ANNUAL REPORT
AND FINANCIAL
STATEMENTS 2020
DELIVERING
CAPTIVATING,
ACCESSIBLE AND
QUALITY GAMING
EXPERIENCES WITH
INDEPENDENT
SPIRIT
We are a leading video games label
and creative partner for independent
(“indie”) developers. The team develops
and publishes games, helping
independent developers from all
backgrounds to bring quality gaming
experiences to all players globally.
We are a highly successful games
publisher, focused on maximising
a game’s commercial success and
creating long-term game franchises.
The Group focuses on premium, rather
than free to play games, and has
launched over 100 games, including
the iconic and well-established Worms
franchise, as well as Overcooked!
and The Escapists.
W H AT ’ S
I N S I D E
Strategic Report
01 Highlights of the year
02 Chief Executive's Q&A
05 Chair & Chief Executive's report
08
Team17 core business model
10 Our portfolio
12
The market opportunity
14 Chief Financial Officer’s review
18
Environmental, social
& governance report
22
Principal risks & uncertainties
Corporate Governance
Group Financial Statements
24
Board of Directors
26 Corporate governance
30
Audit Committee report
31
Remuneration Committee report
38 Directors’ report
41
Independent Auditors’ report to the members
of Team17 Group plc
47
Consolidated statement of comprehensive income
48 Consolidated statement of financial position
49 Consolidated statement of changes in equity
50
Consolidated statement of cash flows
51 Notes to the consolidated financial statements
Company Financial Statements
75
76
Company statement of financial position
Company statement of changes in equity
77 Notes to the Company financial statements
HIGHLIGHTS OF THE YEAR
Revenue
£83.0m
2020
2019
£61.8m
2018
£43.2m
Gross Profit
£39.1m
2020
2019
2018
£19.8m
£29.5m
Profit Before Tax
£26.2m
2020
2019
£19.2m
2018 £8.7m
Gross Profit Margin
47%
2020
2019
2018
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£83.0m
+34%
£39.1m
+33%
£26.2m
+36%
Adjusted EBITDA*
£30.1m
2020
2019
2018
£22.1m
£15.3m
£30.1m
+36%
Cash and Cash Equivalents
£61.5m
2020
2019
£41.9m
2018
£23.5m
£61.5m
+47%
Adjusted Earnings per Share**
18.2p
2020
2019
2018
8.1p
18.2p
+34%
13.6p
-1%
47%
48%
46%
* Adjusted EBITDA is defined as operating profit adjusted to add back
depreciation of property, plant and equipment, depreciation of right
of use assets, amortisation of brands and share based payment costs.
See note 11.
** Adjusted earnings per share is calculated by dividing the profit after
tax adjusted to add back share based payment costs including related
employers national insurance contributions by the weighted average
number of ordinary shares in issue. See note 11.
NON-FINANCIAL HIGHLIGHTS
12 titles launched across 2020 including
a record 10 new games
Senior management and board strengthened
alongside key infrastructure upgrades
Solid pipeline of new launches across 2021
and beyond underpins Group performance
+25%Headcount
Headcount increased 25% to 250
including the acquisition of
Yippee Entertainment
Completed the acquisition
of the Golf With Your
Friends IP in January 2021
for a total consideration
of £12m
Recognition Received
in 2020:
▲ Team17 named Indie Publisher
of the Year at MCV Develop Awards
▲ Blasphemous won Game of the
Year, Best Art, Best Game Design,
Best PC Game, and Best Console
Game at Gamelab
▲ Moving Out awarded Game
of the Year Award at Australian
Game Developer Awards
▲ Team17 named Publishing Star at
Develop:Star Awards
▲ Team17 and Worms inducted into
Golden Joysticks Hall of Fame
▲ Greak: Memories of Azur won
the award for the Best Upcoming
Game for PC/Consoles as well as
Best Graphic Art at VJMX Awards
▲ Debbie Bestwick named
Entrepreneur of the Year at the
2020 AIM Awards
Team17 Group plc
Annual Report and Financial Statements 2020
01
CHIEF EXECUTIVE’S Q&A
“
We are delighted to report
another record performance
in 2020, underpinned by positive
momentum across our
portfolio of games.”
Debbie Bestwick MBE
DEBBIE BESTWICK MBE
CHIEF EXECUTIVE
OFFICER
Team17 Group plc
Annual Report and Financial Statements 2020
02
Q
Team17 has grown
phenomenally since
you came to the market.
How do you manage
that growth, what have been
the biggest changes within the
business and what are the cultural
changes during such an exciting
period of change?
A
Our culture is very inclusive,
we embrace the quirky here
at Team17 and that runs
from the top down and bottom up
to ensure we protect it as we grow.
Our people are the business and we
will always ensure that they have the
creative freedom needed to maintain
both our culture and business goals.
It’s important to understand that we
retain an agile and entrepreneurial
ethos, we don’t have a hierarchical
management system, we are one
team together and that is what we
believe brings the most success. We
are gamers at heart doing what we
are incredibly passionate about and
that means we have a very different
approach to how other businesses
would be managed. Ultimately, our
success comes from total dedication
to the day-to-day business.
Q
How have you managed
the pressures of video
game development,
particularly around the
completion and launch of more
complex titles whilst remote
working?
A
I know it’s a bit of a
stereotype, but many
across the gaming sector
are introverts, so lockdown fits
their lifestyle outside of office-
based working, but equally brings
challenges as we rely on office
environments for that social fix. It
has also been emotionally hard for
many of our younger workforce and
we’ve been working tirelessly to
support everyone on our team; you’re
never alone when you work here.
In terms of delivering on titles,
it has of course been challenging,
particularly with larger scale or
more complex projects, specifically
big online multiplayer games, but
we’ve faced the challenge head on
and delivered in 2020. We also know
this will be an important part of
2021 and are doing all we can with
our partners and Teamsters to help
ensure we are in a good place to
deliver our pipeline as we did in 2020.
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Q
The business has
generated a healthy cash
balance and has now
made two acquisitions
since listing. How important will
acquisitions be in your growth
plans given the gaming sector
is awash with Mergers &
Acquisitions ("M&A")?
A
We have a healthy pipeline
of M&A opportunities which
will form part of our story
but are not central to our long-term
vision. Remember, we have built a
great company by being selective
and focusing on our core values.
I’ve always said M&A in gaming is
really easy if you play the short-term
EBITDA growth strategy but long-
term beneficial M&A takes being
selective. Ultimately, we want to build
partnerships with people who not
only buy into our long-term values
regarding growth, but also add real
personal value to the wider business.
“ Whilst many desire to be like
Team17, we are constantly
evolving and growing
to stay ahead of the
competition.”
Team17 Group plc
Annual Report and Financial Statements 2020
03
CHIEF EXECUTIVE’S Q&A CONTINUED
We are very focused on working with
talented creators who want to build
sustainable franchises across genres
and multiple platforms.”
Q “
Can you give us any
insight into what your M&A
strategy is in terms of types
of targets, will they always
be development studios like Yippee
or IP like Golf With Your Friends?
