REG - tinyBuild, Inc. tinyBuild Inc - TBLS - 2024 Half Year Results
30/09/2024 07:00
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RNS Number : 1253G tinyBuild, Inc. 30 September 2024
30 September 2024
tinyBuild, Inc
("tinyBuild" or the "Group")
2024 Half Year Results
tinyBuild (AIM:TBLD), a premium video games publisher and developer with
global operations, is pleased to announce its unaudited results for the six
months ended 30 June 2024.
Financial highlights:
· Revenue of $18.8m (H1 2023: $23.3m), 19% lower primarily due to a
further drop in development service revenues and continued underperformance of
Versus Evil (VE).
· Adjusted EBITDA¹ loss of $1.9m (H1 2023: $1.2m loss), due to
lower revenues and relatively stable development cost amortization.
· Gross profit improved to $4.1m (H1 2023: $8.8m loss), due to
lower impairment of development costs, while cost of sales remained broadly
stable at 62% of revenues (H1 2023: 59%).
· Cash flows from operating activities dropped to $2.0m (H1 2023:
$6.6m), reflecting the flow through of lower revenues and the negative net
working capital contribution.
· Impairment of development costs $3.0m (H1 2023: $18.3m) due to
lower revenue prospects for Broken Roads (VE title).
· In January 2024, tinyBuild raised $12.3m ($11.4m net proceeds)
from existing and new shareholders in a placing, subscription and open offer.
Alex Nichiporchik (CEO) provided $9.7m in new funds, Atari $2m and other
existing shareholders $0.6m.
· Sale of Totally Reliable Delivery Service and Surgeon Simulation
for an aggregate consideration of $3m (upfront net proceeds of $2.3m were
received in H1 2024).
· Net cash position of $9.2m as at 30 June 2024 (31 December 2023:
$2.5m), after $8.7m investment in game development costs (H1 2023: $16.9m).
Cash and cash equivalents remained higher than expected throughout the summer
and it is anticipated to reduce towards the end of the year as the Company
continues to invest in a disciplined manner in upcoming game releases.
(
1) Includes amortisation of Development costs. Excludes impairment of
Development costs ($3.0m) and share-based compensation expenses (see note 6).
Operational highlights:
· Contribution from own-IP (first and second party) titles
increased to 78% of Gaming revenues(2) (H1 2023: 65%), primarily due to
stronger performance of second-party titles.
· Back catalogue(3) sales decreased slightly to 89% of Gaming
revenue(2) (H1 2023: 93%), due to a higher number of new titles launched in
the first six months 2024 compared to 2023.
· Release of new titles such as Lil' Guardsman, Tamarak Trail,
Broken Roads and Astor: Blade of the Monolith, plus expansion of catalogue
with the launch of Cartel Tycoon for consoles and Kill It With Fire 2 (early
access).
· The announcement trailer of Kingmakers collected tens of
thousands views across all social networks in the first few weeks, making it
one of the most successful announcements in the Group's history.
· Among other titles already announced, Streets of Rogue 2, VOIN,
FEROCIOUS, and SAND continue to track in line with expectations.
(
2) Excludes revenues from Development Services and Events
(3) Includes titles released prior to the current fiscal year
Employee Benefit Trust:
· The Employee Benefit Trust continued to purchase ordinary shares
on the market from time to time and now holds a total of 3,937,587 ordinary
shares as at 27 September 2024. The EBT was set up in 2022 for the benefit of
current and future employees and will continue to act independently of the
Group to satisfy potential future option exercises of vested options granted.
Post-Period End highlights:
· Released new titles Train Valley World, Level Zero: Extraction,
DUCKSIDE, Rawmen and Drill Core, plus downloadable content (DLC) launches for
Not for Broadcast and Punch Club 2: Fast Forward, which is now also available
on iOS.
· New trailers for season 2 of the Hello Neighbor animated series,
Welcome to Raven Brooks, were well received, with a release planned in the
second half of the year.
Outlook
· The pipeline for the remainder of 2024 and beyond is strong and
includes a number of larger-budget (above $1m), high-potential games alongside
continuous investment in the catalogue including updates, DLCs and platform
launches.
· The implication of the conflict in Ukraine and the evolving
macroeconomic situation impose caution and vigilance in the medium and long
term. In particular, tinyBuild continues to carefully assess the position of
its staff, its exposure in terms of revenues and any other factor that may
have an impact on the business.
· All considered, the Board remains confident the Company is on
track to deliver results in line with expectations.
Alex Nichiporchik, Chief Executive Officer of tinyBuild, commented:
"In the first half of 2024 we achieved significant milestones: over 3 million
wishlists across the portfolio, of which over 1 million in June alone after
our new dedicated event tinyBuild Connect. Overall, our playable demos
accumulated over 10 million views on YouTube with a total of 1.8 million hours
played across only three games. tinyBuild currently has 4 titles on the Steam
Top200 Wishlist chart, 3 of which are in the Top 100."
