REG - YOLO Leisure & Tech - Final Results <Origin Href="QuoteRef">YOLO.L</Origin> - Part 1
RNS Number : 2166AYOLO Leisure & Technology PLC22 March 2017YOLO Leisure and Technology plc
("YOLO" or the "Company")
Final Results for the year ended 30 September 2016
YOLO (AIM:YOLO), the AIM listed company investing in leisure and technology, today announces its audited final results for the year ended 30 September 2016.
The audited Report and Accounts for the year ended 30 September 2016 is being sent to shareholders today and will also be available on the Company's website: www.yoloplc.com. Shareholders are also being sent a notice of AGM to be held at Third Floor, New Liverpool House, 15 Eldon Street, London, EC2M 7LD at 11.00 a.m. on 20 April 2017.
For further information please contact:
YOLO Leisure and Technology plc
Simon Lee Robinson
Simon.robinson@yoloplc.com
Cairn Financial Advisers LLP (Nominated Advisor)
Sandy Jamieson, Emma Earl
Tel: +44 20 7213 0880
Peterhouse Corporate Finance Limited (Sole broker)
Eran Zucker / Lucy Williams
Tel: + 44 20 7469 0930
Walbrook PR Ltd
Tel: +44 20 7933 8787 or yolo@walbrookpr.com
Paul McManus
Mob: +44 7980 541 893
Sam Allen
Mob: +44 7884 664 686
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present our Annual Report for YOLO Leisure & Technology plc ("YOLO" or the "Company"), covering the financial year ended 30 September 2016. During this year we have continued to fulfil our strategy with the four companies we are now invested into, with TVPlayer Ltd and Simplestream Ltd having split to become separate and accountable entities.
Each of the businesses are pioneering innovators in their sectors with strong content and technology platforms with the capability to scale and create value for customers and shareholders.
Financial Review
During the year the Company completed a placing of 40,000,000 shares raising gross funds of 600,000 for further investment and working capital.
Simplestream Limited and TVPlayer Limited
The Company made its first investment of 550,000 into Simplestream Ltd on 28 January 2015, for 5.1% of the company. This was followed up this year on the 29 of January 2016 when the Company made a further investment of 257,384 through convertible loan notes ("Loan Notes") bearing an interest of 8% which were repayable on or before 16 July 2018.
On the 18 August 2016, Simplestream Ltd demerged its B2C business TVPlayer Ltd, creating two separate limited companies with focussed strategies and accountable management. As a result of the conversion and a further direct investment round led by A&E Television Network LLC ("A&E" - 50% owned by Disney and Hearst Media) into TVPlayer YOLO had a holding of 6.78% in Simplestream and 4.66% in TVPlayer.
YOLO's investment has been into two innovative TV technology platforms, namely Simplestream and TVPlayer, both of which are undergoing growth in a market where user behaviour is transforming the way content is distributed and consumed. These types of services, which deliver television content over the internet, are called Over The Top ("OTT") services. Such is the demand for watching television online, OTT services are forecast to grow to $54 billion by 2029 (source: Markets & Markets - OTT Market Report 2014-2019), with over $1 billion forecast to be generated each year in the UK. The growth of OTT viewing is fueled by the continued growth of smartphone, tablet and so called "streaming stick" sales.
Simplestreamisa leading and profitable B2B provider of videoservices including live streaming, automated catch-up and live-to-Video On Demand("VOD") solutions through its proprietary Media Manager platform. Simplestream provides broadcasters and rights owners with a Technology Services Ecosystem with a full range of multi-platform TV and video distribution including;live streaming, real-time highlights clipping, catch-up, social syndication andsubscription management services.
Simplestream's technology platform provides formulti-channel and multi-territory content delivery for premium live-streaming, catch-up andautomated live-to-VOD into mobiles, tablets, and a large variety of other media platforms such as Amazon Fire,AppleTV, SmartTV's, YouView,Freesat, Freeview, and other connected devices.
TVPlayer is a leading next generation B2C Over-The-Top ("OTT")TV platform with 2.8 million downloads and up to 1 million regular monthly active users. TVPlayer critically is a fully-licensed platform having enteredinto multi-year content licensing agreements with the leadingfree-to-air and subscription television broadcasters.Itstreams 60 free to air and 24 Plus channels of the UK's most popularTV channels to desktop, mobiles, tablet, Apple TV, Amazon Fire TV, Samsung Smart TVand various set-top-boxes.