A
We are always looking at
M&A opportunities. We
focus on three areas all with
long-term shareholder value first
and foremost. They are: IP where it
makes sense; studios or services that
benefit the wider Group margins
and wider Group strategic ‘good
fits’ that meet long-term goals with
likeminded growth companies.
Q
There have been recent
moves by your peers to
attempt to replicate
Team17’s successful
games label. How do you see
that competition impacting your
business and your ability to find,
develop and launch future third-
party games?
A
We’ve built something very
unique and special within
the games industry. Our
secret sauce isn’t easy to replicate
and whilst we still don’t see direct
competitors doing exactly what we
do, we see a variety doing small
bits of some parts. Competition is
healthy and it keeps us on our toes.
Remember, we are constantly evolving
and growing ourselves so that’s hard
for others to keep up with our pace.
Will Team17 always
develop ‘Indie’ games
or could we see you
targeting AAA titles?
Q
A
AAA is absolutely not where
we want to play. It carries
significant financial risk and
exposure. Our indie portfolio model
is at the heart of the business and
culturally Team17 is a premium indie
business, it’s very much in our DNA.
How important are next
generation consoles to
the long-term success of
the gaming sector and
Q
specifically to Team17?
A
Console development
has been a central part of
the gaming industry for
many decades. Despite the onset
of streaming platforms, I believe
that consoles have a significant role
to play for the foreseeable future.
We develop the vast majority of
our games to be played on multiple
devices including consoles and we
want to make our games available
to as many players as possible.
Do you see streaming
services as a threat or an
opportunity for Team17?
Q
A
We see it as an opportunity
for our business and we are
already embracing them.
We have a huge back catalogue of
titles which lends itself to this model
very well. As with everything we do –
the commercial terms must be right
for our business as does the timing
which to date, they have been.
How important is the
Greenlight process
to Team17?
Our Greenlight process sits
at the heart of our business
model and enables us to
Q
A
evaluate a large number of potential
games both internally created or
from external third-party developers.
We make decisions on games based
on assessing potential commercial
upside using the knowledge and
experience across our team. We
are very focused on working with
talented creators who want to build
sustainable studios, new IP and
develop franchises across many
genres and on multiple platforms.
That has always been our message
and it will continue to be so.
Q
How much do you
typically invest in
a title and what stage
of development is the
title when you chose to invest,
how does that compare with
your peers?
A
There is no one size fits
all model as each game is
unique. Our involvement
varies from a few years out to a few
months before launch. Investment
equally varies depending on what
stage the 3rd party game is at as well
as what type of game it is. Historically,
our funding on an external game is
below £1m but is likely to be higher
for a 1st party game. That said, if
we thought a game needed further
financial support, we would happily
invest above those thresholds if
the commercials all stacked up.
Team17 Group plc
Annual Report and Financial Statements 2020
04
CHAIR & CHIEF EXECUTIVE’S REPORT
ACCELERATED
MOMENTUM ACROSS
OUR PORTFOLIO
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We are pleased
to report another
record year for
Team17"“
Debbie Bestwick MBE
Chief Executive Officer
Chris Bell
Non-Executive Chair
• Neon Abyss – dungeon-based
action-platformer (Veewoo Games,
China)
• Hammerting – dwarf mining
simulator (Warpzone Studios,
Sweden)
• The Survivalists – island survival in
The Escapists universe (own-IP, UK)
• Overcooked! All You Can Eat
– boosted Overcooked bundle for
next-gen (Ghost Town Games, UK
• Worms Rumble – real-time, cross-
platform Worms title (own-IP, UK)
• Monster Sanctuary (console*)
– monster collecting and turn-
based combat (Moi Rai Games,
Germany)
* Existing games launched on to new platforms.
Introduction
We are delighted to report a sixth
consecutive record performance
year. Supported by our Teamsters
and Games Label partners, we
delivered one of our most ambitious
rosters of game launches, built upon
our internal tech wrappers for 1st
and 3rd party online games to
include Cross-Play (for Unity and
Unreal engine games), alongside
further enhancements to our back
catalogue portfolio contributing to
another excellent year.
Pleasingly, we launched 2 existing
titles on new platforms and released
a record 10 new game titles in 2020
which included 7 new game releases
and 3 new games set in existing
gaming universes. We continued to
build on our existing franchises with
additional 34 downloadable content
packs (“DLC”) delivered across
15 titles, further enhancing their
lifecycles and encouraging continued
player interaction.
Across the year, 78% of the Company’s
revenues came from our strong and
diverse back catalogue portfolio, partly
as a result of Covid related lockdowns
which provided an opportunity for
gamers globally to explore our diverse
mix of content. This contributed to a
significantly better than expected
performance in FY2020 with new
releases in total for the year accounting
for 22% of sales. Our portfolio model
came into its own in 2020 and
underpins our low risk business model
that we believe in so strongly.
2020 Launches
As referenced above, we continued
to strengthen our IP portfolio with
record title releases during the year
working alongside development
teams globally:
• Moving Out –physics-based
moving simulator (SMG Studio,
Australia & DevM Games, Sweden)
• Golf with Your Friends (console*)
– multiplayer mini golf game
(Blacklight Interactive, Australia)
• Main Assembly – robot building
sandbox game (Bad Yolk, Sweden)
• Crown Trick – role-playing game
with turn-based combat (NeXT
Studios, China)
• Going Under – satirical dungeon
crawler (Aggro Crab, USA)
• Ageless – time altering puzzle
platformer (One More Dream
Studios, Malaysia)
Team17 Group plc
Annual Report and Financial Statements 2020
05
New titles Rogue Heroes and Narita
Boy have been launched in the
first quarter of 2021 as well as
Overcooked! All you can Eat on
additional platforms with full cross
play. Together with new titles already
announced, we look forward to
updating our shareholders on
further titles to be released in 2021.
Industry Recognition
The quality of Team17’s business,
management and games has
continued to be recognised within
the video game industry throughout
2020 with many awards and
nominations but call out to:
• Team17 named Indie Publisher of
the Year at MCV Develop Awards
• Blasphemous won Game of the
Year, Best Art, Best Game Design,
Best PC Game, and Best Console
Game at Gamelab
• Moving Out awarded Game of the
Year Award at Australian Game
Developer Awards
• Team17 named Publishing Star at
Develop:Star Awards
• Team17 and Worms inducted into
Golden Joysticks Hall of Fame
• Greak: Memories of Azur won the
Award for the Best Upcoming
Game for PC/Consoles as well as
Best Graphic Art at VJMX Awards
• Debbie Bestwick named
Entrepreneur of the Year at the
2020 AIM Awards
CHAIR & CHIEF EXECUTIVE’S REPORT CONTINUED
As a result of both the strength
of our portfolio model and the
successful launch of new titles in
2020, we are delighted to report
revenues of £83.0m up 34%
(2019: £61.8m), an increase of 33%
in gross profit to £39.1m (2019:
£29.5m), profit before tax up 36%
to £26.2m (2019: £19.2m) and a 36%
increase in adjusted EBITDA to
£30.1m (2019: £22.1m), all of which
are records for the business.
