REG - World Chess PLC - Interim Results for Six Months Ended 30 June 2023
14/09/2023 11:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230914:nRSN3790Ma&default-theme=true
RNS Number : 3790M World Chess PLC 14 September 2023
14 September 2023
World Chess Plc
("World Chess" or the "Company" or the "Group")
Interim Results for the Six Months Ended 30 June 2023
World Chess plc (LSE: CHSS), a leading chess organisation seeking to promote
the mass market appeal of chess globally through the offering of different
chess-related activities, is pleased to announce its unaudited interim results
for the six months ended 30 June 2023.
Financial Overview
The first half of 2023 has been transformative for the Company. The structure
of the business has changed significantly when compared to the comparable
period in 2022. In addition to the listing, the Company has become
digital-first, focusing on the development of its official gaming platform as
well as launching and promoting the Armageddon Championship Series, and the
opening of World Chess Club Berlin.
This transition is reflected in the financial results for the period, with
€1.0m invested in the Arena, Club and strategic growth but with the
positioning of the Company now complete we look forward to further development
over the short and medium term.
· Revenue of €1.2m (H1 2022: €2.0m)
· Pre-tax loss of €2.3m (H1 2022: €0.9m)
· Fundraise of €3.5m (H1 2022: €1.0m)
· Invested €1.0m in development of the World Chess Arena and
World Chess Club Berlin
Corporate, strategic and operational progress
· Development of World Chess Arena, with multiple new developments
to the online platform including an IOS version and multi-language options to
further encourage and support the use of the platform
· Commencement of the World Chess Armageddon Series in March 2023.
Armageddon offers a new 'speed' approach to the traditional game and is being
broadcasted on 30 TV channels across over 20 countries
· Official opening of World Chess Club Berlin in April 2023, which has
a bar, event space, concept chess shop, coffee shop and cafe
· Listed on the Main Market of the London Stock Exchange on 6 April
2023
· 3-year partnership with IT.com Domains announced in June. The
partnership will see IT.com become an official sponsor of Armageddon
Post-period end
· Appointment of Novum Securities Limited as sole broker in August
2023
· Agreement to issue €1.5m of Equity in September 2023 of which
€0.3m has been received
Ilya Merenzon, Chief Executive Officer of World Chess, said:
"It's been a game-changing period for World Chess. A pivotal event was our
successful listing on the Main Market of the London Stock Exchange, attracting
new investors in the process who have shown great support for our plans.
"The opening of World Chess Club Berlin was another proud moment for the
team. We have been delighted with the environment we have created, in terms of
a social hub for the game, and the positive reception we have received from
players and customers. Taking the same concept formula, we are assessing
potential sites in other countries and cities for the next World Chess Club.
"The inaugural Armageddon Series has been a huge success in terms of player
response, audience numbers, commercial partnerships and promoting our brand.
Anticipation among fans has been building for the imminent Grande Finale and
we wish the finalist the best of luck.
"I would like to take this opportunity to thank our team and partners for
their hard work. With further exciting developments in the pipeline, we look
forward to bringing more news in due course."
The half-yearly financial report has not been audited or reviewed by auditors
pursuant to the Financial Reporting Council guidance on Review of Interim
Financial Information.
For more information, please visit https://worldchess.com/investors
(https://worldchess.com/investors) or contact:
World Chess Via Yellow Jersey PR
Ilya Merenzon, CEO
Novum Securities Limited +44 (0) 20 7399 9400
David Coffman / George Duxberry
Colin Rowbury
Yellow Jersey PR
Charles Goodwin +44 (0) 77 4778 8221
Annabelle Wills +44 (0) 77 7519 4357
Notes to Editors
About World Chess Plc
World Chess (LSE: CHSS) is a London-based chess gaming and entertainment
company and Fédération Internationale des Échecs ('FIDE') official
commercial partner. World Chess organised the FIDE Championship Matches in the
USA, and the UK, and revolutionised the sport by signing the biggest media
partnerships in history. World Chess develops Armageddon, the chess league for
prime-time television. World Chess also runs FIDE Online Arena, the exclusive
official chess gaming platform. More at worldchess.com
(https://worldchess.com/) .
INTERIM MANAGEMENT REPORT
World Chess Arena
World Chess Arena (the 'Arena'), the official FIDE gaming platform developed
and managed by World Chess, has seen further development and grown during the
period, adding important parts of the technical envelope and customer-facing
features, which have significantly improved the user experience.
Major updates in the period included server-side rendering and the
introduction of a new solution for the gaming engine that allows major
capacity and performance improvements and scalability of the platform.
An IOS version of the platform has also been released and the Arena has been
set up for multi-language versions.
The Group also further developed its proprietary fair play and anti-cheating
software, 'NightWatch'; which has been tested and approved by the FIDE
FairPlay commission. NightWatch has been deployed by the Arena and its
capability is being improved on a weekly basis.