TVPlayer generates revenue through two businessmodels; firstly an ad-supported free to air TVPlayer service andsecondlya paid subscription service with TVPlayer Plus, offeringpremium channels in the UK without a contract, providing24 additional premiumchannels for a monthly fee of 5.99 with additional up sell services.
A+E Television Networks LLC, a $20 billion mass media global media JV company between Disney and Hearst Media, sees great opportunities for the business. Both TV Player and Simplestream businesses are wellpositioned to capitalise on the growth and user opportunities within the UK and International markets.
GFinity Plc
YOLO holds a total of 2,143,023 shares in GFinity Plc ("GFinity") which, as at 31 August 2016, represented 1.36% of the company (source: GFinity plc website, shares in issue),
GFinity is an end-to-end eSports (also known as competitive gaming) solution, founded in 2012. GFinity has quickly established itself as one of the world's leading eSports companies, capable of providing an end-to-end solution and with a strong reputation for quality across publishers, players and eSports fans. It stages elite tournaments for the top players in the world, producing industry leading broadcasts and providing on-line competitions and content to engage the eSports community.
In the year to 30 June 2016, GFinity continued to invest in the business in line with its stated strategy to build its reputation with game publishers, prospective sponsors and the wider eSports community to cement its position as a leader within the eSports industry. This has been achieved through the development of both physical assets, such as the eSports Arena in the UK, and digital assets to host and stream eSports competitions online. Collectively these assets, together with the expertise of the GFinity team, mean that the Company is uniquely positioned to provide an end-to-end eSports solution both to game publishers and other partners looking to access the growing audience of eSports enthusiasts.
The growth reflects widening acknowledgement of GFinity's capability, across a broad range of games and platforms. Events during the year have been staged across PC, console and mobile devices. Clients, meanwhile, have included game publishers, platform providers, brands from within the industry and also increasingly consumer brands looking for a way to reach the core eSports audience of young affluent males, who they find it increasingly difficult to reach via other channels.
As a sector, eSports continues to go from strength to strength. Leading industry analysts NewZoo report that the eSports audience has now risen to over 250 million globally. Major events are already filling arenas and attracting audiences that dwarf many conventional sports. A recent report by Newzooforecasts that the eSports market will grow at a compound annual growth rate of 42% to over US$1.1bn by 2019. eSports Fans typically watch 41.8 hours of eSports content per month, which compares to a total of 23 hours per month for football, and major brands are starting to engage. GFinity's Management continues to believe it has significant potential to grow rapidly over this time frame and believes that its strategy of continued investment in the capability and reputation of the business are the correct route to deliver long-term value to the shareholders.
The year to 30 June 2016 was one in which GFinity continued to deliver on its strategic objective to develop its operational capability and to build its reputation with the eSports audience and key partners within the industry. Revenue for the financial year increased significantly from 0.56m to 1.45m as activity at the Company's eSports arena increased and the Company signed contracts with a number of leading video game publishers and eSports sponsors such as Microsoft, Gillette and FutHead.com.
Following the year-end, GFinity also successfully completed a placing to raise a further 3.7m, positioning the company in a strong cash position to accelerate its drive towards its strategic goals.
In 2016, GFinity staged 30 international events, achieved 480,000 registered users, 58.5 million views, 4.2 million sessions, 200,000 games played and 8.15 million Twitter impressions per month. GFinity has strong potential for monetising commercial rights attached to broadcasts and events, with access to a wide range of ancillary revenue streams such as sponsorship, advertising, broadcast rights, pay per view, data, 3rd party events and promotions, Pay to Play, Ticketing, Betting, Fantasy and an Xbox App (Build Your Own Tournament).
AudioBoom Plc
YOLO holds 3,500,000 shares in AudioBoom Plc ("AudioBoom"), equating to 0.65% of the issued share capital.
AudioBoom is the leading spoken-word audio platform for hosting, distributing and monetising content that enables the creation, broadcast and syndication of audio content across multiple networks and geographies. AudioBoom works with its partners to monetise their audio via live in-reads, the dynamic insertion of pre and post roll audio adverts and video ads. The platform enables partners to deliver their content to millions of listeners worldwide via embedded (in websites) players, mobile applications, Facebook and Twitter integrations.
At 31 May 2016, the number of content channels was 8,115, an increase of over 55% on 12 months earlier (2015: 5,237). This improvement reflected not only the addition of new content partners but also the scale of those partners, with many establishing multiple channels for different genres and geographic regions.
