TIDMGILD
RNS Number : 8597Y
Guild Esports PLC
10 May 2023
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014, as retained as part of
the law of England and Wales. Upon the publication of this
announcement via the Regulatory Information Service, this inside
information is now considered to be in the public domain.
Press release
10 May 2023
Guild Esports PLC
("Guild Esports", "Guild" or "the Company")
Interim results
Guild Esports, (LSE: GILD; OTCQB: GULDF), a global teams
organisation and lifestyle brand, is pleased to announce its
unaudited financial results for the six months ended 31 March
2023.
Financial highlights
-- Revenues increased by 241% to GBP3.7m (H1 2022: GBP1.1m), driven by strong growth in sponsorship
income;
-- Gross profit rose by 256% to GBP2.5m (H1 2022: GBP0.7m);
-- Loss before tax declined to GBP2.3m (H1 2022: GBP4.96m) reflecting increased sponsorship revenue
and a significant reduction in operating expenses;
-- Net cash of GBP1.1m as at 31 March 2023.
Operating highlights
-- Entered a four-year partnership with SCL Education to launch Guild College, providing a career
pathway for young people in the esports industry and a new revenue opportunity for Guild globally;
-- Launched in-house production and creative division, Guild Studios, to provide bespoke, campaign-led
solutions for brands. Since launching in February, Guild Studios has already signed contracts
with Samsung Mobile and blood cancer charity Anthony Nolan;
-- Strengthened the Board of Directors with appointments of Jasmine Skee as Chief Executive Officer
and Jocelin Caldwell as a Non-Executive Director ("NED"), to lead the next phase of the Company's
development;
-- Reinforced senior leadership team with appointments of Clare Jarvis as Chief Financial Officer
and Company Secretary, Luke Jones as Director of Esports and Gaming, Nick Westwood as Senior
Vice President of Creative and Strategy, and Matthew Charles as Director of Operations;
-- Entered Counter-Strike: Global Offensive ("CS:GO"), the world's second most popular esport
(source: Esports Charts, 2023), signing an all-female roster to represent Guild in international
tournaments. The new team is intended to grow Guild's owned audience and create further revenue-generating
opportunities;
-- Signed R&D partnership with artificial intelligence and data analytics company Gerford AI,
to utilise AI technologies to improve the discovery and development of professional esports
players;
-- Guild professional player Anas "Anas" El-Abd won global Fortnite competition MrBeast's Extreme
Survival Challenge, with a top prize of US$1m. Anas and Guild teammate Henrik "Hen" McLean
extended their contracts in February 2023 to remain with Guild until at least 2024.
Post-period highlights
-- Appointed hummel as Guild's Official Technical Kit Partner in a three-year deal valued at
up to GBP0.7m in sponsorship revenues in addition to a double-digit share of merchandising
sales;
-- Developed UK-focused esports competitions using established game IP, including world's first
mixed-gender VALORANT tournament in partnership with Coca-Cola, a women's European league
in Rocket League launched by Guild with Sky Broadband, and a new influencer-led esports competition
with Samsung;
-- Further development and enhancement of the Sky Guild Gaming Centre that will provide further
opportunities for public attendance, events and live broadcasting.
Outlook
-- Company continues to trade in line with expectations underpinned by a strong order book and
pipeline of potential new business;
-- Following a 23% reduction in administrative costs including staffing expenses, the net cash
used in operating activities declined by 58% in the first half, putting the Company on track
for a substantially lower cash burn for the full year;
-- Second half revenues are expected to show further growth compared with the corresponding period
in the previous year;
-- In January, Guild Esports committed to adding 2 million new followers to its owned audience.
After seeing success across the first three months of 2023, Guild has upgraded this audience
growth estimate to 5 million.
Commenting on the results, Jasmine Skee, Chief Executive
Officer, said: "Guild has navigated a challenging macroeconomic
environment to deliver triple-digit revenue growth, driven by
strong sponsorship income and relationships with our partners.
Combined with a significant reduction in operational expenses,
we've seen our gross profits rise and our loss cut in half. We're
keen to carry this positive momentum into the second half of 2023,
with ambitious revenue and audience-growth targets for the full
year.
"Guild Studios and Guild College present an opportunity to both
complement our sponsorship income, and appeal to new brands looking
to enter the esports space for the first time. With a strong
leadership team, high-level performances from our esports teams and
a growing audience, we are making excellent operational progress,
positioning the Company for another year of solid growth. As a
result, the Board looks to the future with confidence."
