Information  X 
Enter a valid email address

tinyBuild, Inc. (TBLD)

  Print   

Wednesday 15 September, 2021

tinyBuild, Inc.

Half year results

RNS Number : 7865L
tinyBuild, Inc.
15 September 2021
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, TO OR FOR THE ACCOUNT OR BENEFIT OF US PERSONS, AS DEFINED IN REGULATION S PROMULGATED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "US SECURITIES ACT"), OR IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

 

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.  Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

 

15 September 2021

 

tinyBuild, Inc

 

("tinyBuild" or the "Company")

 

Half year results

 

tinyBuild (AIM:TBLD), a leading video games publisher and developer with global operations, is pleased to announce its unaudited results for the 6 months ended 30 June 2021.

 

Financial highlights:

Revenue of $18.6m (H1 2020: $18.5m), in line with expectations and reflecting a second-half weighted release schedule.

Adj EBITDA¹ growth of 18% to $7.9m (H1 2020: $6.7m), with margins increasing to 42% (H1 2020: 36%), as contribution to revenues from own-IP increased to 78% of group revenue (67% in H1 20), supporting long-term margin expansion.

Adj. Operating Profit² increased 94% to $5.1m (H1 2020: $2.6m), reflecting lower share-based payments

Adj. Cash Flow from Operations² was $3.8m, lower than the previous year (H1 2020: $6.9m) due to timing differences in payments to developers and tax payments

Net cash increased to $61.6m (Dec 2020: $26.3m), including $50m gross proceeds following the successful listing on AIM

1 Excludes expenses related to the IPO, share based compensation expenses; includes amortisation of Development costs

2 Excludes expenses related to the IPO

 

Operational highlights:

Three new games published including first-party titles Cartel Tycoon (early access), Mayhem in a Single Valley and Hello Engineer (early access), growing tinyBuild's portfolio to over 40 games, in addition to platform launches (Secret Neighbor on PS4 and iOS).

Strong back catalogue sales representing 91% of total revenues, demonstrating the Company's ability to extend games' life cycles, while adding new titles.

Three development studio acquihires We're Five Games (Totally Reliable Delivery Service), Hungry Couch (Black Skylands) and DogHelm (Streets of Rogue).

Successful admission to AIM, raising £36.2m ($50m) of gross proceeds, to accelerate organic growth and support our M&A strategy.

Henrique Olifiers was appointed as Non-Executive Chairman, with Nick Van Dyk and Neil Catto appointed as Non-Executive Directors.

 

Post-Period End

Acquihire of BadPixel, the studio behind successful shooter Deadside, currently in early access, for a total consideration of up to $17.1m (see separate announcement).

Acquihire of Animal (Rawmen) announced in August 2021, for a total consideration of up to $10.2m.

Released Black Skylands (early access), plus release dates announced for Potion Crafts (early access), Despot's Game (early access) and Happy's Humber Burger Farm.

Secured a new credit facility of $25m (expiry September 2022) with Bank of America.

 

 

Outlook

The pipeline for coming years now stands at 29 titles, including near launch games such as Potion Craft, Despot's Game and Happy's Humble Burger Farm.

While tinyBuild reviews the impact of the pandemic, and the fluid macroeconomic situation, early indicators of traction across the pipeline, including KPIs for Hello Neighbor 2, are very encouraging.

The Board remains confident the Company is on track to deliver results at least in line with expectations, plus accretive acquisitions.

 

Alex Nichiporchik, Chief Executive Officer of tinyBuild, commented:

"We are really excited about tinyBuild's progress this year, with major titles in our pipeline showing strong KPIs ahead of launch. This includes new titles such as Tinykin and the widely anticipated Hello Neighbor 2.

 

"Our successful listing on AIM earlier this year and the additional expected $25m facility announced today, provide a platform from which we can deliver our organic and M&A growth ambitions. Our back catalogue has performed strongly, and we remain focused on finding new games at different stages of development. We are  evaluating a number of M&A targets to help accelerate growth.

 

"Our goal is to expand our position as a leading global developer and publisher, focusing on IP ownership while creating long-term scalable franchises across multiple media formats. To date, 2021 has seen significant progress towards that ambition, and we look to the future with confidence."

 

 

Enquiries :

tinyBuild, Inc

Alex Nichiporchik - Chief Executive Officer

Luke Burtis - Chief Operating Officer

Antonio Jose Assenza - Chief Financial Officer

Giasone (Jaz) Salati - Head of M&A and IR

[email protected]

 



Zeus Capital (Nominated Adviser and Joint Broker)

Nick Cowles, Richard Kauffer (Corporate Finance)

Benjamin Robertson (Equity Capital Markets)

+44 (0)20 3829 5000



Berenberg (Joint Broker)

Ben Wright, Mark Whitmore, Alix Mecklenburg-Solodkoff, Milo Bonser

+44 (0)20 3207 7800

SEC Newgate (Financial PR)

Robin Tozer, Bob Huxford, Megan Kovach

[email protected]

+44 (0)7540 106366

 

 

About tinyBuild:

Founded in 2013, tinyBuild (AIM: TBLD) is a leading premium AA-rated and indie video games publisher and developer. tinyBuild strategically secures access to IP and partners with developers to establish a stable platform on which to build multi-game and multimedia franchises. tinyBuild has a strong portfolio of over 40 titles, and its upcoming pipeline includes over 20 new titles currently in development.

