Interim Results

RNS Number : 7884Y

Gaming Realms PLC

04 December 2014

 



Gaming Realms plc

(the "Company" or the "Group")

Interim results for the six months ending 30 September 2014

Focus has been on acquiring affiliate and player data, building a market leading 'cross platform' technology base and licensing unique formats such as Slingo

Gaming Realms, which creates, publishes and markets next generation online gaming products, today announces its interim results for the six months ending 30 September 2014.

Financial highlights

§ Revenue up 421% to £4.6 million (H2/13: £0.9 million) 

§ Loss before taxation of £3.1 million which includes marketing spend of £3.6 million,  costs for the Alderney Licence,

      and those related to the acquisition of Blueburra Holdings, as well as continued costs associated with building the

      Group's new gaming platform, in line with the Group's strategy 

§ Strong balance sheet with £3.8 million cash and cash equivalents (H1/14: £1.8 million)

Operational highlights 

§ Daily active players up 14% to 5,205 (H1/14: 4,576)

§ Acquisition of Blueburra Holdings Limited for approximately £10.5 million to increase affiliate size and bingo database

§ Obtained licenses from the Alderney Gambling Control Commission and the UK Gambling Commission

§ Delivery of new in-house scalable platform with the launch of Spin Genie  brand which includes a feature set to

      enhance conversion, retention and monetisation of  real money gambling players

§ Exclusive UK Licence agreed with RealNetworks for the provision of Slingo, (one of the world's most popular bingo

      formats) for use on our real money gambling platform. Strong cross-selling opportunities for slots players via social

      gaming which had 50 million monthly active users at its peak

Commenting on the results, Chief Executive, Patrick Southon, said:

"We are pleased to report the completion and launch of our platform which is showing good initial growth. We believe the acquisitions of QuickThink Media and Blueburra Holdings, coupled with the monetisation ability of our exciting new 'feature led' gambling platform, will enable us to grow revenues even more quickly in 2015."

Outlook

The Board remains confident that the Group is well positioned to maintain its strong growth trajectory and continued player acquisition. The strategy remains to engage users on new mobile devices through a soft gaming proposition, while maintaining its focus on reducing CPA.

The Group is now better placed to deliver a more 'tailored' and unique experience for players with development in its analytics and player behaviour tools. The Group expects to see improved retention and player values through this focus.

The launch of Spin Genie, delivery of the proprietary platform; and exciting licence deals such as Slingo, gives the Board confidence there are significant market opportunities ahead to achieve further progress in 2015 and beyond.

- Ends -

This document contains forward looking statements, which are based on the Company's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially. Each forward looking statement speaks only as of the date of this announcement. Except as required by the AIM Rules, the London Stock Exchange or otherwise by law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

For more information contact:

Gaming Realms Patrick Southon, Chief Executive Mark Segal, Chief Financial Officer	[phone]
Cenkos Securities (Nominated Adviser and Broker) Max Hartley/Michael Johnson	[phone]
Bell Pottinger Olly Scott James Newman	[phone]

About Gaming Realms

Gaming Realms is an online gaming business formed in 2012 to develop a new generation of social bingo and slot machine gaming concepts.

Gaming Realms was founded by the team behind Cashcade, which created the leading online bingo brand, Foxy Bingo, in addition to other online bingo and casino games. The success of Cashcade culminated in its sale to bwin.party digital entertainment plc for a total consideration of approximately £96 million in 2009.

Business review

Summary of financial and operational activity

The Board is pleased to report that the Group has continued to make good progress during the second half of its financial period. During the six month period, the Group delivered revenues of £4.6 million, up 29% over the previous six month period. At the same time the Group has reduced its marketing investment by 30% to focus on the development and investment in its new platform. Total marketing spend was £3.6 million which combined with operating costs resulted in a loss before taxation of £3.1 million, consistent with the Group's operating plan.