For further information, please contact:
Guild Esports
Jasmine Skee via Tancredi +44 207 887
Chief Executive 7633
Neil Thapar
Investor Relations
+44 7876 455 323
-------------------------
Tennyson Securities
-------------------------
Corporate Broker
Peter Krens +44 207 186 9030
-------------------------
Tancredi Intelligent Communication
Media Relations
-------------------------
Helen Humphrey
Charlie Hobbs +44 7449 226 720
Maddy Newman +44 7897 557 112
guild@tancredigroup.com +44 7380 127 135
-------------------------
About Guild Esports:
Guild Esports PLC is a global fan-focused team organisation and
lifestyle brand that fields professional players in gaming
competitions under the Guild banner. Our in-house training academy
aims to attract and nurture the best esports talent, and our goal
is to provide the ultimate entertainment experience alongside a
distinctive lifestyle brand authentic to the esports community
worldwide. Guild is led by an experienced management team of
entertainment sector and esports veterans and co-owned by David
Beckham. The Company is headquartered in the UK and its shares are
listed on the Main Market of the London Stock Exchange (ticker:
GILD) and on the OTCQB Venture Market in the United States (ticker:
GULDF). Please visit www.guildesports.com for more information.
Interim Management Report
Overview
Guild has continued to gain momentum into 2023 driven by a
strong contracted order book and a diversification of its revenue
streams, despite a challenging and uncertain macroeconomic
environment.
First half revenues more than tripled to GBP3.7m (H1 2022:
GBP1.1m), including GBP1.1m in prize money won by Guild's
professional players. Gross profit increased to GBP2.5m (H1 2022:
GBP0.7m).
In combination with these increasing revenues, Guild executed a
significant rationalisation of administrative costs which declined
from GBP5.6m to GBP4.3m, including an approximately 29% reduction
in staffing expenses compared with the corresponding period last
year.
As a result, the Company saw its loss before tax for the half
year decrease substantially to GBP2.28m from GBP4.96m.
The Company continues to review its contracted revenue,
pipeline, cash balances and committed expenditure. Based on the
directors' assessment of the Company's cash needs and the
availability of financing, the directors consider the Company to be
a going concern, though anticipate a fundraising may be required
during the year ahead. A further update will be provided in due
course.
Operating review
The Company delivered strong growth in sponsorship revenue,
reflecting continued progress with the fulfilment of existing
contracts as well as generation of revenue from new projects which
commenced in the period under review.
Guild has a strong contracted order book, which currently stands
at GBP5.8m, representing the total amounts remaining to be
recognised as revenues over the lifetime of contracts signed to
date.
Subsequent to the end of the first half, the Company won a new
three-year sponsorship and merchandising contract with hummel, a
well-known sports and lifestyle brand. hummel has been appointed as
Guild's first ever Technical Kit Partner, generating sponsorship
revenues of up to GBP0.7m over the three-year term for Guild, in
addition to a double-digit percentage of merchandising sales. The
Company expects to generate approximately GBP1m in revenue over the
course of the contract including certain performance targets being
achieved. The partnership will develop a new esports professional
performance line, as well as consumer-focused lifestyle ranges and
a dedicated kidswear line, with products potentially to be made
available in online stores globally and physical stores in the UK.
Similarly, Guild is in positive conversations with its existing
client base for further work and renewals.
New revenues in H2 through sponsorship will be targeted around
filling the remaining spots available to partners on the
professional jersey and in activation spaces across the Sky Guild
Gaming Centre. This includes naming rights to the newly formed
Guild College and targeted expansion of our esports division into
new gaming titles and virtual sport categories.
As well as generating significant sponsorship revenue, in the
first half Guild has taken steps to diversify revenue generation
through the launch of new partnerships and expansion of new
initiatives, notably in education, creative and production, and
AI.
In November 2022, Guild launched Guild College in a four-year
partnership with post-16 education provider SCL Education, to
provide BTEC Level 2 and Level 3 qualifications in esports. The
partnership generates four-figure revenues for each student
enrolled in the course, with an initial projection of 125 students
to enrol in the programme. The first course will begin in September
2023, and enrolments are progressing in-line with expectations.
