Half Yearly Report

RNS Number : 8470Z
Frontier Developments PLC
12 February 2014
 



12 February 2014

 

Frontier Developments plc

 

Half yearly results

 

Frontier Developments plc (AIM: FDEV; "Frontier" or the "Group"), a leading independent developer of video games with studios in Cambridge, UK and Halifax, Canada, has published its results for the six months to 30 November 2013.

 

Financial highlights

 

·      Investment in self published titles and technology up 114%

·      Revenue down only 15% to £5.05m as strategic focus changes during the transitional period

·      EBITDA loss of £0.35m  (2012: £1.63m profit)

·      Adjusted EBITDA of £0.04m (2012: £1.93m)

·      Earnings per share of (5.3p) (2012: 3.7p)

·      Cash balance at £11.05m as of 30 November 2013

 

Operational highlights

 

·      Elite:Dangerous  Backers - to date over £2.31m raised from 43,537 backers

·      Key appointments - Jo Cooke, Head of Marketing 

·      The proportion the Group's staff working on self published and technology projects rose to 34% from 18%. The Group is investing in its own Technology and content as follows:

 

Man Months for the six months ended November

2013

2012

%

Self Published

373

157

138%

Technology

128

77

66%

Total

501

234

114%

 

Delivering on strategy

 

·      Elite: Dangerous Alpha successfully launched December 2013

·      Support for the Oculus Rift virtual reality headset

·      Coaster Crazy Deluxe released on WiiU, iOS and Kindle

·      Zoo Tycoon released as an Xbox One launch title

·      IPO and pre IPO raised £5.4m net

 

David Braben, Chief Executive of Frontier Developments, said:

 

"These are hugely exciting times for Frontier. We have entered an important investment phase of our business as we move to deliver high growth in the medium to long term through refocusing our business from a low margin cost plus business model to one of a significant revenue share.

 

"The self-funded investment we are making in Elite: Dangerous  will continue to bear fruit over the next six months as we make further releases such as the recent Alpha 2.0 multiplayer build and beyond, in parallel with developing new projects with strategic publisher partners."

 

Enquiries:

 

Frontier Developments

+44 (0)1223 394 300

David Braben, CEO


David Walsh, COO


Neil Armstrong, CFO




Canaccord Genuity

+44 (0) 207 523 8000

Simon Bridges/Cameron Duncan




Instinctif Partners

+44 (0) 20 7457 2020

Kay Larsen/Adrian Duffield


 

Overview:

 

Frontier Developments is a leading developer of video games with studios in Cambridge, UK and Halifax, Canada. Frontier has a proven track record of software technology development and innovation spanning several decades of rapid technological change.  The Group has leveraged its technology to develop innovative video games across a wide variety of different game genres and platforms, and has established relationships with globally renowned partners.

 

Frontier's proprietary Cobra software technology supports multi-core CPU and GPU architectures of PC, console, tablet and smartphone with a modular, high performance system offering of state of the art efficiency and visual fidelity that is applicable across a wide range of game genres.  

 

The year to 31 May 2013 and the current financial year are transitional years for Frontier, as the Group continues to evolve from being primarily a developer of video games for major external publishers into a business which develops and licenses technology to support games for major external publishers, other developers and Frontier's own self-published game titles.

 

Elite: Dangerous will be sold directly to customers through Frontier's own e-commerce platform and through third parties.

 

Frontier expects Elite: Dangerous revenues to grow gradually in a similar way to other PC online games, but also that it will hit a quality resonance at which point revenues would increase significantly, as it did for those other titles.

 

The Group is pleased to report significant progress in executing the transition of the business to its next stage.

 

The key pillars of the Group's strategy are:

·      Focus strongly on the development and launch of Elite: Dangerous

·      Invest significant resources in the development of the Group's technology for third party use

·      Maintain publisher funded project work.

 

To fund this transition, Frontier completed a £2.71m pre-IPO fundraising in May and June, and followed this up with the IPO in July, raising a further £4.03m from institutional investors. In addition, the Group put in place a £3.00m revolving credit facility with Barclays, which has not been drawn down as at 30 November 2013. These three tranches provided the Group with a total of £9.74m to execute its strategy. In August 2013 the 'Atlantic Canada Opportunities Agency' approved an interest free loan of up to CD$0.50m, which was not drawn upon as at 30 November 2013.

