TIDMGMR
RNS Number : 0842C
Gaming Realms PLC
27 September 2018
Gaming Realms plc
(the "Company" or the "Group")
Interim results for the six months ended 30 June 2018
Positive Adjusted EBITDA for H1 2018 of GBP0.4m, up GBP1.5m from
H1 2017 loss of GBP1.1m
Gaming Realms plc (GMR.L), the developer, publisher and licensor
of mobile real money and social games, today announces its interim
results for the six months to 30 June 2018.
Financial highlights:
Like-for-like ongoing business* H1 2018 H1 2017 Movement
GBPm GBPm %
Revenue - Real Money & Licensing 4.8 3.7 28%
Revenue - Social 2.1 4.0 (48%)
-------- -------- ----------
Total 6.8 7.7 (11%)
Marketing spend - Real Money
& Licensing 1.9 2.7 (31%)
Marketing spend - Social 0.2 1.6 (88%)
-------- -------- ----------
Total 2.1 4.4 (53%)
----------------------------------- -------- -------- ----------
* excludes UK B2C brands sold post-period end
UK B2C brands sold post period H1 2018 H1 2017 Movement
end
GBPm GBPm %
Revenue - Real Money 4.1 7.2 (43%)
Marketing spend - Real Money 0.7 2.0 (65%)
--------------------------------- -------- -------- ----------
-- Real Money revenue excluding UK B2C brands sold to River UK
Casino post-period end increased by 18% to GBP4.1m (H1/17:
GBP3.5m)
-- Licensing revenue increased by 175% to GBP0.6m (H1/17: GBP0.2m)
Social publishing revenue decreased by 48% to GBP2.1m (H1/17:
GBP4.0m) with a reduction in marketing spend of 88% to GBP0.2m
(H1/17: GBP1.7m)
Group H1 2018 H1 2017 Movement
GBPm GBPm %
Total revenue excluding disposals
** 11.0 15.0 (27%)
Adjusted EBITDA before Share
Based Payments 0.4 (1.1) n/a
------------------------------------ -------- -------- ----------
** excludes GBP0.2m in respect of affiliate business disposed
May 2018 (H1/17 GBP0.7m)
-- Adjusted EBITDA before share-based payments increased by
GBP1.5m to GBP0.4m (H1/17: loss of GBP1.1m)
-- Decrease in Group revenue driven by Social
-- Cash at bank at 30 June 2018 was GBP0.4m before the receipt
of the GBP4.2m cash payment from River UK Casino for the sale of
the UK B2C brands
-- Capitalised development costs were GBP1.5m in the period
(H1/17: GBP1.7m) as there was further investment in content and
platform development
Operational highlights:
-- 6 new contracts signed to license the Company's 'Slingo
Originals' portfolio of games in New Jersey and Europe (H1 2017: 4
licenses signed)
-- Launch of new 'white label' real money gambling sites for Health Lottery
-- Sale of Affiliate Business for GBP2.4m
Post-period end trading:
-- Disposal of 70% of UK B2C brands to River UK Casino for up to
GBP23.1m, with GBP4.2m received in August 2018. Of the remaining
GBP18.9m, GBP4.2m will be received upon the completion of the June
2019 audit and up to GBP14.7m will be subject to the earn out for
the same period
-- Licensing revenue increased 88% in the 9 weeks post period end
-- Real Money Gaming revenue, excluding UK B2C brands sold,
increased 10% in the 9 weeks post period end
-- Successful launch, on time and on budget, of a new faster
mobile optimized gambling platform
-- Launch of 'Slingo Originals' games on GVC and Rank, also on
time and budget, which have both been very well received
Outlook for FY 2018:
Following the sale of the UK B2C brands the business will be
focussed on executing the following growth strategy to create value
for shareholders:
-- Expand existing market-leading 'Slingo Originals' library
with additional internally developed content
-- Sign further licensing deals for proprietary 'Slingo
Originals' content, which will deliver higher margin returns
-- Grow Partnership base in the Real Money B2B business. This
will diversify customer concentration, provide a higher quality of
income, increase revenues and allow the sharing of marketing spend.
