intangible 
  fixed assets                       6       2,487,333     1,772,822     3,979,941 
 Finance income                      3         (1,513)       (2,954)       (3,022) 
 Finance expense                     3          40,482        19,943        36,850 
 Movement in deferred and 
  contingent consideration           3        (83,800)       753,101     1,141,304 
 Unrealised currency translation 
  loss/(gain)                                  126,441      (69,290)     (191,548) 
 Income tax credit                   4       (305,223)     (118,595)     (248,941) 
 Loss on disposal of property, 
  plant and equipment                              115         4,763         6,531 
 Profit on disposal of 
  digital marketing agency 
  and third-party platform 
  driven website properties                          -     (269,226)     (318,834) 
 Share-based payment expense                   373,049       491,172       993,349 
 
 
 (Increase)/decrease in 
  trade and other receivables                 (60,960)   (1,173,661)       643,961 
 Increase in trade and 
  other payables                             1,374,712     3,899,165     2,759,244 
 Increase in other assets                       19,697             -             - 
 
 
 Net cash from operating 
  activities                                   298,006     (309,926)     2,224,281 
 
 Investing activities 
 Acquisition of subsidiary, 
  net of cash acquired                               -             -        18,759 
 Purchases of property, 
  plant and equipment                         (49,971)      (61,545)     (289,256) 
 Purchase of intangible 
  assets                             6     (1,739,245)   (1,878,994)   (3,969,611) 
 Proceeds from disposal 
  of third-party platform 
  driven website properties                          -     1,200,000     1,200,000 
 Interest received                               1,513         2,954         3,022 
 
 
 Net cash from investing 
  activities                               (1,787,703)     (737,585)   (3,037,086) 
 
 Financing activities 
 Proceeds of Ordinary Share 
  issue                              12              -     1,525,000     4,025,000 
 Issuance cost of shares                             -             -      (45,000) 
 Payment of contingent 
  consideration                                      -             -   (3,071,447) 
 Interest paid                                (40,482)      (19,943)      (36,850) 
 
 
 Net cash from financing 
  activities                                  (40,482)     1,505,057       871,703 
 
 
 Net (decrease)/increase 
  in cash and cash equivalents             (1,530,179)       457,546        58,898 
 Cash and cash equivalents 
  at beginning of period                     2,597,465     2,516,820     2,516,820 
 Exchange gain on cash 
  and cash equivalents 
                                                17,385         5,424        21,747 
  Cash and cash equivalents 
  at end of period                    10     1,084,671     2,979,790     2,597,465 
 
 

Consolidated statement of changes in equity

for the 6 months ended 30 June 2017

 
                         Share        Share         Merger     Foreign       Retained         Total   Non-controlling         Total 
                       capital      premium        reserve    exchange       earnings     to equity          interest        equity 
                                                               reserve                      holders 
                                                                                          of parent 
                           GBP          GBP            GBP         GBP            GBP           GBP               GBP           GBP 
 
 1 January 
  2016              24,920,829   85,127,955   (68,393,657)     605,546   (19,462,809)    22,797,864                 -    22,797,864 
 Loss for 
  the period                 -            -              -           -    (5,661,655)   (5,661,655)                 -   (5,661,655) 
 Other 
  comprehensive 
  income                     -            -              -   1,076,941              -     1,076,941                 -     1,076,941 
-----------------  -----------  -----------  -------------  ----------  -------------  ------------  ----------------  ------------ 
 
 Total 
  comprehensive 
  income 
  for the 
  period                     -            -              -   1,076,941    (5,661,655)   (4,584,714)                 -   (4,584,714) 
 
 
 Contributions 
  by and 
  distributions 
  to owners 
 Shares 
  issued 
  as part 
  of capital 
  raising              762,500      762,500              -           -              -     1,525,000                 -     1,525,000 
 Shares 
  issued 
  as part 
  of the 
  consideration 
  in a business 
  combination          480,000            -        720,000           -              -     1,200,000                 -     1,200,000 
 Share-based 
  payment 
  on share 
  options                    -            -              -           -        491,172       491,172                 -       491,172 
 
 
 30 June 
  2016 
  (unaudited)       26,163,329   85,890,455   (67,673,657)   1,682,487   (24,633,292)    21,429,322                 -    21,429,322 
 