 

 Business development

Elite: Dangerous

 

Frontier has continued to generate substantial interest in the Elite: Dangerous project, with the game being cited as one of the most anticipated titles of 2014 by several media outlets.

 

In December 2013 the Group launched the first phase of the Alpha test of Elite: Dangerous.  This tested out the flight controls for the game's spaceships in different combat scenarios, and included support for the Oculus Rift virtual reality headset and other 3D display technologies. The alpha version of Elite: Dangerous is accessed via Frontier's own retail channel, the capabilities of which continue to be developed.

 

At the time of writing Frontier has received backing from 43,537 people generating over £2.31m of pledges and pre orders.

 

Further Cobra technology developments

 

After further investment in Frontier's in-house Cobra technology the Group can now take full advantage of 64 bit multi-core processor systems as used in key new hardware target platforms such as the Xbox One, PlayStation 4, iPhone 5S and iPad Air, as well as having enhanced the Group's networking technology.  Both of these aspects of Cobra were used in Frontier's successful development and release of Zoo Tycoon on Xbox One in November 2013.

 

Coaster Crazy

 

The Group completed development and released a new version of its game, Coaster Crazy Deluxe on both iOS and Nintendo WiiU.  The game was based on the Group's cross-platform Cobra technology including a shared cloud-based server backend.  This allows content to be shared between the different gaming devices.

 

Zoo Tycoon

 

The Group completed development and released Zoo Tycoon with Microsoft Studios as publisher.  This was an XboxOne launch title, and was also developed and released simultaneously on Xbox360. This development allowed Frontier to make an early entry into the new console generation released around 'Holiday 2013', and illustrated the high quality and efficiency that can be achieved using the Group's Cobra technology.

 

Key industry partnerships

 

As well as continuing a close working relationship with Microsoft with the release of Zoo Tycoon Frontier also announced an extended relationship with Atari, whereby the Group now has non-exclusive rights to distribute Atari PC games to accelerate the e-commerce strategy, as well as the publishing rights to Frontier's  RollerCoasterTycoon 3 game on new platforms.

 

Operating and financial review

 

Group trading performance

 

The Group is using the investment secured in 2013 to facilitate a transition phase taking it to the full launch of Elite: Dangerous and associated technology development and licensing.  As expected, revenues have seen a temporary decline and costs are higher, predominantly as a result of the investment required to deliver the Company's strategy but in part due to the costs associated with the Company's IPO.

 

Looking at the financial performance in the first six months of the financial year to 31 May 2014, there was an underlying decrease in revenue of 20% and adjusted EBITDA was £0.04m, £1.91m lower than the comparative six months.  The Group reported an operating loss of £1.56m set against an operating profit of £0.92m in the prior comparative period.

 

Revenue

 

Frontier recorded a 20% decline in underlying revenue after excluding sub contract costs recharged to customers at nil margin, reconciled as follows:

 

Underlying revenue £'000

For the six months ended November

2013

2012

%

Headline revenue

5,047

5,968

(15%)

Sub contract pass through

(296)

(10)


Underlying revenue

4,751

5,958

(20)%

 

The timings of Game releases impacted on Self Published revenues. The launch of Coaster Crazy Deluxe towards the end of November and only small recognition of Elite: Dangerous revenues meant that self published revenues dipped by 36% in the six month period. The first release of the Elite: Dangerous Alpha in December is expected to reverse this trend in the second half of the financial year as the Group recognises a portion of the deferred revenue.  

 

Publishing revenue was lower, as proportionally more work was undertaken on the self-published Elite: Dangerous  reducing the Group's capacity to earn more income from publishing work. Royalty income improved with Atari Interactive Inc. (Atari), the distributor of RollerCoasterTycoon 3 on PC and Mac computes, coming out of Chapter 11 in December 2013.

 

Revenue mix £'000

For the six months ended November

2013

2012

%

Publishing

4,619

5,570

(17%)

Self published

137

215

(36%)

Royalties

291

183

59%

Headline Revenue

5,047

5,968

(15%)

 

Intangible assets and research & development expenditure

 

Investment in the Group's own IP capitalised in the period was up 95% at £1.63m reflecting Frontier's commitment to a strategic software development programme in respect of Cobra technology and self published titles.