 

Headquartered in Seattle, Washington, USA, the Company has key operations worldwide, with employees, contractors or partners in multiple locations across five continents. tinyBuild's geographic diversity enables it to source high-potential IP, cost-effective development resources and a loyal customer base through innovative grassroots marketing.

 

tinyBuild was admitted to AIM, a market operated by the London Stock Exchange, in March 2021.

 

For further information, visit: www.tinybuildinvestors.com .

 



 

OPERATIONAL REVIEW

 

2021 has seen the progressive lifting of Covid restrictions across a number of countries. In contrast with general expectations that video games sales would be negatively impacted by the lifting of restrictions, the Board is pleased to confirm that catalogue titles are performing strongly, alongside new game launches. Sales are progressing at least in line with expectations for the financial year 2021.

 

tinyBuild continues to benefit from platform competition and is also well-positioned to work with subscription services. Revenues from deals with distribution partners were above management expectations and gave the Company greater visibility of future revenue growth, while helping de-risk the development process for new games.

 

As anticipated, the release schedule for 2021 is weighted towards the second half of the year (e.g. Potion Craft and Despot's Game). As a result, back catalogue contribution to total revenue in the first six months of the year increased to 91%. The share of revenues from own-IP also increased to 78% in H1 2021.

 

Current portfolio and pipeline

Since the beginning of the year, tinyBuild published four new games (including Black Skylands in July) and added new platforms for two games already in the portfolio:

Cartel Tycoon (early access) - a survival business sim inspired by the eighties narco trade. Expand and conquer, fight off rival cartels and evade the authorities

Mayhem in Single Valley (PC only) - a puzzle-loaded action adventure where you have to prevent the end of the world while keeping everyone from finding out it was all your fault

Hello Engineer (early access on Stadia) - a multiplayer machinery-building construction game set in the sandbox world of a mysterious amusement park, but beware of the Neighbor

Black Skylands (early access) - a skypunk Open World action-adventure. Build your skyship and explore the open world, fight factions of pirates and monsters, and claim territories.

Totally Reliable Delivery Service (Steam) - a ragdoll physics simulation about terrible package delivery couriers

Secret Neighbor (PS4, iOS and Switch) - a Multiplayer Social Suspense Game where a group of intruders try to rescue their friend from the Neighbor's creepy basement

 

We have recently announced, or we are close to announcing a release date for:

Potion Craft (early access on Steam) - an alchemist simulator that was the number one trending game in the February Steam Game Festival

Despot's Game (early access on Steam) - a rogue-like game with turbocharged battles and a top 10 trending game in the February Steam Game Festival

Happy's Humble Burger Farm (Steam and consoles) - a first person adventure horror cooking game, a sequel to the award-winning burger simulation

Trash Sailors (Steam and consoles) - a hand-drawn sailing simulator with co-op up to 4 players. Create the trashiest sailing team in history, fight with monsters and trash

Undungeon - an Action/RPG game driven by intense real-time combat and an immensely rich science fiction story.

 

Finally, we announced three new titles:

Tinykin - an innovative 3D puzzle platformer where astronaut Milo uses hundreds of tinykin and their unique powers to go back to his home planet - and back to normal size.

SpiderHeck - a physics-based brawler that's easy to pick up but difficult to master. Duel to the death or choose to team up and hold back swarms of savage enemies.

BookWalker - a thief with an ability to dive into books is forced to use his powers to track and steal the likes of Thor's Hammer and the Excalibur to save his brother.

 

tinyBuild had 23 games in the pipeline at the end of 2020. So far, in 2021, the Company has signed an additional ten new games, increasing the total number of new games under development to 29, after accounting for the four new titles already launched in 2021. Five of these new games will be developed in Eastern Europe and Russia, four in the United States and one in New Zealand.

 

Acquisitions

Since the beginning of the year, we have made five acquisitions. We acquihired two studios in January and February 2021: We're Five Games, the Minneapolis developer of Totally Reliable Delivery Service and the Russia based developer of Black Skylands year, Hungry Couch.

 

In June, we acquihired DogHelm, the studio behind Streets of Rogue, the highest-rated title in tinyBuild's portfolio according to Steam users. In August, we announced the acquihire of Animal, following a two-year partnership to develop a new game, Rawmen.