We continue to be highly cash
generative, ending the year with
cash and cash equivalents of £61.5m
(2019: £41.9m).
The Company’s portfolio continues
to grow and now comprises nearly
400 digital revenue lines (“DRL”),
compared to just over 300 DRL this
time last year. The expansion of our
DRL across our genre and platform
agnostic portfolio continues to
underpin the Company’s growth and
mitigates the risks associated with
over-dependence on any one title or
specific distribution platform.
The Company’s core business model
has remained focused, robust and is
central to our ongoing success.
Therefore, we will continue to focus
on our key priorities:
• Growing our strong portfolio of
titles, including additional paid
and free DLC;
• Harnessing new technology and
platforms;
• Capitalising on the strength of the
Games Label model and our
unique Greenlight process that
identifies and contracts new IP;
• Evaluating selective M&A
opportunities; and
• Continuing to invest in our people
and infrastructure, while
identifying new creative and
commercial talent
Covid
Over the course of the pandemic and
continuing into 2021, the safety and
wellbeing of our Teamsters and
Label Partners has remained our
number one priority. Due to the
seamless transition to remote
working, the business suffered
minimal interruption during the
early stages of the pandemic.
Having proven their ability to work
effectively from home, we will
continue to bring our people back to
the office only when we feel safe and
comfortable to do so. We also expect
to see a permanent shift in working
and business travel practices across
our industry and will listen closely to
feedback from our teams and
partners, as we develop increasingly
flexible working practices across the
business.
During the period, the business did
not furlough any of its staff nor did it
apply or utilise any covid funding
support from local or central
government.
2021 Pipeline
Continuing on from 2020, with one
of our most ambitious pipelines
delivered not just in the number of
game launches and updates but
technically as a remote work force,
our fiscal 2021 outlook is no less
ambitious. We have a solid and
diverse pipeline of new IP to look
forward to including: Rogue Heroes,
Narita Boy, King of Seas, Thymesia,
Epic Chef, Super Magbot, Greak:
Memories of Azur, Honey I Joined a
Cult and Hokko Life with new games
yet to be announced. In addition to
new IP, there is a special
mention for some of our
existing portfolio titles
such as Hell Let Loose
which will arrive on next
generation consoles this
year alongside Worms
Rumble which will launch on
additional existing platforms with
full cross play.
Team17 Group plc
Annual Report and Financial Statements 2020
06
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Market Overview
In 2020, the video games market saw
an unprecedented period of growth,
accelerated by the significant
increase in demand for at home
entertainment during the
Covid-19 pandemic.
As a result of this positive tailwind,
the overall market grew1 19.6%
2020 vs 2019 to $174.9 billion
whilst previous estimates were for
8.2% growth to $164.6 billion. The
market is now predicted to reach
$217.9 billion by 2023 growing at
7.6% CAGR, a slightly lower rate than
prior year predictions reflecting
uncertainty within the global
marketplace. Over the same period,
the mobile gaming sector is
expected to grow at 9.8% CAGR,
whilst console and PC sectors are
predicted to grow at 7.4% and 2.4%
respectively.
With the launch of next-generation
consoles in November 2020, we
entered a new era of gaming with
both consoles boasting significant
improvements to architecture,
processing, and graphic's
capabilities. Our platform agnostic
approach means that although we
will continue to release games across
all platforms, including PlayStation 5
and Xbox Series X|S, the Company’s
performance remains untethered to
a single console.
1 Market data sourced from NewZoo Global
Games Market Data January 2021.
Outlook
Team17 has a solid pipeline of
launches for 2021 and beyond
coupled with a strengthening
Greenlight process continually
adding further IP and strengthening
our offering to 3rd party partners
with our unique development tools
and resources. The Company is
therefore well positioned to continue
to deliver on our growth plans.
The expansion of both major
consoles and distribution platforms
underpins management’s optimism
about the future of gaming given its
unique mixture of technology and
entertainment.
Whilst gaming has proven to be
extremely resilient, the board
continues to be mindful of any
potential headwinds associated with
a prolonged pandemic, including
uncertain macro-economic and
consumer environments alongside
manufacturing and supply chain
challenges facing next generation
and existing hardware. We expect
these to be in part ongoing and key
considerations in 2021.
We would like to take this
opportunity to thank our Teamsters
for their tenacity and faultless
commitment in what has been a
challenging year for all of us. It is
through their endurance and
ingenuity that Team17 has been able
to thrive in an unprecedented
trading environment.
With a solid pipeline of launches for
2021 and beyond, Team17 is well
positioned to continue to deliver
underlying growth and support the
long-term prospects aligned with
our ambitious strategic plans. The
acquisition in early January of IP
rights and assets for Golf With Your
Friends is a clear indication of our
strategic intent and desire to grow
our IP base, expanding our portfolio
and franchise footprint.
We continue to review a healthy
pipeline of potential M&A
opportunities that could deliver
long-term value.
The Group continues to focus on
retaining cash generated from
operations to further invest in the
business and its growth plans and
the Directors do not propose a
dividend at this time.
We are confident that our ever-
growing portfolio and high quality
development and commercial
resources place Team17 in a
strong position and will continue
to underpin the Group’s future
performance.
Debbie Bestwick MBE
Chief Executive Officer
Chris Bell
Non-Executive Chair
17 May 2021
“
We look forward to another exciting year
ahead with a solid pipeline of new game
launches and consistent performance
from our back catalogue.”
Debbie Bestwick MBE
Chief Executive Officer
Team17 Group plc
Annual Report and Financial Statements 2020
07
TEAM17 CORE BUSINESS MODEL
GROWING
TOGETHER
OUR KEY STRENGTHS
▲
EXPANDING OUR PORTFOLIO
WHAT WE DO
Strong Games Portfolio
– Growing back catalogue with multiple “evergreen”
franchises (Worms, Escapists, Overcooked!)
– De-risked balance of own IP and growing
third-party IP
– Genre and platform agnostic with nearly 400 digital
revenue lines
Award-winning
– Team17 and Worms entered the Golden Joystick
Awards 2020 Hall of Fame
– Numerous industry awards, including BAFTA, TIGA,
Develop, Game Critics, GameLab, VJMX, Australian
Game Awards and The Game Awards
– Industry recognised leader, Debbie Bestwick voted
AIM entrepreneur of the year 2020
A Growing Pipeline
– Our greenlight process goes from strength to strength
– Reviewing and signing more high-quality prospects
than ever before whilst ensuring high-quality hurdle
– Reputation growing around the world
(APAC, Europe, USA as well as UK)
Savvy and Innovative Teamsters
– Team17 attracts and nurtures the best talent
within the gaming sector
– Drawing interest from all over the world
– Highly creative and agile teams across Development
Studio, Commercial and Support teams
A Creative and Entrepreneurial Culture
– Pushing technical innovation with multi player and
cross-platform own technology
– Mix of co-development and publishing only
third-party contracts enhance title development
and build a valuable IP portfolio
– Launched own e-commerce site
Go-to Creative Partner for Indie Developers
– We now have partners in 13 different countries
around the world
– Grown our reputation in Asia in 2020 with development
and publishing partnerships
– Long-term partnerships providing full service
development and publishing solutions to
a global market
Our Greenlight Process seeks to identify and assess internal
and external new title ideas at all stages of development.