This was followed by the launch of Guild Studios, the Company's
in-house creative and production division, providing bespoke
campaign-led solutions for brands looking to connect with Guild's
audience. Guild Studios not only widens the Company's offering to
brands, but provides a lower barrier to entry, encouraging brands
not typically associated with esports to collaborate with Guild to
reach new audiences. Since Guild Studios' soft launch in January
2023, Guild has signed and delivered contracts for Samsung Mobile
and blood cancer charity Anthony Nolan. Guild Studios has already
generated six-figure revenues for the Company.
The Guild Studios team will be delivering campaigns and large
events for Coca-Cola, Samsung TV, Sky Broadband and Subway across
the summer as part of their existing sponsorship commitments. These
innovative campaigns will include the launch of the world's first
mixed-gender VALORANT tournament in partnership with Coca-Cola, the
launch of a women's European league in Rocket League, and the
launch of a new influencer-led competition with Samsung.
In March 2023, the Company signed an agreement with Gerford AI,
a leading developer of artificial intelligence and machine learning
technologies, to develop and utilise AI technologies for the
scouting and development of esports professional players. Guild
sees long-term potential in the licensing and sale of the
technologies developed by the partnership, intending to benefit
from a first-mover advantage in esports.
The Company continues to attract the interest of global brands
and has focused on developing a number of new partnership
opportunities across a variety of sectors, including automotive,
aviation, travel and finance. Guild's healthy pipeline consists of
discussions at a range of levels of investment, many of which are
at an advanced stage of progression.
On 25 April 2023, it was announced that Guild and Bitstamp had
mutually decided to end their sponsorship one year early. The
termination is not expected to impact Guild's revenues in the
current financial year. The release of inventory and other rights
from the Bitstamp deal will enable the Company to pursue similar
contracts with other sponsors. The Company has adapted its
contracting process to have more innovative and collaborative
relationships with its sponsors moving forward, which will allow
the Company to reduce the costs of servicing contracts in addition
to leveraging its inventory and sponsorship rights more effectively
with future sponsors.
Leadership team strengthened
Guild fortified both its Board-level and senior management
teams, appointing Jasmine Skee as Chief Executive Officer and
Jocelin Caldwell as Non-Executive Director in November 2022.
Ms Skee has taken steps to strengthen Guild's executive team
since her arrival, recruiting Clare Jarvis as Chief Financial
Officer and Company Secretary, Luke Jones as Director of Esports,
Nick Westwood as Senior Vice President of Creative and Strategy,
Georgia Morison as Head of Events and HQ, and Matthew "Charlie"
Charles as Director of Operations. Post period, Luke Jones has been
promoted to Vice President of Commercial, Esports and Gaming, owing
in part to his excellent performance in securing hummel as
Technical Kit Partner. Mr Jones (formerly Senior Gaming and Esports
Manager at Formula One team Red Bull Racing and Digital
Partnerships Director at live event company Live Nation
Entertainment) will help strengthen Guild's sponsorship team
leveraging his significant experience leading strategic planning,
new business development and high-level digital partnership
experience.
Audience
Guild refocused its audience-targeting strategies in January for
aggressive growth. In January, Guild committed to adding 2 million
new followers in 2023. This has been revised, following good growth
in the three months to March 2023, to adding five million new
followers.
Guild's channel growth will be driven by an always-on content
strategy that will utilise a variety of digital platforms. The
company is also developing its owned-and-operated site and
exploring more ways to deliver live esports and gaming
entertainment to UK fans.
Esports
The Company's athletes continue to compete at the highest levels
of esports, and Guild has been delighted with their success over
the half-year period. Guild Fortnite professional player Anas won
the MrBeast's Extreme Survival Challenge tournament in December
2022 (with official confirmation received in January 2023),
securing the entire prize pool of US$1m. Guild received a
percentage of these winnings in line with contractual agreements
with its pro-players.
Guild has looked to sign high-level players to secure the
Company's long-term future as a top-level esports brand. Anas and
Guild teammate Hen, who have won five tournaments between them for
Guild so far and have a combined social media reach of more than 1m
followers, extended their contracts until at least 2024. The
Company additionally signed an all-female CS:GO team, representing
its first entry into the esport. CS:GO is expected to create new
audience-growth and revenue-generation opportunities for the
Company.
As at 31 March 2023, the Company has a roster comprising 17
pro-players.
Academy
Guild Academy's transition to a predominantly in-person
experience has served to provide a stream of owned talent for
Guild's professional teams and build a source of future revenue for
Guild through the scouting, development and subsequent sale and
transfer of professional players to other teams for profit.