 

Today, we are pleased to announce the acquihire of Bad Pixel, the development studio behind the very popular open world game Deadside. Bad Pixel is based in Russia with five developers currently.

 

People

As part of its effort to secure talent at a competitive cost, the Company continued to hire staff (both employees and independent contractors) in strategic geographies.

 

tinyBuild aims to offer employees the best working conditions in the industry. For example, the Company has implemented clear policies against crunching, the industry practice by which developers overwork to meet specific targets. In June, tinyBuild also gifted one extra week of holiday to all direct employees in a gesture of appreciation for everybody's hard work.

 

As a result, tinyBuild enjoys one of the lowest levels of staff turnover, low single-digit, compared to an estimated 15.5% across the industry ( Wired ).

 

Position and strategy

tinyBuild is well-positioned with a strong pipeline of new titles and a proven ability to attract, screen and market high-quality game franchises. Our low-risk M&A strategy continues to help us increase our IP portfolio, and our multimedia franchise model allows us to extend the life of our IP, maximising our return on investment.

 

Our medium-term strategy is to expand our position as a leading global video games developer and publisher, focussing on IP ownership while creating long-term scalable franchises across multiple media formats. 2021 has seen significant progress towards that ambition, and I would like to thank all of our shareholders for their support.

 

Alex Nichiporchik

Chief Executive Officer

15 September 2021

 

 

FINANCIAL REVIEW

 

On 9 March 2021, tinyBuild raised $50m (£36.2m) in gross proceeds, which is being used to accelerate organic growth and support the M&A strategy. Adjusted EBITDA for the six months ended June 2021 was marginally ahead of expectations, and the Company closed three acquihires in the period.

 

Revenue

In the six months to June 2021, tinyBuild revenues were $18.6m, slightly ahead of the previous year (H1 2020: $18.5m), reflecting a release schedule skewed towards the second half and the success of  Totally Reliable Delivery Service, which was first released on 1 April 2020. Back catalogue performed strongly in the first half, with new platform launches of Secret Neighbor driving revenues across the wider Hello Neighbor franchise. Revenue from events, primarily DevGAMM, fell slightly as a result of the global pandemic.

 

Adjusted EBITDA and Operating Profit

Adjusted EBITDA is presented net of amortisation of development costs, excluding share-based compensation expenses and exceptional costs (e.g. IPO), giving a clear picture of the business progression. Adjusted EBITDA grew 18% to $7.9m in H1 of 2021, with margin expanding to 42% (H1 2020: 36%) as a result of higher share of revenues from own-IP (78% in H1 2021 vs 67% in H1 2020) and back catalogue (91% in H1 2021).

 

Operating profit for H1 2021 was $0.7m (H1 2020: $2.6m). Excluding the $4.4m one-off IPO costs, Adjusted Operating Profit increased over 90% to $5.1m due to higher margins and lower charges relating to share-based compensation ($2.2m in H1 2021 vs $3.6m in H1 2020).

 

Interest income and taxation

Interest income was immaterial in H12021, and taxation charges were $1.0m, lower than $1.6m in H1 2020 due to timing differences that will reverse in the second half of the year.

 

 

Exceptional Costs Relating to the AIM Listing

In H1 2021, tinyBuild incurred one-off costs ($4.4m) related to the IPO on the London Stock Exchange's AIM market, including expenses related to audit and legal fees ($3m).

 

Financial Position

In H1 of 2021, the net cash position increased from $26.3m, as of December 2020, to $61.6m, with the majority of the increase being driven by the AIM float, where tinyBuild raised $50m in gross proceeds.

 

Cash Flow

Adjusted cash flows from operating activities decreased from $6.9m to $3.8m in H1 2021, (-$0.6m including exceptional costs relating to the IPO) mainly due to timing of payments to developers and tax, which will reverse in the second half of the year. Software development costs, mainly consisting of developer salaries, advances, localisation and porting, increased from $2.4m to $5.6m, reflecting the increase in investment for upcoming pipeline releases.

 

Events after the reporting date

In August 2021, tinyBuild announced the acquihire of Animal, for a total consideration up to a max of $10.2 million, split approximately 30%-70% between cash and newly issued tinyBuild shares, including upfront and deferred payments over the next three financial years.

 

In September 2021, we announced the acquihire of Bad Pixel, the development studio behind the very popular open-world game Deadside, for a total consideration of up to $17.1m, including upfront and deferred payments over the next three financial years. The deal will be marginally accretive in 2021, a year of investments, with greater potential for return in the following years (please see separate press release published today).

 

tinyBuild secured a new credit facility of $25m (expiry September 2022) on favourable terms with Bank of America. The new credit facility has been designed to expand tinyBuild's financial capacity in the event of larger M&A deals while having minimal impact on P&L and cash flow if not used.

 

Antonio Jose Assenza

Chief Financial Officer

15 September 2021


TINYBUILD INC. 