Identify
▲
▲
Product Creation and Acquisition
This process is highly agile and scalable allowing a growing
number of prospects to be reviewed in a short period of time
but maintains the highest standards of due-diligence.
Our Greenlight Process
IDENTIFICATION
INITIAL REVIEW
COMMERCIAL
ANALYSIS
PRODUCT
DEVELOPMENT
DUE DILIGENCE
SIGN OFF
We utilise multiple sources from
Teamsters themselves, desk
research across social media
platforms including crowdfunding
platforms, conferences, agents,
direct submissions and more on a
global scale
Our experienced team review
all submissions for both internal
and external concepts/games
each week
Our commercial team benchmark
titles against other titles in the
genre and reviews the target
market and quantifies the
market opportunity
Our production, design and
development teams provide critical
review of all titles at this stage,
assessing the quality of the game
design, code and suitability for
delivery across multiple platforms
Commercial decision-making stage
where we set challenging minimum
ROI criteria with a high degree of
risk analysis and mitigation scenario
planning and look at long-term
potential
Sustainable Economics
– Cautious and dependable financial management
approach
– Highly profitable and scalable with low capital
investment (people-based)
– Highly cash generative
The whole process from
identification to offer
typically takes 2 to 4 weeks.
Team17 Group plc
Annual Report and Financial Statements 2020
08
▲
▲
Enhance
▲
▲
▲
IP/Product incubation
If our games label partners are the equivalent of music artists, then Team17 is the studio
with a producer, experience and infrastructure providing all the expertise and resources
needed to help polish and improve the gamer’s experience and commercially enhance
individual game titles. Using both internal teams and some external supplier partners,
Team17 offers expert advice and feedback from design and development consultancy
to user research and provides help in specialist technical areas to deliver a title ready for
launch on all platforms capable of adding multiplayer, cross-platform functionality and
overall performance optimisation.
Publish
Go-to-market execution
Our experienced product marketeers devise bespoke launch plans, using market insights
and working with internal and external studios to align and refine the right content
and gameplay with key messages. Titles are launched through integrated campaigns,
involving our specialist digital marketing, PR & community, creative services and business
development teams. Team17 works closely with platform, influencer and promotional
partners across the globe to ensure campaigns reach the right audiences and engage
players from the title announce through its entire lifecycle.
▲
Extend
Lifecycle management
The commercial expertise across marketing and business development teams deliver
post launch plans that maximise long-term revenues through promotions, platform
partnerships and content-driven activities. These include strategic additional platform
releases, subscription partners and new sales avenues such as limited physical "collector"
runs. We work with our studio teams to plan, develop and launch incremental DLC
to monetise existing audiences as well as free DLC to retain players and increase the
experience and presence of the game within the market, gathering insight to explore
further expansion possibilities such as sequels and spin-offs that could lead
to future franchise potential.
▲
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▲
VALUE DRIVERS
Teamsters
Our people are the experienced,
creative heart of our business
and we continue our
investment to recruit and build
this valuable team.
▲
25%Increase in headcount in 2020
Indie Partners
We have partners across the
globe with a growing reputation
in Asia which drives an ever
increasing interest from new
potential partners submitting
games to our greenlight process.
▲
8Third-party new games
released in 2020
Investors
Team17 has continued to grow
and deliver enhanced value
to our shareholders with a
125% growth in adjusted EPS
since 2018.
▲
18.2p
Adjusted EPS
Team17 Group plc
Annual Report and Financial Statements 2020
09
OUR PORTFOLIO
EXPANDING
OUR PORTFOLIO
Team17 is a global entertainment games label focused on
delivering premium video games. Alongside developing our
own successful games, Team17 partners with indie
developers around the globe to co-develop and publish
games across all genres and platforms.
OUR PORTFOLIO
First-party IP
100% owned & internally developed,
representing 21% of 2020 revenues
Third-party IP
Co-developed & published,
represents 79% of revenues
Developing our own IP has been at the
heart of our business since 1990. We
have successfully created, developed and
published numerous own IP titles and
have since grown many of these titles into
successful and ongoing franchises.
To continue growing our portfolio as a
Games Label we work with external partners
throughout the development and publishing
phase where our involvement will depend on
the specific requirements of the individual
development partner, but it can also be
solely as a publisher to help launch the title
across multiple platforms.
PLATFORMS
We develop and co-create games
for PC, console and mobile gaming
formats and look to bring them to
market across multiple platforms
alongside physical sales channels
to make them available to a wide
customer base and maximise their
commercial success.
PC▲
PC
— Steam
— Epic
— GOG
— Amazon Prime Gaming
— A number of smaller
regional based stores
▲ Console — Nintendo Switch
— Sony PlayStation 4 / 5
— Microsoft Xbox One / Series S/X
▲ Mobile
— Apple iOS/OSX
— Amazon Mobile
— Android
▲ Streaming — Microsoft
Cloud Streaming
— Amazon Luna
— Other smaller providers
Approaching
400Digital sales make up 93% of all
digital
revenue
lines
revenues and digital revenues
with digital revenue lines1 across
multiple genres and platforms.
1 A digital revenue line is defined as a title available
on an individual platform, so typically an individual
title launched on multiple platforms could have
between 4-6 digital revenue lines.
Team17
Team17 Group plc
Annual Report and Financial Statements 2020
Annual Report and Accounts 2020
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LIFECYCLE MANAGEMENT
Once we have identified titles through our greenlight
process and developed them for release internally
or by supporting our third-party development
partners, Team17 draws on an experienced
publishing team with global reach and connections
across the gaming sector that successfully launches
titles and extends the life of titles to optimise the
commercial lifecycle value of our growing portfolio.
Look to create
"evergreen"
PROMOTIONAL
franchises with
PLANNING
sequel titles for
lifecycle extension
Strong influencer
relations and
marketing capability
to expertly plan and
launch titles
GROWING IP
PORTFOLIO
Adding new first and
third-party titles to the
growing back catalogue,
creating a valuable
content-driven, genre
agnostic portfolio
Deeper market
penetration by
leveraging our
strong platform
relations to
maximise title
success
New downloadable
content developed
and released as
product extensions
Street-smart
commercial team
dynamically manage
global digital
promotional lifecycle
OUR FRANCHISES
Certain IP titles show enough promise to be more
than one game and lend themselves to sequels and
diversification of products: spin-offs, different genres,
licensing/product development (particularly in
complementary areas such as merchandise, apparel,
board/card gaming, toys, transmedia, music, events etc.
Worms, Overcooked! and The Escapists Universe are three
key franchises that have already begun to expand and we
will see a lot more from them in areas outside of video
games during 2021 onwards, bringing new audiences
into the IPs, new regional opportunities and improved
awareness of the video games these IPs were born out of.
Alongside Worms, The Escapists Universe and Alien Breed
are Team17-owned franchises, and with the newly
acquired Golf With Your Friends having the potential to
grow into a long-term franchise – this will continue to be
a key focus area for Team17.