Listens are the number of times users consume AudioBoom hosted content via embeddable content players on third party websites or apps. The number of listens is a key metric for the business, as it is the sole driver of advertising revenue. Total listens in the period under review was 222 million - an increase of 80% on the same period last year (H1 2015: 123 million). Total lifetime listens of AudioBoom content achieved since inception have now exceeded one billion.
The geographical split on listens is currently circa 70% USA, 11% UK, 5% Australia and 14% Rest of the World, reflecting the global appeal and the spread of content hosted.
AudioBoom has made further tangible progress in H1 2016, growing revenue, securing significant new content partners and further broadening its geographic distribution. The momentum from H1 has continued into H2, which has started well, with the business securing significant advanced bookings for advertising revenue. Fill rates and CPMs (cost per thousand listens that advertisers pay) are expected to improve further in all the major territories and content verticals over the next few months and beyond. There have also been multiple technological upgrades to the AudioBoom platform scheduled for H2 2016, which should create increasingly large volumes of monetisable ad impressions.
Placing of shares
On 20 January 2016 the Company placed 40,000,000 shares at 1.5p and raised 600,000 before costs. As part of the placing the Company also issued 10,000,000 warrants to subscribe for new ordinary shares in the Company at 1.8p per share. The funds were used for investment and working capital.
Investment Strategy
Our vision is to be a successful and profitable investment company focussing on technology, travel leisure and media businesses. We will achieve this by identifying early stage or turnaround opportunities that require investment and/ or have potential for a reverse takeover. We will invest into businesses with content and delivery capability that engage customers, monetise the user experience and have potential to scale.
The Company's Investing Policy is that the Company will invest in businesses which have some or all of the following characteristics:
strong management with a proven track record;
ready for investment without the need for material re-structuring by the Company;
generating positive cash flows or imminently likely to do so;
via an injection of new finances or specialist management, the Company can enhance the prospects and therefore the future value of the investment;
able to benefit from the Directors' existing network of contacts; and
the potential to deliver significant returns for the Company.
The Company will focus on opportunities in the technology, travel and leisure sectors.
Whilst the Directors will be principally focused on making an investment in private businesses, they would not rule out investment in listed businesses if this presents, in their judgment, the best opportunity for Shareholders.
The Company intends to be an active investor in situations where the Company can make a clear contribution to the progress and development of the investment. In respect of other, more substantial investment opportunities, the Directors expect that the Company will be more of a passive investor.
The Directors believe that their broad collective experience together with their extensive network of contacts will assist them in the identification, evaluation and funding of appropriate investment opportunities. When necessary, other external professionals will be engaged to assist in the due diligence on prospective targets and their management teams. The Directors will also consider appointing additional Directors with relevant experience if required.
There will be no limit on the number of projects into which the Company may invest, and the Company's financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover pursuant to Rule 14 of the AIM Rules. Where the Company builds a portfolio of related assets it is possible that there may be cross-holdings between such assets. The Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate.
The Company's primary objective is that of securing for the Shareholders the best possible value consistent with achieving, over time, both capital growth and income for Shareholders through developing profitability coupled with dividend payments on a sustainable basis.
Outlook
We will continue to pursue and evaluate opportunities that meet our investment criteria. In parallel to this we remain positive in the prospects of each of our four current investment partners and recognise that Management are continuing to execute their strategic plan to monetise and engage their content and users and build on the impressive foundations that have been laid.
Post Year End Placing of shares
On 7 November 2016, the Company completed a placing of 254,000,000 shares at a price of 1.0p raising total gross funds of 2,540,000. A further 8,400,000 fee shares were issued at a price of 1.0p.
Also on the same date 9,800,000 director warrants at exercise price of 1.3p were awarded to Simon Robinson.
Further investments post the financial 15/16 year end
On 5 November 2016, the Company completed an investment in Magic Media Works Ltd ("Magic Media Works") by investing 1.4m through a convertible loan note in Magic Media Works ("Loan Notes"). The Loan Notes bear interest at a rate of 10% per annum from 1 March 2017 and are repayable on or before 31 December 2018. The Loan Notes are secured by a first ranking debenture over the assets of Magic Media Works and are convertible into approximately 41.2% of the ordinary share capital of Magic Media Works on a fully diluted basis.
Magic Media Works has developed a number of subscription-free music streaming products and services which allow users to access ad-free music content without the requirement for account registration, passwords, software downloads or pairing of third party streaming devices.