"In a difficult environment, our strategy of investing cautiously in
higher-budget games is showing good results: we are building a diversified
portfolio of own-IP, which gives us the best upside with the minimum risk.
Once again, I want to thank our exceptional people for their enthusiasm and
dedication - we have achieved a lot so far and we can look to the future with
cautious optimism."
Enquiries:
tinyBuild, Inc investorrelations@tinybuild.com (mailto:investorrelations@tinybuild.com)
Alex Nichiporchik - Chief Executive Officer
Giasone (Jaz) Salati - Chief Financial Officer
Berenberg (Nominated Advisor and Joint Broker) +44 (0)20 3207 7800
Mark Whitmore, Ciaran Walsh, Milo Bonser
SEC Newgate (Financial PR) tinybuild@secnewgate.co.uk
Robin Tozer, Molly Gretton, Harry Handyside +44 (0)7540 106366
About tinyBuild:
Founded in 2013, tinyBuild (AIM: TBLD) is a leading premium AA-rated and indie
video games publisher and developer. tinyBuild has a strong portfolio of over
80 titles and it strategically secures access to IP and partners with
developers to establish a stable platform on which to build multi-game and
multimedia franchises.
Headquartered in Bellevue, Washington, USA, the Group has key operations
worldwide, with employees, contractors or partners in multiple locations
across five continents. tinyBuild's geographic diversity enables it to source
high-potential IP, cost-effective development resources and a loyal customer
base through innovative grassroots marketing. tinyBuild was admitted to AIM, a
market operated by the London Stock Exchange, in March 2021.
For further information, visit: www.tinybuildinvestors.com
(http://www.tinybuildinvestors.com) .
OPERATIONAL REVIEW
The first half of 2024 in the gaming industry was a spillover of game
cancellations and studio closures that occurred in 2023. Funding that was
abundant until recently and supported ever more ambitious projects, suddenly
disappeared leaving many studios struggling. Looking forward, we all need to
listen to gamers first and foremost, validating our decisions as often as
possible with the help of demos and real data.
Over the past few years we have refocused on products that connect with
audiences, on infinitely re-playable games centred around systems: the
one-thousand hour game. Over the past few months, we have started seeing the
benefits of this approach. Since the beginning of the 2024 we have generated
over three million wishlists across the portfolio, of which over one million
wishlists in June alone. Shortly after our first dedicated showcase in May
(tinyBuild Connect) we had six titles on the Steam Top200 Wishlist chart,
three of which in the Top 100: Streets of Rogue 2, Kingmakers, Level Zero:
Extraction, DUCKSIDE, SAND and FEROCIOUS.
We are also leaner and more efficient, with a lower and more flexible cost
base. Significant effort has gone into enhancing internal processes, improving
visibility and maintaining ownership of each line of budget, from the bottom
up. We are improving the quality and timeliness of our internal reporting
while making it more timely, which gives everyone more time to act in a
fast-evolving industry.
In the first half, back catalogue and own-IP titles contributed 89% and 78% of
Gaming revenue, respectively, (H1 2023: 93% and 65%), broadly in line with the
average of the past five years. The pipeline of new titles has been realigned
to maximise the long-term revenue and profitability potential, while
maintaining a well-diversified portfolio.
In an uncertain environment, the Board is pleased with the operational
reorganisation achieved to date and it is confident the Group is progressing
in line with expectations for the financial year 2024.
Current portfolio and pipeline
In the first half of 2024, the release schedule included titles mostly from
Versus Evil, delayed from the previous year:
· Lil' Gardsman (PC and consoles) - A deduction adventure. Lil, an
unlikely 12-year-old hero, is tasked with deciding the fate of over 100 unique
characters.
· Tamarak Trail (PC and consoles) - A deck-building roguelike, with
customisable dice as players battle through randomly generated trails.
· Broken Roads (PC and consoles) - A narrative-driven RPG set in
Australia with a very distinct look.
· Astor: Blade of the Monolith (PC and consoles) - A fast-paced
action RPG where players play as Astor, a young warrior determined to unveil
the secrets behind his creators' unforeseen demise.
· Kill It With Fire 2 (Early Access, PC only) - An interdimensional
action comedy game about murdering spiders. As The Exterminator, players will
travel across the multiverse.
After the end of the period, tinyBuild published:
· Train Valley World - An engrossing transport tycoon inspired by
the genre classics. Build and manage efficient railroads across the globe -
solo or in multiplayer.
· Level Zero: Extraction - Tactical extraction shooter meets
immersive survival horror. Play as rival mercenaries fighting for loot, or as
alien monsters hunting humans. Solo or in multiplayer.