(Owned IP)
▲ 30 existing titles
▲
7 DLC launched in 2020
▲
Worms Rumble launched in
December on PC and PlayStation 5
and Playstation 4
(Third-party IP)
▲ 2 existing titles
▲ 4 DLC launched in 2020
▲
Overcooked! All You Can Eat
launched in November on
PlayStation 5, Xbox Series X and S
(Owned IP)
▲ 2 existing titles
▲
1 DLC launched in 2020
▲
The Survivalists launched in October
on PC, Nintendo Switch, PlayStation 4,
Xbox One and Apple Arcade
Team17 Group plc
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THE MARKET OPPORTUNITY
THE GLOBAL GAMING
OPPORTUNITY
The consistent and rapid growth of the worldwide gaming industry
accelerated further in 2020 than previous estimates expected and
clearly the COVID-19 pandemic underpinned increased demand for
in-home, co-operative, and interactive entertainment. Total market
revenue grew nearly 20% in 2020 to $174.9bn and is predicted to grow
to $217.9bn by 2023 with CAGR reverting back to normalised levels
according to the NewZoo 2020 report.
2.7bn
Number of gamers worldwide in 2020,
including 1.3bn PC players and 0.8bn
console players
7.6%Global gaming industry
CAGR from 2020-2023
30.2%Growth of Middle East and Africa
market, the fastest growing
regions in 2020. All geographies
saw double-digit growth this year
2020 Revenue by Market Segment
Mobile
Console
PC
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$86bn
$51bn
$37bn
Team17 Group plc
Annual Report and Financial Statements 2020
$63.2bn
Expected value of console market
by 2023, growing at a CAGR of 8.9%
MARKET TRENDS
▲
Subscription and
Cloud-based Gaming
Video game subscription services
provide players with access to
hundreds of games without the need to
purchase each individual title. Adoption
of the model has been rapid with Xbox’s
Game Pass (18m subscribers1) and
PlayStation Now (2.2m subscribers2)
proving particularly popular with
console gamers. With new cloud-based
competitors such as Google’s Stadia
(1m subscribers3) and Amazon’s Luna
service, gamers can also access games
without the need to purchase new
hardware or download content directly
to their devices.
▲ What it means for us
Team17 is a platform agnostic
Company, which is why you can
find our content on your Switch, PC,
Xbox or PlayStation. We see both
streaming and cloud-based services
as a great opportunity to share our
games with the widest possible
audience. In December, our newest
Worms title, Worms Rumble was
launched on PlayStation Plus and
we were delighted with the positive
reaction from new gamers and Worms
veterans alike. Team17’s significant
back catalogue of titles lends itself
to subscription-based models and
we look forward to working with our
commercial partners to bring our
communities more titles on-demand
in 2021.
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Increasing Platform
Diversity
▲
Inclusive and
Accessible Games
The digital gaming marketplace
continues to see the emergence of
new revenue channels that include
premium sales, Games As A Service,
subscription and potentially rental in
the future. Recent next generation
console launches are reinvigorating
those platforms and helping to drive
engagement and growth. PC digital
distribution platforms have also grown
with Steam and Epic Games Store
now boasting a combined total of
176m monthly active users4,5, and new
streaming platforms such as Amazon
Luna and Google Stadia are growing
new routes to market. Mobile continues
to be the fastest growing channel
through platforms provided by Apple
iOS and Google's Android OS.
▲ What it means for us
Team17 consistently look to launch
titles on the widest range of platforms
in order to maximise the potential
gamers able to find our titles and
play them. Our commercial team
maintains strong relationships with
platform holders whilst forging new
partnerships with identified growth
platforms ensuring that opportunities
for Team17 are maximised. We
continue to ensure our development
teams drive their technical capabilities
to be able to launch titles across
multiple channels and our commercial
teams have strong relationships
across all global platform providers.
There is an ongoing, industry-wide
effort to make games both more
inclusive and accessible. Increasingly,
creators are adding characters who
are more representative of society
as a whole and features to make
games more accessible to those with
disabilities or learning difficulties. The
gaming industry does not operate in a
vacuum and all companies, regardless
of size or status, from AAA publishers to
one-man indie studios are recognising
the role they can play in bringing about
positive change.
▲ What it means for us
Team17 has always strived to be an
inclusive Company, not only for our
own employees, but also in terms of
the content we create and publish.
2020 was the year where we feel we
made our greatest enhancements in
inclusivity features for our games. In
November, we launched Overcooked!
All You Can Eat, the most accessible
Overcooked! title yet, including dyslexia
friendly text, a scalable user interface,
and colour-blind friendly chef indicators,
alongside an assist mode that adds
features to increase level times. Moving
Out also had assist modes and many of
the same accessibility options. Team17’s
games are for everyone and we will
continue to ensure our games are as
accessible and diverse as possible this
year and beyond.
References
1 https://www.theverge.com/2021/1/26/22250795/xbox-game-pass-subscribers-growth-microsoft
2 https://www.theverge.com/2020/5/19/21263492/sony-playstation-subscribers-active-users-ps4-subscription
3 https://www.cgmagonline.com/2020/04/23/google-stadia-hits-1-million-users/
4 https://steamcommunity.com/groups/steamworks/announcements/detail/2961646623386540827
5 https://www.epicgames.com/store/en-US/news/epic-games-store-2020-year-in-review#:~:text=There%20are%20now%20over%20160,in%202019%20to%2056%20million
Team17 Group plc
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CHIEF FINANCIAL OFFICER’S REPORT
DELIVERING
FINANCIAL
RESILIENCE
Team17 has delivered another strong
financial performance with Group
revenues growing 34% to £83.0m.”
“
▲ Key performance indicators for the period ended 31 December 2020
Revenue
Gross Profit
£83.0m
2020
£83.0m
2019
2018
£61.8m
£43.2m
£39.1m
2020
£39.1m
2019
2018
£19.8m
£29.5m
Adjusted EBITDA*
Gross Profit Margin
£30.1m
2020
£30.1m
2019
2018
£22.1m
£15.3m
47%
2020
2019
2018
47%
48%
46%
* Adjusted EBITDA is defined as operating
profit adjusted to add back depreciation
of property, plant and equipment,
amortisation of brands and impairment
of intangible assets.
Team17 Group plc
Annual Report and Financial Statements 2020
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▲
Mark Crawford
Chief Financial Officer
Performance Overview
2020 was undoubtedly an exceptional
year with the Covid pandemic
impacting individuals and businesses
across the globe. We reported record
revenues with higher than expected
back catalogue sales alongside the
launch of 12 titles with 2 existing
titles released on new platforms
and a record 10 new titles launched
during the year (2019: 7) resulting
in new releases representing 22%
of revenues in the period (2019:
29%). Overall, the Group’s revenues
grew 34% to another record level
of £83.0m (2019: £61.8m) for the
year to 31 December 2020.
Gross profit grew by 33% to £39.1m
(2019: £29.5m) and gross margin
percentage was 47% (2019: 48%).