 

Frontier expensed £0.13m of costs within software development projects. Frontier took an impairment charge of £0.28m on the Coaster Crazy franchise. The Group gained valuable experience and proved its technology with the game, but the monetization level of the free to play game has not been as quick and successful as had been expected and subsequent versions were released later than planned.

 

Gross margin and contribution

 

The overall gross margin fell to 5% from 37%. The main causes of this were a lower margin on the published contracts partly as a result of pass through costs, and a continuing cautious approach on capitalisation and amortisation for the Group's self published games.

 

Profitability and adjusted EBITDA

 

The Board monitors performance on an adjusted EBITDA basis. The adjusting items were primarily Share Based Compensation and funding costs associated with the IPO.

 

There was an operating loss of £1.56m compared to an operating profit of £0.92m. EBITDA was also negative at (£0.35m) against a comparative of £1.63m.

 

Adjusted EBITDA was £0.04m against £1.93m, the reconciliation is as follows:

 

For the six months ended November 

2013

2012

%

£'000

£'000


Operating result before interest and tax

(1,557)

920

(269%)

Depreciation

104

69


Amortisation and impairment

1,099

645


EBITDA

(354)

1,634

(122%)

Share based compensation

178

170


Funding costs

195

96


Dilapidations provision

18

18


Canada set up fees

-

10


EBITDA adjusted

37

1,928

(98)%

 

Interest and tax

 

Net interest payable in the period was £0.01m. Interest payable was incurred in respect to the Convertible Loan Notes in issue of £0.02m. Interest receivable from the Group's cash resources was £0.01m and remains at low levels due to the current interest rate environment worldwide.

 

The tax charge in the period comprised of a deferred tax liability of £0.01m for overseas tax due to the timing difference over which local Digital media tax credits operate, offset by an over provision in the prior year. The UK trading company continues to hold unused tax losses of nearly £4.00m to set against future taxable profits generated in the UK.

 

Earnings per share and dividend

 

The basic Earnings per share reduced from 3.7 pence per share to (5.3) pence based on a weighted average number of shares of 29.7m (2012: 24.8m).

 

The adjusted earnings per share dropped to (3.0) pence from 4.6 pence per share on an undiluted basis.

 

The Directors are not paying a dividend (2012: £nil).

 

Share issues

 

As part of a pre IPO raise, 131,580 shares were issued in June 2013 for £0.013m. A Convertible loan was issued granting shares at a discount of 15% to the IPO flotation price, the amount received was £1.57m.

 

Upon flotation Convertible loans valued at £2.71m were converted at £1.0795 into 2,509,504 shares. 3,169,292 of new shares were issued at £1.27, being gross proceeds of £4.03m

.

Employees converted 112,470 share options into ordinary shares during the period to November 2013 the exercise proceeds were £0.08m.  The Group did not grant any share options in the period.

 

Cash and cashflow

 

The Group generated £0.12m from continuing operations, invested £1.87m and raised from financing activities £5.78m net resulting in a net increase in cash of £3.89m to £11.05m at the period end.

 

Key Performance Indicators

 

In addition to the adjusted Revenue and EBITDA measures mentioned previously as a key indicator of growth and profitability, the Group is looking to invest in its own content to produce a balanced spread of income streams:

 

% of Revenue by Segment for the six months ending November

2013

2012

Publishing

91%

93%

Self published

3%

4%

Royalties & Other income

6%

3%

Total

100%

100%

 

The proportion the Group's staff working on self published and technology projects rose to 34% from 18%. The Group is investing in its own Technology and content as follows:

 

Man Months 6 months ending November

2013

2012

%

Self Published

373

157

138%

Technology

128

77

66%

Total

501

234

114%

 

Risk and uncertainties

 

The Board continuously monitors and assesses the key risks of the business. The key risks that could affect the Group's financial performance and their associated mitigating factors, have not significantly changed from those set out on pages 12 and 13 of the Group's Annual Report for 2013, a copy of which is available from the Frontier Developments website 

 

http://www.frontier.co.uk/docs/files/Annual_report_and_accounts_2013-Frontier_Developments_plc.pdf

 

Current trading and outlook

 

In the year ended 31 May 2014 the Group expects to further execute its plans to continue with publisher funded projects, focus strongly on the development and promotion of Elite: Dangerous, and continue to invest significant resources in the development of its technology, as it evolves to become a business which develops and licenses technology to support games for major external publishers, other developers and Frontier's own self-published game titles.