The business has a market leading proprietary platform for gaming
products which needs to be built upon
-- Maximise the earn out from the B2C sale to River UK Casino
The Board expects the Company to continue to incur capital
expenditure on game and platform development, of approximately
GBP2.5m per annum. However, given the sale of the assets to River
UK Casino, the Board believes that the Group will have sufficient
cash resources to cover these costs until such time as the Group is
cash generative after all capitalised costs.
Alongside building on this strategy, Gaming Realms will continue
to evaluate strategic opportunities for our non-core activities
such as the social publishing business.
Patrick Southon, Chief Executive, said:
"Our strategy moving forward is to leverage our real money
gaming platform and our market leading 'Slingo Originals' games
library into the UK and international gaming markets. We believe
that licensing our platform and content to leading brands and
gaming operators will deliver high margin revenues, and we have
been very pleased with the results of our efforts over the first
half of 2018. We look forward to delivering news about more
developments on our strategy during the second half of the
year."
For more information contact
Gaming Realms plc
Patrick Southon, CEO
Mark Segal, CFO 0845 123 3773
Peel Hunt LLP, Nomad and Broker
Dan Webster, George Sellar 020 7418 8900
Yellow Jersey 020 7457 2020
Charles Goodwin 07747 788 221
Georgia Colkin 08725 916 715
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 generated
positive Adjusted EBITDA before Share Based Payments of GBP0.4m
during the first half of the year (H1/17: GBP1.1m loss). This
improvement 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 GBP3.6m to GBP2.8m (H1/17:
GBP6.4m).
Gaming Realms has undergone a number of changes in recent months
as part of the Group's strategy to focus on international licensing
and content development. Whilst this transition is ongoing, the
Board believes that Gaming Realms is now in a stronger position to
capitalise on its skill set of creating entertaining, immersive
gaming content which plays to a licensing-focused model, led by its
popular Slingo gaming format.
Real money gaming
The Group's real money division has undergone significant change
with the disposal of the affiliate marketing business and, since
the period end, the sale of a 70% stake in most of its UK online
casino B2C business to River UK Casino Limited. Excluding disposals
to River UK Casino, real money revenues grew by 18% despite a
significant reduction in marketing spend, illustrating the quality
of our real money games portfolio and player loyalty. Whilst the
Group now holds a minority stake, it will be working closely with
River UK Casino to improve the platform, with revenue generated
becoming a significant source of income for the Group's B2B
platform.
Licensing
The Group has made significant progress with its licensing
business with a number of high-profile agreements for Slingo
Originals content signed in the period, which includes those with
888 Holdings, GVC, Sony Pictures Television and Golden Nugget
Casino, one of New Jersey's largest casino operators. Licensing
revenue has increased 175% to GBP0.6m (H1/17: GBP0.2m) during the
period as the Slingo format went live on 6 new licensee platforms.
The Group is already experiencing the benefits of the stable,
higher margin revenues this brings and expects this to continue as
licensees grow player numbers and new agreements are signed.
Social publishing
Social Publishing continues to generate a profit each month
following the closure of Seattle operations in H2 2017 and minimal
investment in marketing.
The Group continues to review its allocation of resources and
investment.