World Chess Armageddon Series
Launched this year, Armageddon is a new format of tournament chess pioneered
by World Chess, with the games played at a fast pace, creating a superior
entertainment experience for both TV and arena audiences. The World Chess
Armageddon Series commenced in March 2023 with the Americas Regionals,
followed by the Asia and Oceania Regionals in April 2023, Women's Armageddon
Week in May 2023, and the Europe and Africa Regionals in June 2023. The Grand
Finale commenced on 14 September 2023 at the Armageddon studio at the World
Chess Club Berlin.
The Series, which features the winners of the online qualifications fighting
it out in blitz and Armageddon matches against the world's strongest
grandmasters, has been well received, generating a strong brand presence with
live or highlights covered on 30 broadcast channels across over 20 countries
and territories.
Through their support of the Armageddon Series, the Company continue its
partnership with Kaspersky, with whom we have a longstanding relationship
through our involvement with tournaments organised under the auspices of FIDE,
the governing body for international chess tournaments. We have also begun a
new partnership with IT.com which, following the success of the first
Armageddon Series, has entered into a new partnership agreement valued at more
than €1.2 million over three years.
World Chess Club Berlin
We were delighted to officially open the doors to the World Chess Club Berlin
in April 2023. The club is located in the centre of Berlin's cultural and
shopping district and is a stark contrast to the traditional chess clubs,
which tend to function out of multipurpose rooms.
The club, which features a bar, event space, concept chess shop, and coffee
shop, marks the launch of World Chess' ambitions to reinvent the chess club
culture in its entirety. The aim is to modernise the concept and function more
as a social and collaborative centre. World Chess sees Berlin as an obvious
location to debut this new and revised approach, given the cumulative factors
of the substantial popularity of chess within Germany, and its vibrant café
and bar scene.
World Chess Club Berlin will also act as a hub, hosting chess events for the
respective city as well as the rest of Europe. In addition, it will operate as
the Armageddon Chess Series' headquarters, with the 2023 series already being
staged and filmed from its bespoke, purpose-built Armageddon studio.
Listing and Fund Raise
In April 2023, the entire issued share capital of the Company was listed and
admitted for trading on the Main Market of the London Stock Exchange. The
Directors believe this will help to build the Company's profile, create value
for its shareholders and improve the Company's ability to raise further
capital over the coming years to support its growth strategy. The Directors
further believe that the reputation of the Main Market for regulation and good
governance structures will improve the Company's international visibility and
reputation, helping it to achieve its strategy.
At listing the Company issued 49,650,972 new ordinary shares for total cash
consideration of €3,475,568 and a further 14,861,840 new ordinary shares on
the conversion of a loan totalling €1,040,329.
The funds raised on listing provided the Group the ability to undertake the
development of the World Chess Arena and the release of the Arena 2.0 - a set
of new gaming features that will be released later this year.
Board Changes
Following admission, the Company welcomed Richard Collett (Chief Financial
Officer), Graham Woolfman (Non-Executive Chair) and Neil Rafferty
(Non-Executive Director) to the board.
Post-Period Events
In September 2023, the Company entered into an agreement for the issue of
equity to an existing shareholder whereby the Company will issue 21,663,386
new ordinary shares for total consideration of €1,508,737 payable in seven
instalments, the shares will be issued upon receipt of the final instalment of
the consideration which is to be paid in March 2024.
Further details of subsequent events are set out in note 14 of this unaudited
condensed consolidated interim financial information.
Principal Risks and Uncertainties
Taking considered risk is the essence of all business and investment activity,
in relation to risk the Company's main objective is to minimise the chance of
a material adverse outcome arising from causes which could reasonably have
been foreseen, this includes both 'upside' (opportunity) and 'downside'
(threat) risks.
The principal risks that are specific to the Group are summarised below, in
the opinion of the Directors these risks remain unchanged from those detailed
in the Company's prospectus which was published on 20 March 2023 and were set
out in the Company's annual report for the year ended 31 December 2022 which
was approved by the Board of Directors on 28 April 2023.
Subscriber growth
The Group's efforts to retain existing online subscribers and to attract new
online subscribers are critical to its business and depend, in part, on the
quality and breadth of the products it offers to online subscribers, the
overall online user experience and broader trends that impact online
subscribers' preferences and the Group's response to such changes. If not
successful, the Group's business could be negatively impacted.
Platform stability
Any significant disruption in service on the Group's platforms, in the Group's
computer systems or software or in the systems operated by third parties that
the Group utilises could damage the Group's reputation and result in a loss of
customers, which could have a material adverse effect on the Group's business,
results of operations, financial condition or prospects. The Group's brand,
reputation, and ability to attract and retain customers to use its platforms
depend upon the reliable performance of the Group's or its third-party
suppliers' cloud infrastructure, physical infrastructure, network
infrastructure and content delivery processes.
Data security
A significant part of the Company's business and products rely on the Group's
ability to comply with data protection laws (including, in particular, GDPR)
and to adequately protect the end users' data and privacy. An actual or
perceived failure to do so would significantly harm the Group's business and
could potentially lead to significant claims being made against the Group. In
order to mitigate this risk, the group has recently appointed a new head of
products risk and compliance, who will focus on ensuring that the Group's
products incorporate high standards of data governance and security.