 

 

Consolidated Income Statement

 

 


Unaudited 6 months ended

Audited 12 months to


30/11/13

£'000

30/11/12

£'000

31/5/13

£'000





Revenue

5,047

5,968

12,072





Cost of sales

(4,798)

(3,770)

(8,375)





Gross profit

249

2,198

3,697





Administrative expenses

(1,806)

(1,278)

(2,645)





Operating (loss)/profit

(1,557)

920

1,052





Finance expense

(21)

-

-





Finance income

9

1

19





(Loss)/profit before tax

(1,569)

921

1,071





Income tax

-

-

(26)





(Loss)/profit for the period

(1,569)

921

1,045









 

 

All the activities of the Group are classified as continuing.

 

 

Earnings per share

8




Basic earnings per share


(5.3p)

3.7p

4.2

Diluted earnings per share


(5.3p)

3.6p

4.1

 

 

 

      Statement of Comprehensive Income

 


Unaudited 6 months ended

Audited 12 months to


30/11/13

£'000

30/11/12

£'000

31/5/13

£'000

(Loss)/Profit for the period

(1,569)

921

1,045

Items that will be reclassified to the profit and loss

Exchange differences on translation of foreign operations

2

(5)

 

 

3

Total comprehensive income for the period attributable to the owners of the Group

(1,567)

916

 

1,048

 

 

The accompanying accounting policies and notes form part of this financial information

 

Consolidated Statement of Financial Position

 

 



Unaudited

Audited


Notes

30 Nov

2013

£'000

30 Nov

2012

£'000

31 May

2013

£'000

Non-current assets





Intangible assets

9

4,073

3,517

3,450

Property, plant and equipment


345

317

299

Total non-current assets


4,418

3,834

3,749






Current assets





Inventories


102

286

-

Trade and other receivables


1,313

1,972

2,082

Current tax assets


9

-

-

Cash and cash equivalents


11,045

3,803

7,155

Current assets


12,469

6,061

9,237






Total assets


16,887

9,895

12,986






Equity and liabilities





Equity





Share capital

10

156

13

127

Share premium account


8,483

1,961

1,847

Option reserve


775

422

643

Foreign exchange reserve


5

(5)

3

Retained earnings


4,252

5,626

5,775

Total equity


13,671

8,017

8,395






Liabilities





Current





Trade and other payables


1,405

1,709

3,060

Current tax liabilities


-

1

33

Deferred income


1,563

-

-



2,968

1,710

3,093

Non-current





Provisions


205

168

187

Deferred income


-

 

-

1,283

Deferred tax


43

-

28



248

168

1,498






Total liabilities


3,216

1,878

4,591

Total equity and liabilities


16,887

9,895

12,986






 

 

The accompanying accounting policies and notes form part of this financial information

 

 

Consolidated Statement of Cash Flows

 

 



Unaudited 6 months ended

Audited 12 months to



Nov 2013

£'000

Nov 2012

£'000

May 2013

£'000






Operating activities





(Loss) /profit after tax


(1,569)

921

1,045

Adjustments


1,287

886

2,198

Net changes in working capital


454

1,182

2,923

Taxes paid


(47)

-

(5)

Cash flow from operating activities


125

2,989

6,161






Investing Activities





Purchase of property, plant and equipment


(158)

(189)

(251)

Expenditure on intangible assets


(1,738)

(845)

(1,783)

Proceeds from disposal of other long-term financial assets


21

-

-

Interest received


9

1

19

Cash flow from investing activities


(1,866)

(1,033)

(2,015)






Financing activities





Proceeds from convertible loan notes


1,570

-

1,129

Interest paid


(22)

-

-

Proceeds from issue of share capital


4,233

168

168

Cash flow from financing activities


5,781

168

1,297






Net change in cash and cash equivalents from continuing operations


4,040

2,124

5,443






Cash and cash equivalents at beginning of period


7,155

1,686

1,686

Exchange differences on cash and cash equivalents


(150)

(7)

26






Cash and cash equivalents at end of period


11,045

3,803

7,155

 

 

The accompanying accounting policies and notes form part of this financial information

 

Consolidated Statement of Changes In Equity

 


Share capital

Share premium account

Option reserve

Foreign exchange reserve

Retained earnings

Total Equity


£'000

£'000

£'000

£'000

£'000

£'000








At 31 May 2012

12

1,794

263

-

4,694

6,763

Increase in equity in relation to options issued

 