Guild has taken great steps towards achieving both goals. The
Company has signed nine players to its Elite development Academy
squad.
Guild now fields Academy graduates "VoltiaX" and Max "Mayza" May
in its professional Fortnite teams, with both competing in this
year's Fortnite Champion Series (FNCS). These two were joined in
April 2023 by content creator Ruby "RubyPlays" Allenby, another
Academy graduate, who produces online content for her more than
50,000 followers as well as competing for Guild.
Outside of Fortnite, Guild Academy's young Rocket League team
continues to flourish. Two Academy players have been signed to
compete professionally for Guild and are competing at a high level
despite their young age. Furthermore, there was the recent success
of signing "BrigArmy17", a top 100 player in Europe, to head up the
Company's FIFA roster.
Guild has run community days to showcase its Academy to young
people, as well as generate interest in Guild College. More than
200 students have visited the Sky Guild Gaming Centre since
January, with Guild committed to giving Academy access to 1000
under 16s by the end of 2023, as well as developing and delivering
a programme of Academy events around the country.
Revenue generation via player sale and transfer has the ability
to create value from the 'path to pro' academy system by developing
select players from the esports talent pyramid that are currently
below the elite level. Guild Academy is helping to feed this
pipeline and increase the value of players. Guild has already sold
players for profit previously, selling Tai "TaySon" Starčič for
US$115,000 in 2021. More recently, former Guild professional player
Vivian "Roxi" Schilling was sold to G2 in March 2023, generating
one of the highest ever transfer fees for a female VALORANT
player.
Outlook
The Company has continued to benefit from positive trading
momentum in the first half of 2023, with strong revenue growth from
sponsorship deals and new initiatives, as well as a sharp reduction
in its cost base implemented under the new leadership team.
The Company continues to trade in line with expectations
underpinned by a strong order book and pipeline of potential new
business. The significant decline in administrative costs including
staffing expenses have helped to right size the business and
reduced cash used in operating activities by 58% in the first half,
putting the Company on track to achieve a substantial reduction in
cash burn for the full year. This cost cutting includes a
continuation of the strategic focus to shift away from employing
influencers on a full-time basis, and instead deploying content
creators and influencers selectively to boost specific campaigns
run with Guild's sponsorship partners.
Second half revenues are expected to show further growth
compared with the corresponding period in the previous year. With a
strong leadership team, high-level performances from our esports
teams and a growing audience, we are making excellent operational
progress, positioning the Company for another year of solid growth.
As a result, the Board looks to the future with confidence.
Responsibility Statement
We confirm that to the best of our knowledge:
-- the Interim Report has been prepared in accordance with International Accounting Standards
34, Interim Financial Reporting, as adopted by the EU; and
-- gives a true and fair view of the assets, liabilities, financial position and profit/loss
of the Company; and
-- the Interim Report includes a fair review of the information required by DTR 4.2.7R of the
Disclosure and Transparency Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact on the set of interim financial
statements; and a description of the principal risks and uncertainties for the remaining six
months of the year.
-- the Interim Report includes a fair review of the information required by DTR 4.2.8R of the
Disclosure and Transparency Rules, being the information required on related party transactions.
The Interim Report was approved by the Board of Directors and
the above responsibility statement was signed on its behalf by
Jasmine Skee (CEO), on 9 May 2023.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
The unaudited condensed statement of comprehensive income of the
Company for the six months ended 31 March 2023 is set out
below.
Unaudited Unaudited Audited
Period ended Period ended 12 months to
31-Mar 2023 31-Mar 2022 30-Sep 2022
Note GBP'000 GBP'000 GBP'000
Revenue 3 3,702 1,086 4,453
Cost of sales 4 (1,165) (372) (1,686)
Gross profit 2,537 714 2,767
--------------------------------------------------------------- ----- -------------- -------------- --------------
Administrative expenses (4,281) (5,630) (10,913)
Depreciation & amortisation (417) (22) (430)
Operating loss (2,161) (4,938) (8,576)
--------------------------------------------------------------- ----- -------------- -------------- --------------
Finance costs (123) (17) (172)
Loss before taxation (2,284) (4,955) (8,748)
--------------------------------------------------------------- ----- -------------- -------------- --------------
Taxation - - -
Loss after taxation (2,284) (4,955) (8,748)
--------------------------------------------------------------- ----- -------------- -------------- --------------
Other comprehensive income - - -
Total comprehensive loss attributable to shareholders from
continuing operations (2,284) (4,955) (8,748)
--------------------------------------------------------------- ----- -------------- -------------- --------------
Basic and diluted earnings per share (pence) 6 (0.44) (0.96) (1.69)
--------------------------------------------------------------- ----- -------------- -------------- --------------
CONDENSED STATEMENT OF FINANCIAL POSITION
The unaudited condensed statement of financial position of the
Company as at 31 March 2023 is set out below.
