REG - Everplay Group plc - Unaudited Final Results 2024
26/03/2025 07:16
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250326:nRSZ1397Ca&default-theme=true
RNS Number : 1397C Everplay Group plc 26 March 2025
26 March 2025
everplay group plc
("everplay", the "Group" or the "Company")
Unaudited Final Results for the year ended 31 December 2024
● A strong bounce back in profitability and margins, and robust cash
generation, reflecting a good performance from key titles across the portfolio
and swift implementation of strategic actions.
● Good progress against mid-term strategic priorities, a
high-quality schedule of new game releases, key new hires, ongoing development
of new revenue streams and robust cost controls all position the Group for a
solid FY 2025.
● Maiden final dividend proposed.
everplay group plc, a leading global independent ("indie") games developer and
publisher of premium video games, working simulation games and children's
edutainment apps, is pleased to announce its unaudited final results for the
year ended 31 December 2024 ("FY 2024").
Financial summary:
Year ended
31 December 2024 (unaudited) 31 December 2023 (audited) % change
Revenue £166.6m £159.1m 5%
Gross profit £69.4m £57.5m 21%
Gross margin 41.6% 36.1%
Adjusted EBITDA(1) £43.5m £29.9m 46%
Adjusted EBITDA margin 26.1% 18.8%
Operating profit £24.0m £0.0m -
Profit/(loss) before tax £25.3m £(1.1)m -
Adjusted profit before tax(1) £43.4m £28.7m 51%
Basic Earnings per share ("EPS") 14.0p (2.6)p -
Adjusted Basic EPS(2) 24.1p 17.5p 38%
Operating cash conversion(3) 97% 87%
Cash and cash equivalents £62.9m £42.8m 47%
Operational summary:
● Double-digit growth in first-party IP revenues, which contributed
37% to Group revenues (FY 2023: 35%). 10 first-party IP projects are in the
development pipeline, based both on established and new IP and to launch
mostly in 2026 and 2027, supporting the Group's focus on accelerating growth
and improving profitability.
● The back catalogue had another excellent year across all
divisions, with revenues up 27%, demonstrating the outstanding lifecycle
management skills and shared learnings across the Group, as well as the
dependable nature of the portfolio strategy. Over 130 titles contributed to
back catalogue revenues during the period, spread across a wide range of
genres and release years.
● Community engagement was very strong across our key titles. In
particular, Hell Let Loose enjoyed record revenues (five years after its
original launch), with peak concurrent users (CCU) during the year over 90%
higher yoy, increasing to over 140,000 following its release on the Epic
platform at the year end.
● astragon delivered strong revenue growth of 22%. Strong
contributors for the year included the popular Police Simulator and
Construction Simulator franchises, the latter which saw the introduction of a
Year 2 Season Pass. Revenue growth was supported by the release of two new
games (FY 2023: three) - including Construction Simulator 4 - as well as the
physical distribution of Farming Simulator 25 in Germany, five existing
first and third-party IP games on additional platforms and 12 paid DLCs(4) (FY
2023: 16).
● StoryToys delivered another excellent year of growth, with revenue
up 25%. It launched three new licensed app titles (FY 2023: 3), including
Sesame Street Mecha Builders, Thomas & Friends™: Let's Roll and LEGO®
DUPLO® Peppa Pig in addition to 531 app updates (FY 2023: 327) across
existing titles supporting subscriptions. Active subscribers continue to grow
and now exceed 337,000, with 11 million active users and the number of total
lifetime downloads now exceeding 240m (FY 2023: 200m).
● Team17 revenues fell by 5% as some new titles failed to meet
management expectations and some titles were moved into FY2025. There was, on
the other hand, strong double-digit growth in the back catalogue. More than 80
titles contributed towards back catalogue revenues in period, encompassing
over 1,200 Digital Revenue Lines (up from over 900 in FY 2023), with stand-out
performers including first-party IPs Hell Let Loose and Golf With Your Friends
and third-party IPs Overcooked!, Dredge, Blasphemous 2 and Trepang(2). Team17
launched 10 new games (FY 2023: 11) in the period, with 11 existing games
released on new platforms (FY 2023: 5). Refinements to our greenlight process
enable swifter decision-making, leveraging expertise across the organisation,
providing increased confidence in the performance of newly signed games.
People and culture:
● In January 2025, the Group rebranded to everplay group plc,
reflecting the evolution of the business since its IPO in 2018. The change
allows the Team17 division to regain its iconic brand identity, whilst
maximising operational synergies and cross-selling opportunities across the
wider Group.
● Rashid Varachia joined in October 2024 in the newly-created role of
Group Chief Financial Officer and Chief Operating Officer. His team is focused
on maximising agility and efficiencies across the divisions.
● Harley Homewood, a gaming industry veteran who previously worked with
Debbie Bestwick at Team17, joined as Group Product Acquisition Director, with
responsibility for innovating our publishing models, leading our IP
acquisition strategy as well as strategic involvement in our greenlight
process.
Dividend declaration
· With consistent revenue growth, robust margin levels and strong
underlying cash generation, everplay has a strong balance sheet. This can
adequately fund the Group's organic growth investment plans for first- and
third-party IP development, as well as an active M&A strategy, which
remain the Group's core capital allocation priorities.
· The Group is in a strong strategic position with an improving outlook
and healthy balance sheet. Therefore the Board believes the Group can
implement a progressive dividend policy, while maintaining flexibility to
support inorganic opportunities. Therefore, the Board is proposing a final
ordinary dividend for the financial year ended 31 December 2024 of 2.7 pence
per share for everplay group plc (TIDM: EVPL; ISIN: GB00BYVX2X20). The
proposed record date is 6 June 2025, with a payment date of 4 July 2025.
Outlook:
● The Group has made a good start to FY 2025, supported by the momentum
from the festive season promotions. As a result, the Board remains confident
that the Group can deliver an improved trading performance in FY 2025,
marginally ahead of current market expectations, and remains well positioned
for continued growth over the medium to long term.
● The group has an exciting pipeline of at least 10 new games and
apps expected to a launch in FY 2025, including two first-party IP titles.
● Our portfolio approach allows the Group to launch a range of games we
identify as having high commercial potential, while limiting the risk from
underperformance of individual games to the Group. So far this year, we have
already launched Sworn in Early Access on PC from Team17, with encouraging
initial results. We have announced a number of additional new releases for
2025, including Date Everything and Epic NPC Man: Nice Day for Fishing at
Team17, Seafarer: The Ship Sim and Firefighting Simulator: Ignite at astragon
and LEGO® Bluey™ at StoryToys.
● We will continue to leverage our exceptional lifecycle management
capabilities to drive another year of robust sales across our back
catalogue.
● We will make further progress against our strategic priorities to
accelerate growth alongside improving profitability, with an elevated focus on
first-party IP, our evergreen franchises and improved returns. Recent Group
hires are driving innovations to our publishing model to maximise
opportunities with developers and progress on our active M&A strategy.
Steve Bell, Group Chief Executive Officer of everplay, commented:
"I am extremely pleased with the Group's performance during 2024, a clear
return to the quality business for which we have been known. As we begin our
first year under the new name of everplay, I am excited about the incredible
slate of games we have lined up for 2025, and some important innovations in
our business model. Allied with stringent cost controls, we are confident that
these will deliver results our shareholders expect.
"I'd like to thank Ann, Julia, Tim and Emmet for their support in leading each
part of our Group that yet again has delivered a great year in gaming, and our
people and development partners for their creativity and dedication. Our new
group roles will ensure we remain efficient and focused on being the best
games company that gives back to creators and shareholders while supporting
our people."
Footnotes:
(1)A full description of Alternative Performance Measures, the rationale for
their use, and reconciliation between adjusted and reported statutory measures
can be found within the Group Chief Financial Officer's Report.
Adjusted profit before tax excludes acquisition-related costs and adjustments,
amortisation and impairment of acquired intangible assets recognised as a
result of business combinations, share-based compensation and one-off Team17
restructuring costs from the statutory measure whilst adding back development
cost amortisation eliminated through acquisition fair value adjustments.
Adjusted profit after tax excludes the same items as adjusted profit before
tax removing corporation tax net of any tax effects on these items.