-

 

-

 

416

 

-

 

-

 

416

Share based payment transfer

-

-

(36)

-

36

-

Issue of share capital

1

167

-

-

-

168

Re-denomination of share capital

114

(114)


-

-

-

Transactions with owners

115

53

380

-

36

584

Profit for the year

-

-

-

-

1,045

1,045

Other comprehensive income:







Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

3

 

-

 

3

Total comprehensive income for the year

-

-

-

3

1,045

1,048

At 31 May 2013

127

1,847

643

3

5,775

8,395








At 1 June 2012

12

1,794

263

-

4,694

6,763

Increase in equity in relation to options issued

 

-

 

-

 

170

 

-

 

-

 

170

Share based payment transfer

-

-

(11)

-

11

-

Issue of share capital

1

167

-

-

-

168

Transactions with owners

1

167

159

-

11

338

Profit for the period

-

-

-

-

921

921

Other comprehensive income:







Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

(5)

 

-

 

(5)

Total comprehensive income for the period

-

-

-

(5)

921

916

At 30 Nov 2012 - Unaudited

13

1,961

422

(5)

5,626

8,017

At 1 June 2013

127

1,847

643

3

5,775

8,395

Increase in equity in relation to options issued

-

-

178

-

-

178

Share based payment transfer

-

-

(46)

-

46

-

Issue of share capital

29

6,636

-

-

-

6,665

Transactions with owners

29

6,636

132

-

46

6,843

Loss for the period

-

-

-

-

(1,569)

(1,569)

Other comprehensive income:

Exchange differences on translation of foreign operations

 

 

-

 

 

-

 

 

-

 

 

2

 

 

-

 

 

2

Total comprehensive income for the period

-

-

-

2

(1,569)

(1,567)

At 30 Nov 2013 - Unaudited

156

8,483

775

5

4,252

13,671

 

 

 

The accompanying accounting policies and notes form part of this financial information

 


Notes to the financial statements

 

 

1.    Financial Information

 

The financial information set out below of the Group and its subsidiary undertaking for the six months ended 30 November 2013 and 30 November 2012 has been prepared by the Directors of the Group on the basis set out in note 3.

 

2.    Corporate Information

 

Frontier Developments plc ("the Group") develops non-game applications and video games for the interactive entertainment sector. The Company is a public limited company and is incorporated and domiciled in the United Kingdom. The address of its registered office is 306 Science Park, Milton Road, Cambridge CB4 0WG.

The Group's operations are based in the UK and a subsidiary, Frontier Developments Inc, in Canada.

 

The condensed consolidated interim financial statements were approved by the Board of Directors for issue on 11 February 2014.

 

The condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 May 2013 were approved by the Board of Directors on 13 November 2013 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

 

The condensed consolidated interim financial statements have been reviewed, not audited.

 

3.    Basis of Preparation and Statement of Compliance

 

The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements of the group and are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU) and the Companies Act 2006 applicable to companies reporting under IFRS.

 

Going concern basis

The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, support the conclusion that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, a period of not less than twelve months from the date of this financial information. The Group therefore continues to adopt the going concern basis in preparing its financial statements.

 

4.    Accounting Policies

The accounting policies adopted in the preparation of the condensed consolidated interim financial statements are unchanged from those set out in the Group's consolidated financial statements for the year ended 31 May 2013. These policies have been consistently applied to all the periods presented.

 

The operations of the Group are not subject to significant seasonality.

 

5.    Significant Accounting Estimates and Key Judgements

 

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

 

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation and uncertainty were the same as those applied to the consolidated financial statements for the year ended 31 May 2013.

 

6.    Risks and uncertainties

 

An outline of the key risks and uncertainties of the Group was described in the 2013 financial statements, including strategic, execution and financial risks associated with the Group's transition as it seeks to diversify its business base. Risk is an inherent part of doing business and the strong cash position and interest in the Elite:Dangerous offering and new contracts leads the Directors to believe that the Group is well placed to manage business risks successfully.

 

7.       Segment Information

 

The Group identifies reportable operating segments based on internal management reporting that is regularly reviewed by the chief operating decision maker and reported to the board.  The chief operating decision maker is the Chief Executive Officer.