Magic Media Works has entered into licensing agreements with the world's major record labels, including Universal Music Group, Sony Music Group and Warner Music Group and majorindependents includingMerlin Music and also the major music publishers, allowing users to access millions of albums and over 29 million music tracks ad-free. Streamed music content is accessed via the Electric Jukebox product, a proprietary streaming device developed by Magic Media Works.
With a potential addressable consumer market of some 800 million users worldwide (Source IFPI), Magic Media Works is currently the world's only dedicated music streaming developer of consumer music streaming players and services that provide on-demand ad-free access to a wide ranging music catalogue without the need for either a user account, application download or a monthly subscription.
Magic Media Works has signed up a number of celebrities to assist in marketing Electric Jukebox, including Robbie Williams and his wife Ayda Field, Stephen Fry, Sheryl Crow, Alesha Dixon and Alexander Armstrong, all of whom have equity interests in the business.
Magic Media Works has successfully launched its first product, Electric Jukebox, in the UK in late November. The business is currently developing its next version of Electric Jukebox and evaluating international expansion into the USA and Europe.
Further to the demerger and investment by A&E in August 2016, TVPlayer completed an investment expansion round for working capital on 28 February 2017 which was led by A&E. YOLO made a further investment of 85,424 in TVPlayer to ensure the Company maintained its existing holding.
The Board has evaluated a number of potential investments during the year and continues to look at opportunities in the technology, travel, leisure and media sectors and will only make investments in those projects that the Board believes will create value for shareholders.
I would like to thank our shareholders and advisors for continuing to show support in the Board and its vision.
Simon Robinson
Chairman
Date: 21 March 2017
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2016
2016
2015
Notes
Revenue
-
-
Cost of sales
-
-
------------------
------------------
Gross profit
-
Other income
2
14,000
9,333
Administrative expenses
(274,595)
(287,651)
Unrealised (losses)/gains on remeasurement to fair value
(372,758)
33,041
------------------
-------------------
OPERATING LOSS BEFORE FINANCING ACTIVITIES
(633,353)
(245,277)
Finance income
3
11,823
357
------------------
------------------
LOSS ON ORDINARY ACTIVITIES BEFORE TAX
4
(621,530)
(244,920)
Tax charge
7
-
-
------------------
------------------
LOSS ON ORDINARY ACTIVITIES AFTER TAX
(621,530)
(244,920)
------------------
------------------
LOSS FOR THE YEAR ATTRIBUTABLE TO EQUITY
SHAREHOLDERS
(621,530)
(244,920)
------------------
------------------
TOTAL COMPREHENSIVE EXPENSES ATTRIBUTABLE TO:
Equity holders of the company
(621,530)
(244,920)
-------------------
------------------
Loss per share (pence per share)
Basic
8
(0.37)p
(0.19)p
=========
=========
Diluted
(0.37)p
(0.19)p
=========
=========
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 SEPTEMBER 2016
2016
2015
Notes
ASSETS
Non-current assets
Investments
9
1,127,262
1,230,846
--------------------
--------------------
1,127,262
1,230,846
--------------------
--------------------
Current assets
Trade and other receivables
10
17,214
16,549
Cash and cash equivalents
139,412
41,901
--------------------
--------------------
156,626
58,450
--------------------
--------------------
TOTAL ASSETS
1,283,888
1,289,296
==========
==========
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables
11
77,016
38,864
--------------------
--------------------
Total liabilities
77,016
38,864
--------------------
--------------------
Equity
Share capital
12
2,582,954
2,182,954
Share premium account
7,617,273
7,439,303
Retained earnings
(8,993,355)
(8,371,825)
---------------------
---------------------
Total equity attributable to equity
shareholders of the parent
1,206,872
1,250,432
---------------------
---------------------
TOTAL EQUITY AND LIABILITIES
1,283,888
1,289,296
==========
==========
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2016
Share
Share
Premium
Retained
capital
Account
Earnings
Total
At 1 October 2014
1,813,675
7,197,319
(8,126,905)
884,089
Total comprehensive
expense for the year
-
-
(244,920)
(244,920)
Transactions with owners
Shares issued
369,279
270,784
-
640,063
Cost of new issue
-
(28,800)
-
(28,800)
-----------------
------------------
--------------------
------------------
At 1 October 2015
2,182,954
7,439,303
(8,371,825)
1,250,432
Total comprehensive
expenses for the year
(621,530)
(621,530)
Transactions with owners
Shares issued
400,000
200,000
600,000
Cost of new issue
(22,030)
(22,030)
-----------------
------------------
--------------------
------------------
At 30 September 2016
2,582,954
7,617,273
(8,993,355)
1,206,872
=========
==========
===========
=========
Share capital
Represents the par value of shares in issue.