Adjusted EBITDA can be calculated from adjusted profit after tax by adding
back all remaining finance income and costs, tax, depreciation, amortisation
and impairment except for those on development costs and publishing rights.
(2)The calculation of adjusted earnings per share is based on the adjusted
profit after tax divided by the weighted average number of shares (either
basic or diluted).
(3)Operating cash conversion is defined as cash generated from operating
activities adjusted to add back payments made to satisfy pre-acquisition
liabilities recognised under IFRS 3 "Business Combinations", divided by
earnings before interest, tax, depreciation and amortisation ("EBITDA")
(4)Downloadable content
Analyst and institutional investor webcast
A meeting for analysts will be held on Wednesday, 26 March 2025 at 08.30 a.m.
GMT. The event will also be webcast. To register for this event and join the
live stream on the day, please contact Vigo on everplay@vigoconsulting.com
(mailto:everplay@vigoconsulting.com) .
Retail investor webcast
A webcast for retail investors will be held on Friday 28 March at 1.00 p.m.
GMT. The presentation will be hosted on the Investor Meet Company platform.
Questions can be submitted pre-event via the Investor Meet Company dashboard
up until 9.00 a.m. the day before the meeting or at any time during the live
presentation.
Investors can sign up for free and add to meet everplay via:
https://www.investormeetcompany.com/everplay-group-plc/register-investor
(https://www.investormeetcompany.com/everplay-group-plc/register-investor)
Enquiries:
everplay group plc ir@everplaygroupplc.com (mailto:ir@everplaygroupplc.com)
Steve Bell, Chief Executive Officer
Rashid Varachia, Chief Financial Officer and Chief Operating Officer
James Targett, Group Investor Relations Director
Peel Hunt (Nominated Advisor and Joint Corporate Broker) +44 (0)20 7418 8900
Neil Patel / Benjamin Cryer / Kate Bannatyne
Jefferies International Limited (Joint Corporate Broker) +44 (0)20 7029 8000
Philip Noblet / Will Brown / Shaam Vora
Vigo Consulting (Financial Public Relations) +44 (0)20 7390 0233
Jeremy Garcia / Fiona Hetherington / Anna Stacey
everplay@vigoconsulting.com (mailto:everplay@vigoconsulting.com)
About everplay group plc
everplay group plc (formerly Team17 Group plc) is an award winning and leading
global indie games label developer and publisher of premium video games and
apps, comprising three distinct divisions: Team17, astragon and StoryToys.
Team17 is a games developer, publisher and creative partner for indie
developers around the world, known for iconic IP such as Hell Let Loose, Worms
and Overcooked!. astragon is a leading games publisher, developer and
distributor of sophisticated working simulation games, including Construction
Simulator and Police Simulator, targeting a broad audience from young
enthusiasts to technical experts and casual gamers. Story Toys a world-class
developer and publisher of educational entertainment apps, bringing the
world's most popular characters, worlds and stories to life for children under
the age of eight, with apps including Disney Colouring World and LEGO®
DUPLO® PEPPA PIG
Visit www.everplaygroupplc.com (http://www.everplaygroupplc.com) for more
information or follow us on LinkedIn: everplay group plc
(http://www.linkedin.com/company/everplay-group-plc) .
Chair's Statement
This report marks my first full year as Chair of everplay group plc. Much
has changed over the last 12 months, such as the realignment of focus on the
Indie market, alongside tighter cost controls and increased effort on driving
our first-party IP. With a strengthened Group leadership and company
re-branding, I believe this year has been pivotal in getting the business back
on the right track to ensure profitable growth over the next few years.
We have refocused our go-to-market strategy by concentrating on what everplay
knows best - Indie games and edutainment apps. We continue to be a leading
player in the Indie space, with our skilled lifecycle management and resilient
back catalogue setting us apart from our competitors. A key example of this
from this year was the launch of Worms Armageddon: Anniversary Edition. It has
been 25 years since the original Worms game was released, yet this series
continues to captivate players and has a dedicated and loyal player community.
In the year ended 31 December 2024, the Group generated revenues of £166.6
million (FY 2023: £159.1 million), gross profit of £69.4 million (FY 2023:
£57.5 million) and adjusted EBITDA of £43.5 million (FY 2023: £29.9
million). The Group continues to provide a strong balance sheet, with £62.9
million of cash and cash equivalents at 31 December 2024 (31 December 2023:
£42.8 million). This places us in a robust position for future growth, as we
consider new opportunities which closely align with our Indie focus.
In January 2025, we launched our new Group brand: everplay group plc. Our new
name reflects the evolution and growth of the Company since our IPO and
creates greater clarity for our three distinct divisions, astragon, StoryToys
and Team17, operating across complementary markets within the video games and
apps industry. Our new brand will have greater external relevance and internal
efficiency, as we further centralise key business functions, such as finance,
HR, legal, IT and compliance across all three divisions.
We are continuing to bring experienced games industry experts into this new
structure, with their knowledge and leadership skills resonating across the
broader business. In October 2024, we welcomed Rashid Varachia to the Board as
Chief Financial Officer and Chief Operating Officer. Rashid is ideally placed
to oversee a widened operational remit, having amassed over 25 years'
financial, gaming, M&A and capital markets experience. The strengthened
senior management team is working alongside our dynamic Board, which has
unrivalled gaming pedigree, making us better placed than ever before to make
everplay the go-to hub for Indie games label developer and publisher of
premium video games and apps.
We have now reenergised our greenlight process, which has historically been
people and data led, but will now benefit from the counsel of our strengthened
senior team. This means that we can move more swiftly when it comes to
attracting brilliant games available for us to develop, expanding on our
first-party IP, as well as third party development. We now focus on
exclusively Indie investment in this process, which is paramount to our goal
of becoming the go-to developer for Indie games.
The Indie market continues to grow, with more titles released in 2024 than any
other year in history. In light of this competitive new release market, the
strength of everplay's back catalogue continues to be vital to the Company's
success. Over the last six years, the back catalogue has on average accounted
for 76% of total revenues, reflecting our ability to develop evergreen,
timeless games which captivate audiences year after year. In 2024, its
resilience strengthened, contributing 86% of the Company's revenue. Our back
catalogue revenue base significantly derisks our exposure to an already
crowded marketplace, as our success is not solely dependent on our latest
releases.
FY 2025 is shaping up to be another successful year for everplay. There are a
number of titles scheduled for launch in 2025, including new first-party IP
titles, while broader market growth will be supported by the launch of the
Nintendo Switch 2 console hardware. We're cognisant of the challenges
associated with growth in an increasingly crowded games market, and so will
deploy our strengthened organisation and strong balance sheet to explore
M&A opportunities to accelerate our growth.
everplay remains a differentiated and compelling investment proposition within
the games industry. Alongside the development of high-quality, engaging games
and apps, everplay has a track record of consistently leveraging the strength
of its back catalogue to drive reliable revenue streams from our existing
content portfolio.
It is this confidence, in both our people and our strategy, that underpins the
strength of the Board's belief in the future prospects for the business.
Frank Sagnier
Chair
Group Chief Executive Officer's Review
Introduction
In my first full year as Chief Executive Officer of everplay group plc, I am
delighted with how the business has responded as we realigned our focus to our
Indie heritage, which best captures the passion and drive of our hugely
talented people. The focus of the team over the past 12 months has been
excellent as we've sought to bring our divisions closer together and align
under shared aspirations and goals.
This progress is evidenced in our financial performance, delivering all-time
high revenues of £166.6 million (FY 2023: £159.1 million) and gross profit
of £69.4 million (FY 2023: £57.5 million) in FY24, supported by strong
traction from our extensive back catalogue, alongside sales from new releases.
The business also saw a sharp recovery in adjusted EBITDA to £43.5 million
(FY 2023: £29.9 million), highlighting the inherent strength of our business
model. Reported profit before tax was £25.3 million (FY 2023: loss of £1.1
million). Further detail and granularity on the financial performance can be
found in the Chief Financial Officer's review.
The Group retains a healthy balance sheet, with £62.9 million of cash and
cash equivalents at 31 December 2024 (31 December 2023: £42.8 million), which
provides a strong base from which to further invest and grow our business.