· Rawmen (EPIC launch) - A light-hearted, third person food
fighter. Players will battle alongside or against their taste buds (2-8
players), pitting average cooks with a talent for hurling fiery feasts against
one another.
· Downloadable content (DLC) for Not for Broadcast and Punch Club
2: Fast Forward.
· Drill Core - Manage a team of miners, carriers, and guards
through hazardous missions to extract minerals and power the drill platform.
· DUCKSIDE - A persistent world survival game with player versus
player, player versus environment, crafting, base building where you play as a
duck wearing funny hat while wielding dangerous weapons.
Looking at the rest of 2024 and beyond, the pipeline is looking strong:
· Streets of Rogue 2 - an immersive role-playing game (RPG) sandbox
set in a vast, randomly generated open world that gives you maximum freedom to
fight, sneak, hack, farm, build, steal, or talk your way to power.
· Kingmakers - Go back in time to a war-torn medieval era with a
vast arsenal of modern weapons, change the course of history, and save the
future in this epic action/strategy sandbox.
· FEROCIOUS - a survival shooter in which you will discover a lost
prehistoric world full of deadly creatures under the control of hostile
forces.
· SAND - A multiplayer sandbox shooter from the developers of
Secret Neighbor.
Investing and innovating for growth
In a period of uncertainty in the industry, the Group continuously reviews the
quantum and allocation of investments into new higher-budget and
higher-potential titles, with lower-risk investment in catalogue expansion.
Since before the IPO, tinyBuild's mantra has been to build a well-diversified
portfolio of own-IP that can be scaled into cross-media franchises, and we
remain loyal to that while maintaining strict discipline on our investments.
Our nimble and decentralised structure is capable of handling larger projects,
delivering high-quality titles across platforms on time and on budget. Recent
announcements like Kingmakers and DUCKSIDE are good examples of how our
sophisticated marketing strategy can attract a large audience even for a
brand-new franchise.
So far in 2024, our focus has been on cash generation and financial stability.
The executive team has become even more selective about signing up new titles,
while we continue to take advantage of opportunities created by an uncertain
macroeconomic environment. We closed two small IP disposals and we stepped
away from any potential acquisitions. We continue to invest more directly in
studios we already have a good working relationship with and in titles spawned
from our internal studios.
People
In late 2023, we took the difficult decision to initiate a cost action plan
that led to the closure of four studios and a reorganisation of our publishing
teams. These changes were not made lightly, and we understand the impact they
have had on our employees. As a result, the number of employees decreased to
less than 400 in June 2024.
tinyBuild continues to support all its staff (employees and independent
contractors) and their families affected by the war in Ukraine and it
continues to carefully monitor the situation. Having helped staff move out of
the riskiest areas, the Group remains focused on mental health and
administrative support so they can settle in their preferred location across
Europe.
Position and strategy
tinyBuild is well-positioned with a strong pipeline of new titles and a proven
ability to attract, screen and market high-quality game franchises. Our
balanced investment strategy aims at building a diversified portfolio of
high-potential own-IP, and our multimedia franchise model allows us to extend
the life of our IP, maximising our return on investment.
Our medium-term strategy is to expand our position as a leading global video
games developer and publisher, focussing on IP ownership while creating
long-term scalable franchises across multiple media formats. 2024 has seen
significant progress towards that ambition, and I would like to thank all of
our shareholders for their support.
Alex Nichiporchik
Chief Executive Officer
30 September 2024
FINANCIAL REVIEW
Results for the six months ended June 2024 were in line with expectations, and
the Group closed two small IP disposals in the period to strengthen its
financial position closing the period with $9.2m in cash and cash equivalents
(no debt).
Revenue
In the six months to June 2024, tinyBuild revenues were $18.8m, a 19% decrease
compared to the previous period (H1 2023: $23.3m), primarily attributable to
the $3.8m drop in development services revenues and to continued
underperformance of Versus Evil, only partly offset by tinyBuild core
publishing label's retail sales. Excluding development services and events,
revenues in the first half decreased 4% to $16.8m, highlighting the resilience
of the portfolio. Back catalogue performed strongly in the first half,
supported by over 80 titles and by well-established franchises such as Hello
Neighbor, Graveyard Keeper, Potion Craft and Streets of Rogue. Revenue from
events, primarily DevGAMM, were stable at $0.6m as the Group consolidated the
new events in Central and Western Europe.
FINANCIAL REVIEW (continued)
Adjusted EBITDA and Operating Profit
Adjusted EBITDA is presented net of amortisation of development costs,
excluding impairment of development costs, share-based compensation expenses,
exceptional costs (e.g. legal costs related to M&A) and other operating
income, giving a clear yet conservative picture of the business progression.