Consolidated statement of comprehensive income
for the 6 months ended 30 June 2018
Note 6M 30 Jun 6M 30 Jun
18 17
Unaudited Unaudited
Continuing GBP GBP
------------------------------------------ ----- ------------ ------------
Revenue 2 10,965,299 14,979,111
Marketing expenses (2,778,560) (6,443,240)
Operating expenses (4,138,132) (4,748,425)
Administrative expenses (3,799,441) (5,465,868)
Share-based payments (154,986) (373,049)
------------------------------------------ ----- ------------ ------------
Adjusted EBITDA total 195,462 (1,474,541)
Adjusted EBITDA - discontinued (48,084) (516,241)
Profit/(Loss) on disposal (53,198) -
Exceptional items - (60,689)
------------
EBITDA continuing 94,180 (2,051,471)
----- ------------ ------------
Amortisation of intangible assets 7 (2,462,140) (2,487,333)
Depreciation of property, plant
and equipment (75,093) (84,122)
Finance expense 4 (511,774) (125,992)
Finance income 4 88,012 170,824
------------------------------------------ ----- ------------ ------------
Loss before tax (2,866,815) (4,578,094)
Tax credit 5 194,557 305,405
------------------------------------------ ----- ------------ ------------
Loss for the period - continuing (2,672,258) (4,272,689)
Profit for the period - discontinued 48,084 516,241
------------------------------------------ ----- ------------ ------------
Loss for the period - total (2,624,174) (3,756,448)
------------------------------------------ ----- ------------ ------------
Other comprehensive income
Exchange gain/(loss) arising
on translation of foreign operations 195,066 (456,058)
------------------------------------------ ----- ------------ ------------
Total other comprehensive income 195,066 (456,058)
------------------------------------------ ----- ------------ ------------
Total comprehensive income (2,429,108) (4,212,506)
------------------------------------------ ----- ------------ ------------
Loss attributable to:
Owners of the parent (2,618,121) (3,738,614)
Non-controlling interest (6,053) (17,835)
------------ ------------
(2,624,174) (3,756,449)
------------------------------------------ ----- ------------ ------------
Total comprehensive income attributable
to:
Owners of the parent (2,423,055) (4,167,966)
Non-controlling interest (6,053) (44,541)
------------------------------------------ ----- ------------ ------------
(2,429,108) (4,212,507)
------------------------------------------ ----- ------------ ------------
(Loss)/gain per share Pence Pence
Basic and diluted - continuing (0.94) (1.56)
Basic and diluted - discontinued 0.02 0.19
------------------------------------------ ----- ------------ ------------
Basic and diluted - total 6 (0.92) (1.37)
------------------------------------------ ----- ------------ ------------
Consolidated statement of financial position
as at 30 June 2018
Note 30 June 2018 31 December
2017
Unaudited Audited
GBP GBP
-------------------------------- ----- ------------- -------------
Non-current assets
Intangible assets 7 19,631,075 20,464,170
Equity investments 8 776,981 747,222
Property, plant and equipment 204,365 263,069
Other assets 9 164,136 163,865
-------------------------------- ----- ------------- -------------
20,776,557 21,638,326
-------------------------------- ----- ------------- -------------
Current assets
Trade and other receivables 10 3,485,466 3,759,434
Cash and cash equivalents 11 1,086,280 2,283,302
-------------------------------- ----- -------------
4,571,746 6,042,736
-------------------------------- ----- ------------- -------------
Assets classified as held
for sale - 2,292,881
-------------------------------- ----- ------------- -------------
Total assets 25,348,303 29,973,943
-------------------------------- ----- ------------- -------------
Current liabilities
Trade and other payables 12 6,761,874 9,269,732
-------------------------------- ----- ------------- -------------
6,761,874 9,269,732
-------------------------------- ----- ------------- -------------
Non-current liabilities
Deferred tax liability 659,560 881,512
Other Creditors 13 3,221,821 2,843,529
Derivative liabilities 13 600,000 600,000
-------------------------------- ----- ------------- -------------
4,481,381 4,325,041
-------------------------------- ----- ------------- -------------
Total liabilities 11,243,255 13,594,773
-------------------------------- ----- ------------- -------------
Net assets 14,105,048 16,379,170
-------------------------------- ----- ------------- -------------
Equity
Share capital 14 28,442,874 28,442,874
Share premium 87,198,410 87,198,410
Merger reserve (67,673,657) (67,673,657)
Available for sale reserve 207,222 207,222
Foreign exchange reserve 1,614,909 1,419,842
Shares to be issued 145,000 145,000
Retained earnings (35,993,481) (33,530,345)
-------------------------------- ----- ------------- -------------