Unaudited Unaudited Audited
As at As at As at
31-Mar 2023 31-Mar 2022 30-Sep 2022
Note GBP'000 GBP'000 GBP'000
------------------------------- ----- ------------- ------------- -------------
ASSETS
Non-current assets
Property, plant and equipment 1,408 478 1,552
Intangible assets 174 151 220
Right-of-use asset 9 3,241 498 3,457
Other receivables 143 - 143
------------------------------- ----- ------------- ------------- -------------
Total non-current assets 4,965 1,127 5,372
------------------------------- ----- ------------- ------------- -------------
Current assets
Cash and cash equivalents 1,050 6,110 2,730
Trade and other receivables 7 942 2,871 3,961
------------------------------- ----- ------------- ------------- -------------
Total current assets 1,992 8,981 6,691
------------------------------- ----- ------------- ------------- -------------
Total assets 6,957 10,108 12,063
------------------------------- ----- ------------- ------------- -------------
EQUITY AND LIABILITIES
Equity
Share capital 10 519 519 519
Share premium 10 22,644 22,643 22,644
Share-based payment reserve 731 419 650
Retained earnings (22,539) (16,462) (20,255)
------------------------------- ----- ------------- ------------- -------------
Total equity 1,355 7,119 3,558
------------------------------- ----- ------------- ------------- -------------
Non-current liabilities
Provisions 334 - 323
Lease liability 9 2,967 532 3,204
------------------------------- ----- ------------- ------------- -------------
Total non-current liabilities 3,301 532 3,527
------------------------------- ----- ------------- ------------- -------------
Current liabilities
Trade and other payables 8 1,117 1,148 3,401
Deferred revenue 787 1,309 1,318
Lease liability 397 - 259
------------------------------- ----- ------------- ------------- -------------
Total current liabilities 2,301 2,457 4,978
------------------------------- ----- ------------- ------------- -------------
Total liabilities 5,602 2,989 8,505
------------------------------- ----- ------------- ------------- -------------
Total equity and liabilities 6,957 10,108 12,063
------------------------------- ----- ------------- ------------- -------------
CONDENSED STATEMENT OF CHANGES IN EQUITY
The unaudited condensed statement of changes in equity of the
Company for the six months ended 31 March 2023 is set out
below.
Share Share premium Share-based Retained Total
capital account payment reserve earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Balance at 1
October 2021 519 22,643 419 (11,507) 12,074
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Loss for the
period - - - (4,955) (4,955)
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Total
comprehensive
loss for the
period - - - (4,955) (4,955)
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Total - - - - -
transactions
with equity
owners
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Balance at 31
March 2022 519 22,643 419 (16,462) 7,119
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Loss for the
period - - - (3,793) (3,793)
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Total
comprehensive
loss for the
period - - - (3,793) (3,793)
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Share-based
payments - - 232 - 232
Warrants
cancelled
during the
period - 1 (1) - -
Total
transactions
with equity
owners - 1 231 - 232
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Balance at 30
September
2022 519 22,644 650 (20,255) 3,558
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Loss for the
period - - - (2,284) (2,284)
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Total
comprehensive
loss for the
period - - - (2,284) (2,284)
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Share-based
payments - - 81 - 81
Transactions
with equity
owners - - 81 - 81
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
Balance at 31
March 2023 519 22,644 731 (22,539) 1,355
--------------- ------------------- ------------------- ------------------- ------------------- -------------------
CONDENSED STATEMENT OF CASH FLOWS
The unaudited condensed statement of cash flows of the Company
for the six months ended 31 March 2023 is set out below.