Adjusted EBITDA was negative $1.9m ($1.2m loss in H1 of 2023), reflecting a
significantly lower revenue base, stable amortisation of development costs
($4.5m in H1 2024 vs $5.0m in H1 2023), and a less favourable revenue mix
(higher share of third- and second-party titles).
Operating profit for H1 2024 was negative $6.2m (H1 2023: $31.9m loss), after
accounting for the $3.0m impairment of development costs (H1 2023: $18.3m).
Excluding the impairment charges, a lower EBITDA is offset by a $0.8m gain on
disposal and by lower general and administrative expenses ($11.1m in H1 2024
compared with $13.6m in H1 2023).
Finance costs and taxation
As the Group carries no debt, finance costs were immaterial in H1 2024.
Taxation charges were $0.3m (H1 2023: $6.4m credit).
Impairment
In H1 2024, tinyBuild incurred $3.0m charges relating to the impairment of
development costs ($18.3m in H1 2023) and no charges relating to
M&A-related intangibles ($6.1m and $2.7m relating to goodwill and other
intangibles in H1 2023 respectively). These non-cash charges reflect the
adjustment of expectations for future revenues of Broken Roads following a
disappointing launch in April 2024.
Cash Flow
Cash flows from operating activities were $2.0m ($6.6m in H1 2023), including
a $1.4m decrease in net working capital (H1 2023: $4.2m increase). Software
development costs, mainly consisting of developer salaries, advances,
localisation and porting, decreased 48% to $8.7m ($16.9m in H1 2023),
reflecting the rationalisation in investment for upcoming pipeline releases
carried out towards the end of 2023.
In January 2024, tinyBuild raised $12.3m ($11.4m net proceeds) from existing
and new shareholders in a placing, subscription and open offer. Alex
Nichiporchik (CEO) provided $9.7m in new funds, Atari $2.0m and other existing
shareholders $0.6m.
Employee incentive plan and EBT update
The Employee Benefit Trust continued to purchase ordinary shares on the market
from time to time and now holds a total of 3,937,587 ordinary shares as at 27
September 2024. The EBT was set up in 2022 for the benefit of current and
future employees and will continue to act independently of the Company to
satisfy potential share awards, restricted stock units and future option
exercises, once vested.
As previously announced, the Remuneration Committee of tinyBuild intends to
utilise share awards to incentivise and retain key employees and executive
directors and further announcements are expected to be made in the future. The
share awards not only encourage share ownership and stakeholder alignment in
the business but also serves to preserve cash resources that would otherwise
be used by the Company to satisfy bonus awards.
Financial Position
The net cash position at the end of June 2024 was $9.2m ($2.5m at the end of
December 2023), with the majority of the variation driven by the $11.4m net
proceeds from the capital raise closed in January. tinyBuild has zero debt.
Giasone (Jaz) Salati
Chief Financial Officer
30 September 2024
TINYBUILD INC.
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2024
TINYBUILD INC.
CONSOLIDATED CONDENSED INCOME STATEMENT
6 months ended 30 June 2024 6 months ended 30 June 2023 Year ended 31 December 2023
Note
Unaudited Unaudited Audited
$'000 $'000 $'000
Revenue 3 18,835 23,295 44,663
Cost of sales:
- Cost of sales (11,692) (13,832) (30,980)
- Impairment of development costs 7 (3,028) (18,288) (36,206)
Total cost of sales (14,720) (32,120) (67,186)
Gross profit/(loss) 4,115 (8,825) (22,523)
Administrative expenses:
- General administrative expenses (11,092) (13,561) (26,090)
- Impairment of intangible assets 7 - (8,908) (11,849)
- Share-based payment expenses (102) (367) (414)
- Non-recurring costs - (281) (3,500)
Total administrative expenses (11,194) (23,117) (41,853)
Gain on disposal of intangible assets 773 - -
Other operating income 137 - 619
Operating loss (6,169) (31,942) (63,757)
Finance costs (62) (16) (128)
Finance income 68 261 391
Loss before tax (6,163) (31,697) (63,494)
Income tax (expense)/credit (323) 6,414 649
Loss for the period (6,486) (25,283) (62,845)
Attributable to:
Owners of the parent company (6,581) (25,523) (62,537)
Non-controlling interests 95 240 (308)
(6,486) (25,283) (62,845)
Basic and diluted loss per share ($) 5 (0.018) (0.126) (0.307)
Adjusted EBITDA* 6 (1,888) (1,249) (7,113)
*Adjusted EBITDA is a non-IFRS measure and is defined as earnings after
capitalised software development costs, but before interest, tax,
depreciation, amortisation, share-based payments expenses, impairment and
other significant one-off other income or expense items.
TINYBUILD INC.