 
 Loss for 
  the period                 -            -              -           -    (1,023,465)   (1,023,465)          (10,223)   (1,033,688) 
 Other 
  comprehensive 
  income                     -            -              -     725,945              -       725,945            33,466       759,411 
-----------------  -----------  -----------  -------------  ----------  -------------  ------------  ----------------  ------------ 
 
 Total 
  comprehensive 
  income 
  for the 
  period                     -            -              -     725,945    (1,023,465)     (297,520)            23,243     (274,277) 
 
 
 Contributions 
  by and 
  distributions 
  to owners 
 Shares 
  issued 
  as part 
  of capital 
  raising            1,250,000    1,250,000              -           -              -     2,500,000                 -     2,500,000 
 Cost of 
  issue 
  of Ordinary 
  Share 
  capital                    -     (45,000)              -           -              -      (45,000)                 -      (45,000) 
 Share-based 
  payment 
  on share 
  options                    -            -              -           -        502,177       502,177                 -       502,177 
 Non-controlling 
  interest 
  on acquisition 
  of subsidiary              -            -              -           -              -             -           181,758       181,758 
 
 
 31 December 
  2016              27,413,329   87,095,455   (67,673,657)   2,408,432   (25,154,580)    24,088,979           205,001    24,293,980 
 
 
 Loss for 
  the period                                                              (3,738,614)   (3,738,614)          (17,835)   (3,756,449) 
 Other 
  comprehensive 
  income                                                     (429,352)              -     (429,352)          (26,706)     (456,058) 
-----------------  -----------  -----------  -------------  ----------  -------------  ------------  ----------------  ------------ 
 
   Total 
   comprehensive 
   income 
   for the 
   period                    -            -              -   (429,352)    (3,738,614)   (4,167,966)          (44,541)   (4,212,507) 
-----------------  -----------  -----------  -------------  ----------  -------------  ------------  ----------------  ------------ 
 
 Contributions 
  by and 
  distributions 
  to owners 
 Share-based 
  payment 
  on share 
  options                    -            -              -           -        373,049       373,049                 -       373,049 
 
 
 30 June 
  2017 
  (unaudited)       27,413,329   87,095,455   (67,673,657)   1,979,080   (28,520,145)    20,294,062           160,460    20,454,522 
 
 
 
 

Notes forming part of the consolidated financial statements

For the 6 months ended 30 June 2017

1. Accounting policies

General Information

Gaming Realms plc ("the Company") and its subsidiaries (together "the Group").

The Company is admitted to trading on AIM of the London Stock Exchange. It is incorporated and domiciled in the UK. The address of its registered office is One Valentine Place, London, SE18QH.

The results for the six months ended 30 June 2017 and 30 June 2016 are unaudited.

Basis of preparation

The financial information for the year ended 31 December 2016 does not constitute the full statutory accounts for that year. The Annual Report and Financial Statements for 2016 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2016 was 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.

This interim report, which has neither been audited nor reviewed by independent auditors, was approved by the board of directors on 12 September 2016. The financial information in this interim report has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2016 and which will form the basis of the 2017 financial statements. There are no new standards, interpretations or amendments which became effective in the period which have had a material effect on the Group's financial information. Management are considering whether IFRS 15 Contracts with customers and IFRS 16 Leases, which are effective for periods beginning after 1 January 2018 and 1 January 2019 respectively, will have a material effect on the Group's future financial statements.

The consolidated financial statements are presented in sterling.

Adjusted EBITDA

EBITDA is a non-GAAP, company specific measure. Adjusted EBITDA excludes adjusting items from EBITDA. Adjusting items are non-recurring material items which are outside the normal scope of the Group's ordinary activities. These items are separately disclosed in order to enhance the reader's understanding of the Group's profitability and cash flow generation. Adjusting items include costs arising from a fundamental restructuring of the Group's operations, acquisition costs, non-trading foreign exchange gains/losses and share-based payment charges. The comparative adjusted EBITDA has been restated to reflect the including of foreign exchange gains/losses as an adjusting item. This has resulted in a decrease in adjusted EBITDA of GBP78,747 in H1/16 and GBP273,695 in 2016.