Anti-Cheating
As seen from the recent media coverage around the fair play issues between
elite grandmasters, cheating can be a major obstacle for the development of
online chess on a professional level. Players receive an individual rating and
when attempting to raise it can try to violate fair play norms, cheating is a
major hurdle that exists on chess platforms and can harm the reputation and
overall integrity of a platform the problem persists.
World Chess is currently using state-of-the-art anti-cheating and fair play
technologies that comprise both the technical analysis, machine learning and
human component. The system will improve with time as more AI technologies are
employed, but for the meantime will continue to be an issue.
Fair play and anti-cheating measures require constant improvement and
investment, as well as enhanced chess education and understanding amongst
users. World Chess will also take steps to incentivise players to start their
over-the-board ('OTB') chess journey. Because of physical fair play measures
at OTB tournaments, players will have fewer (if any) incentives to cheat, thus
reducing their potential incentive to violate fair play norms online.
World Chess Online Arena Contract with FIDE
The World Chess Online Arena Contract with FIDE has an initial term which
expires in 2026, providing World Chess with a time frame to establish theirs
as the pre-eminent gaming platform while also giving the Group time to seek a
greater or indefinite contract extension. The agreement will automatically
renew at the expiry of its initial term, for a further five-year period,
subject to certain conditions.
Rating recognition and adoption
One of the key propositions of the Company's gaming platform is the fact that
it will operate as the official FIDE gaming platform with ratings and titles
recognised by FIDE. This is an important benefit that provides the opportunity
for online chess players to establish themselves as professional sportspeople.
However, it should be noted that because the online ratings proposition is new
and not developed yet, there could be substantial adoption issues. For
example, conversion of online rating into the OTB ratings requires the
development of additional rules and procedures. Acceptance of online-rated
players into the OTB tournaments will also require development of special
rules and regulations.
Reliance on certain key individuals
The Group's business, development and prospects are dependent on a small
number of key management personnel. The loss of the services of one or more of
such key management personnel may have an adverse effect on the Group.
Related Parties' Transactions
In April 2023, following its admission to trading, the Company appointed three
new Directors, details of these and other material transactions with Directors
are disclosed in note 13. Transactions with and between the Company and its
subsidiary undertakings, who are related parties, have been eliminated on
consolidation and are disclosed in note 13.
Other than as disclosed in note 13 to this unaudited condensed consolidated
interim financial information there have been no changes to the related
parties' transactions described in the Company's annual report for the year
ended 31 December 2022 which was approved by the Board of Directors on 28
April 2023.
Outlook
The Company's multiple revenue streams are all developing. We believe that the
Company's chess gaming product, FIDE Online Arena, will attract increasing
numbers of users over the coming months and into 2024 based on the Company's
current focus on investing in its core team, strengthening its software
envelope and a robust roadmap of new features.
Similarly, the Company is developing its flagship venue, World Chess Club
Berlin, as a model for further expansion, and the Company is confident that
the concept will grow, both with visitor numbers as it becomes an established
specialist hospitality venue in Berlin, as well as a concept for potential
geographical expansion.
The anticipated receipt, as previously announced, of staged additional
investment of approximately €1.5m by March 2024, will support our continued
investment programme over the short and medium term.
Approved by the Board on 14 September 2023 and signed on its behalf by:
Graham Woolfman Ilya Merenzon
Non Executive Chair of the Board of Directors Chief Executive Officer
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR
THE PERIOD 1 JANUARY 2023 TO 30 JUNE 2023
6 months to 30 June 2023 Unaudited 6 months to 30 June 2022 as restated Unaudited Year ended 31 December 2022 Audited
Notes € € €
Revenue 3 1,234,713 1,978,506 2,796,207
Cost of (1,347,197) (1,506,028) (2,097,754)
sales
GROSS PROFIT (112,484) 472,478 705,453
Other operating income 151,872 - 17,939