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
6 months ended 30 June 2024 6 months ended 30 June 2023 Year ended 31 December 2023
Unaudited Unaudited Audited
$'000 $'000 $'000
Loss for the period (6,486) (25,283) (62,845)
Other comprehensive income/(loss) net of taxation
Exchange differences on translation of foreign operations - items that may be (57) 94 (24)
reclassified to profit and loss
Total comprehensive loss for the period (6,543) (25,189) (62,869)
Attributable to:
Owners of the parent company (6,638) (25,429) (62,561)
Non-controlling interests 95 240 (308)
(6,543) (25,189) (62,869)
TINYBUILD INC.
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
30 June 31 December 2023
2024
Unaudited Audited
ASSETS Note $'000 $'000
Non-current assets
Intangible assets 7 49,416 51,512
Property, plant and equipment:
- owned assets 443 661
- right-of-use assets 516 374
Other receivables 383 385
Total non-current assets 50,758 52,932
Current assets
Trade and other receivables 9,978 13,666
Cash and cash equivalents 9,202 2,500
Total current assets 19,180 16,166
TOTAL ASSETS 69,938 69,098
EQUITY AND LIABILITIES
Equity
Share capital 8 397 204
Share premium 76,810 65,593
Own shares (1,100) (1,031)
Warrant reserve 1,920 1,920
Translation reserve (74) (17)
Retained earnings (24,692) (18,213)
Equity attributable to owners of the parent company 53,261 48,456
Non-controlling interest (256) (351)
Total equity 53,005 48,105
LIABILITIES
Non-current liabilities
Lease liabilities 329 146
Deferred tax liabilities 455 388
Total non-current liabilities 784 534
Current liabilities
Trade and other payables 15,964 20,227
Lease liabilities 185 232
Total current liabilities 16,149 20,459
Total liabilities 16,933 20,993
TOTAL EQUITY AND LIABILITIES 69,938 69,098
TINYBUILD INC.
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
Share capital Share premium Own shares Warrant reserve Translation reserve Retained Total equity attributable to owners of the parent Non-controlling interest Total
earnings equity
Note $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2024 204 65,593 (1,031) 1,920 (17) (18,213) 48,456 (351) 48,105
Income/(loss) for the period - - - - - (6,581) (6,581) 95 (6,486)
Other comprehensive income:
Foreign exchange differences on translation of foreign operations - - - - (57) - (57) - (57)
Total comprehensive loss for the period - - - - (57) (6,581) (6,638) 95 (6,543)
Transactions with owners in their capacity as owners:
Issue of shares, net of transaction costs 8 193 11,217 - - - - 11,410 - 11,410
Share-based payments - - - - - 102 102 - 102
Own shares acquired - - (69) - - - (69) - (69)
Total transactions with owners 193 11,217 (69) - - 102 11,443 - 11,443
Balance at 30 June 2024 397 76,810 (1,100) 1,920 (74) (24,692) 53,261 (256) 53,005
TINYBUILD INC.
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
Share capital Share premium Warrant reserve Translation reserve Retained Total equity attributable to owners of the parent Non-controlling interest Total
earnings equity
Note $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2023 204 65,593 1,920 7 43,910 111,634 (43) 111,591
Income/(loss) for the period - - - - (25,523) (25,523) 240 (25,283)
Other comprehensive income:
Foreign exchange differences on translation of foreign operations - - - 94 - 94 - 94
Total comprehensive loss for the period - - - 94 (25,523) (25,429) 240 (25,189)
Transactions with owners in their capacity as owners:
Issue of shares, net of transaction costs 8 - - - - - - - -
Share-based payments - - - - 367 367 - 367
Total transactions with owners - - - - 367 367 - 367
Balance at 30 June 2023 204 65,593 1,920 101 18,754 86,572 197 86,769
TINYBUILD INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
6 months ended 30 June 2024 6 months ended 30 June 2023 Year ended 31 December 2023
Unaudited Unaudited Audited
Note $'000 $'000 $'000
Cash flows from operating activities
Cash generated from operations 9 1,987 6,289 10,617
Interest received 6 261 262
Net cash generated from operating activities 1,993 6,550 10,879
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired - (1,234) (1,234)
Software development costs (8,748) (16,925) (31,899)
Proceeds from disposal of intangible assets 2,557 - -
Costs arising from disposal of intangible assets (262) - -
Purchase of property, plant and equipment (11) (287) (180)
Net cash used in investing activities (6,464) (18,446) (33,313)
Cash flows from financing activities
Acquisition of own shares (69) - (1,031)
Proceeds from issuance of shares 12,299 - -
Transaction costs arising from issuance of shares (889) - -
Payment of principal portion of lease liabilities (168) (262) (531)
Net cash generated from/(used in) financing activities 11,173 (262) (1,562)
Cash and cash equivalents
Net increase/(decrease) in the period 6,702 (12,158) (23,996)
At beginning of period 2,500 26,496 26,496
At end of period 9,202 14,338 2,500
TINYBUILD INC.