2. Segment information

The Board is the Group's chief operating decision-maker. Management has determined the operating segments based on the information reviewed by the Board for the purposes of allocating resources and assessing performance. The Group has three reportable segments. The social publishing provides freemium games to the US and Europe. Licensing includes IP brand and content licensing to partners in the US and Europe. The real money gaming products and marketing services operates our brands and provides other digital marketing services to both gaming and non-gaming clients in the UK.

Revenue by product:

 
                               6M 30        6M 30       12M 31 
                              Jun 17       Jun 16       Dec 16 
                                 GBP          GBP          GBP 
 Real money gaming and 
  affiliate marketing     11,441,260   11,153,687   23,313,208 
 Disposed white label 
  and agency business              -    1,708,921    1,928,451 
 Social publishing         3,989,943    3,446,827    7,884,101 
 Licensing                   228,639      322,502      786,843 
 Other                        32,580            -       45,515 
 
 
                          15,692,422   16,631,937   33,958,118 
 
 

Geographical information

The Group considers that its primary geographic regions are the UK, including Channel Islands, USA and the rest of the world. No revenue is derived from real money gaming in the US. Revenues from customers outside the UK (including Channel Islands) and USA are not considered sufficiently significant to warrant separate reporting. All non-current assets are based in the UK.

 
                               External        External        External 
                                revenue         revenue         revenue 
                            by location     by location     by location 
                           of customers    of customers    of customers 
                                  6M 30           6M 30          12M 31 
                                 Jun 17          Jun 16          Dec 16 
                                    GBP             GBP             GBP 
 
 UK, including Channel 
  Islands                    11,427,248      12,405,254      23,925,469 
 USA                          2,782,952       3,769,329       6,754,016 
 Rest of the world            1,482,222         457,354       3,278,633 
 
 
                             15,692,422      16,631,937      33,958,118 
 
 

3. Finance income and expense

 
                                 6M 30     6M 30      12M 31 
                                Jun 17    Jun 16      Dec 16 
                                   GBP       GBP         GBP 
 
 Finance income 
 Interest received               1,513     2,954       3,022 
 Foreign exchange gain         169,311         -           - 
  on deferred consideration 
                              --------  --------  ---------- 
 
 Total finance income          170,824     2,954       3,022 
 
 
 Finance expense 
 Bank interest expense 
  paid                          40,482    19,943      36,850 
 Deferred consideration 
  unwinding                     85,511   186,998     292,212 
 Foreign exchange loss 
  on deferred consideration          -   566,103     849,092 
 
 
 Total finance expense         125,993   773,044   1,178,154 
 
 

The deferred consideration in relation to the acquisition from RealNetworks, Inc. was retranslated at the period-end exchange rate which resulted in a gain of GBP169,311 (6M 30 Jun 2016: loss of GBP566,103, 12M 31 Dec 2016: loss of GBP849,092) charge in the current period.

4. Tax credit

 
                                6M 30     6M 30    12M 31 
                               Jun 17    Jun 16    Dec 16 
                                  GBP       GBP       GBP 
 Current tax expense 
 Adjustment for over 
  provision in prior 
  periods                           -         -   (4,451) 
 Research and development 
  tax credit                  175,000    27,861    27,961 
 
 
 Total current tax            175,000    27,861    23,510 
 
 
 Deferred tax expense 
 Origination and reversal 
  of temporary differences    130,405   118,595   248,941 
 
 
 Total deferred tax           130,405   118,595   248,941 
 
 
 Total tax expense            305,405   146,456   272,451 
 
 

The reasons for the difference between the actual tax charge for the period and the standard rate of corporation tax in the UK applied to profits for the period are as follows:

 
                                        6M 30         6M 30        12M 31 
                                       Jun 17        Jun 16        Dec 16 
                                          GBP           GBP           GBP 
 
 Loss for the period              (4,061,854)   (5,808,111)   (6,967,794) 
 Income tax credit                    305,405       146,456       272,451 
 
 
 Loss after income taxes          (3,756,449)   (5,661,655)   (6,695,343) 
 
 
 
 Loss for the period              (4,061,854)   (5,808,111)   (6,967,794) 
 