Management information is reported as a single operating segment being the design and production of computer software irrespective of platform or route to market. Resources are managed on the basis of the Group as a whole.

The Group's revenues from external customers are divided into the following geographical areas:

 

 

 


Unaudited 6 months ended

Audited year ended


30/11/13
£'000

30/11/12
£'000

31/5/13
£'000

United Kingdom (country of domicile)

1,228

22

113

United States of America

3,709

5,831

11,684

Rest of the World

110

115

275


5,047

5,968

12,072

 

 

At November 2013 £67,086 (2012: £88,647) of non-current assets are based in Canada, with the remainder in the UK. At May 2013 £72,574 of non-current assets were based in Canada, with the remainder in the UK.

All revenue is categorised as either 'self published', 'publishing' royalties or other. The majority of the revenue is services provided, a small proportion, defined as other, is for goods provided.

 

 


Unaudited 6 months ended

Audited year ended


30/11/13
£'000

30/11/12
£'000

31/5/13
£'000

Publishing

4,619

5,570

11,355

Self published

137

215

511

Royalties

291

183

203

Other

-

-

3


5,047

5,968

12,072

 

 

EBITDA before material exceptional items is a key performance indicator for the Group and is also used by the CEO and is calculated as follows:

 

 


   Unaudited 6 months ended

 Audited year ended


30/11/13
£'000

30/11/12
£'000

31/5/13
£'000

Operating (loss)/profit before interest and tax

(1,557)

920

1,052

Depreciation

104

69

151

Amortisation and impairment

1,099

645

1,650

EBITDA

(354)

1,634

2,853

Share based compensation

178

170

416

Funding costs

195

96

308

Dilapidation provision

18

18

37

Canada set up fees

-

10

10

EBITDA adjusted

37

1,928

3,624

 

 

8.       Earnings per Share

 

The calculation of the basic earnings per share is based on the profits attributable to the shareholders of Frontier Developments plc divided by the weighted average number of shares in issue during the period. Separate calculations have been performed to a profit taking out the adjusted items in note 7 Adjusted EBITDA computation.

 


November 2013

November  2012

May 2013

(Loss)/Profit attributable to shareholders (£'000)

(1,569)

921

1,045

Weighted average number of shares

29,726,900

24,795,243

25,014,043

Basic earnings per share (pence)

(5.3)

3.7

4.2

 

 

The calculation of the diluted earnings per share is based on the profits attributable to the shareholders of Frontier Developments plc divided by the weighted average number of shares in issue during the year as adjusted for diluted share options. For November 2013 as the effect of options and convertible loan notes would reduce the loss per share, the diluted loss per share is the same as the basic loss per share.

 

 


November  2013

November  2012

May 2013

(Loss)/profit attributable to shareholders (£'000)

(1,569)

921

1,045

Weighted average number of shares

29,726,900

25,538,576

25,495,040

Diluted Basic earnings per share (pence)

(5.3)

3.6

4.1

 

 

The reconciliation of average number of ordinary shares used for basic and diluted earnings per share is as follows:

 

 

Weighted average number of ordinary shares

November  2013

November  2012

May 2013

Ordinary shares

29,726,900

24,795,243

25,014,043

Under option

-

743,333

480,997

Diluted average number of shares

29,726,900

25,538,576

25,495,040

 

 

The calculation of the adjusted earnings per share, as calculated by external analysts, is based on the profit after tax. Separate calculations have been performed to a profit taking out adjusted items:

 

 


November  2013

November  2012

May 2013

Adjusted (Loss)/profit attributable to shareholders (£'000)

 

(902)

 

1,136

 

1,816

Weighted average number of shares

29,726,900

24,795,243

25,014,043

Adjusted Basic earnings per share (pence)

(3.0)

4.6

7.3





Weighted average number of shares (diluted)

29,726,900

25,538,576

25,495,040

Adjusted diluted earnings per share (pence)

(3.0)

4.5

7.1

 

 

Adjusted profit

November 2013

November  2012

May 2013


£'000

£'000

£'000

(Loss)/profit attributable to shareholders

(1,569)

921

1,045

Share based compensation

178

170

416

Funding costs

195

17

308

Impairment of Intangible

276

-

-

Dilapidations provision

18

18

37

Set up of Canadian Subsidiary

-

10

10

Adjusted (loss)/profit

(902)

1,136

1,816

 

 