Movement in gross margins reflect a
combination of the sales mix, the age
profile of the titles within our portfolio
and the ongoing support provided to
titles post launch. It should be noted
that this combination of sales mix
between back catalogue and new
releases together with associated
amortisation charges is subject to the
scale and timing of new game releases
and will vary from year to year.
was recognised in the period under
IFRS 15. As a result of the licence
deal combined with the launch on
the next generation console, first
year revenues are expected to be
more heavily weighted towards the
launch date and we have therefore
updated our amortisation policy
to better reflect this with a higher
amortisation charge for this title being
recognised in December 2020. The
total amortisation charges for this title
over the first year after launch will
remain in line with the existing policy.
Administration costs grew by 23%
to £13.0m (2019: £10.6m) with the
key driver of the increase being
the growth in headcount. We were
pleased to be able to continue to
recruit throughout the year despite
the pandemic related restrictions and
as a result total headcount grew by
25% to 250 (2019: 200). The increase
in headcount includes the team that
joined as a result of the acquisition
of Yippee in January 2020, enabling
the expansion our development
capability with a second studio
based in Media City, Manchester with
access to a new and broad talent
pool. Average headcount increased
by 34% to 233 during the period
(2019: 173) reflecting the fact that
prior year headcount increase was
predominantly second half loaded.
In line with the increased number of
game launches in the period, there
were increased marketing costs,
however other commercial costs
associated with global gaming events
were reduced as a direct result of
Covid restrictions. In addition, there
were relatively small overhead costs
associated with the Manchester
studio in its first year within Team17.
The resulting operating profit
for the period was £26.2m which
showed a 38% growth compared to
the previous year (2019: £19.0m).
With a growing pipeline of titles in
production combined with more
internal IP, development costs
capitalised in the period have
increased by 134% to £7.5m (2019:
£3.2m). Capitalised costs will vary
from year to year as they reflect
the combination of the increased
number of titles in development,
timing and number of planned
launches, the mix of own IP launched
in the year and also the technical
tools we build within our talented
development teams including
multiplayer online games and cross-
platform technology. Costs incurred
to support an increasing number of
live games or deliver new content as
DLC (either paid for or free updates)
are fully expensed in the period.
Amortisation charges have risen
primarily due to the increase in
number of titles launched in the
period. Team17’s amortisation policy
means that the majority of the
capitalised development costs for a
title are written off in the 12 months
after the title is launched. Charges
will vary year to year in accordance
with the timing and quantity of
titles launched alongside the level
of development costs capitalised.
In December 2020, we launched
Worms Rumble on PC, PlayStation 4
and the next generation PlayStation
5 console and as part of this launch,
revenue was secured under a license
agreement with PlayStation which
Group launched
“ In total the
10
new games in 2020
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Operating Profit**
£26.2m
2020
£26.2m
2019
£19.0m
2018
£12.5m
Operating Profit Margin**
32%
2020
2019
2018
32%
31%
29%
** 2018 excludes exceptional costs.
Team17 Group plc
Annual Report and Financial Statements 2020
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CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
The business continues to remain
debt free (with the exception of
the lease liabilities included under
IFRS 16); with global interest rates
remaining extremely low, bank
interest generated net finance
income of £0.1m (2019: £0.2m). The
resulting profit before tax grew
36% to £26.2m (2019: £19.2m).
Adjusted EBITDA was £30.1m which
grew 36% year on year (2019: £22.1m)
and the Adjusted EBITDA margin as
expressed as a percentage remained
at 36% (2019: 36%) continuing to
support the underlying profitability
of the portfolio business model
whilst making important investment
in the team and infrastructure
to support the future growth
aspirations for the business.
Adjusted EBITDA includes the add
back for share based payments
charges including employers
national insurance contributions of
£1.7m (2019: £0.9m) associated with
share awards used to reward and
incentivise Team17 employees.
The effective tax rate after
Video Games Tax Relief (VGTR)
and adjustments made to prior
years is 16% (2019: 13%).
Statement of
Financial Position
Team17 remains highly cash
generative with an operating cash
conversion of 109% (2019: 103%).
Cash generated from operations
increased to £35.4m (2019: 25.1m)
which resulted in the continued
growth in net cash and cash
equivalents to £61.5m (2019: £41.9m)
at 31 December 2020, an increase
of £19.6m (2019: £18.3m). The Board
expects the Group to remain highly
cash generative in 2021. Cash and
cash equivalents include £3.2m
(2019: £3.2m) held in the Employee
Benefit Trust (EBT) which is used to
support employee share awards and
incentivise Team17 employees.
“
On 21 January 2021, Team17 announced
the acquisition of all rights and
assets for Golf With Your Friends
for a total consideration of £12m."
Profit Before Tax
Profit After Tax
£26.2m
2020
£26.2m
£21.9m
2020
£21.9m
2019
£19.2m
2019
£16.6m
2018 £8.7m
2018 £7.2m
Intangible assets are reviewed for
indicators of impairment every six
months. As at 31 December 2020
the net book value was £22.4m
(2019: £21.1m) for goodwill reflecting
the addition to goodwill associated
with the Yippee acquisition, £14.3m
(2019: £16.0m) for brands and also
includes £6.3m (2019: £2.8m) of
capitalised development costs
relating to unreleased titles and
titles that have been launched
within the previous two years.
Trade and other receivables have
increased by £4.9m to £16.4m
(2019: £11.5m). This increase is
predominantly driven by trading
uplift. Timing on tax recoveries
has led to a tax receivable of £0.7m
(2019: £Nil). Trade and other payables
equally increased in line with
trading to £17.2m (2019: £11.7m),
most notably impacted by royalty
accruals and licence income
timing on trading towards the
end of the financial period.
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Annual Report and Financial Statements 2020
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“ We were pleased to be able
to continue to recruit
throughout the year despite
the pandemic restrictions.”
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During the year Team17 announced
separate share issues, firstly in January
2020 for 114,000 new ordinary shares
issued as part of the consideration
for the acquisition of Yippee and
then in July, further to the exercise of
options as part of the Team17 Group
plc Long Term Incentive Plan, 70,946
ordinary shares were issued and
allotted. The Group's issued share
capital now comprises 131,473,222
ordinary shares of £0.01 each.
The Group continues to manage a
Deferred Bonus Share Plan for its
senior management as well as an
All Employee Share Incentive Plan
(“SIP”). Team17 runs an employee
SIP with matching shares and this
continues to be well supported with
44% of all employees as shareholders
making monthly contributions.
These are both funded from the
Employee Benefit Trust (“EBT”) and
therefore will not result in the issue
of shares to satisfy the options.
Events After the
Reporting Date
On 21 January, Team17 announced
the acquisition of all rights and
assets for Golf With Your Friends,
an existing third-party title to
become a fully owned IP for a total
consideration of £12m which will
be satisfied totally in cash with an
initial payment of £9m and a further
£3m paid within 12 months.
Mark Crawford
Chief Financial Officer
17 May 2021
Cash Generated
from Operations
£35.4m
2020
£35.4m
2019
£25.1m
2018
£17.5m
Cash and Cash Equivalents
£61.5m
2020
£61.5m
2019
£41.9m
2018 £23.5m
Basic Earnings Per Share
17.0p
2020
2019
12.9p
2018
6.1p
17.0p
Diluted Adjusted
Earnings Per Share***
18.1p
2020
2019
2018
8.1p
13.6p
18.1p
*** Diluted Adjusted Earnings Per Share is calculated by dividing the adjusted profit after tax
by the weighted average number of ordinary shares adjusted for the effect of share options.