 Expected tax at effective 
  rate of corporation tax 
  in the UK of 20% (30 Jun 
  2016: 20% and 31 Dec 2016: 
  20%)                              (812,371)   (1,161,622)   (1,393,559) 
 Expenses not deductible 
  for tax purposes                     63,466       256,580       224,896 
 Depreciation in excess 
  of capital allowances                16,824         8,898         7,543 
 Effects of overseas taxation          39,316     (195,089)     (224,795) 
 Adjustment in respect                      -       169,879             - 
  of loss carried back 
 Unwind of deferred tax 
  recognised on business 
  acquisition                       (130,405)     (118,595)     (248,941) 
 Research and development 
  tax credit                        (175,000)      (27,861)      (27,961) 
 Adjustment for over provision 
  in prior periods                          -             -         4,451 
 Tax losses carried forward           692,765       921,354     1,385,915 
 
 
 Total tax credit                   (305,405)     (146,456)     (272,451) 
 
 

5. Loss per share

 
                                     6M 30         6M 30         12M 31 
                                    Jun 17        Jun 16         Dec 16 
                                       GBP           GBP            GBP 
 
 Loss after tax                (3,756,449)   (5,661,655)    (6,695,343) 
 
 
                                    Number        Number         Number 
 
 Weighted average number 
  of Ordinary Shares used 
  in calculating basic loss 
  per share                    274,133,291   254,857,879    262,432,743 
 
 
 Weighted average number 
  of Ordinary Shares used 
  in calculating dilutive 
  loss per share               274,133,291   254,857,879    262,432,743 
 
 
 
 Basic and diluted loss 
  per share (pence)                 (1.37)        (2.22)         (2.55) 
 
 

6. Intangible assets

 
                      Goodwill    Customer    Software   Development     Domain   Intellectual         Total 
                                  database                     costs      names       property 
                           GBP         GBP         GBP           GBP        GBP            GBP           GBP 
 Cost 
 At 1 January 
  2016              18,092,116   4,543,648   1,091,241     2,888,724    363,401      5,354,379    32,333,509 
 Additions                   -           -           -     1,873,868      5,126              -     1,878,994 
 Disposal          (2,513,764)   (698,447)           -             -          -              -   (3,212,211) 
 FX movement           495,725     110,102      88,733             -     27,393        528,262     1,250,215 
 
 
 At 30 June 
  2016              16,074,077   3,955,303   1,179,974     4,762,592    395,920      5,882,641    32,250,507 
 
 
 Acquired 
  through 
  business 
  combination           75,413           -     217,216             -          -              -       292,629 
 Additions                   -           -           -     2,090,617          -              -     2,090,617 
 FX movement           396,374     156,668     141,310             -     38,824        518,789     1,251,965 
 
 
 At 31 December 
  2016              16,545,864   4,111,971   1,538,500     6,853,209    434,744      6,401,430    35,885,718 
 
 
 Additions                   -           -           -     1,739,245          -              -     1,739,245 
 FX movement         (294,346)    (86,966)    (82,115)       (4,696)   (21,637)      (342,354)     (832,114) 
 
 
 At 30 June 
  2017              16,251,518   4,025,005   1,456,385     8,587,758    413,107      6,059,076    36,792,849 
 
 
 
   Amortisation 
 At 1 January 
  2016                       -   2,055,945     135,717       919,856     45,581        248,609     3,405,708 
 Amortisation 
  charge                     -     584,349     189,187       588,541     64,190        346,555     1,772,822 
 Disposal                    -   (452,365)           -             -          -              -     (452,365) 
 FX movement                 -     (1,811)     (1,459)             -      (451)        (2,673)       (6,394) 
 
 
 At 30 June 
  2016                       -   2,186,118     323,445     1,508,397    109,320        592,491     4,719,771 
 
 
 Amortisation 
  charge                     -     571,804     251,032       924,322     73,901        386,060     2,207,119 
 FX movement                 -      83,750      68,511           260     20,837        123,633       296,991 
 
 
 At 31 December 
  2016                       -   2,841,672     642,988     2,432,979    204,058      1,102,184     7,223,881 
 
 
 Amortisation 
  charge                     -     573,926     250,926     1,208,034     63,985        390,462     2,487,333 
 FX movement                 -    (47,731)    (40,842)         (895)   (11,875)       (70,461)     (171,804) 
 
 
 At 30 June 
  2017                       -   3,367,867     853,072     3,640,118    256,168      1,422,185     9,539,410 
 
 
 