Share premium
Represents amounts subscribed for share capital in excess of its nominal value, net of directly attributable issue costs.
Retained earnings
Represents accumulated losses to date.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
2016
2015
Operating activities
Loss for the year
(621,530)
(244,920)
Adjustments for:
Decrease/(Increase) in trade and other receivables
(665)
(8,952)
Decrease in trade and other payables
38,152
3,055
Net finance income
(11,823)
(357)
Unrealised losses/(gains) on remeasurement to fair value
372,758
(33,041)
-------------------
-------------------
Net cash used in activities
(223,108)
(284,215)
-------------------
------------------
Investing activities
Payments to acquire investments
(269,174)
(1,197,805)
Interest received
11,823
357
-------------------
---------------------
Net cash (used in)
(257,351)
(1,197,448)
-------------------
--------------------
Financing activities
Net proceeds from issue of shares
577,970
611,263
------------------
------------------
Net cash generated from financing activities
577,970
611,263
-------------------
---------------------
Taxation
-
-
Net increase/(decrease) in cash and cash equivalents
97,511
(870,400)
Cash and cash equivalents at the start of the year
41,901
912,301
------------------
-------------------
Cash and cash equivalents at the end of the year
139,412
41,901
------------------
-------------------
Cash and cash equivalents consists of:
Cash and cash equivalents
139,412
41,901
=========
==========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2016
1.ACCOUNTING POLICIES
1.1Basis of preparation
The financial statements have been prepared in accordance with EU endorsed International Accounting Standards and International Financial Reporting Standards (collectively "IFRS") and the requirements of the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements are presented in sterling and have been prepared on the historical cost basis, except where IFRS requires an alternative treatment. The principal variations from historical cost relate to financial instruments (IAS 39).
The Company is a public listed company, quoted on AIM and is incorporated and domiciled in the UK.
Adoption of international accounting standards
Standards adopted early by the Company
Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for later accounting periods and which have not been adopted early. There were no new standards, amendments or interpretations that are expected to have a material impact on the Company.
1.2Going Concern
The Company had net assets of 1,206,872 as at 30 September 2016 (2015 net assets of 1,250,432) and generated a loss before tax of 621,530 (2015 loss before tax: 244,920 ) in the reporting period.
The Directors have prepared a cash flow forecast for the 12 months to 31 March 2018. Having considered all known costs, the Board is of the opinion that there are sufficient funds available to continue as a going concern for the foreseeable future. The Board is also planning to raise additional funds to continue to carry out its investment strategy as opportunities arise.
In light of this and after taking into account all information that could reasonably be expected to be available, the Directors are confident that the Company will remain in operational existence for the foreseeable future and that the going concern basis of preparation is appropriate to the Company's financial statements.
1.3Revenue
Revenue is recognised when revenue and associated costs can be measured reliably and future economic benefits are probable. Revenue is measured at fair value of consideration received or receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.
1.4Interest income
Interest income is accrued on a time apportioned basis, by reference to the principal outstanding and at the effective interest rate applicable.
1.5Deferred taxation
The tax expense represents the sum of the current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and further excludes items that are never taxable or deductible. The Company's liability to current tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference arises from goodwill or if the initial liabilities in a transaction that affect either the taxable profit or the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
1.6Financial instruments
Financial assets and financial liabilities are recognised on the balance sheet when the Company has become a party to the contractual provisions of the instrument.
Investments
Equity investments are initially recognised at cost, being the consideration paid. All investments are classified at fair value through profit or loss and measured at fair value with changes in their fair value recognised in the Statement of Comprehensive Income in the year in which they arise. In respect of unquoted investments (Level 3) fair value is determined by reference to a variety of valuation techniques. In respect of quoted or listed investments (Level 1) the value is based on the closing mid-market price recorded by the relevant market.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short term deposits with maturities of three months or less. Bank overdrafts also form part of net cash and cash equivalents for the purposes of the cash flow statement.
Trade and other receivables
Trade and other non-interest bearing receivables are initially recognised at cost and are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective and probable evidence that it is uncertain if the amount due can be collected. Movement in the provision charged or credited in the period is recognized in the income statement.