The number of average daily depositing players rose 14% to 5,205 during the period (H1/14: 4,576). The new depositing players acquired was 38,656 (H1/14: 76,465). This reflects a refocusing of group efforts to retention and acquisition in better performing verticals which can be carried forward in to 2015 and a reduction in marketing spend for the period.

In September 2014, the Group acquired Blueburra Holdings Limited ("BBH") for approximately £10.5 million to help facilitate its strategy of acquiring affiliate data and generating revenue on its products. The Board are confident that this acquisition will be successfully integrated into the Group before the end of the 2014 and will generate positive cash flow and a large consumer database for future growth.

The Group has been working to mitigate the effects of Point Of Consumption tax by developing its own proprietary platform to aid efficiencies as well as building features to aid retention. Utilising QTM and the affiliate data in BBH will enable the Group to acquire players at a lower cost.

White Label

Since the acquisition of BBH, the Group has expanded its existing White Label business with Diva Bingo, Butterfly Bingo, and Total Gold. The Group also plans to launch two more gaming brands in Q1 2015.

Revenue through the White Label Business decreased 6% during the period to £1.6 million (H1/14: £1.7 million) as a result of refocus of efforts and marketing budgets on the Group's own platform and products as stated in the strategy above.

Proprietary platform

Gaming Realms launched its new platform through its subsidiary Bear Group Limited, licenced by Alderney Gambling Control Commission and, more recently the UK Gambling Commission, in September 2014. This will enable the Group to fulfil on its strategy of delivering unique content to the real money gambling market. It will also bring enhanced cash flow, running at more efficient margins, thereby offsetting the effect of the introduction of Point Of Consumption tax.

The first brand to have launched on this platform, Spin Genie, has shown very promising results with low cost of acquisition and good initial player values and retention.

In furtherance of our stated strategy to launch new gambling formats, the Group has agreed an exclusive licensing deal for the UK for Slingo, which will be used as a real money gambling product on Spin Genie. Slingo is a Vegas-derived bingo game which was successfully grown by Zynga into a player base of 50 million monthly users.

Pocket Fruity has continued to deliver a strong performance during the period, supported by the further development of the product, licensing slots and table games from Realistic Games, which has led to a 141% increase in active daily players funding their accounts and a 45% increase in NGR. The Group is continuing with the migration of Pocket Fruity onto its new proprietary platform, which will be delivered early in the New Year. This move is expected to enable greater scaling of the product whilst simultaneously increasing profit margins.

Staff

A significant focus for the Group has been ensuring the business has the right levels of skilled employees to deliver its strategy. During the period the headcount grew from 58 to 89 as the Group grew organically and through acquisitions. These additional employees have contributed to the Group's upgraded skillset, delivering a step-change in corporate capabilities. The Group now has a highly experienced and skilled software development team which will further develop and maintain its platform and new gambling formats. Allied to the Group's own in-house behavioural science tools, the Group is able to gain a unique insight and analysis of its players, which helps to drive CRM efforts and development for new and existing customers.

Consolidated statement of profit or loss and other comprehensive income

for the 6 months ended 30 September 2014

	Note	6 month ended 30 Sep 14		6 month ended 31 Mar 14		6 month ended 30 Sep 13
		£		£		£
		Unaudited		Unaudited		Unaudited
Revenue		4,588,664		3,551,925		881,060
Marketing expenses		(3,603,052)		(5,170,151)		(1,713,277)
Operating expenses		(681,206)		(679,126)		(348,260)
Administrative expenses		(2,599,362)		(2,052,423)		(1,042,505)
Adjusted EBITDA		(2,294,956)		(4,349,775)		(2,222,982)
Listing and acquisition costs		(132,671)		(37,500)		(436,341)
Share-based payments arising on reverse transaction		-		-		(431,392)
Share-based payments		(224,918)		(69,165)		(36,471)
EBITDA		(2,652,545)		(4,456,440)		(3,127,186)
Amortisation of intangible assets	6	(473,228)		(419,022)		(150,367)
Depreciation of property, plant and equipment		(19,259)		(15,119)		(2,992)
Finance expense	3	(14,524)		(4,171)		(3,090)
Finance income	3	10,511		2,794		1,886
Loss before tax on continuing operations		(3,149,045)		(4,891,958)		(3,281,749)
Tax expense	4	35,716		-		-
Loss and total comprehensive income for the financial period		(3,113,329)		(4,891,958)		(3,281,749)
Earnings per share
Loss per share
Basic and diluted (pence)	5	(1.66)		(3.15)		(9.01)