 Net book 
  value 
 At 30 June 
  2016              16,074,077   1,769,185     856,529     3,254,195    286,600      5,290,150    27,530,736 
 
 
 At 31 December 
  2016              16,545,864   1,270,299     895,512     4,420,230    230,686      5,299,246    28,661,837 
 
 
 At 30 June 
  2017              16,251,518     657,138     603,313     4,947,640    156,939      4,636,891    27,253,439 
 
 

7. Available-for-sale investments

 
                                    30 Jun    30 Jun    31 Dec 
                                        17        16        16 
                                       GBP       GBP       GBP 
 Available-for-sale investments 
                                   540,000   540,000   540,000 
 
 

8. Other assets

 
                  30 Jun    30 Jun    31 Dec 
                      17        16        16 
                     GBP       GBP       GBP 
 Other assets 
                 164,303   152,000   152,000 
 
 

Other assets represent the rental deposits on operating leases.

9. Trade and other receivables

 
                                   30 Jun      30 Jun      31 Dec 
                                       17          16          16 
                                      GBP         GBP         GBP 
 
 Trade and other receivables    1,794,268   3,841,642   2,736,038 
 Allowance for doubtful 
  debts                           (1,477)     (8,938)     (1,477) 
 
 
                                1,792,791   3,832,704   2,734,561 
 
 
 
 Prepayments and accrued 
  income                        1,583,764   1,344,279     613,034 
 
 
                                3,376,555   5,176,983   3,347,595 
 
 

All amounts shown fall due for payment within one year

10. Cash and cash equivalents

 
                                 30 Jun      30 Jun      31 Dec 
                                     17          16          16 
                                    GBP         GBP         GBP 
 
 Cash and cash equivalents    1,084,671   2,979,790   2,597,465 
 Restricted cash                 18,702      19,568      18,802 
 
 
                              1,103,373   2,999,358   2,616,267 
 
 

Restricted cash of GBP18,702 (30 Jun 2016: GBP19,568 and 31 Dec 2016: GBP18,802) relates to funds held in Swiss subsidiaries which are currently undergoing liquidation. The funds are restricted and are not included in the consolidated statement of cash flows.

Included within cash and cash equivalents is the Group's overdraft facility. The total facility is GBP1.500,000 and at 30 June 2017 was drawn down by GBP993,968 (30 Jun and 31 Dec 2016: nil).

11. Trade and other payables

 
                                30 Jun      30 Jun      31 Dec 
                                    17          16          16 
                                   GBP         GBP         GBP 
 
 Trade and other payables    2,932,740   3,388,604   2,012,196 
 Accruals                    5,105,067   4,317,263   4,681,212 
 Player liabilities            395,686     413,204     365,373 
 
 
                             8,433,493   8,119,071   7,058,781 
 
 

The carrying value of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.

12. Share capital

Ordinary Shares

 
                                  30 Jun       30 Jun       31 Dec 
                                      17           16           16 
                                     GBP          GBP          GBP 
 
 274,133,292 (30 Jun 
  16: 261,633,292 and 
  31 Dec 16: 274,133,292) 
  Ordinary Shares of 10 
  pence each                  27,413,329   26,163,329   27,413,329 
 
 

Movements in share capital

 
                                              Number             GBP 
 
 At 1 January 2016                       249,208,292      24,920,829 
 
 Ordinary shares issued for 
  cash consideration                       7,625,000         762,500 
 Ordinary shares issued for 
  settling the Blueburra Holdings 
  Limited contingent consideration         4,800,000         480,000 
 
 
 At 30 June 2016                         261,633,292      26,163,329 
 
 
 Ordinary shares issued for 
  cash consideration                      12,500,000       1,250,000 
 
 
 At 31 December 2016 and 30 
  June 2017                              274,133,292      27,413,329 
 
 

13. Events after reporting date

On 17 July 2017, the Company amended the Asset Purchase Agreement with Real Networks Inc, which provided for a final payment to Real Networks of $4m by the 10 August 2017. The final payment to Real Networks was amended, and it was agreed that the final payment of $4.5m will be made by the 15 December 2017.

On 8 August 2017, the Company raised GBP1,132,500 by issuing 10,295,455 shares at GBP0.11 per share.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR OKBDPCBKDKCD

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September 13, 2017 02:01 ET (06:01 GMT)

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