In January 2025, we successfully completed the rebranding of our business to
everplay group plc. Our new name better captures the breadth of our genre,
platform and demographic-agnostic business. It also reflects the connection we
have with our consumers: inspiring gamers to never stop playing. It supports
our ambition to be the best place in the world to make and play games,
creating pioneering and captivating experiences that enrich and inspire
players around the world of all ages. It also allows astragon, StoryToys and
Team17 to retain their distinctive and well-established brand identities
whilst maximising operational synergies and cross-selling opportunities across
the wider Group.
Strategic Priorities
As highlighted at the beginning of 2024, we set out our key strategic
priorities, along with our "Action Plan for Growth Delivery", aimed
specifically at accelerating revenue growth, improving profitability and
tightening cost control, while increasing agility, maximising synergies across
the business and ultimately improving shareholder returns. These strategic
priorities are laying the foundations for the Group to deliver continued
market-beating growth, and I'm pleased to report we are already demonstrating
tangible progress against these:
Evergreen brands: we continue to focus on our first-party IP games, which
drives our return on investment. Ten exciting first-party IP projects are
currently in development, with the first launch anticipated in 2025. At the
same time, we maximise our lifecycle management skills to sustain our
resilient back catalogue, which remains the bedrock of our business, supported
by evergreen franchises such as Overcooked!, Hell Let Loose and Worms, while
innovative marketing strategies drive both player engagement and sales.
Relationship builders: to be the leading Indie publisher, we need to continue
to nurture our world-class partnerships with developers, platforms and brand
owners. We reviewed more games in FY 2024 than in any prior year through our
reinvigorated and streamlined greenlight process, in which we evaluate and
analyse game submissions from potential developers, ensuring we access the
most exciting games from outstanding developers from around the world. Our
recently-appointed Group Legal Director has already enhanced the rigour of the
process. We have reinforced our strict investment limits for games signed,
ensuring each title has the right investment profile and our teams are fully
aligned to develop and promote the games accordingly. StoryToys' launch of
LEGO™ DUPLO™ Peppa Pig in May 2024 was further evidence of another leading
brand choosing to partner with everplay, entrusting the Group to maintain the
brand reputation.
Innovation and M&A: we are exploring opportunities to capitalise on our
knowledge base and drive growth into new markets, audiences and IP, both
organically and through M&A. Our commercial and scouting teams are
adopting more flexible and innovative publishing models to ensure we are
attracting the highest quality developers and publishing the best Indie games
in the world. We are cognisant of our skillset and experience with back
catalogue management and are exploring the opportunity to leverage this in
innovative adjacent business models.
Synergies and collaboration: we are continuing to foster greater collaboration
between all our teams and divisions, maximising the potential of their unique
skills and expertise, whilst simultaneously optimising efficiencies and
synergies across the business. The Group team is creating a more connected
culture throughout the business, facilitating a greater sharing of best
practise, expertise and cost discipline, while freeing up resources from the
divisions.
Talent and culture: to deliver growth and achieve our ambitions, we need to
ensure we retain our world class talent, and that our culture supports
aspiration, creativity and belonging. We believe that when our employees have
pride in their work, trust in the business and camaraderie amongst their
colleagues, they will be more engaged and productive. We have taken several
major steps during 2024 to improve employee engagement through surveys,
townhalls, training programmes and workshops and look forward to building on
this in 2025.
Operational Review
The Indie gaming market remains highly dynamic, as favourable demographic
trends support underlying growth in gamers, while the proliferation of
development tools and distribution channels lowers barriers to entry. Although
growth in the broader gaming market remained modest in 2024 at 0.6%(( 1 )),
this highly competitive landscape saw 18,148(( 2 )) titles launched on Steam
in 2024, a 30% increase on 13,933 titles launched in 2023.
Against the backdrop of an increasingly competitive marketplace,
discoverability remains crucial in driving the success of games. With such an
increased number of titles competing for players' attention across all
platforms, the role of marketing in growing and developing communities that
engage with and raise awareness of our games has never been more important.
Adopting innovative marketing strategies forms a key component of driving
discoverability, alongside supporting the Group's expertise in life cycle
management. Targeted marketing, optimisation for platform-specific algorithms
and social media campaigns are three examples of the many components we have
at our disposal. In 2024, we successfully partnered with a number of
influencers on social media platforms to drive awareness of specific titles
from our back catalogue, including a feast of TikTok content for Overcooked!
and taking over a burger bar in LA to recreate Overcooked! in real life with
influencers, resulting in 53m views across social media platforms, and driving
a pleasing resulting peak in sales. Exploring partnerships and targeted
marketing opportunities continues to form a key part of our marketing strategy
going forward.
The strength of everplay's back catalogue and the team's expertise in life
cycle management cannot be overstated and it continues to elevate our brands
in what has become a crowded marketplace. Over 130 games contributed revenues
to our back catalogue in FY24 and the team's ability to continue to drive
player engagement, launch new content and develop sequel titles for the back
catalogue is key to underpinning the resilience of our revenues and the
long-term success of everplay.
Divisional Highlights
Revenues generated by Team17 in 2024 were underpinned by the strong
performance of the back catalogue. Whilst 10 new titles were launched (FY
2023: 11 titles) - comprising a mix of first- and third-party IP - Team17 was
equally focused on driving sales through the release of additional content
across existing titles within the portfolio. Key launches in the period
included the multi-award-winning Conscript, Classified: France 44 and Amber
Isle, along with content updates including Dredge, The Iron Rig, Worms
Armageddon: Anniversary Edition and Olympus Odyssey for Golf With Your
Friends.
astragon continued the historic trend of delivering solid revenue growth over
the period, with its high-quality working simulation titles. New titles in
2024 included Construction Simulator 4, based in a new Canadian setting, along
with additional content released across Construction Simulator, Police
Simulator and Lawn Mowing Simulator among others. astragon also launched
Police Simulator - Prop Island in August in collaboration with Fortnite, which
sees gamers in either the Props or Hunters teams, battling to reign
victorious.
The launch of additional apps including Thomas & Friends™: Let's Roll
and the highly successful LEGO™ DUPLO™ Peppa Pig, our first collaboration
with this globally iconic children's brand, further expanded StoryToys'
portfolio in the period. Furthermore, an additional 520 app updates were
delivered in the period, demonstrating the continued development and evolution
of the products and responsibility in updating content to reflect feedback
from users. The foundation of StoryToys' success is the strength of its
partner relationships and reputation for delivering high quality apps that do
not diminish a brands' value.
As previously outlined, part of the Group's strategy is to drive revenues from
first-party titles, where we naturally retain a higher portion of revenues. In
FY 2024, 4 of the top 10 games sold in the period came from first-party IP
titles, with the constituents of the top 10 including titles from Team17,
astragon and StoryToys. For FY 2024, the top ten selling games represented
approximately 60% of total revenues, demonstrating the breadth of the
portfolio's performance.
The Team
I would like to acknowledge the dedication and passion of the entire team at
everplay group plc. I remain inspired by the level of dedication they bring to
the business and am continually motivated by the company culture.
We have continued to strengthen the team throughout FY 2024 and, in
particular, introduced a number of roles at the Group level which will help to
drive synergies and ensure we benefit from the expertise and skillset across
the divisions.
Rashid Varachia joined us in October 2024 in the newly-created role of Chief
Financial Officer and Chief Operating Officer. Rashid replaced Mark Crawford,
who I would like to personally thank for his support and contribution to the
business over the last five years. In Rashid, we have someone with a rich
pedigree in the video games industry and we are already benefitting enormously
from his experience and insights. In December 2024, Harley Homewood, a gaming
industry veteran who previously worked with Debbie Bestwick at Team17, joined
as Group Product Acquisition Director.
I believe the strength of the board continues to be a point of differentiation
for everplay group plc. During my first year at the helm, I have been
privileged to benefit from such a breadth of experience in the gaming and
public markets.
Outlook
Our ambition is clear, to create pioneering and captivating experiences that
enrich and inspire players around the world and to never stop playing, whilst
also delivering market-beating growth and improved profitability for our
shareholders.