 

CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME

 

 

 

 

Note

6 months ended 30 June 2021

 

6 months ended 30 June 2020

 

Year ended 31 December 2020



Unaudited

Audited

Audited



$'000

$'000

$'000


 

 

 

 

Revenue

4  

18,626

  18,510

  37,648

Cost of sales

 

 (5,449)

  (8,635)

(15,120)


 

 

 

 

Gross profit

 

13,177

  9,875

22,528


 


 


Administrative expenses:

 


 


 - General administrative expenses

 

 (5,920)

 (3,690)

 (8,714)

 - Share-based payment expenses


 (2,159)

 (3,561)

 (5,845)

 - IPO transaction costs

5

 (4,409)

 -

 (467)



 

 

 

Total administrative expenses


 (12,488)

 (7,251)

 (15,026)

 





Other operating income


-

162



 

 

 

Operating profit


689

2,624

7,664

 





Finance costs


 (9)

 (11)

 (21)

Finance income


4

55

57

 


 

 

 

Profit before tax


684

2,668

7,700

 





Income tax expense 


 (981)

 (1,599)

 (2,752)

 

 

 

 

 

(Loss)/profit and total comprehensive income for the year

 

 

 (297)

 

  1,069

 

  4,948


 

 

 

 


 


 


Attributable to:



 


Owners of the parent company


 (225)

1,063

4,942

Non-controlling interests


 (72)

6

6



 

 

 



 (297)

1,069

4,948



 

 

 




 

 

Earnings per share ($)

6

 (0.001)

0.006

0.028

Diluted earnings per share ($)

6

 (0.001)

0.006

0.027

Adjusted EBITDA

7

7,905

6,705

15,275

 



 

TINYBUILD INC. 

 

CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION

 

 



30 June 2021

31 December 2020



Unaudited

Audited

ASSETS

Note

$'000

$'000

Non-current assets




Intangible assets

8

  21,933

  15,141

Property, plant and equipment:




  - owned assets


  87

  87

  - right-of-use assets


  573

  673

Trade and other receivables


  16

  16



 

 

Total non-current assets


  22,609

  15,917

 

Current assets




Trade and other receivables


7,926

  4,999

Cash and cash equivalents


61,642

  26,313



 

 

Total current assets


69,568

  31,312



 

 

TOTAL ASSETS


92,177

  47,229



 

 

EQUITY AND LIABILITIES

Equity




Share capital

10

  202

  1

Share premium


  60,877

  18,674

Warrant reserve


  1,920

-

Retained earnings


  21,853

  19,919



 

 

Equity attributable to owners of the parent company


  84,852

  38,594

Non-controlling interest


  90

  162



 

 

Total equity


  84,942

  38,756



 

 

LIABILITIES




Non-current liabilities




Trade and other payables


  50

  -

Lease liabilities


  356

  442

Deferred tax liabilities


  1,663

  1,663



 

 

Total non-current liabilities


  2,069

  2,105



 

 

Current liabilities




Borrowings


  - 

  13

Trade and other payables


3,355

  3,496

Contract liabilities


1,625

2,675

Lease liabilities


186

  184



 

 

Total current liabilities


5,166

  6,368



 

 

Total liabilities


7,235

  8,473



 

 

TOTAL EQUITY AND LIABILITIES


92,177

  47,229



 

 

 



 

TINYBUILD INC. 

 

CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY

 

 


Note

Share capital

Share premium

Warrant reserve

Retained

earnings

Total equity attributable to owners of the parent

Non-controlling interest

Total

 equity



 $'000

 $'000

 $'000

$'000

$'000

$'000

$'000










Balance at 1 January 2020


1

18,674

-

9,132

27,807 

156

27,963










Profit and total comprehensive income for the period


 

 

 

  1,063

  1,063

  6

  1,069










Transactions with owners in their capacity as owners:









Share-based payments


3,561

3,561

  - 

3,561



 

 

 

 

 

 

 

Total transactions with owners


3,561

3,561

  - 

3,561



 

 

 

 

 

 

 

Balance at 30 June 2020


1

18,674

-

13,756

32,431 

162

32,593



 

 

 

 

 

 

 





















Share capital

Share premium

Warrant reserve

Retained

earnings

Total equity attributable to owners of the parent

Non-controlling interest

Total

 equity



 $'000

 $'000

 $'000

$'000

$'000

$'000

$'000










Balance at 1 January 2021


1

18,674

-

19,919

38,594

162

38,756










Loss and total comprehensive expense for the year


 

 

 

  (225)

  (225)

  (72)

  (297)










Transactions with owners in their capacity as owners:









Share split

10

178

 (178)

Issue of shares, net of transaction costs

10

  22

  44,147

  - 

  - 

  44,169

  - 

  44,169

Issue of shares on exercise of options

 

10

  1

  154

  - 

  - 

  155

  - 

  155

Issue of warrants

10

 (1,920)

1,920

Share-based payments


2,159

2,159

2,159



 

 

 

 

 

 

 

Total transactions with owners


201

42,203

1,920

2,159

46,483

46,483



 

 

 

 

 

 

 

Balance at 30 June 2021


202

60,877

1,920

21,853

84,852

90

84,942



 

 

 

 

 

 

 










 



 

TINYBUILD INC. 