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2024
1 GENERAL INFORMATION
tinyBuild Inc. ("the Company") is a public company limited by shares, and is
registered, domiciled and incorporated in Delaware, USA. The address of the
registered office is 1239 120(th) Ave NE, Suite A, Bellevue, WA 98005, United
States.
The Group ("the Group") consists of tinyBuild Inc. and all of its
subsidiaries. The Group's principal activity is that of an indie video game
publisher and developer.
The Board of Directors approved this interim financial information on 30
September 2024.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These condensed, consolidated financial statements for the interim half-year
reporting period ended 30 June 2024 have been prepared in accordance with IAS
34 'Interim Financial Reporting'. These interim financial statements do not
constitute full financial statements and do not include all the notes of the
type normally included in annual financial statements. Accordingly, these
financial statements are to be read in conjunction with the annual report for
the year ended 31 December 2023.
The annual financial statements of the Group are prepared in accordance with
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB"). The Annual Report and
Financial Statements for 2023 have been issued and are available on the
Group's investor relations' website:
https://www.tinybuildinvestors.com/documents-and-presentations.
With the exception of the new standards set out below, the Group has applied
the same accounting policies and methods of computation in its interim
consolidated financial statements as in its 31 December 2023 annual financial
statements.
Standard/amendment Effective date
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) (issued on 22 1 January 2024
September 2022)
Classification of Liabilities as Current or Non-current (Amendments to IAS 1) 1 January 2024
The above standards, that will apply for the first time in the next annual
financial statements, are not expected to have a material impact on the Group.
Tax charged within the 6 months ended 30 June 2024 has been calculated by
applying the effective rate of tax which is expected to apply to the Group for
the year ending 31 December 2024 as required by IAS 34.
The financial statements have been prepared on the historical cost basis
except for, where disclosed in the accounting policies, certain financial
instruments that are measured at fair value. The financial statements are
prepared in US Dollars, which is the functional currency and presentational
currency of the Group. Monetary amounts in these financial statements are
rounded to the nearest thousand US Dollars (US$'000).
Going concern
The Group remains in a significant net asset position of $69.9 million at the
reporting date. The Group continues to have no borrowings and has cash and
cash equivalents of $9.2m at the reporting date. Generating further funds
through the sale of intellectual property remains an option for the Group.
Furthermore, the Group has a number of high-potential games in the pipeline,
which are anticipated to contribute to organic revenue growth in the second
half of FY24. Having considered the information available and recent changes
to the business, the Directors have concluded that there are no material
uncertainties related to events or conditions that might cast significant
doubt upon the Group's ability to continue as a going concern.
As disclosed in the Operational Review, a reduction in workforce was
undertaken during the period as part of the Group's measures to reduce the
cost base.
3 REVENUE 6 months ended 30 June 2024 6 months ended 30 June 2023 Year ended 31 December 2023
Unaudited Unaudited Audited
An analysis of the Group's revenue is as follows: $'000 $'000 $'000
Revenue analysed by class of business
Game and merchandise royalties 16,837 17,455 36,581
Development services 1,408 5,224 6,919
Events 590 616 1,163
18,835 23,295 44,663
4 SEGMENTAL REPORTING
IFRS 8 'Operating Segments' requires that operating segments be identified on
the basis of internal reporting and decision-making. The Group identifies
operating segments based on internal management reporting that is regularly
reported to and reviewed by the Chief Executive Officer, who is identified as
the chief operating decision maker. Management information is reported as one
operating segment, being revenue from self-published franchises and other
revenue streams such as royalties, licensing, development and events.
Whilst the chief operating decision maker assessed there to be only one
segment, the Group's portfolio of games is split between those based on IP
owned by the Group and those based on IP owned by a third party and hence to
aid the readers' understanding of our results, the split of revenue from these
two categories is shown below.
Game and merchandise royalties 6 months ended 30 June 2024 6 months ended 30 June 2023 Year ended 31 December 2023
Unaudited Unaudited Audited
$'000 $'000 $'000
Owned IP 13,070 12,765 23,765
Third-party IP 3,767 4,690 12,816
16,837 17,455 36,581
Four customers were responsible for approximately 75% of the Group's revenues
(30 June 2023: three - 51%, 31 December 2023: three - 60%). Four customers
were responsible for approximately 43% of the Group's accounts receivable
balance (30 June 2023: three - 50%, 31 December 2023: three - 41%).
The Group has seven right-of-use assets located overseas with a carrying value
of $516,000 (30 June 2023: nine - $272,000, 31 December 2023: nine -
$374,000). The Group also has tangible fixed assets located overseas with a
total carrying value of $397,000 (30 June 2023: $687,000, 31 December 2023:
$541,000). All other non-current assets are located in the US.