Consolidated statement of financial position

As at 30 September 2014

	Note	30 Sep 14		31 Mar 14		30 Sep 13
		£		£		£
Assets		Unaudited		Unaudited		Unaudited
Non-current assets
Property, plant and equipment		175,076		58,068		59,640
Goodwill	6	13,543,905		6,714,215		4,810,187
Intangible assets	6	3,428,757		1,310,065		1,105,471
Other assets	7	121,500		55,598		57,598
		17,269,238		8,137,946		6,032,896
Current assets
Trade and other receivables	8	2,044,899		1,934,838		1,344,776
Cash and cash equivalents	9	3,798,445		1,844,990		5,185,323
		5,843,344		3,779,828		6,530,099
Total assets		23,112,582		11,917,774		12,562,995
Current liabilities
Trade and other payables	10	2,759,392		2,127,615		1,890,331
Loans and borrowings	11	23,593		24,000		24,000
Deferred tax liability		50,003		85,719		-
		2,832,988		2,237,334		1,914,331
Non-current liabilities
Loans and borrowings	11	-		8,504		20,504
Contingent consideration	13	4,850,770		-		-
		4,850,770		8,504		20,504
Total liabilities		7,683,758		2,245,838		1,934,835
Net assets		15,428,824		9,671,936		10,628,160
Equity
Share capital	12	18,729,170		16,080,988		14,633,369
Share premium reserve		78,049,850		72,052,733		70,437,354
Shares to be issued		803,571		803,571		-
Merger reserve		(71,077,359)		(71,077,359)		(71,077,359)
Retained earnings		(11,076,408)		(8,187,997)		(3,365,204)
Total equity		15,428,824		9,671,936		10,628,160

Consolidated statement of cash flows

for the 6 months ended 30 September 2014

	Note	30 Sep 14		31 Mar 14		30 Sep 13
		£		£		£
		Unaudited		Unaudited		Unaudited
Cash flows from operating activities
Loss for the period		(3,113,329)		(4,891,958)		(3,281,748)
Adjustments for:
Depreciation of property, plant and equipment		19,259		15,119		2,992
Amortisation of intangible fixed assets	6	473,228		419,022		150,367
Finance income	3	(10,511)		(2,794)		(1,886)
Finance expense	3	14,524		4,171		3,090
Fair value adjustment to equity interest held		-		-		38,187
Income tax credit		(35,716)		-		-
Share-based payment arising on reverse transaction		-		-		431,392
Share-based payment expense		224,918		69,165		36,471
Decrease/(increase) in trade and other receivables		223,053		(341)		(1,313,177)
Increase/(decrease) in trade and other payables		277,868		(271,172)		(445,455)
(Increase)/decrease in other assets		(64,402)		2,000		(2,000)
Net cash flows from operating activities		(1,991,108)		(4,656,788)		(4,381,767)

Investing activities
Acquisition of subsidiary, net of cash acquired	13		(1,847,946)			(1,442,365)			119,622
Investments			-			-			(15,000)
Purchases of property, plant and equipment			(88,489)			(13,546)			(33,772)
Purchase of intangibles	6		(248,288)			(165,207)			(219,526)
Interest received	3		10,511			2,794			1,886
Net cash from investing activities			(2,174,212)			(1,618,324)			(146,790)
Financing activities
Acquisition of Gaming Realms plc, net of cash acquired			-			-			3,838,539
Proceeds of Ordinary Share issue	12		6,239,001			3,062,998			4,910,010
Issuance cost of shares			(93,702)			-			(30,016)
Repayment of other loans			(12,000)			(12,000)			(4,000)
Interest paid	3		(14,524)			(4,171)			(3,090)
Net cash from financing activities			6,118,775			3,046,827			8,711,443
Net increase/(decrease) in cash and cash equivalents			1,953,455			(3,228,285)			4,182,886
Cash and cash equivalents at beginning of period			1,825,422			5,063,470			880,584
Exchange losses on cash and cash equivalents			-			(9,763)			-
Cash and cash equivalents at end of period	9		3,778,877			1,825,422			5,063,470

