Interim Results

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 £'000s	H1 2016 £'000s	Movement %
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 £15.7m (H1/16: £14.9m) 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 £4.0m (H1/16: £3.4m) of social gaming revenues in H1/17

·      Adjusted EBITDA loss reduced by 71% to £0.9m (H1/16: £3.1m), with Loss before Tax on continuing operations reducing by 30% to £4.1m (H1/17: £5.8m)

·      Continued execution in cost reductions, in particular marketing optimization on real money gaming, was 26% lower at £4.8m (H116: £6.5m), whilst revenues grew 5% to £10.7m (H1/16: £10.2m) and head count reduction of 28 staff through synergies in our social publishing for annualized costs saving of approximately £2.0m, 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

·      £1.1m 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 £15.7m (H1/16: £16.6m,) and a reduction of £2.2m in Adjusted EBITDA loss to £0.9m (H1/16: £3.1m). 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 £3.0m to £6.5m (H1/16: £9.5m).

Real money gaming

Our proprietary platform continues to be the focus of the Group's strategy with revenue growth of 5% to £10.7m (H1/16: £10.2m) 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 £4.0m (H1/16: £3.4m). 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 ended 30 Jun 17		6 months ended 30 Jun 16		12 months ended 31 Dec 16
		£		£		£
		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 17		30 Jun 16		31 Dec 16
		£		£		£
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 ended 30 Jun 17		6 months ended 30 Jun 16		12 months ended 31 Dec 16
		£		£		£
		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 Cash and cash equivalents at end of period	10	17,385 1,084,671		5,424 2,979,790		21,747 2,597,465

Consolidated statement of changes in equity

for the 6 months ended 30 June 2017

	Share capital	Share premium		Merger reserve		Foreign exchange reserve		Retained earnings		Total to equity holders of parent		Non-controlling interest		Total equity
	£	£		£		£		£		£		£		£
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 £78,747 in H1/16 and £273,695 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 Jun 17		6M 30 Jun 16		12M 31 Dec 16
	£		£		£
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 revenue by location of customers		External revenue by location of customers		External revenue by location of customers
	6M 30 Jun 17		6M 30 Jun 16		12M 31 Dec 16
	£		£		£
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 Jun 17		6M 30 Jun 16		12M 31 Dec 16
	£		£		£
Finance income
Interest received	1,513		2,954		3,022
Foreign exchange gain on deferred consideration	169,311		-		-
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 £169,311 (6M 30 Jun 2016: loss of £566,103, 12M 31 Dec 2016: loss of £849,092) charge in the current period.

4. Tax credit

	6M 30 Jun 17		6M 30 Jun 16		12M 31 Dec 16
	£		£		£
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 Jun 17		6M 30 Jun 16		12M 31 Dec 16
	£		£		£
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 of loss carried back	-		169,879		-
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 Jun 17		6M 30 Jun 16		12M 31 Dec 16
	£		£		£
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 database	Software	Development costs	Domain names	Intellectual property	Total
	£	£	£	£	£	£	£
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 17		30 Jun 16		31 Dec 16
	£		£		£
Available-for-sale investments
	540,000		540,000		540,000

8. Other assets

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

Other assets represent the rental deposits on operating leases.

9. Trade and other receivables

	30 Jun 17		30 Jun 16		31 Dec 16
	£		£		£
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 17		30 Jun 16		31 Dec 16
	£		£		£
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 £18,702 (30 Jun 2016: £19,568 and 31 Dec 2016: £18,802) 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 £1.500,000 and at 30 June 2017 was drawn down by £993,968 (30 Jun and 31 Dec 2016: nil).

11. Trade and other payables

	30 Jun 17		30 Jun 16		31 Dec 16
	£		£		£
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 17		30 Jun 16		31 Dec 16
		£		£		£
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		£
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 £1,132,500 by issuing 10,295,455 shares at £0.11 per share.

 

END

 

 

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