The Company discounts some of its trade receivables. The accounting policy is to continue to recognize the trade receivables within current assets and to record cash advances as borrowings within current liabilities. Discounting fees are charged to the income statement as finance costs.
Trade and other payables
Trade and other payables are not interest bearing and are initially recognized at cost and are subsequently measured at amortised cost using the effective interest method.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
1.7Share based payments
The Company issues equity-settled and cash-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date of equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of the number of instruments that will eventually vest with a corresponding adjustment to equity. Fair value is measured by use of a Black Scholes model. The expected life use in the model has been adjusted based on management's best estimated, for the effect of non-transferability, exercise restrictions, and behavioral considerations.
Non-vesting and market vesting conditions are taken into account when estimating the fair value of the option at grant date. Service and non-market vesting conditions are taken into account by adjusting the number of options expected to vest at each reporting date.
1.8 Standards in issue but not yet effective
New standards and interpretations currently in issue but not effective, based on EU mandatory effective dates, for accounting periods commencing on or after 1st October 2016 are:
- IFRS 9 Financial Instruments (EU effective date 1st January 2018)
- IFRS 15 Revenues from Contracts with Customers (EU effective date 1st January 2018)
- IFRS 16 Leases (EU effective date 1st January 2019)
- Amendments to IAS 7 Statement of Cashflows (effective for accounting periods beginning on or after 1st January 2017)
- Amendments to IAS 16 Property, Plant and Equipment (effective for accounting periods beginning on or after 1st January 2016)
- Amendments to IAS 34 Interim Financial Reporting (effective for accounting periods on or after 1st January 2016)
- Amendments to IAS 38 Intangible Assets (effective for accounting periods beginning on or after 1st January 2016)
The Company is in the process of assessing the impact of these new standards and interpretations on its financial reporting.
1.9Critical accounting judgements and key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience, internal controls, advice from external experts and other factors, including expectations of future events that are believed to be reasonable under circumstances.
2.
OTHER INCOME
2016
2015
Management fees
14,000
9,333
=========
=========
3.
FINANCE INCOME
2016
2015
Bank and other interest received
11,823
357
=======
=======
4.
LOSS FOR THE YEAR BEFORE TAX
2016
2015
Loss for the year is stated after charging:
Auditors' remuneration
- audit services
10,750
10,730
- non-audit services
1,000
1,500
=========
==========
5.
DIRECTORS' EMOLUMENTS
2016
2015
Aggregate emoluments including benefits in kind, by director,
are as follows:-
Simon Robinson
50,000
37,000
Sohail Bhatti
54,988
38,581
----------------
----------------
Aggregate emoluments
104,988
75,581
========
========
No director benefitted from any increase in the value of warrants during the year. No director exercised share warrants in the year.
The number of Directors for whom retirement benefits are accruing under defined contribution schemes was Nil (2015: Nil). The total contributions payable during the year amounted to Nil (2015: Nil).
No new warrants were awarded to Directors during the year. Warrants held at the end of the year are detailed below
2016
2015
Number
Number
Simon Robinson - exercise price 1.3p, expires 15 July 2017
4,461,538
4,461,538
- exercise price 1.8, expires 31 July 2017
400,000
-
Sohail Bhatti (exercise price 1.3p, expires 15 July 2017)
1,500,000
1,500,000
- exercise price 1.8, expires 31 July 2017
166,666
-
---------------------
---------------------
6,528,204
5,961,538
===========
==========
Warrants acquired by the directors during the year were acquired as part of a placing that took place on 20 January 2016.
Post year end Simon Robinson took part in the placing in November 2016 and acquired further 800,000 warrants and was awarded a further 9,000,000 warrants with an exercise price of 1.3p and expiring on 31 October 2019.
6.
STAFF COSTS
2016
2015
Number
Number
The average monthly number of employees (including Directors)
during the year was
Administration
2
2
========
========
Employment costs
Wages and salaries
100,000
74,000
Social security costs
9,107
2,661
----------------
----------------
109,107
76,661
========
=========
7.
TAXATION
2016
2015
7(a)
Current year tax
UK corporation tax (note 7(b))
-
-
=======
========
7(b)
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation
(621,530)
(244,920)
-----------------
-----------------
Loss on ordinary activities before taxation multiplied by the main
rate of UK corporation tax 20% (2015: 20%)
(124,360)
(48,984)
-----------------
------------------
Effects of:
Non deductible expenses
74,552
-
Non taxable income
-
Accelerated capital allowances
-
Other timing differences
-
Utilisation of tax losses
-
Carried forward management expenses
48,754
48,984
-----------------
------------------
Current tax charge
-
-
=========
========
8.LOSS PER SHARE
The calculations of loss per share are based on the following losses and number of shares.