 

 

Consolidated statement of changes in equity

For the 6 months ended 30 September 2014

	Share capital	Share premium	Shares to be issued	Merger reserve	Retained earnings	Total equity
	£	£	£	£	£	£
2 July 2012	-	-	-	-	-	-
Loss for the period	-	-	-	-	(119,926)	(119,926)
Issue of share capital	100,000	900,000	-	-	-	1,000,000
31 March 2013 (unaudited)	100,000	900,000	-	-	(119,926)	880,074
Loss for the period	-	-	-	-	(3,281,749)	(3,281,749)
Issue of share capital	123,750	1,376,250	-	-	-	1,500,000
Adjustments in respect of reverse transaction	8,262,661	67,404,195	-	(72,134,521)	-	3,532,335
Shares issued as part of the consideration in a business combination	3,523,873	-	-	1,057,162	-	4,581,035
Shares issued as part of the capital raising	2,623,085	786,925	-	-	-	3,410,010
Cost of issue of Ordinary Share capital	-	(30,016)	-	-	-	(30,016)
Share-based payment  - Share options	-	-	-	-	36,471	36,471
30 September 2013 (unaudited)	14,633,369	70,437,354	-	(71,077,359)	(3,365,204)	10,628,160
Loss for the period	-	-	-	-	(4,891,958)	(4,891,958)
Shares issued as part of the capital raising	1,447,619	1,615,379	-	-	-	3,062,998
Shares to be issued	-	-	803,571	-	-	803,571
Share-based payment  - Share options	-	-	-	-	69,165	69,165
31 March 2014 (unaudited)	16,080,988	72,052,733	803,571	(71,077,359)	(8,187,997)	9,671,936

	Share capital	Share premium	Shares to be issued	Merger reserve	Retained earnings	Total equity
	£	£	£	£	£	£
31 March 2014 (unaudited)	16,080,988	72,052,733	803,571	(71,077,359)	(8,187,997)	9,671,936
Loss for the period	-	-	-	-	(3,113,329)	(3,113,329)
Shares issued as part of the consideration in a business combination	757,576	1,742,424	-	-	-	2,500,000
Shares issued as part of the capital raising	1,890,606	4,348,395	-	-	-	6,239,001
Cost of issue of Ordinary Share capital	-	(93,702)	-	-	-	(93,702)
Share-based payment  - Share options	-	-	-	-	224,918	224,918
30 September 2014 (unaudited)	18,729,170	78,049,850	803,571	(71,077,359)	(11,076,408)	15,428,824

Notes forming part of the consolidated financial statements

For the 6 months ended 30 September 2014

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 are unaudited to 6 months ended 30 September 2014. The comparative period, 6 months ended 30 September 2013 is extracted from the audited annual financial statements.

Basis of preparation

The financial information for the period ended 30 September 2014 does not constitute the full statutory accounts for that period. The comparative period, 6 months ended 30 September 2013 which has neither been audited nor reviewed by independent auditors, is extracted from the Annual Report and Financial Statements for 2013 filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2013 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 3 December 2014. 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 period ended 30 September 2013 and which will form the basis of the 2014 financial statements. A number of new and amended standards have become effective for periods beginning on 1 October 2013, however none of these are expected to materially affect the Group.

The consolidated financial statements are presented in sterling.

The risks and uncertainties and significant estimates and judgements faced by the Group have not changed significantly since the 2013 Annual Report was published and are not expected to change significantly during the remaining six months of the financial year.