5 EARNINGS PER SHARE
The Group reports basic and diluted earnings per common share. Basic earnings
per share is calculated by dividing the profit attributable to common
shareholders of the Group by the weighted average number of common shares
outstanding during the period, which excludes any treasury shares held by the
Group.
Diluted earnings per share is determined by dividing the profit attributable
to common shareholders by the weighted average number of common shares
outstanding, taking into account the effects of all potential dilutive common
shares, including options.
6 months ended 30 June 2024 6 months ended 30 June 2023 Year ended
31 December 2023
Unaudited Unaudited Audited
$'000 $'000 $'000
Total comprehensive loss attributable to the owners of the Group (6,581) (62,537)
(25,523)
Weighted average number of shares 369,513,019 203,284,429 203,877,356
Basic loss per share ($) (0.018) (0.126) (0.307)
6 months ended 30 June 2024 6 months ended 30 June 2023 Year ended
31 December 2023
Unaudited Unaudited Audited
$'000 $'000 $'000
Total comprehensive loss attributable to the owners of the Group (6,581) (62,537)
(25,523)
Weighted average number of shares 369,513,019 203,284,429 203,877,356
Dilutive effect of share options - - -
Dilutive effect of warrants - - -
Dilutive effect of restricted stock awards - - -
Weighted average number of diluted shares 369,513,019 203,284,429 203,877,356
Diluted loss per share ($) (0.018) (0.126) (0.307)
The 2,837,095 options outstanding at period end (30 June 2023: 3,143,531 and
31 December 2023: 2,963,027), 1,511,449 warrants outstanding at period end (30
June 2023: 1,511,449 and 31 December 2023: 1,511,449) and nil restricted stock
awards outstanding at period end (30 June 2023: 477,327 and 31 December 2023:
nil) are not included in the calculation of diluted earnings per share because
they are antidilutive for the periods ended 30 June 2024, 30 June 2023 and the
year ended 31 December 2023. These options could potentially dilute the basic
earnings per share in future.
Pursuant to IAS 33 'Earnings per Share', options whose exercise price is
higher than the value of the Group's security were not taken into account in
determining the effect of dilutive instruments. The calculation of diluted
earnings per share does not assume conversion, exercise, or other issue of
potential ordinary shares that would have an antidilutive effect on earnings
per share.
6 ALTERNATIVE PERFORMANCE MEASURES
The Directors of the Group have presented the performance measure 'Adjusted
EBITDA' as they monitor this performance measure at a consolidated level and
they believe this measure is relevant to an understanding of the Group's
financial performance. Adjusted EBITDA is calculated by adjusting profit from
continuing operations to exclude the impact of taxation, net finance costs,
share-based payment expenses, depreciation, impairment of intangible assets,
amortisation of purchased intellectual property, acquisition costs, legal and
professional costs associated with the purchase of subsidiaries and
intellectual property, Ukraine-related expenses and fair value gains on
contingent consideration liabilities. Adjusted EBITDA is not a defined
performance measure in IFRS. The Group's definition of Adjusted EBITDA may not
be comparable with similarly titled performance measures and disclosures by
other entities.
Amortisation of $4.5m (30 June 2023: $5.0m, 31 December 2023: $10.6m) of
software development costs has been included in arriving at Adjusted EBITDA as
they are a primary cost in the Group's ordinary course of business.
6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
$'000 $'000 $'000
Loss for the period (6,486) (25,283) (62,845)
Income tax expense/(credit) 323 (6,414) (649)
Finance costs 62 16 128
Finance income (68) (261) (391)
Share-based payment expenses 102 367 414
Amortisation of purchased intellectual property, brands and customer 1,758 2,327 4,482
relationships
Depreciation of property, plant and equipment 303 496 785
Impairment of development costs and other intangible assets 3,028 27,195 48,055
Legal settlement - - 3,500
Ukraine-related costs - 281 -
Acquisition costs - 27 27
Other operating income (137) - (619)
Gain on disposal of intangible assets (773) - -
Adjusted EBITDA (1,888) (1,249) (7,113)
7 INTANGIBLE ASSETS Purchased intellectual property Software development costs
Goodwill Brands Customer relationships Total
$'000 $'000 $'000 $'000 $'000 $'000
Cost:
As at 1 January 2023 13,202 1,815 4,261 29,966 65,698 114,942
Additions - internally generated - - - - 31,898 31,898
Additions - separately acquired 2,418 - - - - 2,418
Disposals (2,418) - - - (413) (2,831)
As at 31 December 2023 13,202 1,815 4,261 29,966 97,183 146,427
Additions - internally generated - - - - 8,748 8,748
Disposals - - - (2,000) (1,159) (3,159)
As at 30 June 2024 13,202 1,815 4,261 27,966 104,772 152,016
Amortisation and impairment:
As at 1 January 2023 9,456 806 659 6,900 16,736 34,557
Amortisation charge for the year - 73 353 4,056 10,652 15,134
Impairment charge for the year 6,164 - 2,773 2,912 36,206 48,055
Disposals (2,418) - - - (413) (2,831)
As at 31 December 2023 13,202 879 3,785 13,868 63,181 94,915
Amortisation charge for the period - 36 48 1,674 4,537 6,295
Impairment charge for the period - - - - 3,028 3,028
Disposals - - - (510) (1,128) (1,638)
As at 30 June 2024 13,202 915 3,833 15,032 69,618 102,600
Carrying amount:
As at 30 June 2024 - 900 428 12,934 35,154 49,416
As at 31 December 2023 - 936 476 16,098 34,002 51,512
During 2024, the Group has recorded impairment losses of $3.0m against the
carrying value of software development costs. $2.9m resulted from a
value-in-use calculation being performed for Broken Roads for which an
impairment indicator was identified due to a disappointing launch in April
2024. The related recoverable amount was calculated to be $0.5m. The value in
use calculation was based on a pre-tax discount rate of 7% and forecast net
revenues.