Total equity attributable
to owners of the parent 13,941,277 16,209,346
-------------------------------- ----- ------------- -------------
Non-controlling interest 163,771 169,824
-------------------------------- ----- -------------
Total equity 14,105,048 16,379,170
-------------------------------- ----- ------------- -------------
Consolidated statement of cash flows
for the 6 months ended 30 June 2018
Note 6M 30 Jun 6M 30 Jun
18 17
Unaudited Unaudited
GBP GBP
---------------------------------------- ------ ------------ -----------------------
Cash flows from operating activities
Loss for the period (2,624,174) (3,756,449)
Adjustments for:
Depreciation of property, plant
and equipment 75,093 84,122
Amortisation of intangible fixed
assets 7 2,462,140 2,487,333
Finance income 4 (88,012) (1,513)
Finance expense 4 511,774 40,482
Movement in deferred consideration - (83,800)
Unwind of deferred tax recognised
on business acquisitions (205,623) (305,223)
Unrealised currency translation
gains 49,338 126,441
Loss on disposal of property,
plant and equipment (11,734) 115
Loss on disposal of assets 43,748 -
Share-based payments expense 154,986 373,049
Decrease/(increase) in trade
and other receivables 673,969 (41,263)
(Decrease)/Increase in trade
and other payables (2,202,200) 1,374,712
---------------------------------------- ------ ------------ -----------------------
Net cash flows from/(used in)
operating activities (1,160,695) 298,006
---------------------------------------- ------ ------------ -----------------------
Investing activities
Purchases of property, plant
and equipment (23,503) (49,971)
Purchase of intangibles 7 (1,464,628) (1,739,245)
Proceeds from disposal of assets 1,849,133 -
Interest received 4 58,253 1,513
---------------------------------------- ------ ------------ -----------------------
Net cash from/(used in) investing
activities 419,255 (1,787,703)
---------------------------------------- ------ ------------ -----------------------
Financing activities
Cost relating to issue of convertible
debt 13 (24,846) -
Interest paid 4 (107,831) (40,482)
---------------------------------------- ------ ------------ -----------------------
Net cash used in financing activities (132,677) (40,482)
---------------------------------------- ------ ------------ -----------------------
Net (decrease)/increase in cash
and cash equivalents (874,117) (1,530,179)
Cash and cash equivalents at
beginning of period 1,319,098 2,597,465
---------------------------------------- ------ ------------ -----------------------
Exchange (loss)/gain on cash
and cash equivalents (16,440) 17,385
---------------------------------------- ------ ------------ -----------------------
Cash and cash equivalents at
end of period 11 428,541 1,084,671
---------------------------------------- ------ ------------ -----------------------
Consolidated statement of changes in equity
for the 6 months ended 30 June 2018
Share Share Merger Available Foreign Shares Retained Total Non-controlling Total
capital premium reserve for sale Exchange to be earnings to equity interest equity
reserve Reserve issued holders
of parents
GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
1 January 2017 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 (Note
26) - - - - - - 373,049 373,049 - 373,049
Non-controlling - - - - - - - - - -
interests
on acquisition
of subsidiary
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
------------------ ----------- ----------- ------------- ----------- ---------- -------- ------------- ------------ ----------------- ------------
31 December 2017 28,442,874 87,198,410 (67,673,657) 207,222 1,419,842 145,000 (33,530,345) 16,209,345 169,824 16,379,169
------------------ ----------- ----------- ------------- ----------- ---------- -------- ------------- ------------ ----------------- ------------
Loss for the
period - - - - - - (2,618,121) (2,618,121) (6,053) (2,624,174)
Other
comprehensive
income - - - - 195,067 - - 195,067 - 195,067
Total
comprehensive
income/(loss)
for the
period - - - - 195,067 - (2,618,121) (2,423,054) (6,053) (2,429,107)
------------------ ----------- ----------- ------------- ----------- ---------- -------- ------------- ------------ ----------------- ------------
Contributions by
and
distributions to
owners
Share-based
payment
on share
options (Note
26) - - - - - - 154,986 154,986 - 154,986
30 June 2018
(unaudited) 28,442,874 87,198,410 (67,673,657) 207,222 1,614,909 145,000 (35,993,480) 13,941,277 163,771 14,105,048
------------------ ----------- ----------- ------------- ----------- ---------- -------- ------------- ------------ ----------------- ------------
Notes forming part of the consolidated financial statements
For the 6 months ended 30 June 2018
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 2018 and 30 June
2017 are unaudited.