Team17 Group plc
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ENVIRONMENTAL, SOCIAL & GOVERNANCE REPORT
DISCOVERING,
SHARING
AND CREATING
TOGETHER
OUR PEOPLE
Our people are savvy, inventive
and talented individuals who care
passionately about the games we make
and the developers who collaborate
with us. We embrace the independent,
the quirky and the wonderful, leading
to our vibrant, welcoming, and team-
oriented culture.
We are constantly looking for ways to
improve our employee experience and
as we continue to grow, we place
significant emphasis on maintaining an
environment where our Teamsters can
feel connected, valued and a sense of
belonging and purpose.
Organisational Growth
We continued to successfully expand and
strengthen our teams and capabilities
through organic investment across our
studios and publishing hub. In the face of
fierce competition for the best talent in the
games industry, we successfully welcomed
more talented individuals across our
business in 2020. Our team at the
Manchester studio almost doubled in size
as we continued to build our presence in
the North-West. By the end of 2020, our
headcount across the Company had grown
by 25% to a total of 250 Teamsters.
New Heights During
a Global Pandemic
Despite the challenging backdrop of the
pandemic, 2020 proved to be another
successful year for Team17. Our
achievements last year were made possible
by the resilience and dedication of our
Teamsters, who spent the majority of the
year working from home.
Our team’s ability to adapt quickly to
change, and our people’s instinctive desire
to remain connected and look after one
another holds true to the team-driven
culture of Team17. Their spirit has enabled
us to continue achieving new heights,
delivering fun, quality, independent games
when they were needed most.
Growth of Skills
We believe in providing opportunities for
everyone to learn, develop and realise their
full potential.
Our growth as a business has provided
increased opportunities for our people to
develop and expand their capabilities and
skill-sets. Our genre and platform agnostic
approach to the games we make provides
our Teamsters with the unique opportunity
to be involved in a wide variety of projects,
boosting their experience and skills.
Last year, approximately 10% of our
Teamsters were promoted internally,
supporting their career progression
and recognising their achievements
across 2020. Team17 believes strongly in
rewarding the hard work of its people and
enhancing their skills whenever possible.
Throughout the year, partnering with
industry experts, we delivered targeted
learning programmes as a continued
investment in our team’s professional
development.
Rewarding our Talent
Our attractive mix of pay, benefits, perks
and learning opportunities at Team17
helps us to hire, retain and reward
impressive talent.
Everyone at Team17 is eligible to
participate in our Share Incentive Plan
(“SIP”) allowing our Teamsters to benefit
from our collective success over time.
We celebrate with pride when our people
achieve great things, and there was much
opportunity for this in 2020. Although the
pandemic prevented us from celebrating
the success of our achievements together
in person, we kept our postal system busy
with parcels of treats to mark the success
of our game launches and to honour
Team17’s 30th birthday.
WAKEFIELD
Development Studio
Based in west Yorkshire, our Wakefield
studio is the largest development site
and custom fitted out in 2019 to support
our growing development capability
requirements. We have a long history
built around Wakefield with some of our
studio team having worked with us over
20 years.
MANCHESTER
Development Studio
We started our Manchester Studio with
the acquisition of Yippee in January 2020
and since then the team has doubled in
size to support the development pipeline.
It is perfectly located to attract new talent
given it is based in Media City which
is viewed as an international hub for
technology, innovation and creativity.
NOTTINGHAM
Commercial Hub
Our commercial teams are based in
Nottingham and range from game
scouting, digital marketing and community
teams, publishing and commercial sales
as well as the central support teams based
here but also working across all our sites to
support the wider business.
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Equality, Diversity & Inclusion
Team17 is an equal opportunities employer and as
such, we remain determined to nurture our vibrant
culture by embracing different and differing
outlooks and perspectives formed by a varied mix
of experiences and backgrounds.
The games industry has traditionally been male
dominated, and we are committed to finding ways
to attract female and non-binary talent to Team17
as well as careers in gaming more generally.
As of 31 December 2020: 19% of our Teamsters
identified as female, 1% non-binary, and 80% male.
Our Board of Directors is 50% male and 50% female.
We have a number of employee-led networks that
were established to create a representative voice for
minority groups within Team17 and the games
industry more broadly. For example, our LGBT17+
group took over our livestream in celebration of
Pride 2020 which helped raise funds for Mermaids
UK, and another group of employee representatives
hosted a virtual panel event in partnership with
‘BAME in Games’. We play an active role within the
wider gaming sector contributing to UKIE, CIC,
IntoGames and other representative bodies within
the games industry.
We know there is more that can be done to reduce
inequality of all kinds in the games industry, and we
will continue in our efforts to address these
imbalances wherever we can.
Teamster Voice
Our Teamster Engagement Committee
(“TEC”) comprises circa 25 self-
nominated employees who meet
on a regular basis to discuss ideas
for improvements and initiatives to
make life at Team17 even better for
our Teamsters. The TEC take it upon
themselves to kick-start employee-led
initiatives. For example, they created
our monthly employee recognition
scheme (Spirit Awards), which are
announced in our internal newsletter.
Team17 Group plc
Annual Report and Financial Statements 2020
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ENVIRONMENTAL, SOCIAL & GOVERNANCE REPORT CONTINUED
▲
Wellbeing
We pride ourselves in looking after our Teamsters by offering a
range of benefits and initiatives to support their mental and
physical wellbeing.
To ensure that everyone has been supported during this most
challenging year, we have sought to provide flexibility,
accommodating personal circumstances and providing remedial
support where needed.
In May, we produced a week-long programme of webinars,
virtual activities, and editorial content for Mental Health
Awareness week, which was so well-received by Teamsters that
a monthly editorial was launched on the topic of mental health
and wellbeing.
Many of our employees view office life as a key source of social
interaction, friendship, and support. With this in mind, we set
up virtual activities and social groups at the start of the first
lockdown to keep Teamsters connected to one another.
Activities have included virtual gaming sessions, monthly
quizzes and competitions, a cinema club and a virtual running
club, all of which remain popular.
Our Teamsters’ health and safety remains of the utmost
importance to us. We aim to return to office-working in the
future so that our Teamsters can be reunited, however, we will
only do so when we are certain it is safe to do so, and we will
manage the change in collaboration and consultation with
Teamsters to ensure a smooth transition.
OUR PLANET
We are keen to play our part in reducing our
environmental impact and are working hard to
change our working practices in order to make
Team17 as sustainable as possible.
In 2020, a number of Teamsters came together to
establish Green17, an employee-led group that is
passionate about finding ways that our Company
and the wider gaming community can become
more climate aware and reduce our impact on the
planet. We are looking forward to seeing the
development and initial impact of Green17’s
sustainability charter in 2021.