Administrative expenses (1,974,288) (1,420,029) (3,114,803)
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS (1,934,900) (947,551) ((2,480,429
Exceptional Items 4 (311,216) 142,353 23,000
OPERATING LOSS (2,246,116) (805,198) (2,457,429)
Finance costs 5 (101,164) (79,903) (337,460)
Finance income 5 68 521 521
LOSS BEFORE INCOME TAX (2,347,212) (884,580) (2,794,368)
Income tax - - 332,680
LOSS FOR THE PERIOD (2,347,212) (884,580) (2,461,688
OTHER COMPREHENSIVE INCOME - - -
(Loss)/gain on currency translation - - (19,787)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (2,347,212) (884,580) (2,484,475)
Loss attributable to:
Owners of the parent (2,347,212) (884,580) (2,461,688)
Total comprehensive income attributable to:
Owners of the parent (2,347,212) (884,580) (2,481,475)
LOSS PER SHARE - CONTINUING AND TOTAL OPERATIONS
Basic and diluted 6 (0.0037) (0.0015) (0.0040)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2022
30 June 2023 30 June 31 December 2022
2022 Unaudited
Unaudited Audited
Notes € € €
NON-CURRENT ASSETS
Intangible assets 8 2,976,044 2,349,319 2,763,358
Property, plant and equipment 9 1,217,104 246,635 714,116
Right-of-use assets 9 1,214,763 1,355,943 1,236,968
Deferred tax 76,697 - 76,697
5,484,608 3,951,897 4,791,139
CURRENT ASSETS
Inventories 152,265 160,545 187,691
Trade and other receivables 560,866 650,184 662,566
Tax receivable 214,171 20,873 251,117
Cash and cash equivalents 254,308 592,325 35,565
1,181,610 1,423,927 1,136,939
TOTAL ASSETS 6,666,218 5,375,824 5,928,078
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Called up share capital 11 75,613 68,260 68,260
Share premium 11 11,027,393 6,518,849 6,518,849
Translation reserve 61,824 16,175 65,941
Retained earnings (7,836,834) -3,912,517 (5,489,625)
TOTAL EQUITY 3,327,996 2,690,767 1,163,425
NON-CURRENT LIABILITIES
Lease liabilities 12 1,331,944 1,410,766 1,308,003
Interest bearing loans and borrowings 12 - - -
Provision for liabilities 184,154 - 180,652
1,516,098 1,410,766 1,488,655
CURRENT LIABILITIES
Trade and other payables 1,527,524 1,175,800 2,098,204
Lease liabilities 12 109,889 36,302 95,686
Interest bearing loans and borrowings 184,711 62,189 1,082,108
1,822,124 1,274,291 3,275,998
TOTAL LIABILITIES 3,338,222 2,685,057 4,764,653
TOTAL EQUITY AND LIABILITIES 6,666,218 5,375,824 5,928,078
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD 1 JANUARY 2023 TO 30 JUNE 2023
Called up share capital Retained Earnings Share Premium Translation reserve Total equity
€ € € € €
Balance at 1 January 2022 66,996 (3,027,937) 5,520,114 85,728 2,644,901
Changes in equity
Issue of share capital 1,264 - 998,735 - 999,999
Total comprehensive income - (884,580) - (69,554) (954,134)
Balance at 30 June 2022 68,260 (3,912,517) 6,518,849 16,174 2,690,766
Balance at 1 January 2023 68,260 (5,489,625) 6,518,849 65,941 1,163,425
Changes in equity
Issue of share capital 7,353 - 4,508,544 - 4,515,897
Total comprehensive income - (2,347,209) - (4,117) (2,351,326)
Balance at 30 June 2023 75,613 (7,836,834) 11,027,393 61,824 3,327,996
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD 1 JANUARY 2023 TO 30 JUNE 2023
6 months to 30 June 2023 Unaudited 6 months to 30 June 2022 as restated Unaudited Year ended 31 December 2022 Audited
Notes € € €
Cash flows from operating activities
Cash absorbed generated from operations 1 (2,233,412) (171,566) (512,077)
Interest paid (23,769) (593) (179,610)
Finance cost paid (77,395) (79,310) (157,850)
Tax refund received 36,946 (20,875) 20,600
Net cash used in from operating activities (2,297,630) (272,344) (828,937)
Cash flows from investing activities
Addition to intangible fixed assets (736,977) (176,717) (799,865)
Proceeds from disposal of intangible fixed assets 275,256 1,367,674 1,367,702
Purchase of property, plant and equipment (588,868) (124,683) (635,818)
Proceeds from disposal of property, plant and equipment - - 23,214
Interest received 68 521 521
Net cash used in investing activities (1,050,521) 1,066,795 (44,246)
Cash flows from financing activities
Loan advanced in the period 13,019 57,445 1,019,068
Loan repayments in period - (1,342,706) (1,341,854)
Payment of lease liabilities (47,489) - (21,986)
Amount introduced by directors 129,913 - 120,619
Proceeds from share issue 3,475,568 999,999 999,999
Net cash generated from/(used in) financing activities 3,571,011 (285,262) 775,846
Decrease in cash and cash equivalents 222,860 509,189 (97,337)
Cash and cash equivalents at beginning of period 2 35,565 152,689 152,689
Effect of foreign exchange rate changes (4,117) (69,554) (19,787)
Cash and cash equivalents at end of period 2 254,308 592,324 35,565
At listing the Company issued 14,861,840 new ordinary shares on the conversion
of a loan totalling €1,040,329 which was a significant non-cash transaction.