Unaudited Unaudited Audited
Period ended Period ended 12 months to
31-Mar 2023 31-Mar 2022 30-Sep 2022
GBP'000 GBP'000 GBP'000
-------------------------------------------------- -------------- -------------- --------------
Cash flows from operating activities
Cash used by operations (1,456) (3,429) (5,370)
--------------------------------------------------- -------------- -------------- --------------
Net cash flow used in operating activities (1,456) (3,429) (5,370)
--------------------------------------------------- -------------- -------------- --------------
Cash flows from investing activities
-------------------------------------------------- -------------- -------------- --------------
Purchase of intangible assets - (101) (206)
Purchase of property, plant and equipment (4) (448) (1,620)
Interest accrued - 16 -
-------------------------------------------------- -------------- -------------- --------------
Net cash used in investing activities (4) (533) (1,826)
--------------------------------------------------- -------------- -------------- --------------
Cash flows from financing activities
-------------------------------------------------- -------------- -------------- --------------
Payment of lease liabilities (220) - (146)
--------------------------------------------------- -------------- -------------- --------------
Net cash generated from financing activities (220) - (146)
--------------------------------------------------- -------------- -------------- --------------
Net (decrease) in cash and cash equivalents (1,681) (3,962) (7,342)
Cash and cash equivalents at beginning of period 2,730 10,072 10,072
Cash and cash equivalents at end of period 1,050 6,110 2,730
--------------------------------------------------- -------------- -------------- --------------
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 31 MARCH 2023
1 Accounting policies
IAS 8 requires that management shall use its judgement in
developing and applying accounting policies that result in
information which is relevant to the economic decision-making needs
of users, that are reliable, free from bias, prudent, complete and
represent faithfully the financial position, financial performance
and cash flows of the entity.
1.1 Basis of preparation
The condensed interim financial statements ("interim financial
statements") have been prepared in accordance with International
Accounting Standard 34 "Interim Financial Reporting" (IAS 34) as
adopted by the European Union (EU). The interim financial
statements have been prepared on the historical cost basis, except
for assets and liabilities measured at fair value through profit
and loss, and are presented in pounds sterling, which is the
currency of the primary economic environment in which the Company
operates. All amounts have been rounded to the nearest GBP'000,
unless otherwise stated. The financial information contained in the
interim financial statements is unaudited and does not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The accounting policies are unchanged from
those disclosed in the previously filed audited financial
statements for the period ended 30 September 2022.
The interim financial statements are for the six months to 31
March 2023, being six months from the financial year end for Guild
Esports Plc ("Guild" or "the Company"), 30 September 2022. The
interim financial information does not include all the information
and disclosures required in the annual financial statements and
should be read in conjunction with the Company's annual audited
financial statements for the period ended 30 September 2022. The
Company has disclosed comparative data for the statement of
comprehensive income for the Company for the period from 1 October
2021 to 31 March 2022, being not materially different from
comparative data for the six months ended 31 March 2022.
The Company has adopted the applicable amendments to standards
effective for accounting periods commencing on 1 October 2021. The
nature and effect of these changes as a result of the adoption of
these amended standards did not have an impact on the financial
statements of the Company and hence have not been disclosed. The
Company has not early adopted any standards, interpretations or
amendments that have been issued but are not yet effective.
The condensed interim financial statements have not been
audited, nor have they been reviewed by the Company's auditors in
accordance with the International Standard on Review Engagements
2410 issued by the Auditing Practices Board. The figures have been
prepared using applicable accounting policies and practices
consistent with those adopted in the audited annual financial
statements for the year ended 30 September 2022.
1.2 Going concern
The preparation of financial statements requires an assessment
on the validity of the going concern assumption. The interim
financial statements have been prepared on a going concern basis,
which assumes that the Company will continue to meet its
liabilities as they fall due. In assessing whether the going
concern assumption is appropriate, the directors have taken into
account all relevant available information about the current and
future position of the Company. The directors have concluded that
the adoption of the going concern assumption is appropriate based
on the Company's contracted revenues, current cash balance and
committed expenditure, together with the directors' assessment of
the Company's ability to secure additional fundraising. However,
this does constitute a material uncertainty that may cast
significant doubt on the company's ability to continue as a going
concern.
2 Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management
to make estimates and judgements and form assumptions that affects
the reported amounts of the assets, liabilities, revenue and costs
during the periods presented therein, and the disclosure of
contingent liabilities at the date of the financial information.
Estimates and judgements are continually evaluated and based on
management's historical experience and other factors, including
future expectations and events that are believed to be
reasonable.