 

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

 

 



6 months ended 30 June 2021

6 months ended 30 June 2020

Year ended 31 December 2020



Unaudited

Audited

Audited


Note

$'000

$'000

$'000

Cash flows from operating activities





Cash generated from operations

11

 (566)

  6,883

16,470



 

 

 

Net cash generated by operating activities


 (566)

  6,883

16,470



 

 

 

Cash flows from investing activities





Software development


 (5,636)

 (2,443)

 (6,549)

Purchase of intellectual property


 (2,089)

 (180)

 (570)

Purchase of property, plant and equipment


 (5)

 (24)



 

 

 

Net cash used in investing activities


 (7,725)

 (2,628)

 (7,143)



 

 

 

Cash flows from financing activities





Proceeds from borrowings


175

175

Repayment of borrowings


 (13)

-

-

Proceeds from issuance of ordinary shares, net of issuance costs


43,570

  - 

  - 

Proceeds on exercise of share options


154

-

-

Payment of principal portion of lease liabilities


 (91)

 (107)

 (198)



 

 

 

Net cash generated by/(used in) financing activities


 

43,620

 

 68

 

 (23)



 

 

 






Cash and cash equivalents





Net increase in the year


35,329

4,323

9,304

At beginning of period


26,313

17,009

17,009



 

 

 

At end of period


61,642

21,332

26,313



 

 

 






 

 

Non-cash investing activities

The Group purchased the intellectual property rights to four video games, for consideration which included non-cash consideration of $599,000 (see note 8).

 

During the period, the Group granted 1,511,448 warrants to subscribe for ordinary shares (see note 10) These warrants had a fair value at grant date of $1,919,540.

TINYBUILD INC. 

 

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021

 

 

1  GENERAL INFORMATION

 

 

TinyBuild Inc. ("the Company") is a public company limited by shares, and is registered, domiciled and incorporated in Delaware, USA. The address of the registered office is 127 Bellevue Way SE, Suite 200, Bellevue, WA 98004, United States. On 9 March 2021, the Company's shares were listed on the Alternative Investment Market of the London Stock Exchange ("AIM").

 

The Group ("the Group") consists of TinyBuild Inc. and all of its subsidiaries. The Group's principal activity is that of an indie video game publisher and developer.

 

The board of Directors approved this interim financial information on 15 September 2021.

 

2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

These condensed, consolidated financial statements for the interim half-year reporting period ended 30 June 2021 have been prepared in accordance with IAS 34 'Interim Financial Reporting'. These interim financial statements do not constitute full financial statements and do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 31 December 2020.

 

The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The Annual Report and Financial Statements for 2020 have been issued and are available on the Group's investor relations' website: https://www.tinybuildinvestors.com/documents-and-presentations.

 

The Group has applied the same accounting policies and methods of computation in its interim consolidated

financial statements as in its 31 December 2020 annual financial statements, except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 January 2021 and will be adopted in the 2021 financial statements. There are deemed to be no new and amended standards and/or interpretations that will apply for the first time in the next annual financial statements that are expected to have a material impact on the Group.

 

Tax charged within the 6 months ended 30 June 2021 has been calculated by applying the effective rate of tax which is expected to apply to the Group for the year ending 31 December 2021 as required by IAS 34 'Interim Financial Reporting'.

 

The financial statements have been prepared on the historical cost basis except for, where disclosed in the accounting policies, certain financial instruments that are measured at fair value. The financial statements are prepared in US Dollars, which is the functional currency and presentational currency of the Company and all entities within the Group. Monetary amounts in these financial statements are rounded to the nearest thousand US Dollars (US$'000).

 

SEGMENTAL REPORTING

 

IFRS 8 Operating Segments requires that operating segments be identified on the basis of internal reporting and decision-making. The Group identifies operating segments based on internal management reporting that is regularly reported to and reviewed by the Board of directors, which is identified as the chief operating decision maker. Management information is reported as one operating segment, being revenue from self-published franchises and other revenue streams such as royalties, licensing, development and events.

 

Whilst the chief operating decision maker considers there to be only one segment, the Company's portfolio of games is split between those based on IP owned by the Group and IP owned by a third party and hence to aid the readers understanding of our results, the split of revenue from these two categories is shown below.

TINYBUILD INC. 