2016
2015
Basic
Diluted
Basic
Diluted
Loss for the financial year
(621,530)
(621,530)
(244,920)
(244,920)
------------------------
----------------------
------------------------
----------------------
Weighted average number of shares for basic and
diluted loss per share
166,226,947
166,226,947
126,908,817
126,908,817
===========
===========
===========
==========
9.
INVESTMENTS
Level 1
Level 3
Total
Held at fair value
At 1 October 2015
673,346
557,500
1,230,846
Additions during the year
-
269,174
269,174
Revaluation
(372,758)
-
(372,758)
----------------------
----------------------
------------------------
At 30 September 2016
300,588
826,674
1,127,262
----------------------
----------------------
-----------------------
Net book value
At 30 September 2016
300,588
826,674
1,127,262
===========
===========
===========
At 30 September 2015
673,346
557,500
1,230,846
===========
===========
===========
Investments are measured at fair value. The directors consider that the carrying amount of investments approximates to their fair value.
Level 1 reflects financial instruments quoted in an active market.
All unquoted investments are level 3 in the fair value hierarchy, being financial instruments whose fair value is determined in whole or in part using valuation techniques based on assumptions that are not supported by prices from observable market transactions in the same instrument and not based on available observable market data.
The Company acquired the following investments during the year:
Simplestream Limited
On 29 January 2016, the Company invested 257,384 as convertible loan note into Simplestream. On 15 August the Loan Note and the accumulated interest were converted at a value of 269,174 and resulting in a holding in Simplestream of 6.78%. Immediately after conversion the Simplestream demerged its subsidiary, TVPlayer and following further fund raise by TVplayer in which the company did not take part the holding in TVplayer at the end of the year was 4.66%.
10.
TRADE AND OTHER RECEIVABLES
2016
2015
Trade receivables
8,400
4,200
Prepayments and accrued income
8,814
3,163
Other receivables
-
9,186
-----------------
-----------------
17,214
16,549
========
========
The Directors consider the carrying value of trade receivables to equal their fair value. No interest is charged on receivables.
11.
TRADE AND OTHER PAYABLES
2016
2015
Other taxes and social security costs
8,123
4,705
Accruals and deferred income
68,893
34,159
---------------
---------------
77,016
38,864
========
========
The Directors consider the carrying value of trade payables to equal their fair value.
12.
SHARE CAPITAL
2016
2015
Issued and fully paid
As at 1 October 2015
2,182,954
1,813,675
Issue of 40,000,000 (2015: 36,927,903) Ordinary shares of 1p each
400,000
369,279
-----------------------
-----------------------
At 30 September 2016
2,582,954
2,182,954
===========
===========
The Company has the following classes of share capital
Ordinary shares 178,922,758 (2015: 138,922,758) shares of 1p each)
1,789,228
1,389,228
Deferred shares (8,819,181 shares of 9p each)
793,726
793,726
----------------------
----------------------
2,582,954
2,182,954
===========
===========
Share transaction history
During the 2016 financial year the following share transactions took place.
Quantity of
1p shares
Value
22 January 2016 Placing
37,733,334
377,333
10 February 2016 Placing
2,266,666
22,667
The Ordinary shares have full voting rights, priority dividend rights and priority in the case of winding up.
The Deferred shares have no voting rights and shareholders are not entitled to any dividend, and only receive the nominal amount paid up on their share after there has been a distributed 1,000,000 to the holders of the Ordinary shares. The Deferred shares shall not entitle the holders thereof to any further or other right of participation in the assets of the Company.
Warrants
During the year warrants were granted as follows:
Type Exercise price Expiry date Number
Placing warrants 1.8p 31 July 2017 10,000,000
Warrant Number
Exercise price pence
Expiry Date
As At 1 October 2015
20,973,048
1.3p
15/07/2017
3,059,846
1.3p
15/07/2019
8,000,000
1.8p
27/01/2018
-------------------------
32,032,894
Granted during the year
10,000,000
1.8p
31/07/2017
-------------------------
42,032,894
-------------------------
As At 30 September 2016
20,973,048
1.3p
15/07/2017
3,059,846
1.3p
15/07/2019
8,000,000
1.8p
27/01/2018
10,000,000
1.8p
31/07/2017
------------------------
42,032,894
============
13. FINANCIAL INSTRUMENTS
The Company's financial instruments comprise cash and various items such as trade receivables and trade payables that arise directly from its operations.