During the period, the Company issued warrants. The directors
have applied the Black--Scholes pricing model to assess the costs
associated with the share--based payments. The Black--Scholes model
is dependent upon several inputs where the directors must exercise
their judgement, specifically: risk--free investment rate; expected
share price volatility at the time of the grant; and expected level
of redemption. The assumptions applied by the directors, and the
associated costs recognised in the financial statements are
outlined in these financial statements.
3 Revenue
The Company derives revenue from various sources, including
revenue from contracts with customers. These revenue sources
involve the transfer of goods and/or services over time and at a
point in time in the following major product lines.
Unaudited period Unaudited period Audited
ended 31 Mar 2023 ended 31 Mar 2022 period
ended 30 Sep 2022
GBP'000 GBP'000 GBP'000
--------------------- ------------------- ------------------- -------------------
Sponsorship revenue 2,490 1,077 3,148
Prize money 1,055 9 1,275
Other revenue 157 - 30
--------------------- ------------------- ------------------- -------------------
Total revenue 3,702 1,086 4,453
--------------------- ------------------- ------------------- -------------------
4 Cost of sales
Unaudited period Unaudited period Audited period
ended 31 Mar 2023 ended 31 Mar 2022 ended 30 Sep 2022
GBP GBP GBP
--------------------------------- ------------------- ------------------- -------------------
Prize money payments to players 899 351 1,190
Sponsorship direct costs 227 - 477
Other direct costs 39 13 19
Opening inventory - - -
Inventory purchases - 8 -
Closing inventory - - -
---------------------------------
Total cost of sales 1,165 372 1,686
--------------------------------- ------------------- ------------------- -------------------
5 Employees
The average monthly number of persons (excluding directors)
employed by the Company during the period was 32 (2022: 45).
Unaudited period Unaudited period Audited period
ended 31 Mar 2023 ended 31 Mar 2022 ended 30 Sep 2022
Senior management 6 11 5
Operations 26 34 31
The aggregate remuneration of employees and directors
comprised:
Unaudited period Unaudited period Audited period
ended 31 Mar 2023 ended 31 Mar 2022 ended 30 Sep 2022
GBP'000 GBP'000 GBP'000
----------------------- ------------------- ------------------- -------------------
Wages & salaries 789 1,128 1,654
Social security costs 93 113 220
Pension costs 11 15 26
894 1,256 1,900
------------------- ------------------- -------------------
6 Earnings per share
The basic earnings per share is calculated by dividing the
profit/(loss) attributable to equity shareholders by the weighted
average number of shares in issue.
Unaudited Unaudited Audited
At 31 Mar At 31 Mar At 30 Sep
2023 2022 2022
Loss for the year from continuing operations (GBP'000) (2,284) (4,955) (8,748)
Weighted average number of ordinary shares in issue 518,617,362 518,617,362 518,617,362
------------------------------------------------------------------------ ------------ ------------ ------------
Basic and diluted earnings per share for continuing operations (pence) (0.44) (0.96) (1.69)
------------------------------------------------------------------------ ------------ ------------ ------------
The Company had in issue 77,595,228 warrants and options at 31
March 2023 (37,914,360 at 31 March 2022). The loss attributable to
equity holders and weighted average number of ordinary shares for
the purposes of calculating diluted earnings per ordinary share are
identical to those used for basic earnings per ordinary share. This
is because the exercise of warrants and options would have the
effect of reducing the loss per ordinary share and is therefore
anti-dilutive.
7 Trade and other receivables
Unaudited period Unaudited period Audited period
ended 31 Mar 2023 ended 31 Mar 2022 ended 30 Sep 2022
GBP'000 GBP'000 GBP'000
--------------------------------- ------------------- ------------------- -------------------
Trade debtors 552 909 1,375
Accrued revenue 5 153 -
Other receivables 12 12 56
Prepayments 368 298 1,870
VAT recoverable 6 1,356 660
Rental deposit - 142 -
Total trade & other receivables 942 2,870 3,961
--------------------------------- ------------------- ------------------- -------------------
The directors consider that the carrying amount of trade and
other receivables is approximately equal to their fair value.
8 Trade and other payables
Unaudited period Unaudited period Audited
ended 31 Mar 2023 ended 31 Mar 2022 period
ended 30 Sep 2022
GBP'000 GBP'000 GBP'000
------------------------------------ ------------------- ------------------- -------------------
Trade creditors 965 755 3,150
Accruals 86 306 242
Other payables 4 - 9
Other taxation and social security 62 87 -
Total trade and other payables 1,117 1,148 3,401
------------------------------------ ------------------- ------------------- -------------------
The directors consider that the carrying value of trade and
other payables is approximately equal to their fair value.