NOTES TO THE STATEMENTS OF CASH FLOWS
FOR THE PERIOD 1 JANUARY 2023 TO 30 JUNE 2023
1 RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
Group 6 months to 30 June 2023 Unaudited 6 months to 30 June 2022 as restated Unaudited Year ended 31 December 2022 Audited
€ € €
Loss before income tax (2,347,212) (884,580) (2,794,368)
Depreciation and amortisation 442,753 278,385 632,935
Provision 3,502 - 180,652
Finance costs 101,164 79,903 337,460
Finance income (68) (521) (521)
(1,799,861) (526,813) (1,643,842)
Decrease/(increase) in inventories 35,426 57,848 30,702
Decrease/(increase) in trade and other receivables 101,700 2,698,067 2,699,953
Decrease in trade and other payables (570,677) (2,400,668) (1,598,890)
Cash absorbed from operations (2,233,412) (171,566) (512,077)
2 CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statements of Cash Flows in respect of cash and
cash equivalents are in respect of these Statement of Financial Position
amounts:
Group 6 months to 30 June 2023 Unaudited 6 months to 30 June 2022 as restated Unaudited Year ended 31 December 2022 Audited
€ € €
Year ended 30 June 2023
Cash and cash equivalents 254,308 592,325 35,565
Year ended 31 December 2022
Cash and cash equivalents 35,565 152,689 152,689
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION FOR THE
PERIOD 1 JANUARY 2023 TO 30 JUNE 2023
1 STATUTORY INFORMATION
This unaudited condensed consolidated interim financial information is for
World Chess PLC ('the Company') and its subsidiary undertakings, (together the
'Group'). The Company is a public limited company incorporated and domiciled
in England with registration number 10589323 and registered office Eastcastle
House, 27/28 Eastcastle Street, London, W1W 8DH.
The Company is listed on the Official List and its
entire issued share capital was admitted for trading on the Main Market of the
London Stock Exchange on 6 April 2023 with ticker symbol CHSS.
2 ACCOUNTING POLICIES
Basis of preparation
This unaudited condensed consolidated financial
information which incorporate the financial information of the Company and its
subsidiary undertakings, have been prepared in accordance with Accounting
Standard IAS 34 'Interim Financial Reporting' as contained in UK - adopted
International Accounting Standards and IFRIC interpretations and with those
parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The interim report does not include all the notes of
the type normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the year ended
31 December 2022 which was approved by the Board of Directors on 28 April 2023
and any public announcements made by the Company during the interim reporting
period.
This financial information has been prepared under
the historical cost convention and unless otherwise specified are presented in
Euro which is the functional currency of the Group and rounded to the nearest
€.
Going concern
Based on the Group's Statement of Financial Position
and a review of its forecast future operating budgets and forecasts, the
Directors have a reasonable expectation that the Group has adequate resources
to continue in operational existence for at least twelve months from the date
of signing of this unaudited condensed consolidated interim financial
information. This review of future operating budgets and forecasts included
certain reasonable downside scenarios and confirmed that even in the case of
such downside scenarios the Group could continue to operate and meet its
obligations as they fall due. Accordingly, the Directors have adopted the
going concern basis in preparing this financial information.
In making this assessment, the Directors have
considered the resilience of the Group in severe but plausible scenarios,
taking into account the principal risks and uncertainties facing the Group and
the effectiveness of any mitigating actions. The Directors' assessment
considered the potential impacts of these scenarios, both individually and in
combination, on the Group's business model, future performance, solvency and
liquidity over the period. Sensitivity analysis was also used to stress test
the Group's strategic plan and to confirm that sufficient headroom would
remain available under the Group's credit facilities. The Directors consider
that under each of these scenarios, the mitigating actions would be effective
and sufficient to ensure the continued viability of the Group.
Risks and uncertainties
Taking considered risk is the essence of all business
and investment activity, the Audit Committee is responsible for a formal risk
assessment on an annual basis and also for reporting, by exception, on any
material changes during the year affecting the risks the Group is currently
exposed to and any potential future risks that need to be considered. The
Group's activities expose it to a variety of risks, including market risk
(foreign currency risk and interest rate risk), credit risk and liquidity
risk, these risks and the activities of the Directors to minimise their
potential adverse effects on the Group's financial performance have not
substantially changed from those set out in the Company's annual report for
the year ended 31 December 2022 which is available from the Company's website:
www.worldchess.com (http://www.worldchess.com) .
3 REVENUE
Revenue from contracts with customers
Revenue by business class 6 months to 30 June 2023 Unaudited 6 months to 30 June 2022 Unaudited Year ended 31 December 2022 Audited
€ € €
Events 825,507 1,491,484 1,711,331
Online 101,051 193,445 399,074
Merchandising and Clubs 308,155 293,577 685,802
1,234,713 1,978,506 2,796,207
By geographical area 6 months to 30 June 2023 Unaudited 6 months to 30 June 2022 Unaudited Year ended 31 December 2022 Audited
€ € €
United Kingdom 1,172,857 1,901,768 2,661,639
Germany 45,099 28,621 27,578
United States of America 16,757 20,539 50,540
Russia - 27,578 56,450
1,234,713 1,978,506 2,796,207
4 EXCEPTIONAL ITEMS
6 months to 30 June 2023 Unaudited 6 months to 30 June 2022 as restated Year ended 31 December 2022 Audited
Unaudited
€ € €
Exchange gain on Crypto-assets 6,829 105,881 (13,472)
Crypto exchange fees (672) - -
Listing costs (317,373) - -
Gain on disposal World Chess Russia LLC - 27,330 27,330
Collateral rewards received - 9,142 9,142
(311,216) 142,353 23,000
Listing
costs
Legal and professional costs associated with the
listing of the entire issued share capital of World Chess PLC on the Main
Market of the London Stock Exchange in April 2023.