For 2025, we have an exciting pipeline of at least 10 games and apps. We
expect a greater proportion of our launches to be our first-party IP going
forward and are employing more innovative marketing strategies to drive
discoverability in a crowded market. We are also implementing more agile
publishing models whilst looking for the best M&A opportunities that are
both strategically and commercially additive to the Group.
We have an enormously experienced and talented team across the business.
Centralising a number of functions will ensure that we are able to drive
further synergies and leverage the business expertise across the portfolio.
I am hugely excited for the future of everplay group plc. The Group is well
positioned to deliver growth in the short to medium term and the current
financial year has started strongly with the positively-received Sworn already
launched and several other titles announced. I look forward to updating all
stakeholders on further progress throughout the year.
Steve Bell
Group Chief Executive Officer
Chief Financial Officer's Report
Performance Overview
FY 2024 was another highly competitive year for the gaming sector. Against
this backdrop, the Group delivered a pleasing revenue performance, up 5%
compared to the prior year, substantially ahead of the market which grew just
0.6%. 2024 was everplay's seventh consecutive year since its IPO of delivering
market-beating revenue growth. This growth was generated organically through
revenues from existing businesses, though a combination of new releases and a
stellar performance from the Group's extensive back catalogue, further
demonstrating the benefit of everplay's portfolio strategy and exceptional
life cycle management skills. Tightened cost controls, improved title mix and
lower impairments all contributed to a significant improvement in margins.
This, along with the higher revenues, contributed to a sharp recovery in
earnings, with profits before tax of £25.3 million (FY 2023: £1.1 million
loss).
Revenue
Group revenues increased 5% on a like-for-like basis to £166.6 million (FY
2023: £159.1 million). Team17 (formerly Team17 Games Label) contributed
£98.6 million, down 5% on the prior year (FY 2023: £103.6 million), astragon
delivered £43.8 million (FY 2023: £36.0 million) showing excellent growth of
22%, whilst StoryToys had another outstanding year, with revenues up 25% to
£24.3 million (FY 2023: £19.5 million).
Overall first-party IP revenues increased 10% to £61.5 million (FY 2023:
£55.9 million) reflecting a strong performance from games such as Hell Let
Loose, Construction Simulator, Police Simulator and Golf With Your Friends -
all of which remain in the Group's top 10 selling titles. This brings
first-party IP revenues up to 37% of revenues (FY 2023: 35%), in line with the
Group's core strategy to increase the weighting of first-party IP revenues.
Third-party game revenues grew modestly to £105.1 million (FY 2023: £103.3
million), led by Overcooked! and 2023's award-winning Dredge.
The Group's back catalogue enjoyed another year of sustained strong
performance, thanks to some excellent new downloadable content ("DLC") and
innovative marketing activity from the teams. Revenues grew 27% to £143.8
million (FY 2023: £113.6 million). This growth is testament both to the
quality of the Group's portfolio, and the team's skills in lifecycle
management. Stand out performers included Overcooked! 2, Hell Let Loose,
Police Simulator and Dredge. The competitive environment and strong prior year
base did result in a more muted revenue performance for new releases at
£22.9million (FY 2023: £45.5 million), affecting Team17 in particular.
However, reviews for many of games which were released were pleasing,
including 90% positive user reviews on Steam for Conscript and 89% for Amber
Isle.
Gross Profit
Gross profit in the year rose 21% to £69.4 million (FY 2023: £57.5 million).
The gross margin increased sharply by 550bps to 41.6% (FY 2023: 36.1%), due to
a number of factors including substantially lower title impairment charges,
development cost amortisation charges, expensed development costs and royalty
payments.
As usual, a full review was undertaken of the value of intangible assets held
on the balance sheet which included both released games with a residual net
book value as well as games in development yet to be released. Title
impairment charges for the year were £4.7 million (FY 2023: £11.1 million),
across select titles following the lower-than-expected performance of new
releases in H1 2024 and the current view of the new release market.
Royalty payments were lower year on year, accounting for 29.9% of sales (FY
2023: 30.4%), due to the stronger performance of first-party titles relative
to third-party titles (the latter of which generate higher levels of royalty
payments). However, astragon's first-party IP simulation games represented a
higher proportion of the Group's first-party revenues this year (50% compared
to 47% in FY 2023) and unlike Team17's first-party IP games, these attract a
royalty paid to astragon's dedicated development partners, which moderated the
reduction in overall royalty payments in the period.
After several years of increases resulting from acquisitions and some larger
third-party game development investments at Team17, capitalised development
costs in the year decreased to £25.0 million (FY 2023: £32.2 million) of
which £12.1 million (FY 2023: £22.5 million) related to Team17, £9.9
million (FY 2023: £7.1 million) to astragon and £3.0 million (FY 2023: £2.6
million) to StoryToys. This reflects lower planned development costs for
Team17 third-party titles, partly offset by higher spending on first-party IP
in both Team17 and astragon - for which there are 10 projects currently under
development. As a result of the capitalisation, impairment and development
cost amortisation charges, capitalised development costs on the balance sheet
at the end of the period stood at £40.6 million (FY 2023: £35.1 million).
Development cost amortisation charges were £13.5 million for the year (FY
2023: £12.7 million), an increase on the prior due to the higher number of
new releases in the period. Expensed development costs also fell during the
year, partly due to the greater use of outsourcing within the Team17 studios.
Administrative Expenses
Total costs in the period decreased to £45.6 million (FY 2023: £57.6
million). The decrease was primarily due to the lower non-cash impairment of
goodwill charge relating to The Label Inc. of £4.6 million (FY 2023: £20.9
million). Acquisition-related adjustments, costs and amortisation were £13.9
million (FY 2023: £10.0 million).
Staff costs within administrative expenses increased 27% in the year
predominantly reflecting higher bonus payments across the Group as well as the
final management incentive payments relating to the acquisition of StoryToys
and astragon. Marketing costs decreased during the year, following the
implementation of tighter controls in H2 2023 to better align to the Indie
model. Depreciation and amortisation fell to £13.1 million (FY 2023: £15.0
million). Other costs including premises, professional fees and travel &
entertainment were lower as a percentage of sales than the prior year. Total
headcount for the Group at 31 December 2024 was 344 (31 December 2023: 348).
Alternative Performance Measures ("APMs")
The Directors believe that the reported APMs provide meaningful performance
information to aid the understanding of the underlying business trading
performance and profitability. Although these are not GAAP measures as defined
by IFRS, they have been applied to provide an accurate comparison as well as
provide readers of the financial statements a clear understanding of the
underlying profitability of the business and more consistent comparisons over
time. A breakdown of the adjusting factors is provided in the table below:
Adjusted EBITDA Adjusted Profit After Tax
FY24 FY23 FY24 FY23
£'000 £'000 £'000 £'000
(Loss)/Profit before Tax 25,323 (1,080) 25,323 (1,080)
Development cost amortisation eliminated through FV adjustments (1,469) (3,791) (1,469) (3,791)
Goodwill Impairment 4,563 20,879 4,563 20,879
Share based compensation 1,008 417 1,008 417
Restructuring costs n/a 1,209 n/a 1,209
Acquisition related costs & adjustments
Amortisation on acquired intangible assets 11,529 13,759 11,529 13,759
Acquisition related costs 2,334 1,360 2,334 1,360
Earn out fair value 84 (5,086) 84 (5,086)
Interest & FX on contingent consideration 7 1,023 7 1,023
Adjusted profit before tax 43,379 28,690 43,379 28690
Finance income and costs net of acquisition related costs and adjustments (1,196) 556 n/a n/a
Depreciation and loss on disposal of tangible assets and software 1,276 1085 n/a n/a
Amortisation of intangible assets (excluding 90 16 n/a n/a
development costs and acquired intangibles)
Adjusted EBITDA 43,549 29,873
Taxation (net of impacts on adjustments) (8,747) (3,467)
Adjusted profit after tax 34,632 25,223
Adjusted basic EPS (p) 24.1 17.5
Adjusted EBITDA reflects the EBITDA of the Group in a steady state, without
the impact of acquisition-related costs which vary year on year based on
acquisition activity. In addition, we include the impact of amortisation and
impairment of development costs and publishing rights, as this reflects the
primary costs incurred by the Group in generating revenue. In the previous
year, restructuring costs were also excluded as one-off in nature and not
reflective of the underlying performance of the Group.