Basis of preparation
The financial information for the year ended 31 December 2017
does not constitute the full statutory accounts for that year. The
Annual Report and Financial Statements for 2017 have been filed
with the Registrar of Companies. The Independent Auditors' Report
on the Annual Report and Financial Statement for 2017 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 2018. 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 2017 and which will form the basis of
the 2018 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.
As a result of IFRS 9, management have reclassified available
for sale investments as equity investments with fair value
movements taken to the income statement. Management have
established that the adoption of the expected credit loss
impairment model did not have a material impact on reported
results.
Management have considered the impact of IFRS 15 on the business
by product. Management consider the recognition basis will remain
unchanged for RMG, Affiliate and Social publishing revenues, which
generate the majority of the Groups revenues. Management continue
to review revenue recognition under IFRS 15 for the licensing
revenues, where terms differ by contract, but do not anticipate a
material impact on the financial statements.
When considering IFRS 16, the Group operates from leased offices
in 4 countries. Management are undertaking a review to calculate
the initial recognition of right of use assets and the related
liabilities.
The consolidated financial statements are presented in
sterling.
Adjusted EBITDA
EBITDA is a non-GAAP company specific measure defined as loss
before tax adjusted for finance income and expense, depreciation
and amortisation.
Adjusted EBITDA excludes non-recurring material items which are
outside the normal scope of the Group's ordinary activities.
Adjusted EBITDA is considered to be a key performance measure by
the Directors as it serves as an indicator of financial
performance. The adjusting items are separately disclosed in order
to enhance the reader's understanding of the Group's profitability
and cash flow generation. Adjusting items include EBITDA from
discontinued operations, costs arising from a fundamental
restructuring of the Group's operations, acquisition costs, and
revaluation of balances denominated in non-presentational currency.
Management have observed the FRC's guidance published in November
2017 regarding the treatment of share-based payments and have now
included this charge in Adjusted EBITDA.
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 Jun 6M 30 Jun
18 17
GBP GBP
------------------------------------- ----------- -----------
Real money gaming 8,262,230 10,727,949
Social publishing 2,074,853 3,989,943
Licensing 628,215 228,639
Other 194,142 32,580
------------------------------------- ----------- -----------
Total - continuing 11,159,440 14,979,111
Affiliate marketing - discontinued 170,384 713,311
------------------------------------- ----------- -----------
Total 11,329,824 15,692,422
------------------------------------- ----------- -----------
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. All
non-current assets are based in the UK.
External External
revenue by revenue by
location location
of customers of customers
6M 30 Jun 6M 30 Jun
18 17
GBP GBP
-------------------------------- --------------- ---------------
UK, including Channel Islands 8,296,799 11,427,248
US 2,462,436 2,782,952
Rest of the World 570,589 1,482,222
-------------------------------- --------------- ---------------
11,329,824 15,692,422
-------------------------------- --------------- ---------------
Adjusted EBITDA
Total
6M 30 Jun
RMG Affiliates Social Licensing Other 18
GBP GBP GBP GBP GBP GBP
------------------ ------------ ------------ ---------- ----------- ------------ ------------
Revenue 8,262,231 170,384 2,074,853 628,215 - 11,135,682
Marketing
expense (2,583,698) (20,834) (202,542) - 7,680 (2,799,394)
Operating
expense (3,479,517) (15,809) (569,536) (88,679) (400) (4,153,941)
Administrative
expense (1,610,505) (84,944) (285,438) (456,890) (1,394,123) (3,831,901)
Share-based
payments - - - - (154,986) (154,986)
Adjusted EBITDA 588,511 48,797 1,017,337 82,646 (1,541,829) 195,460
------------------ ------------ ------------ ---------- ----------- ------------ ------------
3. Disposal of Affiliate business
In March 2018 the Group sold its Affiliate CGU for total
consideration of GBP2.4 million to First Leads Ltd. First Leads has
paid GBP2.0m on closing, and a further GBP0.4m will be payable on
31 December 2018, based on the achievement of performance
targets.