Categories of fair values of financial assets and liabilities
Set up below is a comparison by category of the carrying amounts and fair values of the Company's financial instruments:
2016
2015
Financial assets
Cash and cash equivalents
139,412
41,901
Trade receivables
8,400
4,200
Other receivables
-
3,500
--------------
--------------
Total financial assets
147,812
49,601
Non-financial assets
Prepayments and accrued income
8,814
3,163
Other receivables
-
5,686
---------------
---------------
TOTAL ASSETS
156,626
58,450
========
=========
Financial liabilities
Financial liabilities measured at amortised cost:
Accruals
68,892
34,159
---------------
---------------
68,892
34,159
Non-financial liabilities
Other payables
8,124
4,705
---------------
---------------
TOTAL LIABILITIES
77,016
38,864
========
=========
The fair value of the Company's financial assets and liabilities are not materially different from their carrying values in the statement of financial position, as such no fair value hierarchy analysis has been produced.
It is and has been throughout the period under review, the Company's policy that no trading in financial derivatives shall be undertaken.
The main risks arising from the Company's financial instruments are interest rate movements, liquidity risk, and credit risk. The Directors do not consider there to be significant exposure to market or price risk.
Interest rate risk
It is the Company's policy to regularly review the Company's exposure to interest rate risk.
Financial assets
The Company's exposure to interest rate risk currently applies only to the interest received on cash deposits which is based on the NatWest base rate. The Company's floating rate cash balances at the year end were 115,391 (2015: 35,357).
Liquidity risk
The principal risk to which the Company is exposed is liquidity risk. The nature of the Company's activities means it finances its operations through retained earnings and the issue of new shares to investors. The principal cash requirements are in relation to the Company's investing policy and meeting working capital requirements. The Company seeks to manage liquidity through planning, forecasting, and careful cash management.
Credit risk
The Company carries out credit checks on potential customers and monitors and chases debts that are overdue to mitigate their credit risk.
Capital management
The Company's main objective when managing capital is to protect returns to shareholders by ensuring the Company will continue to invest and trade profitably in the foreseeable future. The Company also aims to maximise its capital structure of equity so as to minimise its cost of capital. The Company expects its current and projected capital resources to be sufficient to cover its existing liabilities.
The Company has not made any changes to its capital management during the year.
14.ULTIMATE CONTROLLING PARTY
The Company is listed on AIM and there is no individual controlling party. The Directors' Report provides details of those shareholders with an individual holding exceeding 3% of issued share capital.
15.RELATED PARTY DISCLOSURES
As well as remuneration of Directors (Note 5), the following transactions fall within the scope of IAS 24 Related Party Disclosures.
During the year Sports Resource Group Limited, a company controlled by Chris Akers who is a significant shareholder in Yolo Leisure and Technology Plc was paid Nil (2015: 28,800) for corporate services relating to the new share issue. At the year end the Company owed Nil (2015: 6,000) to Sports Resource Group Limited.
Simon Robinson's director's fees of Nil (2015: 8,000) were paid to Positive Thoughts Limited, a company controlled by him.
Sohail Bhatti's director's fees of Nil (2015: 8,000) were paid to Woodhouse Price Limited, a company controlled by him.
16.POST BALANCE SHEET EVENTS
Placing of shares
On 7 November 2016, the Company completed a placing of 254,000,000 shares at a price of 1.0p raising total gross funds of 2,540,000. A further 8,400,000 fee shares were issued at a price of 1.0p.
Also on the same date 9,000,000 director warrants at exercise price of 1.3p were issued to Simon Robinson.
Further investment
On 5 November 2016, the Company completed an investment in Magic Media Works Ltd by investing 1,400,000 through a convertible loan note in Magic Media Works ("Loan Notes"). The Loan Notes bear interest at a rate of 10% per annum from 1 March 2017 and are repayable on or before 31 December 2018. The Loan Notes are secured by a first ranking debenture over the assets of Magic Media Works and are convertible into approximately 41.2% of the ordinary share capital of Magic Media Works on a fully diluted basis.
This information is provided by RNSThe company news service from the London Stock ExchangeENDFR OKBDNBBKDPNB
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