Gain on Crypto-assets
The Group has historically received some sponsorship
revenue in the form of crypto-assets which it has converted to fiat currencies
at the earliest opportunity, usually upon receipt or in accordance with an
agreed schedule of conversion. Crypto-assets are not amortised but are
reviewed for impairment if the prevailing price at which they can be converted
into fiat currency indicates their value has fallen below their carrying
value. Any impairment or realised gains on the conversion of crypto-assets to
fiat currency are recognised within exceptional items.
Crypto exchange fees
Costs relating to crypto exchange fees.
Gain on disposal World Chess Russia LLC
In April 2022 the entire share capital of World Chess
Russia LLC was disposed of as a result, a profit on disposal of €27,330 has
been recognised.
Collateral rewards received
The Group was entitled to the interest receivable on
collateral provided in crypto-assets by a partner to secure a loan. The
interest receivable was in exchange for share options provided to the partner.
The share options were exercised in January 2021 and the loan was repaid and
the collateral returned in January 2022.
5 NET FINANCE COSTS
6 months to 30 June 2023 Unaudited 6 months to 30 June 2022 as restated Year ended 31 December 2022 Audited
Unaudited
€ € €
Finance income:
Loan interest receivable 68 521 521
68 521 521
Finance costs:
Other loan interest 23,769 593 179,610
Interest on IFRS 16 lease liabilities 77,395 79,310 157,850
101,164 79,903 337,460
6 LOSS PER SHARE
The basic earnings per share is calculated by
dividing the (loss)/profit attributable to owners of the parent company by the
weighted average number of shares in issue during the year. In calculating the
diluted earnings per share, any outstanding share options, warrants and
convertible loans are taken into account where the impact of these is
dilutive.
6 months to 30 June 2023 Unaudited 6 months to 30 June 2022 as restated Year ended 31 December 2022 Audited
Unaudited
Loss attributable to the owners of the parent (2,347,212) (884,580) (2,461,688)
company €
Weighted average number of shares in issue 632,688,761 593,422,214 597,912,402
Basic and diluted earnings per share € (0.0037) (0.0015) (€0.0040)
7 DIVIDENDS
No dividend was recommended or paid for the period
under review.
8 INTANGIBLE ASSETS
Exclusive FIDE rights Software Licence Online Platform Crypto-assets Total
€ € € € €
COST
At 1 January 2023 1,105,291 115,000 3,107,438 208 4,327,937
Additions - - 409,072 327,905 736,977
Disposals - - - (275,256) (275,256)
At 30 June 2023 1,105,291 115,000 3,516,510 52,857 4,789,658
AMORTISATION
At 1 January 2023 663,174 33,000 868,405 - 1,564,579
Amortisation for year 55,265 11,500 182,270 - 249,035
At 30 June 2023 718,439 44,500 1,050,675 - 1,813,614
NET BOOK VALUE
At 30 June 2023 386,852 70,500 2,465,835 52,857 2,976,044
At 31 December 2022 442,117 82,000 2,239,033 208 2,763,358
The Directors considered the carrying value at 30
June 2023 for each asset identified above, except crypto-assets, and it was
determined that no impairment was required. Where an asset does not generate
cash inflows that are largely independent of the cash inflows from other
assets or groups of assets the carrying value was considered against the
smallest identifiable group of assets that generates cash inflows (cash
generating unit or CGU).
The Directors considered the carrying value at 30
June 2023 for crypto-assets based on the prevailing exchange rate at which the
crypto-asset could readily be converted into US dollars or Euros and it was
determined that no impairment was required.
9 PROPERTY, PLANT AND EQUIPMENT
Right of use asset Fixtures and fittings Computer Equipment Total
€ € € €
COST
At 1 January 2023 1,374,409 773,918 1,698 2,150,025
Additions 85,633 588,868 - 674,501
At 30 June 2023 1,460,042 1,362,786 1,698 2,824,526
DEPRECIATION
At 1 January 2023 137,441 59,802 1,698 198,941
Charge for year 107,838 85,880 - 193,718
At 30 June 2023 245,279 145,682 1,698 392,659
NET BOOK VALUE
At 30 June 2023 1,214,763 1,217,104 - 2,431,867
At 31 December 2022 1,236,968 714,116 - 1,951,084
10 INVESTMENTS
Shares in group undertakings
30 June 30 June 31 December 2022
2023
2022 Unaudited
Audited
Unaudited
€ € €
COST
At start of the period 351,616 251,616 251,616
Additions - 225,000 275,000
Disposals - (175.000) (175,000)
At 30 June 2023 351,616 301,616 351,616
IMPAIRMENTS
At start of the period (50,000) (225,000) (225,000)
Disposals - 175,000 175,000
At 30 June 2023 (50,000) (50,000) (50,000)
CARRYING VALUE
At end of the period 301,616 251,616 301,616
At start of the period 301,616 26,616 26,616
The Directors considered the carrying value at 30
June 2023 for each group undertaking, identified below, and it was determined
that no further impairment was required.