4. Finance income and expense
6M 30 Jun 6M 30
18 Jun 17
GBP GBP
------------------------------ ------------------------
Finance income
Interest received 58,253 1,513
Fair value changes 29,759 -
Foreign exchange movement on deferred
consideration - 169,311
------------------------------ ------------------------
Total finance income 88,012 170,824
------------------------------ ------------------------
Finance expense
Bank interest expense paid 52,439 40,482
Deferred consideration movement - 85,511
Effective interest on Other Creditor 459,335 -
------------------------------ ------------------------
Total finance expense 511,774 125,993
------------------------------ ------------------------
5. Tax credit
6M 30 Jun 6M 30
18 Jun 17
GBP GBP
----------- ---------
Current tax credit
Adjustment for over provision in (11,066) -
prior periods
Current tax credit for the period - 175,000
----------- ---------
Total current tax (11,066) 175,000
----------- ---------
Deferred tax expense
Origination and reversal of temporary
differences 205,623 130,405
----------- ---------
Total deferred tax 205,623 130,405
----------- ---------
Total tax credit 194,557 305,405
----------- ---------
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 Jun 6M 30
18 Jun 17
GBP GBP
------------ ------------
Loss for the period (2,818,731) (4,061,853)
Expected tax at effective rate of
corporation tax in the UK of 19% (2017:
20%) (535,559) (812,371)
Expenses not deductible for tax purposes 58,881 63,466
Depreciation in excess of capital
allowances - 16,824
Effects of overseas taxation 64,732 39,316
Adjustment for over provision in (11,066) -
prior periods
Unwind of deferred tax recognised
on business acquisition (205,623) (130,405)
Research and Development tax credit - (175,000)
Tax losses for which no deferred
tax assets have been recognised 823,193 692,765
Total tax credit 194,557 (305,405)
------------ ------------
6. Loss per share
6M 30 Jun 6M 30
18 Jun 17
GBP GBP
------------ ------------
Loss after tax - continuing (2,672,258) (4,272,689)
(Loss)/profit after tax - discontinued 48,084 516,241
------------ ------------
Loss after tax - total (2,624,174) (3,756,448)
------------ ------------
Number Number
------------ ------------
Weighted average number of ordinary
shares used in calculating basic loss
per share 284,428,746 274,133,291
------------ ------------
Weighted average number of ordinary
shares used in calculating dilutive
loss per share 284,428,746 274,133,291
------------ ------------
Pence Pence
------------ ------------
Basic and diluted loss per share
- continuing (0.94) (1.56)
Basic and diluted (loss)/profit per
share - discontinued 0.02 0.19
------------ ------------
Basic and diluted loss per share
- total (0.92) (1.37)
------------ ------------
7. Intangible assets
Goodwill Customer Software Development Domain Intellectual Total
database costs names Property
GBP GBP GBP GBP GBP GBP GBP
---------------------- ----------- ----------- ---------- ------------- ---------- -------------- -----------
Cost
Balance at 31
December 2017 10,645,557 1,626,509 1,403,941 10,047,108 394,331 5,843,092 29,960,538
Additions - - - 1,464,628 - - 1,464,628
Disposals - - - - (319,646) - (319,646)
Reclassified as - - - - -
held for sale
FX Movement 114,926 33,956 32,215 6,587 (47,941) 133,671 273,414
At 30 June 2018 10,760,483 1,660,465 1,436,156 11,518,323 26,744 5,976,763 31,378,934
---------------------- ----------- ----------- ---------- ------------- ---------- -------------- -----------