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, being social gaming, real money gaming and marketing services. Each segment represents different brands, products and services provided. The social gaming segment operate the brands 5 Star Slot, AvaTingo and Sh*tHEAD and provide freemium gaming services to the US and Europe. The real money gaming segment operates the PocketFruity and Spin Genie brands in the UK. The marketing services segment represents the services provided to market the white label products. The marketing services segment also includes other online marketing services provided to other bingo and casino operators and other marketing services.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.

The Board evaluates performance on the basis of segment loss. This measurement basis excludes head office costs not derived from operations of any segment and are only disclosed in total.

Reportable segment information

The Group has reportable segments as follows:

§ Real money gaming

§ Social gaming

§ Marketing services

		For the 6 months ended 30 September 2014 (Unaudited)
	Social gaming		Real money gaming	Marketing services	Total
	£		£	£	£
Revenue	299,480		959,952	3,329,232	4,588,664
Marketing expenses	-		(561,185)	(3,014,329)	(3,575,514)
Operating expenses	(132,505)		(548,701)	-	(681,206)
Administration expenses - operating segments	(120,024)		(789,361)	(857,229)	(1,766,614)
Reportable segment loss	46,951		(939,295)	(542,326)	(1,434,670)

		For the 6 months ended 31 March 2014 (Unaudited)
	Social gaming		Real money gaming	Marketing services	Total
	£		£	£	£
Revenue	801,343		662,102	2,088,480	3,551,925
Marketing expenses	(607,058)		(417,152)	(4,123,049)	(5,147,259)
Operating expenses	(313,240)		(365,792)	(94)	(679,126)
Administration expenses - operating segments	(707,600)		(320,701)	(507,833)	(1,536,134)
Reportable segment loss	(826,555)		(441,543)	(2,542,496)	(3,810,594)

	For the 6 months ended 30 September 2013 (Unaudited)
	Social gaming	Real money gaming	Marketing services	Total
	£	£	£	£
Revenue	442,837	217,196	221,027	881,060
Marketing expenses	(520,177)	(123,021)	(1,070,079)	(1,713,277)
Operating expenses	(239,070)	(109,190)	-	(348,260)
Administration expenses - operating segments	(235,521)	(159,444)	(382,108)	(777,073)
Reportable segment loss	(551,931)	(174,459)	(1,231,160)	(1,957,550)

Reconciliation of reportable segments to Group totals:

	30 Sep 2014 Unaudited		31 Mar 2014 Unaudited		30 Sep 2013 Unaudited
	£		£		£
Total revenue from reportable segments, being total Group revenue	4,588,664		3,551,925		881,060

Total loss from reportable segments	(1,434,670)		(3,810,594)		(1,957,550)
Administration expenses - head office	(832,748)		(516,289)		(265,432)
Administration expenses - Listing and acquisition costs	(132,671)		(37,500)		(436,341)
Marketing expenses - head office	(27,538)		(22,892)		-
Amortisation of intangible assets	(473,228)		(419,022)		(150,367)
Depreciation of property, plant and equipment	(19,259)		(15,119)		(2,992)
Finance expense	(14,524)		(4,171)		(3,090)
Finance income	10,511		2,794		1,886
Share-based payments arising from reverse transaction	-		-		(431,392)
Share-based payments	(224,918)		(69,165)		(36,471)
Loss before tax	(3,149,045)		(4,891,958)		(3,281,749)

	As at 30 September 2014 (Unaudited)
	Social gaming	Real money gaming	Marketing services	Total
	£	£	£	£
Additions to non-current assets	-	267,356	3,082	270,438
Reportable segment assets	582,235	991,296	4,644,305	6,217,836
Head office assets				16,894,746
Total Group assets				23,112,582
Reportable segment liabilities	(116,534)	(698,919)	(1,393,199)	(2,208,652)
Head office liabilities				(5,475,106)
Total Group liabilities				(7,683,758)