Adjusted profit before tax reflects the profitability of the Group, adjusted
for the previously outlined acquisition-related costs. In the prior year, this
was also adjusted for the goodwill impairment which is not a recurring cost to
the Group.
Share-based compensation charges of £1.0 million (FY 2023: £0.4 million)
relate to options that were granted to the Executive Directors, the senior
leadership team and other members of the team under a variety of schemes which
other than in the case of the Executive Directors and Non-Executive Directors
will be satisfied by shares held in the Employee Benefit Trust ("EBT").
Acquisition-related adjustments created a net cost in the period of £2.4
million (FY 2023: £2.7 million credit), relating to one-off costs directly
associated with the acquisitions made over the last three years. There were
£2.3 million of associated management incentive payments in FY 2024 (FY 2023:
nil), with other acquisition costs and fair value adjustments totalling £0.1
million (FY 2023: £1.4 million). Finance costs relating to contingent
consideration was £0.1 million (FY 2023: £1.0 million) reflecting the lower
balances outstanding.
Adjusted EBITDA
Adjusted EBITDA rose to £43.5 million, a sharp recovery from the £29.9
million in FY 2023, reflecting the strong revenue growth, underlying margin
improvements and materially lower title impairment costs. Adjusted EBITDA
excludes acquisition related adjustments and fees, amortisation on and
impairment of acquired intangible assets as a result of business combinations,
share-based compensation (as well as one-off Team17 restructuring costs and
tax in FY 2023).
Profit Before Tax
Profit Before Tax for the year was £25.3 million, compared to a £1.1 million
loss in the prior year (which was negatively affected by the £32.0m of
non-cash impairment charges).
In addition, net finance income increased to £1.2m (FY 2023: £0.9 million
cost), reflecting higher interest rates and cash on balance.
Adjusted profit before tax, adjusting for the items outlined in the APMs table
above, was £43.4 million (FY 2023: £28.7 million).
The tax charge for the year was £5.1 million (FY 2023: £2.7 million). The
effective tax rate for the year was 20%.
Earnings Per Share ("EPS")
Basic EPS rose to 14.0 pence (FY 2023: (2.6) pence), reflecting higher pre-tax
profits, as well as the non-cash impairment charges affecting the FY 2023
base. Basic adjusted EPS, reflecting the APM adjustments noted above and
calculated using the adjusted profit after tax increased 38% to 24.1 pence (FY
2023: 17.5 pence).
Statement of Financial Position
The Group remains highly cash generative with an operating cash conversion of
97% (FY 2023: 87%), and a net inflow of cash from operations of £51.2 million
(FY 2023: £41.4 million). As a result of final cash earn-out payments in the
period (£5.0 million) and investment in capitalised development costs (£25.0
million), there was an overall net increase in cash and cash equivalents to
£62.9 million (FY 2023: £42.8 million) which includes £2.7 million (FY
2023: £2.9 million) held in the Employee Benefit Trust.
The EBT remains an important fund established at IPO to support employee share
awards and incentivise team members across the Group. All UK and EU employees
across the Group continue to be awarded share options on joining, noting that
the use of the EBT avoids the issue of new shares to satisfy these and other
employee options.
Goodwill and intangible assets now total £197.0 million (FY 2023: £210.0
million). As at 31 December 2024, the net book value of goodwill was £82.3
million (FY 2023: £86.2 million). The value of the Group's brands now
stands at £51.4 million (FY 2023: £57.6 million) which takes into account
the annual brand amortisation charge. The current net book value of
capitalised development costs at year end stands at £40.6 million (FY 2023:
£35.1 million).
Movements in working capital totalled £1.7m in the period (FY 2023: £3.5m).
This amounted to a £9.1m increase in trade and other receivables (FY 2023:
£0.4m), offset by a corresponding increase in trade and other payables
balance of £7.6m (FY 2023: £3.3m decrease). This increase in trading
balances is due to high volumes of trade in Q4 related to physical
distribution within astragon, while an increase in license sales also impacted
year end working capital.
Share Issues
As at 31 December 2024, the Group's issued share capital comprised 145,848,677
ordinary shares of £0.01 each (FY 2023: 145,803,620).
A total of 317,970 (FY 2023: 294,535) share options were issued during the
year to the Executive Directors with a three-year vesting period with
performance criteria, 391,465 (FY 2023: 532,858) share options were issued to
other employees across the Group also with a similar three-year vesting period
and performance criteria, while 61,648 share options were issued to
Non-Executive Directors as part of a new Share Option Plan.
The Group has extended the use of its Long-Term Incentive Plan with
performance criteria across its senior divisional leadership team together
with the deferred bonus share plan for senior management. everplay continues
to administer an All-Employee Share Incentive Plan ("SIP") which is a UK
employee SIP with matching shares open to all UK employees and which continues
to be well supported.
Rashid Varachia
Group Chief Financial Officer and Chief Operating Officer
Unaudited Consolidated Statement of Profit or Loss
For the Year Ended 31 December 2024
Note Year ended Year ended 31 December 2023
31 December
£'000
2024
£'000
Revenue 4 166,624 159,125
Cost of sales (97,250) (101,620)
Gross profit 69,374 57,505
Other income 140 176
Administrative expenses (45,567) (57,639)
Operating profit 5 23,947 42
Finance income 1,695 344
Finance costs (507) (1,261)
Share of net profit/(loss) of associates accounted for using the equity method 188 (205)
Profit/(Loss) before tax 25,323 (1,080)
Taxation 6 (5,133) (2,665)
Profit/(Loss) for the year 20,190 (3,745)
Earnings per share 7 14.0
- Basic (pence)
14.0
- Diluted (pence) 7 (2.6)
(2.6)
Unaudited Consolidated Statement of Comprehensive Income
Year ended Year ended
31 December 2024 31 December
£'000 2023
£'000
Profit/(Loss) for the year 20,190 (3,745)
Other comprehensive (expense):
Items that may be reclassified to profit or loss:
Exchange (loss) on translation of foreign operations (5,149) (3,209)
Total other comprehensive income (5,149) (3,209)
Total comprehensive income/(expense) for the year 15,041 (6,954)
Unaudited Consolidated Statement of Financial Position
As at 31 December 2024
Note As at As at
31 December 31 December
2024 2023
£'000 £'000
Assets
Non-current assets
Goodwill 8 82,314 86,244
Other intangible assets 8 114,668 123,748
Investments accounted for using the equity method 969 867
Property, plant and equipment 1,080 1,440
Right-of-use assets 2,499 3,172
Deferred tax assets 624 -
Total non-current assets 202,154 215,471
Current assets
Inventories 1,082 960
Trade and other receivables 44,534 38,408
Cash and cash equivalents 9 62,877 42,824
Total current assets 108,493 82,192
Total assets 310,647 297,663
Equity and liabilities
Equity attributable to owners of the parent
Share capital 1,458 1,458
Share premium 137,572 137,572
Retained earnings 118,450 97,514
Other reserves 5,086 10,235
Total equity 262,566 246,779
Non-current liabilities
Lease liabilities 2,227 2,889
Provisions 127 113
Deferred tax liabilities 6,281 8,386
Total non-current liabilities 8,635 11,388
Current liabilities
Trade and other payables 37,040 35,422
Current tax liabilities 1,714 3,391
Lease liabilities 692 683
Total current liabilities 39,446 39,496
Total liabilities 48,081 50,884
Total equity and liabilities 310,647 297,663
Unaudited Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2024
Equity attributable to shareholders of the Group
Note Share Share premium account £'000 Retained Other reserves Total
capital earnings £'000 Equity
£'000 £'000 £'000
At 1 January 2023 1,456 136,775 100,785 13,444 252,460
Comprehensive expense
Loss for the year - - (3,745) - (3,745)
Other comprehensive expense for the year - - - (3,209) (3,209)
Total comprehensive loss - - (3,745) (3,209) (6,954)
Transactions with owners
Issue of shares 2 797 - - 799
Share based compensation - - 474 - 474
Total transactions with owners 2 797 474 - 1,273
At 31 December 2023 1,458 137,572 97,514 10,235 246,779
Comprehensive income/(expense)
Profit for the year - - 20,190 - 20,190
Other comprehensive expense for the year - - - (5,149) (5,149)
Total comprehensive income - - 20,190 (5,149) 15,041
Transactions with owners
Share based compensation - - 1,008 - 1,008
Purchase of own shares - - (262) - (262)
Total transactions with owners - - 746 - 746
At 31 December 2024 1,458 137,572 118,450 5,086 262,566
Unaudited Consolidated Statement of Cash Flows
For the Year Ended 31 December 2024
Note Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Cash generated from operations 11 58,511 50,721
Payments for contingent consideration on business acquisitions - (4,189)
Income taxes paid (7,238) (5,148)
Net cash inflow from operating activities 51,273 41,384
Cash flows from investing activities
Payment for acquisition of Independent Arts Software GmbH, net of cash - (1,792)
acquired
Payments for contingent consideration on business acquisitions - (6,886)
Payments for IP (7,000) (7,500)
Payments for other intangibles - (900)
Payments for property, plant and equipment (323) (477)
Payment for capitalised development costs 8 (24,962) (32,184)
Proceeds from sale of property, plant and equipment 35
Proceeds from sale of intangible assets 400 -
Dividends from associates 213 -
Interest received 1,528 299
Net cash outflow from investing activities (30,144) (49,405)
Cash flows from financing activities
Interest paid (188) (89)
Principal elements of lease payments (583) (546)
Net cash outflow from financing activities (771) (635)
Net increase/(decrease) in cash and cash equivalents 20,358 (8,656)
Cash and cash equivalents at beginning of year 42,824 50,828
Effect of exchange rates on cash and cash equivalents (305) 652
Cash and cash equivalents at end of year 9 62,877 42,824
Notes to the Unaudited Consolidated Financial Statements
1. General information
The principal activity of everplay group plc (formally Team17 Group plc) (the
"Company") is that of a holding company and the principal activity of the
Company and its subsidiaries (together, the "Group") is the development and
publishing of independent ("indie") premium video games and development of
educational entertainment apps for children and a leading working simulation
games developer and publisher.