Amortisation -
Balance at 31
December 2017 - 1,327,658 1,057,660 5,061,262 312,613 1,737,175 9,496,368
Amortisation charge - 244,890 231,514 1,576,696 48,780 360,260 2,462,140
Disposed - - - - (338,605) - (338,605)
Reclassified as - - - - - - -
held for sale
FX Movement - 36,661 33,215 3,695 266 54,119 127,956
At 30 June 2018 - 1,609,209 1,322,389 6,641,653 23,054 2,151,554 11,747,859
---------------------- ----------- ----------- ---------- ------------- ---------- -------------- -----------
Net book value -
At 31 December
2017 10,645,557 298,851 346,281 4,985,846 81,718 4,105,917 20,464,170
At 30 June 2018 10,760,483 51,256 113,767 4,876,670 3,690 3,825,209 19,631,075
---------------------- ----------- ----------- ---------- ------------- ---------- -------------- -----------
8. Equity investments
Equity Investments
GBP
--------------------
At 31 December 2017 747,222
Change in Fair Value through
profit & loss 29,759
--------------------
At 30 June 2018 776,981
--------------------
9. Other assets
30 Jun 18 31 Dec
17
GBP GBP
----------- --------
Other Assets 163,865 152,000
----------- --------
Other assets represent the rental deposits on operating
leases.
10. Trade and other receivables
30 Jun 18 31 Dec
17
GBP GBP
----------- ----------
Trade and other receivables 2,364,537 2,461,523
Prepayments and accrued income 1,120,930 1,447,824
----------- ----------
3,485,466 3,909,347
----------- ----------
All amounts shown fall due for payment within one year
11. Cash and cash equivalents
30 Jun 18 31 Dec
17
GBP GBP
----------- ----------
Cash and cash equivalents 1,086,280 2,283,302
Restricted cash (18,702) (18,702)
Overdraft (639,038) (945,501)
----------- ----------
Cash and cash equivalents for
Statement of Cash Flows 428,539 1,319,098
----------- ----------
Restricted cash 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 GBP1,000,000.
12. Trade and other payables
30 Jun 18 31 Dec
17
GBP GBP
-------------------------- ----------
Trade and other payables 4,744,004 5,655,862
Bank Overdraft 639,038 945,501
Accruals 929,566 2,270,675
Player liabilities 449,266 397,693
6,761,874 9,269,732
-------------------------- ----------
The carrying value of trade and other payables classified as
financial liabilities measured at amortised cost approximates fair
value.
13. Arrangement with JackpotJoy
In December 2017 the group entered into a GBP3.5m secured
convertible loan agreement with Jackpotjoy plc and group companies
(together "Jackpotjoy Group") alongside a 10-year framework
services agreement for the supply of various real money
services.
Under the framework services agreement the first GBP3.5m of
services are provided free-of-charge within the first 5 years. This
will be recognised as revenue as it is utilised.
The convertible loan has a duration of 5 years and carries
interest at 3-month LIBOR plus 5.5%. It is secured over the Group's
Slingo assets and business. At any time after the first year,
Jackpotjoy Group may elect to convert all or part of the principal
amount into ordinary shares of Gaming Realms Plc at a discount of
20% to the share price prevailing at the time of conversion. To the
extent that the price per share at conversion is lower than 10p
(nominal value), then the shares can be converted at nominal value
and the difference paid in cash. Under this arrangement, the
maximum dilution to Gaming Realms shareholders will be
approximately 12%, assuming the convertible loan is converted in
full.