	As at 31 March 2014 (Unaudited)
	Social gaming	Real money gaming	Marketing services	Total
	£	£	£	£
Additions to non-current assets	5,544	3,814	1,722	11,080
Reportable segment assets	861,052	332,964	2,261,263	3,455,279
Head office assets				8,462,495
Total Group assets				11,917,774
Reportable segment liabilities	(273,351)	(514,548)	(1,156,692)	(1,944,591)
Head office liabilities				(301,247)
Total Group liabilities				(2,245,838)
	As at 30 September 2013 (Unaudited)
	Social gaming	Real money gaming	Marketing services	Total
	£	£	£	£
Additions to non-current assets	794,880	120,169	116,048	1,031,097
Reportable segment assets	1,330,848	298,902	2,639,000	4,268,750
Head office assets				8,294,245
Total Group assets				12,562,995
Reportable segment liabilities	(702,107)	(427,128)	(323,144)	(1,452,379)
Head office liabilities				(482,456)
Total Group liabilities				(1,934,835)

Geographical information

The Group considers that its primary geographic regions are UK, including Channel Islands and Gibraltar, USA and the Rest of World. No revenue is derived from real money gaming in the USA. Revenues from customers outside the UK (including Channel Islands and Gibraltar) and USA are not considered sufficiently significant to warrant separate reporting. Marketing services revenues primarily relates to end users located in the UK and have been included in UK on that basis. All non-current assets are based in the UK.

The Group's performance can be reviewed by considering the geographical locations within which all assets in the Group operates. This information is outlined below:

		External revenue by location of customers		External revenue by location of customers		External revenue by location of customers
		30 Sep 2014		31 Mar 2014		30 Sep 2013
		£		£		£
UK, including Channel Islands and Gibraltar		4,302,698		2,697,712		455,650
USA		223,998		601,619		323,128
Rest of the World		61,968		252,594		102,282
		4,588,664		3,551,925		881,060

		Non-current assets by location of assets		Non-current assets by location of assets		Non-current assets by location of assets
		30 Sep 2014		31 Mar 2014		30 Sep 2013
		£		£		£
UK, including Channel Islands and Gibraltar		17,269,238		8,137,946		6,032,896
USA		-		-		-
Rest of the World		-		-		-
		17,269,238		8,137,946		6,032,896

 

 

3. Finance income and expense

	30 Sep 2014		31 Mar 2014		30 Sep 2013
Finance income	£		£		£
Interest received	10,511		2,794		1,886
Total finance income	10,511		2,794		1,886
Finance expense
Bank interest expense paid	4,082		4,171		3,090
Unwinding of discount on contingent consideration	10,442		-		-
Total finance expense	14,524		4,171		3,090

 

 

4. Tax expense

	30 Sep 2014		31 Mar 2014		30 Sep 2013
	£		£		£
Loss for the period	(3,149,045)		(4,891,958)		(3,281,749)
Expected tax at effective rate of corporation tax in the UK of 21% (31 Mar 2014: 23% and 2013: 23.5%)	(661,299)		(1,125,150)		(771,211)
Expenses not deductible for tax purposes	2,441		1,822		86,376
Depreciation in excess of capital allowances	4,044		3,496		709
Effects of overseas taxation	9,225		-		-
Origination and reversal of temporary differences	35,716		-		-
Tax losses carried forward	645,589		1,119,832		684,126
Total tax credit/(expense)	35,716		-		-

There are unused tax losses carried forward as at the balance sheet date of £21,161,282 (31 Mar 14: £18,053,558 and 30 Sep 2013: £13,184,724) equating to an unrecognised deferred tax asset of £4,443,869 (31 Mar 14: £4,152,318 and 2013: £3,098,410). No deferred tax asset has been recognised in respect of these losses, as the recoverability of any asset is dependent upon sufficient profits being achieved in future years to utilise this asset. The timings of such profits are uncertain.