The Group's investments at the Statement of Financial
Position date in the share capital of companies include the following
subsidiaries:
Subsidiary Name % holding Registered Office Nature of business
World Chess Events Limited 100 Eastcastle House, 27/28 Eastcastle Street, United Kingdom, W1W 8DH Organising chess events (Worldwide)
World Chess US, Inc 100 1201 N. Orange Street, Suite 762, Wilmington, New Castle County, DE, USA 19801 Organising chess events (USA), online chess
World Chess Digital Limited (formerly CNCweb Limited)(1) 100 21st Floor, Tay Chau Building, 262 Des Voeux Road Central, Hong Kong Dormant and in the process of being dissolved
World Chess Europe GmbH(2) 100 Mittelstrasse 51 - 53, 10117 Berlin, Deutschland Various chess related activities
World Chess Sakartvelo LLC(3) 100 Georgia, City Tbilisi, Didube district, Ak. Tsereteli Avenue, N 49-51-51a, Organising chess events, chess club activities
Entrance 3, Floor 13, Apartment N 128
World Chess Russia LLC(4) 0 123242, Moscow, Kudrinskaya Square, 1 room XIIB Organising chess events, chess club activities
1 - World Chess Digital Limited at 30 June 2023 the
company remained dormant and the dissolution process is ongoing.
2 - During 2022, World Chess PLC provided a capital
contribution of €275,000 to World Chess Europe GmbH.
3 - World Chess Sakartvelo LLC was incorporated on 2
June 2022 but did not commence trading until after 1 January 2023.
4 - In April 2022 the Group disposed of its entire
interest in World Chess Russia LLC
11 CALLED UP SHARE CAPITAL
30 June 2023 31 December 2022
Unaudited Audited
Number of shares € Number of shares €
Allotted, issued, and fully paid Ordinary shares of £0.0001 666,905,501 75,613 602,392,689 68,260
Number of shares Nominal value Share capital Share Premium (€)
(€)
At 31 December 2022 602,392,689 £0.0001 68,260 6,518,849
6 April 2023 issue of new ordinary shares for cash consideration 49,650,972 £0.0001 5,659 3,469,909
6 April 2023 issue of new ordinary shares on the conversion of a loan 14,861,840 £0.0001 1,694 1,038,635
At 30 June 2023 666,905,501 £0.0001 75,613 11,027,393
12 FINANCIAL LIABILITIES - BORROWINGS
Group
30 June 30 June 31 December 2022
2023
2022 Unaudited
Audited
Unaudited
€ € €
Current:
Other loans less than 1 year 184,711 62,189 1,082,108
Lease liabilities 109,889 36,302 95,686
294,600 98,491 1,177,794
Non-current:
Lease liabilities 1,331,944 1,410,766 1,308,003
1,331,944 1,410,766 1,308,003
13 RELATED PARTIES' DISCLOSURES
Appointment of Directors
In April 2023, following its admission to trading, the Company appointed three
new Directors, and reviewed the remuneration packages and service contracts
for existing Directors and details of the new agreements for all directors are
summarised below.
Ilya Merenzon's service agreement as Chief Executive Officer is terminable on
six months' notice by either party and contains customary post-employment
restrictive covenants. He also has a German employment agreement dated 1 March
2022 in respect of duties undertaken direct for World Chess Europe GmbH.
Across the two agreements Ilya Merenzon's combined salary is €212,400.
Matvey Shekhovtsov's service agreement as Chief Operating Officer is
terminable on six months' notice by either party and contains customary
post-employment restrictive covenants. He also has a German employment
agreement dated 1 March 2022 in respect of duties undertaken direct for World
Chess Europe GmbH. Across the two agreements Matvey Shekhovtsov's combined
salary is €115,200.
Richard Collett's service agreement is for an initial term of 24 months, but
terminable on three months' notice by either party and contains customary
post-employment restrictive covenants. His total salary is £100,000 per
annum.
Graham Woolfman's appointment as an independent non-executive director and
chair of the Board of Directors is terminable upon three months' notice by
either party. His annual fee as non-executive director and chair (which
includes fees for membership of all board committees and subsidiaries) is
£42,500.
Neil Rafferty's appointment as an independent non-executive director is
terminable upon three months' notice by either party. His annual fee as
non-executive director (which includes fees for membership of all board
committees and subsidiaries) is £32,000.
Jamison Firestone's appointment as an independent non-executive director is
terminable upon three months' notice by either part. His fee for the first 12
months as non-executive director (which includes fees for membership of all
board committees and subsidiaries) is £12,000, after which fees for further
work will be agreed between Jamison Firestone and the Board or Remuneration
Committee.
Other material Contracts with Directors
Ilya Merenzon
On 6 April 2023 Mr Merenzon entered into a
relationship agreement with the Company and Novum Securities Limited
('Novum') pursuant to which Mr Merenzon has agreed with the Company and Novum
that for such time as he and his affiliates own or control interests in
Ordinary Shares comprising not less than 25% of the Company's issued Ordinary
Shares from time to time, he will not exercise and will procure that his
affiliates will not exercise, his voting rights to influence the Directors or
to change the Company's articles of association to result in his position and
those of his affiliates being preferred or promoted ahead of those of other
shareholders, and to exercise (or to refrain from exercising, as the case may
be) such voting rights so as to ensure that the Company is managed and
conducted independently from him and such affiliates acting as majority
shareholder on the operational level.