The number of shares is variable. The option therefore violates
the fixed-for-fixed criteria for equity classification and as a
result is classified as a liability. The fair value of the
conversion feature is determined at each reporting date with
changes recognised in profit or loss. The fair value as at 30 June
2018 was GBP0.6m based on a probability assessment of conversion
and future share price. This is a level 2 valuation as defined by
IFRS 13.
The remaining GBP2.9m of proceeds plus an estimate for
free-of-charge services is accounted for as an interest-bearing
loan. The interest rate used to discount the loan was calculated as
30.8%.
Other Creditors Derivative Total
Liability
GBP GBP GBP
---------------------------------------- ----------------- ------------ ----------
At 1 January 2018 2,843,529 600,000 3,443,469
Cost relating to issue of convertible
debt (24,846) - (24,846)
Interest paid (61,773) - (61,773)
Effective interest (30.8%) 464,911 - 464,911
---------------------------------------- ----------------- ------------ ----------
At 30 June 2018 3,221,821 600,000 3,821,821
---------------------------------------- ----------------- ------------ ----------
The proceeds are first allocated to the fair value of the
derivative liability. The key assumptions used to estimate the
derivative liability are as follows:
-- Future share price
-- Probability assessment of expected conversion
-- Timing and proportion converted to shares by JackpotJoy Group
The proceeds are then allocated between the use of the free
services and the interest-bearing loan. The key assumptions used to
estimate this split are:
-- Timing and amount of usage of the free services
-- Future 3-month LIBOR rates
Key sensitivities in the calculation of the above values
include:
-- For every GBP0.5m reduction in the estimate of free services,
there will be an equal reduction in the interest expense over the
term
-- Each 1% increase in 3-month LIBOR would result in an
additional GBP35k interest payable per annum, or GBP140k in total
assuming no capital is repaid or converted to shares
-- If the share price does not exceed 12p there will be no value
in the conversion element meaning the carrying value of the loan
will increase by GBP0.6m and interest expense will decrease by
GBP0.6m
14. Share capital
Ordinary Shares
30 Jun 30 Jun 31 Dec 31 Dec
18 18 17 17
Number GBP Number GBP
Ordinary shares of 284,428,747 28,442,874 284,428,747 28,442,875
------------ ----------- ------------ -----------
10 pence each
------------ ----------- ------------ -----------
Movements in share capital
Number GBP
------------ -----------
At 30 June 2017 274,133,292 27,413,329
Ordinary shares issued
for cash consideration 10,295,455 1,029,545
At 31 December 2017 284,428,747 28,442,874
------------ -----------
At 30 June 2018 284,428,747 28,442,874
------------ -----------
15. Events after reporting date
On 16th August 2018 the Group entered into an Asset Purchase
Agreement with River iGaming Plc (River iGaming) for the sale of 4
of the Group's Real Money brands for minimum consideration of
GBP8.4m.
Further consideration is achievable on an earn-out basis,
payable no later than 31 August 2019 based on 5.5 times River UK
Casino's EBIT for the 12 months to 30 June 2019 to a maximum of
GBP14.7m.
Following the completion of the transaction, River iGaming will
hold 70% of the issued share capital of a newly created UK
subsidiary (River UK Casino), with Gaming Realms holding the
remaining 30%.
There is a Put and Call option for River iGaming to purchase
Gaming Realms' 30% share of River UK Casino at the end of the earn
out period based on an Enterprise value of 5.5 times River UK
Casino's EBIT.
River UK Casino has entered into a five-year B2B platform and
content agreement with the Group on normal commercial terms. River
iGaming and Gaming Realms will jointly provide a working capital
loan facility of GBP3m to River UK Casino (GBP2.1m from River
iGaming and GBP0.9m from Gaming Realms).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR SEMESMFASEEU
(END) Dow Jones Newswires
September 27, 2018 02:01 ET (06:01 GMT)
Gaming Realms (LSE:GMR)
Historical Stock Chart
From Feb 2024 to Mar 2024
Gaming Realms (LSE:GMR)
Historical Stock Chart
From Mar 2023 to Mar 2024