5. Loss per share

	30 Sep 2014		31 Mar 2014		30 Sep 2013
	£		£		£
Loss after tax	(3,113,329)		(4,891,958)		(3,281,749)
			Number		Number
Weighted average number of Ordinary Shares used in calculating basic loss per share	187,324,640		155,081,243		36,434,501
Weighted average number of Ordinary Shares used in calculating dilutive loss per share	187,324,640		155,081,243		36,434,501
The weighted average number of ordinary shares in 2013 was calculated using an exchange ratio applied in the reverse take over
Basic and diluted loss per share (pence)	(1.66)		(3.15)		(9.01)

 

 

6. Intangible assets

	Goodwill	Customer database	Software	Development costs	Total
	£	£	£	£	£
Cost
Acquired through business combination	4,810,187	387,512	-	477,439	5,675,138
Additions	-	-	361,684	48,522	410,206
At 30 September 2013	4,810,187	387,512	361,684	525,961	6,085,344
Acquired through business combination	1,904,028	458,409	-	-	2,362,437
Additions	-	-	-	165,207	165,207
At 31 March 2014	6,714,215	845,921	361,684	691,168	8,612,988
Acquired through business combination (note 13)	6,829,690	2,343,632	-	-	9,173,322
Additions	-	-	-	248,288	248,288
At 30 September 2014	13,543,905	3,189,553	361,684	939,456	18,034,598
Amortisation
Amortisation charge	-	53,662	71,900	44,124	169,686
At 30 September 2013	-	53,662	71,900	44,124	169,686
Amortisation charge	-	218,284	60,280	140,458	419,022
At 31 March 2014	-	271,946	132,180	184,582	588,708
Amortisation charge	-	317,050	60,269	95,909	473,228
At 30 September 2014	-	588,996	192,449	280,491	1,061,936
Net book value
At 30 September 2013	4,810,187	333,850	289,784	481,837	5,915,658
At 31 March 2014	6,714,215	573,975	229,504	506,586	8,024,280
At 30 September 2014	13,543,905	2,600,557	169,235	658,965	16,972,662

7. Other assets

	30 Sep 2014		31 Mar 2014		30 Sep 2013
	£		£		£
Other assets
	121,500		55,598		57,598

Other assets represent the rental deposits on an operating leases.

8. Trade and other receivables

	30 Sep 2014		31 Mar 2014		30 Sep 2013
	£		£		£
Trade and other receivables	736,565		661,398		612,307
Prepayments and accrued income	1,308,334		1,273,440		732,469
	2,044,899		1,934,838		1,344,776

All amounts shown fall due for payment within one year

9. Cash and cash equivalents

	30 Sep 2014		31 Mar 2014		30 Sep 2013
	£		£		£
Cash and cash equivalents	3,778,877		1,825,422		5,063,470
Restricted cash	19,568		19,568		121,853
	3,798,445		1,844,990		5,185,323

Restricted cash of £19,568 (31 Mar 2014: £19,568 and 30 Sep 2013: £121,853) 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.

10. Trade and other payables

	30 Sep 2014		31 Mar 2014		30 Sep 2013
	£		£		£
Trade and other payables	1,164,849		1,226,074		574,582
Accruals	1,253,824		635,851		1,217,702
Player liabilities	340,719		265,690		98,047
	2,759,392		2,127,615		1,890,331

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

 

11. Loans and borrowings

	30 Sep 2014		31 Mar 2014		30 Sep 2013
	£		£		£
Current liabilities
Loans and borrowings	23,593		24,000		24,000
Non-current liabilities
Loans and borrowings	-		8,504		20,504

12. Share capital

Ordinary Shares

		30 Sep 2014		31 Mar 2014		30 Sep 2013
		£		£		£
187,291,694 (31 Mar 2014: 160,809,880 and 2013: 146,333,690) Ordinary Shares of 10 pence each		18,729,170		16,080,988		14,633,369