 

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)

 

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021

 

 

SEGMENTAL REPORTING (CONTINUED)

 

Game and merchandise royalties

6 months ended 30 June 2021

6 months ended 30 June 2020

Year ended 31 December 2020


Unaudited

Audited

Audited


$'000

$'000

$'000





Owned IP

14,100

12,242

24,683

Third-party IP

4,050

4,874

9,239


 

 _ 

 _ 


18,150

17,116

33,922


 

 

 

 

Five customers were responsible for approximately 80% of the Group's revenues (30 June 2020: four - 73%, 31 December 2020: five - 81%).

 

The Group has one right-of-use asset located overseas with a carrying value of $39,881 (30 June 2020: $58,287, 31 December 2020: $49,084). All other non-current assets are located in the US.

 

REVENUE

6 months ended 30 June 2021

6 months ended 30 June 2020

Year ended 31 December 2020


Unaudited

Audited

Audited

An analysis of the Group's revenue is as follows: 

$'000

$'000

$'000





Revenue analysed by class of business




Game and merchandise royalties

18,150

17,116

33,922

Development services

224

980

2,917

Events

252

414

809


 

 

 


18,626

18,510

37,648


 

 

 





 

 

IPO TRANSACTION COSTS

6 months ended 30 June 2021

6 months ended 30 June 2020

Year ended 31 December 2020


Unaudited

Audited

Audited


$'000

$'000

$'000





IPO related costs

4,409

-

467


 

 

 

 

IPO transaction costs in the 6 months ended 30 June 2021 relate to significant one-off costs, which have not been deducted from equity, associated with the Group's admission onto AIM in March 2021. The costs comprise advisors' fees, stock exchange listing fees and other IPO costs. Costs totalling $8,593,000 incurred in association with the IPO which met IAS 32 definition of transaction costs (being incremental and directly related to the issuance of new equity instruments and which would have been avoided had the instruments not been issued) have been deducted from share premium.

 

 

 

TINYBUILD INC. 

 

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)

 

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021

 

 

EARNINGS PER SHARE

 






The Group reports basic and diluted earnings per common share. Basic earnings per share is calculated by dividing the profit attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period.

 

Diluted earnings per share is determined by adjusting the profit attributable to common shareholders by the weighted average number of common shares outstanding, taking into account the effects of all potential dilutive common shares, including options.

 


6 months ended 30 June 2021

6 months ended 30 June 2020

Year ended

31 December 2020


Unaudited

Audited

Audited


$'000

$'000

$'000

Total comprehensive (loss)/income attributable to the owners of the company

 

(225)

 

1,063

 

4,942

Weighted average number of shares

192,047,223

179,602,538

179,602,538


 

 

 

Basic earnings per share ($)

(0.001)

0.006

0.028


 

 

 

 


6 months ended 30 June 2021

6 months ended 30 June 2020

Year ended

31 December 2020


Unaudited

Audited

Audited


$'000

$'000

$'000

Total comprehensive income attributable to the owners of the company

  (225)

 

  1,063

 

  4,942

Weighted average number of shares

192,047,223

179,602,538

179,602,538

Dilutive effect of share options

-

2,393,223

2,739,413


 

 

 

Weighted average number of diluted shares

192,047,223

181,995,761

182,341,950


 

 

 

Diluted earnings per share ($)

(0.001)

0.006

0.027


 

 

 

 

Pursuant to IAS 33, options whose exercise price is higher than the value of the Company's security were not taken into account in determining the effect of dilutive instruments. The calculation of diluted earnings per share does not assume conversion, exercise, or other issue of potential ordinary shares that would have an antidilutive effect on earnings per share.

 

The earnings per share disclosed for the 6 months ended 30 June 2020 and year ended 31 December 2020 have been adjusted for the stock split occurring in 2021 (see note 10).

 

ADJUSTED EBITDA

 

The Directors of the Group have presented the performance measure adjusted EBITDA as they monitor this performance measure at a consolidated level and they believe this measure is relevant to an understanding of the Group's financial performance. Adjusted EBITDA is calculated by adjusting profit from continuing operations to exclude the impact of taxation, net finance costs, share-based payment expenses, depreciation, amortisation of purchased intellectual property and IPO transaction costs. Adjusted EBITDA is not a defined performance measure in IFRS. The Group's definition of adjusted EBITDA may not be comparable with similarly titled performance measures and disclosures by other entities.

 

TINYBUILD INC. 