2. Basis of preparation
The preliminary results for the year ended 31 December 2024 are unaudited. The
financial information set out in this announcement does not constitute the
Group's financial statements for the year ended 31 December 2024 as defined by
Section 434 of the Companies Act. This financial information has been prepared
in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006. It has been prepared on the historical
cost basis, except for those items which are measured at fair value.
This financial information should be read in conjunction with the financial
statements of Team17 Group plc for the year ended 31 December 2023 (the "prior
year financial statement"), which are available from the Registrar of
Companies. The prior year financial statements which were prepared in
accordance with UK adopted international accounting standards (UK IFRS) and
the applicable legal requirements of the Companies Act 2006. The auditors,
PricewaterhouseCoopers LLP, reported on those accounts and their report was
unqualified, did not contain an emphasis of matter paragraph and did not
contain any statement under Section 498 (2) or (3) of the Companies Act 2006.
The Group's financial statements for the year ended 31 December 2024 will be
finalised on the basis of the financial information presented by the Directors
in these preliminary results and will be delivered to the Registrar of
Companies following the Annual General Meeting of everplay group plc.
Accounting policies
The Group's principal accounting policies used in preparing this information
are as stated on pages 67 to 76 of the prior year financial statements. There
have been no changes to accounting policies implemented since the date of the
prior year financial statements except as disclosed below:
New and amended standards adopted by the Group
The following accounting standards or IFRIC interpretations are effective for
the year ended 31 December 2024:
• Classification of Liabilities as Current or Non-current - Amendments to
IAS 1 (effective 1 January 2024)
• Non-current Liabilities with Covenants - Amendments to IAS 1 (effective 1
January 2024)
• Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 (effective
1 January 2024)
• Supplier finance arrangements - Amendments to IAS 7 and IFRS 7 (effective
1 January 2024)
None of these are expected to have a material impact on the Group's financial
statements or the accounting policies are already consistent with the new
requirements.
Publishing rights
Publishing rights represent payments to secure the rights to publish a game
title for a fixed term. A publishing right intangible asset will be recognised
only on titles that meet the following criteria:
● the asset meets the definition of an intangible asset under IAS 38
'Intangible Assets';
● the asset is separable or arises from contractual or legal rights;
● sufficient information exists to measure reliably the fair value
of the asset.
● the title is already released in the market with a demonstrable
revenue stream.
● additional development work is not expected on the title.
The cost of such intangible assets is the purchase price of the publishing
rights. Following initial recognition, intangible assets are carried at cost
less accumulated amortisation and accumulated impairment losses, if any.
Amortisation
The useful lives of intangible assets are assessed as either finite or
indefinite and at the year end date no intangible assets are accorded an
indefinite life other than goodwill.
Intangible assets with finite lives are amortised over their useful economic
lives and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least
at the end of each reporting period.
Amortisation is calculated over the estimated useful lives of the assets as
follows:
● Brands - 10 to 15 years straight line
● Development costs - over the period of expected benefit (as
discussed below)
● Acquired apps - 7 to 10 years straight line
● Customer and developer relationships - 10 years straight line
● Publishing rights - over the period of expected benefit (as
discussed below)
● Other intangibles - 2 years straight line
Amortisation on publishing rights
The useful economic life of publishing rights is assessed at the point of
acquisition based on the contractual length of the acquisition and forecasted
benefits. This is then reassessed each year for any changes to this life.
Amortisation commences at the point of acquisition and is recognised in the
Consolidated Statement of Profit or Loss in cost of sales. Amortisation is
calculated over the estimated useful life of the publishing rights and
amortisation is calculated using the sum of digits method.
3. Segmental analysis
The Group has three different operating segments within the business which are
as follows:
● Games Label - Developing and publishing video games for the
digital and physical market
● Simulation - Developing and publishing simulation games for the
digital and physical market
● Edutainment - Developing educational entertainment apps for
children
The chief operating decision maker ("CODM") of the Group is considered to be
the Group CEO and CFO, the group executive directors. The CODM reviews the
Group's internal reporting in order to assess performance and allocate
resources. The CODM determines the operating segments based on these reports
and on the internal reporting structure.
The CODM considered the aggregation criteria set out within IFRS 8 "Operating
Segments" where two or more operating segments can be combined for reporting
purposes so long as aggregation provides financial statement users with
information to evaluate the business and the environment in which it operates.
After assessing this criteria, the CODM deems it appropriate for all three
operating segments to be aggregated and reported as a single segment. Each
segment develops and publishes games and apps using own and third-party IP
through similar distribution methods with similar margins in the same
regulatory environments. Therefore all figures reported in the annual report
are reported as a single aggregated reporting segment.
Non-current assets are located in the following locations:
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
UK 95,755 101,690
EU 106,399 108,792
Rest of World - 4,989
202,154 215,471
4. Revenue
All revenue was generated by the sale of goods. Whilst the CODM considers
there to be only one reportable segment, the Company's portfolio of games is
split between internal IP (those based on IP owned by the Group) and
third-party IP incurring royalties. Therefore, to aid the readers
understanding of our results, the split of revenue from these two categories
is shown below:
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
First-Party IP 61,487 55,854
Third-Party IP 105,137 103,271
166,624 159,125
The Group does not provide any information on the geographical location of
sales as the majority of revenue is through third-party distribution platforms
which are responsible for the sales data of consumers.