On 21 December 2022 Mr Merenzon advanced a short-term
loan of €20,000 to World Chess Europe GmbH, this loan was unsecured, did not
bear interest and was fully repaid at 30 June 2023.
Matvey Shekhovtsov
On 29 December 2022 Mr Shekhovtsov advanced a
short-term loan of €20,000 to World Chess Europe GmbH, this loan was
unsecured, did not bear interest and was fully repaid at 30 June 2023.
Graham Woolfman
On 28 April 2023 Mr Woolfman was granted an option
over 6,669,055 Ordinary Shares exercisable between 6 April 2024 and 6 April
2029 at a price of €0.07 (seven euro cents) per share.
Neil Rafferty
On 28 April 2023 Mr Rafferty was granted an option
over 1,667,264 Ordinary Shares exercisable between 6 April 2024 and 6 April
2029 at a price of €0.07 (seven euro cents) per share.
Group undertakings
The following transactions took place during the six
months ended 31 June 2023 with and between group undertakings.
Payments to World Chess PLC Payments to/ (receipts from) other group undertakings
€ €
World Chess Events Ltd
Payment of interest 14,491 -
Sale of inventory - (9,974)
Purchase of inventory - 48,490
Purchase of services - 126,000
Commission paid on third party transactions - 11,165
World Chess Europe GmbH
Payment of interest 28,522 -
Purchase of inventory - 9,974
Sale of inventory - (40,370)
World Chess US Inc.
Commission charged on third party transactions - (11,165)
Purchase of inventory - (8,120)
World Chess Sakartvelo LLC
Provision of services - (126,000)
Balances at 30 June 2023
The following balances remained outstanding at 30
June 2023 from and between group undertakings.
Due to/(from) World Chess PLC Due to/(from) other group undertakings Total due to/(from) group undertakings
€ € €
Ilya Merenzon (6,761) 121,874 115,113
Matvey Shekhovtsov - 4,800 4,800
Graham Woolfman - 474 474
Group undertakings
● World Chess Events Ltd 5,057,161 (2,510,556) 2,546,605
● World Chess Europe GmbH 2,410,908 56,556 2,467,464
● World Chess US Inc. (2,738,158) 2,460,544 (277,614)
● World Chess Sakartvelo LLC - (9,000) (9,000)
4,723,150 124,692 4,847,842
14 SUBSEQUENT EVENTS
On 4 August 2023 the Company issued 288,000 ordinary shares to Novum
Securities Limited ('Novum') in consideration for Novum's appointment as the
Company's sole broker.
On 4 September 2023 the Company announced an agreement for the issue of equity
to an existing shareholder whereby the Company will issue 21,663,386 new
ordinary shares for total consideration of €1,508,737 to be paid in seven
instalments, the shares will be issued upon receipt of the final instalment of
the consideration which is to be paid in March 2024.
15 PRIOR YEAR ADJUSTMENT
In 2022, the Directors reassessed the accounting treatment of the
crypto-assets which previously had been included within cash and cash
equivalents. The Directors concluded that in accordance with IAS 1, IFRS 13,
IAS 2, IAS 8, and IAS 38 the correct accounting treatment was to treat them as
intangible assets.
16 OTHER
Copies of the unaudited half-yearly results have not
been sent to shareholders, however copies are available at www.worldchess.com
(http://www.worldchess.com) or on request from the Company's Registered
Office.
17 APPROVAL OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMSTION
Responsibility Statement
The Company's Directors, whose names and functions appear below this
statement, are responsible for preparing this unaudited interim condensed
consolidated financial information in accordance with the Disclosure Guidance
and Transparency Rules of the United Kingdom's Financial Conduct Authority
('DTR') and with Accounting Standard IAS 34 'Interim Financial Reporting'.
The Directors, and each Director individually, confirms that, to the best of
their knowledge, this unaudited condensed consolidated financial information
gives a true and fair view of the assets, liabilities, financial position and
profit or loss of the Group and that the interim management report includes a
fair review of the information required by DTR4.2.7R 7R (indication of
important events during the first six months and description of principal
risks and uncertainties for the remaining six months of the year) and by
DTR4.2.8R (disclosure of material related parties' transactions).
Board of Directors:
Ilya Merenzon (Chief Executive Officer)
Matvey Shekhovtsov (Chief Operating Officer)
Richard Collett (Chief Financial Officer) - appointed 6 April 2023
Graham Woolfman (Chair) - appointed 6 April 2023
Neil Rafferty (Non-Executive Director) - appointed 6 April 2023
Jamison Reed Firestone (Non-Executive Director)
This unaudited condensed consolidated financial information was approved by
the Board on 14 September 2023.
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 IR FFFIIAAIVLIVRecent news on World Chess
See all newsREG - World Chess PLC - Final Results for the year ended 31 December 2023
AnnouncementREG - World Chess PLC - Put Option Agreement
AnnouncementREG - World Chess PLC - Total Voting Rights
AnnouncementREG - World Chess PLC - Business Update
AnnouncementREG - World Chess PLC - TR-1: Notification of Major Holdings
Announcement