9.       Intangible assets

 

The Group's Intangible assets comprise capitalised development tools and acquired software licences and self published software games. The carrying amounts for the reporting periods under review can be analysed as follows:

 

 

 

Development tools

& licences

Self published software

Third party software

Total


£'000

£'000

£'000

£'000

Cost





At 31 May 2012

5,023

854

737

6,614

Additions

290

535

20

845

Transfer from intangibles

-

-

(17)

(17)

Transfer to intangibles

-

-

14

14

At  30 Nov 2012 - Unaudited

5,313

1,389

754

7,456

Additions

405

478

55

938

Disposals

(768)

-

-

(768)

Adjustment

-

(78)

-

(78)

At 31 May 2013

4,950

1,789

809

7,548

Additions

545

1,082

111

1,738

Disposals

-

(16)

-

(16)

At  30 Nov 2013 - Unaudited

5,495

2,855

920

9,270






Amortisation and impairment





At 31 May 2012

2,454

292

537

3,283

Charge for the period

547

62

36

645

Transfer from intangibles

-

-

(1)

(1)

Transfer to intangibles

-

-

12

12

At  30 Nov 2012 - Unaudited

3,001

354

584

3,939

Charge for the period

546

384

75

1,005

Disposals

(768)

-

-

(768)

Adjustment

-

(78)

-

(78)

At 31 May 2013

2,779

660

659

4,098

Charge for the period

471

280

72

823

Impairment

-

276

-

276

At  30 Nov 2013 - Unaudited

3,250

1,216

731

5,197






Net Book Value at 30 Nov 2013 - Unaudited

2,245

1,639

189

4,073

Net Book Value at 31 May 2013

2,171

1,129

150

3,450

Net Book Value at 30 Nov 2012 - Unaudited

 

2,312

 

1,035

 

170

 

3,517

Net Book Value at 31 May 2012

2,569

562

200

3,331

 

All amortisation charges, impairments (or reversals if any) are included within cost of sales.

In November 2013 Coaster Crazy was impaired by £276k. No impairment loss was recognised for 2012.


 

10. Equity

 

10.1     Share Capital

 


Unaudited

Audited


30 November 2013

30 November 2012*

31 May 2013


£'000

£'000

£'000

Called up, allotted and fully paid

£0.005 each

£0.001 each

£0.005 each

Ordinary shares

156

13

127

 

*On 21 December 2012 the company re-organised into a plc and bonus shares were issued on a 9 to 1 basis out of share premium, on the same day the Ordinary shares were re-denominated to 0.5p per share. The combined effect of these changes resulted in the addition of 12,617,023 shares and a transfer from share premium of £113,553.

 

10.2     Movements in share capital

 


Unaudited 6 months ended

Audited year ended

Movements in number of Ordinary Shares

30 November 2013

30 November 2012

31 May 2013

Number of shares at beginning of period

25,234,046

12,364,332

12,364,332

Issued on share option exercises

112,470

252,691

252,691

Issue of shares

131,580

-

-

Issued on listing to AIM

3,169,292

-

-

Issued on exercise of convertible loan note

2,509,504

-

-

Shares re-denominated to 0.5p

-

-

12,617,023

At the end of the period

31,156,892

12,617,023

25,234,046

 

During the period to 30 November 2013:

 

112,470 Ordinary shares of £0.005 were allotted as fully paid as a result of options exercise, with a weighted average exercise price of £0.739 per share for a total cash consideration of £80,298.   

 

131,580 Ordinary shares of £0.005 were allotted as fully paid for a cash consideration of £0.95 per share being a total cash consideration of £125,001. 

 

3,169,292 Ordinary shares of £0.005 were allotted as fully paid upon the Group's listing on AIM for a cash consideration of £1.27 per share being a total of £4,025,001.  

 

2,509,504 Ordinary shares of £0.005 were allotted as fully paid upon the Group's listing on AIM being convertible loan notes of £2,709,000 at a price of £1.0795.   

 

11. Cautionary statement

 

Sections of this Interim Financial report contain certain forward-looking statements with respect of the Group's financial condition, results, operations and business. These forward-looking statements involve risk and uncertainties because they relate to events that may or may not occur in the future. There are a number of factors that could cause the actual results of developments to differ materially from those expressed or implied by these forward-looking statements. Nothing in this document should be construed as a profit forecast.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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