All committed revenue contracts in progress at the 31 December 2024 are
expected to be completed and recognised in revenue within one year or less. As
permitted under IFRS 15, the transaction price allocated to these unsatisfied
contracts is not disclosed. All brought forward accrued income and deferred
income has been recognised or released during the year. The timing of revenue
recognition is shown below:
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Over time 5,863 7,488
At a point in time 160,761 151,637
166,624 159,125
The following customers each contributed over 10% of the total revenue in 2024
and 2023:
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Steam 44,746 45,066
Microsoft 17,035 17,679
Sony 31,904 28,952
Nintendo 18,496 17,344
Apple 18,812 19,980
Customers contributing <10% 35,631 30,104
166,624 159,125
5. Operating Profit
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
The following items are charged/(credited) in arriving at operating profit:
Cost of sales
Amortisation of development costs (note 8) 13,482 12,674
Impairment of development costs (note 8) 4,742 11,121
Redundancy costs - 1,010
Administrative expenses
Amortisation of intangible assets (note 8) 11,874 13,759
Impairment of goodwill (note 8) 991 20,879
Impairment of intangible assets (note 8) 3,572 -
Depreciation of property, plant and equipment 596 692
Depreciation of right-of-use assets 676 563
Net gain on disposal of intangible assets (note 8) 43 -
Net loss on disposal of property, plant and equipment (7) -
Redundancy costs - 199
Acquisition fees - 44
Fair value adjustment on contingent consideration - (5,086)
Finance costs
Loss on foreign exchange 264 1,513
Auditors' remuneration:
Fees payable to the Company's auditors for the audit of everplay group Plc 236 180
Additional fees in respect of prior year audit 98 53
Fees payable to the Company's auditors for the audit of Company's subsidiaries 307 232
6. Taxation
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Current tax:
Current year tax 8,769 6,756
Video Games Tax Relief (115) (1,067)
Adjustments in respect of prior periods:
Video Games Tax Relief - (589)
Other (1,103) 564
Deferred tax:
Origination and reversal of temporary differences (2,418) (2,999)
Total tax charge 5,133 2,665
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Reconciliation of total tax charge:
Profit before tax 25,323 (1,080)
Taxation using the UK Corporation Tax rate of 25% (2023: 23.5%) 6,331 (254)
Effects of:
Expenses not deductible for tax purposes 529 3,964
Video Games Tax Relief (115) (1,067)
Adjustment in respect of prior periods (1,103) (25)
Change in tax rate - (192)
Difference in overseas tax rates (509) 239
Total tax charge 5,133 2,665
Deferred taxes at the balance sheet date have been measured using the enacted
local tax rates of between 12.5% and 32.5% (2023: 12.5% and 32.5%).
7. Earnings per share
The calculation of the basic earnings per share is based on the Profit/(loss)
attributable to the shareholders of everplay group plc divided by the weighted
average number of shares in issue. The weighted average number of shares takes
into account treasury shares held by the Team17 Employee Benefit Trust. The
diluted earnings per share uses the same calculation, however, the number of
shares in issue are adjusted to include shares considered to be dilutive under
the treasury stock method. An option is considered to be dilutive when the
total proceeds per option is less than the average share price for the year.
Year ended Year ended
31 December 31 December
2024 2023
Profit/(loss)attributable to shareholders £'000 20,190 (3,745)
Weighted average number of shares 143,924,037 143,809,466
Weighted average diluted number of shares 144,250,472 144,005,551
Basic earnings/(loss) per share (pence) 14.0 (2.6)
Diluted earnings/(loss) per share (pence) 14.0 (2.6)
8. Intangible Assets
Customer and developer relationships Publish-ing rights
Development costs Acquired apps £'000 £'000 Other intangibles
£'000 Brands £'000 Goodwill £'000 Total
£'000 £'000 £'000
Cost
At 1 January 2023 55,492 80,683 29,354 5,280 - 113,424 124 284,357
Additions 32,184 - - - - - 900 33,084
Adjustments - - 8,269 - - (5,561) - 2,708
Amounts arising on acquisitions - - - - - 2,103 - 2,103
Translation on foreign operations (195) (66) (405) (261) - (2,843) (4) (3,774)
Disposals (3,401) - - - - - - (3,401)
At 31 December 2023 84,080 80,617 37,218 5,019 - 107,123 1,020 315,077
Additions 24,962 - - - 2,000 - - 26,962
Translation on foreign operations (1,097) (133) (1,730) 85 - (2,586) (48) (5,509)
Disposals (1,678) - - - - - - (1,678)
At 31 December 2024 106,267 80,484 35,488 5,104 2,000 104,537 972 334,852
Accumulated Amortisation
At 1 January 2023 28,662 16,873 4,144 528 - - 41 50,248
Charge for the year 12,674 6,118 6,365 512 - - 764 26,433
Impairment 11,121 - - - - 20,879 - 32,000
Translation on foreign operations (48) (6) (100) (37) - - (4) (195)
Disposals (3,401) - - - - - - (3,401)
At 31 December 2023 49,008 22,985 10,409 1,003 - 20,879 801 105,085
Charge for the year 13,482 6,112 4,916 500 256 - 90 25,356
Net impairment 4,742 - - 3,572 - 991 - 9,305
Translation on foreign operations (281) (26) (588) 29 - 353 (42) (555)
Disposals (1,321) - - - - - - (1,321)
At 31 December 2024 65,630 29,071 14,737 5,104 256 22,223 849 137,870
Net carrying amount
At 31 December 2024 40,637 51,413 20,751 - 1,744 82,314 123 196,982
At 31 December 2023 35,072 57,632 26,809 4,016 - 86,244 219 209,992
Adjustments
During the previous year the valuation of brands related to the acquisition of
astragon Entertainment GmBH was reassessed and an adjustment was identified in
the valuation model after the permitted IFRS 3 measurement period for
determining fair value. This reassessment increased the valuation of the
acquired apps asset by £8,269,000, whilst decreasing the value of Goodwill by
£5,561,000 and increasing the related deferred tax liability by £2,708,000.
These reclassification adjustments have been made in the current year
accordingly.
Development costs
The Group capitalises the costs of developing new games for release to the
market. The balance consists of internal salary costs, advances payable to
external developers under development agreements and other external payments.
Amortisation is calculated over the assets' useful life of between 2 to 5
years. The assets are tested for impairment biannually or more frequently if
there are indicators of impairment.
Indicators of impairment
The recoverable amount of development cost assets at 31 December 2024 are
determined from the value in use. In arriving at a value in use, management
has used a 2 to 3 year cashflow forecast in line with the expected useful life
of the assets. These cashflows are not discounted due to the short-term nature
of the assets. Through this process, impairment of £4,742,000 (2023:
£11,121,000) was recognised on development cost assets. This impairment is
due to the titles not meeting their full market potential in a congested
marketplace. Impairment is stated net of £1,120,000 (2023: £Nil) reversal of
impairments.
Key assumptions used for value-in use calculations
Management considers the projected future cash inflows to be the key
assumption in calculating the value in use of each asset. Budgeting is done on
a game by game basis, with game revenues varying based on management's best
estimates.
Impact of possible changes in key assumptions
In assessing the carrying value of development costs, management performed
sensitivity analysis on each of the key assumptions. In assessing the
sensitivity of projected future cash inflows the effects of a decrease in
revenue of 10% over the remaining useful life were modelled for all
development cost assets with an indicator of impairment and this would cause
an additional impairment of £263,000 (2023: £604,000).
Brands
These reflect the value of brands acquired either through direct purchases of
IP recognised under IAS 38 "Intangible Assets" or brands recognised under IFRS
3 "Business Combinations". Amortisation on brands are calculated on a straight
line basis over the assets estimated useful life of between 10 and 15 years.
Brands
10 to 15 years straight line
Acquired games and apps
These represent the fair value of games and apps arising at acquisition. The
assets are tested for impairment annually or more frequently if there are
indicators of impairment. Amortisation is calculated over the estimated useful
life using the following policy:
Acquired games and apps 7 to 10 years
straight-line
Indicators of impairment
The financial performance of games and apps were assessed against the
forecasts produced at the point of acquisition for indicators of impairment.
Where an impairment trigger was identified due to under performance, a 10 year
cash flow forecast was produced to measure the value in use. No impairment was
identified through this process.
Key assumptions used for value-in use calculations
Management considers the pre-tax discount rate to be a key assumption in the
calculation of value in use and the rate used in the model is 15.7%. We
reviewed sensitivities to this and any increase of the discount rate to over
36.1% would reduce the headroom in the value in use model over the carrying
value to £Nil.
Projected future cash inflows (revenue) from unreleased titles are also
considered to be a key assumption. Budgeting is done on a game by game basis,
with game revenues varying based on management's best estimates. A reduction
of 42% to future unreleased sequel revenue in the model would reduce the
headroom over the carrying value to £Nil.