 

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)

 

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021

 

 

ADJUSTED EBITDA (CONTINUED)

 

6 months ended

30 June 2021

6 months ended

30 June 2020

Year ended

31 December 2020


Unaudited

Audited

Audited


$'000

$'000

$'000





(Loss)/profit for the period

(297)

1,069

4,948

Income tax expense

981

1,599

2,752

Finance costs

9

11

21

Finance income

(4)

(55)

(57)

Share-based payment expenses

2,159

3,561

5,845

Amortisation of purchased intellectual property

547

402

1,222

Depreciation of property, plant and equipment

101

118

239

IPO transaction costs

4,409

-

467

Other operating income

  - 

 -

 (162)


 

 

 

Adjusted EBITDA

7,905

6,705

15,275


 

 

 

 

8  INTANGIBLE ASSETS

 

Purchased intellectual property

Software development costs

Total


$'000

$'000

Cost:




As at 1 January 2020

10,578

16,178

Additions - internally generated

  - 

  6,549

6,549

Additions - separately acquired

570

  - 

  570


 

 

 

As at 31 December 2020

  6,170

  17,127

23,297

Additions - internally generated

  - 

  5,636

5,636

Additions - separately acquired

2,688

  - 

2,688

Transfers

645

 (645)

  - 


 

 

 

As at 30 June 2021

  9,503

  22,118

31,621


 

 




Amortisation and impairment:



As at 1 January 2020

  2,568

2,835

Amortisation charge for the year

819

  4,502

5,321


 

 

 

As at 31 December 2020

  1,086

  7,070

8,156

Amortisation charge for the period

547

  985

1,532


 

 

 

As at 30 June 2021

  1,633

  8,055

9,688


 

 




Carrying amount:



As at 30 June 2021

  7,870

  14,063

21,933


 

 

As at 31 December 2020

  5,084

  10,057

15,141


 

 

 

During the period, the Group purchased the intellectual property rights to four video games for total consideration of $3,333,000, including non-cash consideration of $599,000 and transfers from software development costs of $645,000. Amortisation of purchased intellectual property is recognised within general administrative expense in the Statement of Comprehensive Income. Amortisation of software development costs is recognised within cost of sales in the Statement of Comprehensive Income.

 

TINYBUILD INC. 

 

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)

 

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021

 

 

9  SHARE-BASED PAYMENTS

 

The Group operates two share-based plans, the Equity Incentive Plan and a Stock Restriction Agreement, which are detailed as follows:

 

The Stock Restriction Agreement is a plan that provides for grants of Restricted Stock Awards (RSA) for the founders of the company. The awarded shares are made in the Company's ordinary share capital. The fair value of the RSAs is estimated by using the Black-Scholes valuation model on the date of grant, based on certain assumptions, and is charged on a straight-line basis over the required service period, normally two to three years. The fair value of the 2017 grant is $8.98 per share and the 2019 grant is $40.21 per share. The RSAs vest in instalments every three months over the service period. Each instalment has been treated as a separate share option grant because each instalment has a different vesting period. This plan is equity-settled. The plan was fully settled upon admission to trading. A reconciliation of RSAs is as follows:

 






 

30 June 2021

31 December

2020








Opening RSA outstanding





191,220

367,730

RSA granted





-

-

RSA vested





(191,220)

(176,510)






 

 

Closing RSA outstanding





-

191,220






 

 








Weighted average remaining contractual life in years





-

1.08

 

The company has an Equity Incentive Plan that provides for the issuance of non-qualified stock options to officers and other employees that have a contracted term of 10 years and generally vest over four years. The stock options are granted on shares issued by the company. A reconciliation of share option movements is shown below:

 


Number of options outstanding

 

Weighted average exercise price ($)

Number of options exercisable

Weighted average exercise price ($)

Weighted average remaining contractual life (years)

At 31 December 2020

21,100

42.41

11,815

13.33

8.08

Adjust for stock split (see note 10)

 

2,718,246

 

0.33




Granted during the period

692,756

1.59




Exercised during the period

(489,836)

0.07





 

 




At 30 June 2021

2,942,266

0.58

1,845,436

0.17

7.99


 

 

 

 

 

 

During the period covered by the financial statements, no options expired or were forfeited. Options granted during the year were valued using the Black-Scholes option-pricing model. The fair value per option granted during the period covered by the financial statements and the assumptions used in the calculation are as follows:

 

 

 

 

TINYBUILD INC. 

 

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)

 

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021

 

 

9  SHARE-BASED PAYMENTS (CONTINUED)

 


Grant date


3

February

2021

25 November

2020

15 October 2020

 

17 April

2020

Share price at grant date

$1.59

$1.59

$1.06

$0.33

Exercise price

$1.59

$1.59

$1.06

$0.33

Option life

6.25

6.25

6.25

6.25

Expected volatility

60.00%

60.00%

60.00%

60.00%

Expected dividends

0.00%

0.00%

0.00%

0.00%

Discount rate

0.25%

0.25%

0.25%

0.25%

Weighted average fair value per option

$0.66

$0.66

$0.44

$0.14

 

Expected volatility is estimated based on the historic volatility (based on the expected term) and the historical volatility of comparable public peers over the same period. The 2020 grants have been adjusted to reflect the impact of the stock split (see note 10).