A 1% increase/decrease in the pre-tax discount rate would increase/decrease
the impairment charge by $5,000.
The disposals during H1 2024 related to the sale of the Totally Reliable
Delivery Service and Surgeon Simulator games. The total cash consideration was
$3m. The gross proceeds received were $2.6m with costs of disposal being
$0.3m. Therefore, net proceeds of $2.3m has been received as at 30 June 2024.
A net gain on disposal of $0.8m was recognised. The remaining gross proceeds
of $0.4m will be received at the earlier of the Company meeting certain
conditions or 6 months past the closing date.
8 SHARE CAPITAL 30 June 31 December 2023
2024
Unaudited Audited
Number Number
Class of share
Ordinary shares of $0.001 each 397,219,319 203,878,238
30 June 31 December 2023
2024
Unaudited Audited
$'000 $'000
Class of share
Ordinary shares of $0.001 each 397 204
On 17 January 2023, 29,251 Ordinary shares of $0.001 each were issued to
employees for $nil consideration. The shares are subject to a 12-month lock-up
period.
In January 2024, a fundraise was approved in a special meeting on 26 January
2024. As part of this fundraise, 193,341,081 Ordinary shares of $0.001 each
were issued at 5 pence per share raising gross proceeds of approximately $12.3
million in aggregate. Net proceeds were approximately $11.4 million.
9 CASH GENERATED FROM OPERATIONS 6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
$'000 $'000 $'000
Loss for the period (6,486) (25,283) (62,845)
Adjustments for:
Share-based payments 102 367 414
Amortisation of intangible assets 6,295 7,323 15,134
Impairment of development costs and other intangible assets 3,028 27,196 48,055
Gain on disposal of operations - - (708)
Write off of bad debt 946 - 87
Depreciation of tangible fixed assets 303 496 785
Loss on disposal of tangible fixed assets 9 39 80
Gain on disposal of intangible assets (773) - -
Finance costs 62 16 (391)
Finance income (68) (261) 128
Income tax expense/(credit) 323 (6,414) (649)
Movements in working capital:
Decrease in receivables 2,810 9,250 12,398
Decrease in payables (4,241) (5,075) (399)
Income tax paid (323) (1,365) (1,472)
Cash generated from operations 1,987 6,289 10,617
10 RELATED PARTY TRANSACTIONS
An analysis of key management personnel remuneration is set out below:
Key management personnel remuneration 6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
$'000 $'000 $'000
Short term employee benefits 636 1,559 2,511
Equity-settled share-based payments/(reversals) (52) 15 46
584 1,574 2,557
One member of key management left the Group during the period, forfeiting
125,932 share options with a weighted average exercise price of $1.59.
Transactions with other related parties
On 4 December 2023, tinyBuild agreed to a binding summary of terms relating to
a global settlement agreement to be entered into with Steve Escalante, Lance
James and Stall Proof, LLC relating to a claim which had been made against
tinyBuild following its acquisition of Versus Evil LLC ("Versus Evil") and Red
Cerberus LLC ("Red Cerberus") in November 2021. The Claimants were the
previous owners of Versus Evil and Red Cerberus. As a result, tinyBuild agreed
to pay to the Claimants $3.5 million in cash (in addition to legal costs). The
first payment was paid in December 2023 of $1.5 million. The second payment of
$2 million was paid during the period on 9 February 2024.
11 SUBSEQUENT EVENTS
Subsequent events have been reviewed and evaluated up to 30 September 2024
when these financial statements were approved and authorised for issue by the
Directors, and there are no material events to be disclosed or adjusted for in
these financial statements.
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