Customer and developer relationships
This is the fair value of relationships held with customers and developers
acquired through business combinations. Group capitalises the costs of
developing new games for release to the market. Amortisation is calculated
over the assets estimated useful life of 10 years. The assets are tested for
impairment annually or more frequently if there are indicators of impairment.
Customer and developer relationships 10 years straight-line
Goodwill
The Group tests for impairment annually, or more frequently if there are
indicators that goodwill might be impaired. There are 4 CGUs in the Group
which are as follows:
● Team 17 Digital (Indie games)
● StoryToys (Edutainment)
● astragon (Simulation)
● Team17 USA (Mobile licence)
The carrying value of Goodwill allocated to those CGU's is split as follows:
StoryToys (Edutainment) astragon (Simulation) Team17 (USA)
Team 17 Digital £'000 £'000 £'000 Total
£'000 £'000
At 1 January 2023 22,379 20,124 47,929 22,992 113,424
Adjustments - - (5,561) - (5,561)
Acquisitions - - 2,103 - 2,103
Foreign exchange - (450) (1,254) (1,139) (2,843)
Impairment - - - (20,879) (20,879)
At 31 December 2023 22,379 19,674 43,217 974 86,244
Foreign exchange - (916) (2,040) 17 (2,939)
Impairment - - - (991) (991)
At 31 December 2024 22,379 18,758 41,177 - 82,314
The recoverable amount of each of the CGUs at 31 December 2024 is determined
from the value in use which is higher than the fair value less costs of
disposal. In arriving at a value in use management has used a discounted
5-year bottom up forecast before applying a long-term growth assumption. The
discount rates and terminal growth used in the impairment assessment of each
CGU is as follows:
2024 2023
Pre-Tax Discount Rate Used Terminal Growth Rate Used Pre-Tax Discount Rate Used Terminal Growth Rate Used
CGU
Team 17 Digital 14.1% 2.0% 12.9% 2.0%
StoryToys (Edutainment) 21.3% 2.0% 21.2% 2.0%
astragon (Simulation) 15.7% 2.0% 17.5% 2.0%
Team17 USA 22.3% 2.0% 29.5% 2.5%
Key assumptions used for value-in use calculations
When reviewing for impairment of goodwill in CGU's, management prepares cash
flow forecasts to estimate the value in use. Management considers the
following to be the key assumptions in the cash flow:
● Pre-Tax discount rate
● Terminal growth rate
During the year the pre-tax discount rate has been adjusted to take into
account the Group's size risk premium which is based on the market cap for the
Group. Projected future cash inflows (revenue) are also considered to be a key
assumption. Budgeting is done on a game by game basis, with game revenues
varying based on management's best estimates.
Impact of possible changes in key assumptions
In assessing the carrying value of Goodwill management performed sensitivity
analysis on each of the key assumptions. The result of the sensitivity tests
on each CGU are detailed below. In assessing the sensitivity of projected
future cash inflows the sensitivity test was split between new release revenue
and back catalogue revenue. New release revenue is deemed to be inherently
riskier in nature and as such a higher level of sensitivity was applied to new
release cash inflows than to back catalogue cash inflows.
The recoverable amount of each CGU would equal its carrying amount if the key
assumptions were to change as follows:
2024 2023
Decrease of Terminal Growth Rate Decrease of Terminal Growth Rate
Reduction in New Release Revenue Reduction in Back Catalogue Revenue Increase in Discount Rate Reduction in New Release Revenue Reduction in Back Catalogue Revenue Increase in Discount Rate
CGU
Team 17 Digital >100%* 45% 22.9% N/A(+) >100%* 36% 14.4% 143%
StoryToys (Edutainment) 47% 22% 10.2% 47.8% 24% 23% 4.6% 10.4%
astragon (Simulation) 12% 39% 2.9% 5.0% 9% 32% 1.9% 3.3%
Team17 (USA) See impairment section below
*In the case of a 100% reduction in new release revenue the recoverable amount
of the CGU would still exceed its carrying value.
+ The recoverable amount of the CGU is supported by the 5-year plan period. As
such no change in terminal growth rate assumption will cause impairment.
Impairment of Team17 (USA)
The impairment review of Team17 (USA) identified impairment of £991,000 to
Goodwill (2023: £20,879,000) and a further impairment of £3,572,000 to
Customer and Developer Relationship intangible assets (2023: £nil). Team17
(USA) is focussed on developing games for the mobile subscription market. Due
to an increasingly competitive landscape and key employees leaving the CGU and
the current pipeline the remaining carrying value of Goodwill and Intangible
assets associated with the purchase were impaired to nil value. As no further
impairment of these assets is possible no associated sensitivity analysis has
been performed.
Other intangibles
These are made up of capitalised software and are amortised under the
following policies:
Capitalised software 2 years straight-line
9. Cash and cash equivalents
31 December 2024 31 December 2023
£'000 £'000
Cash at bank and in hand 60,178 39,923
Restricted cash 2,699 2,901
62,877 42,824
Included within the restricted cash balance above is £2,699,000 (FY 2023:
£2,901,000) held by the Team17 Employment Benefit Trust. This cash is not
readily available for use by the Group to meet its everyday operating costs
but can be spent for the benefit of the employees and as such is considered
restricted cash.
10. Contingent consideration
31 December 2024 31 December 2023
£'000 £'000
Amounts falling due in under one year - 4,944
Included within trade and other payables is £nil (FY 2023: £4,944,000) of
contingent consideration. Contingent consideration is broken down as follows:
Business acquisitions IP Purchase Total
£'000 £'000 £'000
At 1 January 2023 13,026 14,308 27,334
On acquisition 964 - 964
Fair value adjustment (2,614) (2,472) (5,086)
Interest 518 608 1,126
Foreign exchange (332) - (332)
Payment - Cash (classified as investing activities in the statement of cash (6,886) (7,500) (14,386)
flows)
Payment - Cash (classified as operating activities in the statement of cash (4,189) - (4,189)
flows)
Payment - Shares (487) - (487)
At 31 December 2023 - 4,944 4,944
Interest - 56 56
Payment - Cash (classified as investing activities in the statement of cash - (5,000) (5,000)
flows)
At 31 December 2024 - - -
The maximum value of outstanding contingent consideration at the year end was
£nil (FY 2023: £16,700,000). The value of the earnout was determined based
on the performance criteria included in the underlying contract.
11. Cash generated from operations
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Cash flow from operating activities
Profit/(Loss) before tax 25,323 (1,080)
Adjustments for:
Amortisation of intangible assets 25,356 26,433
Impairment of intangible fixed assets 9,305 32,000
Depreciation of property, plant and equipment 596 692
Depreciation of right-of-use assets 676 563
Gain on disposal of intangible assets (43) -
Loss on disposal of tangible assets (7) 34
Fair value movement in contingent consideration - (5,086)
Share based compensation 741 (474)
Share of (profit)/loss of associates (307) 205
Finance income (1,696) (344)
Financial expenses 243 1,261
Operating cash flow before changes in working capital 60,187 54,204
(Increase) in trade and other receivables (9,116) (394)
Increase/(decrease) in provisions 14 (27)
Increase/(decrease) in trade and other payables 7,597 (3,301)
(Increase)/decrease in inventory (171) 239
Cash generated from operations 58,511 50,721
12. Dividends not recognised at the end of the reporting period
Since the year end the directors have recommended the payment of a final
dividend of 2.7 pence per fully paid ordinary share (2024: Nil). The aggregate
amount of the proposed dividend is expected to be paid on 4 July 2025. The
dividend not recognised as a liability at year end, is £3,893,000 (2023:
Nil).
(( 1 )) Newzoo Total gaming market growth (2024)
(( 2 )) Video Games Insights
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://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 (https://www.lseg.com/privacy-and-cookie-policy)
. END FR BIGDXRBDDGUURecent news on Everplay
See all newsREG - Everplay Group plc - Holdings in Company
AnnouncementREG - Everplay Group plc - Holding(s) in Company
AnnouncementREG - Everplay Group plc - Holdings in Company
AnnouncementREG - Everplay Group plc - Unaudited Final Results 2024
AnnouncementREG - Everplay Group plc - Holding(s) in Company
Announcement