 

10  SHARE CAPITAL



30 June 2021

31 December 2020




Unaudited

Audited




Number

Number

Class of share





Ordinary shares of $0.001 each



201,744,118

1,059,052

Series Seed preferred shares of $0.001 each



-

125,755

Series A preferred shares of $0.001 each



-

198,560




 

 









30 June 2021

31 December 2020




Unaudited

Audited




$

$

Class of share





Ordinary shares of $0.001 each



201,744

 1,059

Series Seed preferred shares of $0.001 each



 -

126

Series A preferred shares of $0.001 each



-

199




 

 




201,744

1,384




 

 

 

On 26 February 2021, 324,315 preferred shares were converted into 324,315 ordinary shares. The Company then completed a stock split pursuant to which 1,383,367 ordinary shares of $0.001 each were split into 179,597,639 shares of $0.001 each.

 

On 9 March 2021, the Company's shares were listed on the Alternative Investment Market of the London Stock Exchange ("AIM"). A total of 21,438,985 new ordinary shares were issued in the placing at the placing price of 169 pence per share. Share premium, net of transaction costs, totalling $44,147,000 has been recognised on the transaction.

 

During the period, 692,756 share options were issued to employees and contractors at an exercise price of $1.59 per share.

 

During the period, 489,836 share options were exercised at an exercise price of $0.07 per share. Share premium totalling $34,000 has been recognised on the transaction.

 

TINYBUILD INC. 

 

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)

 

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021

 

 

10  SHARE CAPITAL (CONTINUED)

 

During the period, 51,454 shares were issued to the Non-Executive Chairman at the placing price of 169 pence per share. Share premium totalling $120,000 has been recognised on the transaction.

 

During the period, 166,204 shares were issued as partial consideration for the acquisition of intellectual property (see note 8).

 

On 3 March 2021, the Company granted Zeus Capital 1,511,448 warrants to subscribe for ordinary shares. Each warrant confers the right, exercisable only if the share price exceeds 253 pence per share, to subscribe in cash for one ordinary share at the placing price of 169 pence per share. The warrants are only exercisable during the period from 9 September 2022 to 9 March 2031. The fair value of this warrant instrument has been calculated using a lattice model, giving a total fair value of $1,919,540. This amount has been recognised within the warrant reserve with a corresponding decrease in the share premium account.

 

 

11  CASH GENERATED FROM OPERATIONS


6 months ended

30 June 2021

6 months ended

30 June 2020

Year ended

31 December 2020



Unaudited

Audited

Audited



$'000

$'000

$'000






(Loss)/profit for the year


 (297)

1,069

4,948

Adjustments for:





Share-based payments


2,159

3,561

5,845

Amortisation of intangible assets


1,532

2,580

5,321

Depreciation of tangible fixed assets


101

118

239

Foreign exchange (gains)/losses


 (2)

-

5

Finance costs


9

11

21






Movements in working capital:





(Increase)/decrease in receivables


 (2,927)

 (1,251)

 (1,299)

Increase/(decrease) in payables


 (1,141)

(55)

511

Increase/(decrease) in deferred tax liability


  - 

850

879



 

 

 

Cash (used in)/generated from operations


 (566)

6,883

16,470



 

 

 

 



 

12  RELATED PARTY TRANSACTIONS

 

An analysis of key management personnel remuneration is set out below:

 

Key management personnel remuneration

6 months ended

30 June 2021

6 months ended

30 June 2020

Year ended

31 December 2020


Unaudited

Audited

Audited


$'000

$'000

$'000





Aggregate emoluments

758

410

1,552

Equity-settled share-based payments

2,001

5,789

5,801


 

 

 


2,759 

  6,199

7,353


 

 

 

TINYBUILD INC. 

 

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)

 

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021

 

 

12  RELATED PARTY TRANSACTIONS (CONTINUED)

 

Transactions with other related parties

The wife of the Company's CEO is a member and manager of DevGAMM LLC and pursuant to an agreement tied to her continued service to DevGAMM LLC, her membership interest in the company increased from 40% to 51% during the six month period ended 30 June 2021. The results of DevGamm LLC are included in the consolidation on the basis of control.

 

There were no other related party transactions during the period which require disclosure.

 

13  SUBSEQUENT EVENTS

 

In August tinyBuild announced the acquihire of Animal, for a total consideration up to a max of $10.2 million, split approximately 30%-70% between cash and newly issued tinyBuild shares, including upfront and deferred payments over the next three financial years. 

 

In September we announced the acquihire of Bad Pixel, the development studio behind the very popular open world game Deadside, for a total consideration of up to $17.1m, including upfront and deferred payments over the next three financial years.

 

tinyBuild secured a new credit facility of $25m (expiry September 2022) on favorable terms with Bank of America. The new credit facility has been designed to expand tinyBuild's financial capacity in the event of larger M&A deals, while having minimal impact on P&L and cash flow if not used.

 

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 [email protected] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR DKQBDBBKBKCD

a d v e r t i s e m e n t