Movements in share capital

	Number		£
Bingo Realms Limited Ordinary Shares issued for cash consideration	1,000,000		100,000
At 31 March 2013	1,000,000		100,000
Bingo Realms Limited Ordinary Shares issued for cash consideration	1,237,500		123,750
Adjustments in respect of the reverse transaction	82,626,610		8,262,661
Ordinary Shares issued in the acquisition of Bejig Limited and AlchemyBet Limited	35,238,730		3,523,873
Ordinary Shares issued for cash consideration	26,230,850		2,623,085
At 30 September 2013	146,333,690		14,633,369
Ordinary Shares issued for cash consideration	14,476,190		1,447,619
At 31 March 2014	160,809,880		16,080,988
Ordinary Shares issued for cash consideration	18,906,063		1,890,606
Ordinary Shares issued in the acquisition Blueburra Holdings Limited	7,575,757		757,576
At 30 September 2014	187,291,700		18,729,170

On 5 September 2014, 18,148,487 shares were issued at £0.33 per share with a cost of £93,702 associated with the share issue. In addition 7,575,757 shares were issued at £0.33 per share as part of the acquisition of Blueburra Holdings Limited.

On 9 September 2014, 757,576 shares were issued at £0.33 per share.

Ordinary B Shares and Deferred Shares

Ordinary B Shares have a nominal value of 0.01 pence each ("B Shares") and Deferred Shares have a nominal value of 0.01 pence each ("Deferred Shares"). The B Shares and the Deferred Shares shall not entitle the holders of them to receive notice of, to attend, to speak or to vote at any general meeting (including Annual General Meetings) of the Company. At 30 September 2014 there were no B Shares or Deferred Shares in issue.

13. Business combination during the period

On 5 September 2014, the Group acquired 100% of the voting equity of Blueburra Holdings Limited. Digital Blue Limited, a wholly owned subsidiary of Blueburra Holdings Limited is an eGaming marketing specialist. The acquisition is expected to expedite the Group's marketing strategy in the UK by adding further reach and capability to its current affiliate marketing subsidiary, Quickthink Media and adding an enlarged database of players for cross promotion, as well as further white label brands, which will allow for greater Group cross marketing and consequently, monetisation. Details of the fair value of identifiable assets and liabilities acquired and purchase consideration and goodwill are as follows:

	Book value	Adjustment	Fair value
	£	£	£
Non-contractual customer lists and relationships	-	2,343,632	2,343,632
Property, plant and equipment	47,779	-	47,779
Trade and other receivables	330,022	-	330,022
Other assets	1,500	-	1,500
Cash	652,054	-	652,054
Trade and other payables	(364,349)	-	(364,349)
Total net assets	667,006	2,343,632	3,010,638

Fair value of consideration paid

	£
Cash consideration	2,500,000
Share consideration	2,500,000
Contingent consideration	4,840,328
Total consideration	9,840,328
Goodwill arising on acquisition (Note 6)	6,829,690

Contingent consideration at acquisition date	4,840,328
Unwinding of discount on contingent consideration	10,442
Contingent consideration at 30 September 2014	4,850,770

The Group has agreed to pay an additional consideration dependent on the achievement of performance targets in the periods post acquisition payable over a three year period. The consideration will be settled in cash and ordinary shares of Gaming Realms plc on their payment dates on achieving the relevant target. The Group has recognised £4,840,328 being the present value of contingent consideration having made a probability based assessment of the amount payable related to the additional consideration, which represents the fair value at acquisition date. Contingent consideration has been calculated based on the Group's expectation of what it will pay in relation to the post-acquisition performance of the acquired entities by weighting the probability of a range of payments to give an estimate of the final obligation.

Goodwill recognised in the acquisition of Blueburra Holdings Limited relates to the presence of certain intangible assets, which do not qualify for separate recognition.

14. Events after reporting date

On 2 December 2014, the original shareholders of Quickthink Media Limited have agreed to accept £825,000 cash in lieu of the 3,571,428 Ordinary Shares as payment of the deferred consideration, The deferred consideration is payable by the 10 December 2014.

 

END

 

 

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