9 Leases
The Group had the following lease assets and liabilities:
Unaudited period Unaudited period Audited period
ended 31 Mar 2023 ended 31 Mar 2022 ended 30 Sep 2022
GBP'000 GBP'000 GBP'000
--------------------- ------------------- ------------------- -------------------
Right-of-use assets
Properties 2,852 498 3,010
Equipment 388 - 447
-------------------
3,240 498 3,457
------------------- ------------------- -------------------
Lease liabilities
Current 397 82 259
Non-current 2,967 450 3,204
------------------- ------------------- -------------------
3,364 532 3,463
------------------- ------------------- -------------------
Right of use assets
A reconciliation of the carrying amount of the right-of-use
asset is as follows:
Unaudited period Unaudited period Audited period
ended 31 Mar 2023 ended 31 Mar 2022 ended 30 Sep 2022
GBP'000 GBP'000 GBP'000
------------------ ------------------- ------------------- -------------------
Properties
Opening balance 3,010 - -
Additions 9 515 3,284
Depreciation (167) (17) (274)
------------------- ------------------- -------------------
2,852 498 3,010
------------------- ------------------- -------------------
Equipment
Opening balance 477 - -
Additions - - 477
Depreciation (59) - (30)
------------------- ------------------- -------------------
388 - 447
------------------- ------------------- -------------------
Total 3,240 498 3,457
------------------- ------------------- -------------------
Lease liabilities
A reconciliation of the carrying amount of the lease liabilities
is as follows:
Unaudited period Unaudited period Audited period
ended 31 Mar 2023 ended 31 Mar 2022 ended 30 Sep 2022
GBP'000 GBP'000 GBP'000
------------------ ------------------- ------------------- -------------------
Opening balance 3,463 - -
Additions 9 519 3,356
Payment made (220) - (50)
Finance charge 112 17 157
------------------- ------------------- -------------------
3,364 536 3,463
------------------- ------------------- -------------------
10 Share-based payments
The following options and warrants over ordinary shares have
been granted by the Company and are outstanding:
Grant Date Outstanding Warrants Exercise Price Expiry date
------------------ --------------------- --------------- --------------------------------------------------
18-Feb-20 3,250,000 GBP0.01 24 months from the first anniversary of admission
13-Mar-20 75,000 GBP0.01 36 months from the first vesting date
09-Jun-20 250,000 GBP0.01 36 months from the first vesting date
18-Jun-20 1,666,666 GBP0.06 36 months from the first vesting date
19-Jun-20 6,963,000 GBP0.06 5 years from issue
29-Jun-20 250,000 GBP0.06 36 months from the first vesting date
07-Jul-20 225,000 GBP0.06 36 months from the first vesting date
05-Aug-20 250,000 GBP0.06 36 months
07-Aug-20 500,000 GBP0.06 36 months from the first vesting date
14-Aug-20 750,000 GBP0.06 36 months from the first vesting date
17-Aug-20 1,000,000 GBP0.06 36 months from the first vesting date
20-Aug-20 1,000,000 GBP0.06 36 months from the first vesting date
28-Aug-20 150,000 GBP0.06 36 months from the first vesting date
02-Oct-20 20,584,694 GBP0.104 5 years from issue
27-Sep-22 25,930,868 GBP0.027 5 years from grant
01-Nov-22 14,750,000 GBP0.014 5 years from issue
------------------ ---------------------
At 31 March 2023 77,595,228
------------------ ---------------------
At the grant date, the fair value of the warrants issued have
been determined using the Black-Scholes option pricing model.
Volatility was calculated based on data from comparable esports
companies, with an appropriate discount applied due to being an
unlisted entity at the grant date, if applicable. Risk-free
interest has been based on UK Government Gilt rates.
11 Share capital and share premium
Shares Share Share
Capital Premium Total
No. GBP'000 GBP'000 GBP'000
---------------------- ----------- -------- -------- -------
At 30 September 2022 518,617,362 519 22,644 23,163
---------------------- ----------- -------- -------- -------
At 31 March 2023 518,617,362 519 22,644 23,163
---------------------- ----------- -------- -------- -------
No shares were issued in the period from the Company's last
annual report on 30 September 2022 to 31 March 2023.
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END
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