MONETARY GAMBLING
MECHANICS IN GAME
We don’t use loot boxes or similar mechanics in
our games that can be linked to problem gambling
since they involve a high degree of chance and a
risk-reward factor, mimicking slot machines and
roulette. We prefer season passes or premium
DLC which offer more choice and control in how
players access the entertainment content they
want to enjoy.
I feel that there has been a lot of
understanding for my situation
involving my children” Teamster
“
Community
We aim to be a responsible and principled business
and employer, giving back to the communities
where we do business. Last year, we offered free
codes for our games to anyone working for the
NHS, and we supported a range of charities focused
on causes close to our Teamsters’ hearts. Our teams
voted for us to support charities which fight against
racism, poverty, and those supporting the LGBTQ+
community as well as people negatively impacted
by Covid-19.
Team17 has always been committed to supporting
charitable causes, both those focused on our local
communities and those with global reach and impact. Our
newly established and employee-led Charity Committee will
be leading increased efforts in this area going forward, with the
remit of reviewing our overall approach to supporting the causes that
are important to us, as well as volunteering in our local communities.
Team17 Group plc
Annual Report and Financial Statements 2020
20
DIVERSITY AND ACCESSIBILITY
IN OUR GAMES
We strive to ensure our games are as accessible as possible, and
fun for everybody. We have recently begun introducing settings
into our games to accommodate this, such as: colour blindness
options, fonts that aid reading comprehension for dyslexic
people, scalable text to aid low vision, subtitling options, and
significantly adjustable difficulty settings. You can see this with
Overcooked! AYCE and Moving Out, which were named as key
titles driving ‘Accessibility’ at The Game Awards in 2020.
With our IPs, where appropriate, we ensure the playable
characters are customisable to represent a diverse range
of races and any gender. For example, the characters in
The Escapists 2 are never explicitly men or women, they’re just
characters; all of which can be dressed to represent whichever
gender the player chooses or if they prefer to be non-binary.
Almost every character can be customised and renamed. With
titles like The Escapists 2 and The Survivalists, that appeal to
younger audiences, combat is not encouraged within the game.
As a sandbox the player has all the choice, but combat is never
solely a winning strategy.
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Carbon Footprint
As a video game developer and publisher,
Team17’s carbon footprint is inherently low,
particularly as 93% of our sales were digital in
2020. The ongoing trend towards digital-only sales
should mean that our carbon footprint per
employee will continue to decrease year-on-year
but was measured as 0.4 CO2e in tonnes per
employee, based on average employees during
the period.
Our new studio in Wakefield was designed with
sustainability in mind. We installed carbon neutral
flooring, all of our lighting and appliances are
designed for low energy usage and we enforce
a strict recycling policy.
We are mindful that there are many opportunities
to further reduce our footprint and we are making
progress in this area with the focus of the Green17
team initiative. Part of the future review will look
at the broader scale of emissions and
environmental impact of the wider gaming
ecosystem and how Team17 can play a part to help
reduce or offset the carbon footprint as an active
part of the gaming community.
▲ Green Suppliers and Partners
Where we control the supply decision, we make a
point of selecting utility providers based on their use
of green energy tariffs, we have joined our main
banking partner’s Green Deposits programme,
whereby a proportion of our cash balance is
deposited in this interest-bearing account and the
programme invests in environmentally beneficial
projects and initiatives.
▲
Emissions
From office utilities
From travel
Total
2020
CO2e in tonnes
79.48
6.12
85.60
2020
gWh
352.86
26.03
378.89
UK proportion of energy usage
100%
100%
The statistics above are based on emissions data from 1 January to 31 December calculated following the Greenhouse Gas Protocol, which incorporates the scope 2 market-based
emissions methodology. The data has been collected from the business during the year and converted using the conversion factors published by the UK Government (https://www.
gov.uk/government/collections/government-conversion-factors-for-company-reporting).
Team17 Group plc
Annual Report and Financial Statements 2020
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PRINCIPAL RISKS & UNCERTAINTIES
EFFECTIVELY MANAGING
OUR RISKS
Team17 Group plc is operating in a
competitive and dynamic growth market
and as such faces a number of strategic
and operational risks. Senior management
actively manage the Group’s risk register
which is regularly reviewed by the Board.
The identified risks are up to date with the
Group’s operations and wider environment.
The risks are appropriately scored, and the
mitigations are evaluated and tested.
The key business and financial risks for the
Group are:
▲
Strategic Risks
Market growth and disruption – no change from 2019
The Group operates in a dynamic industry that has seen
consistent growth over many years and increasing levels
of competition as the number of new games released
grows year on year. This competition is multifaceted,
ranging in size, sophistication and capability from
large competitors to independent games developers
who choose to self-publish. Slower than expected
market growth or a failure to remain competitive would
adversely affect the Group’s performance.
• The Group has longevity and an entrenched
position in the industry today. Its balanced
portfolio approach, rigorous Greenlight process
and active lifecycle management of its games
provide the Group with confidence that it will
continue to secure, develop and release popular
games and optimise their commercial success.
Technological change – no change from 2019
The industry has seen some major changes over the
past few years with the shift to digital distribution along
with the development of middleware such as Unity
and Unreal. Ongoing technological change in both the
development and distribution of games is to be expected
and the Group will need to adapt quickly to these
changes in order to remain competitive.
• The Group has a track record of being one of the first
to market across new platforms and distribution
channels and remains platform agnostic with no
dependency on any specific platform partner. The
Group invests in upskilling its workforce to be at the
forefront of technological developments. It is
therefore able to anticipate changes in technology
and delivery and be agile and adaptable in order that
it can react swiftly to changes as they emerge and
exploit these as opportunities.
Team17 Group plc
Annual Report and Financial Statements 2020
22
Dependence on concentrated customer base – no change
from 2019
The Group serves a small but growing number of customers
who utilise their proprietary distribution platforms to provide
the Group’s games to end consumers on a global basis. Any
adverse changes in the status of the Group’s relationship with
its customers could negatively impact financial performance.
•
As a result of developing and growing a commercially
successful games portfolio over a long period, the Group
has developed heavily entrenched partnerships with its
customers over more than 20 years that deliver commercial
value on both sides. The Group will continue to invest in
these relationships to ensure enduring partnerships that
grow and prosper. In addition, the group continues to
develop relationships with new and emerging platform
partners to ensure that it can continue to remain platform
agnostic and maximise all opportunities to distribute its
portfolio of existing and new games.
Dependence on key titles to generate significant share of
Group revenue – reduced from 2019
The Group has historically been reliant on a subset of
successful titles to generate a large share of its revenues.
Should the Group fail to competently manage the lifecycle of
its core games this may adversely affect it financial results.
•
The Group has expanded its portfolio of successful titles
over recent years and a core part of its strategy is
focussed on continuing to do this in the future. It has a
track record of developing franchises with long
lifecycles and potential for multiple follow on titles. Its
Greenlight process is directed at identifying future titles
with this same potential and the Group invests in this
process to ensure it remains agile to identify new IP in
order to continue to grow the portfolio.
▲ Operational Risks
The ability to recruit and retain key and skilled personnel –
no change from 2019
The achievement of the Group’s business plan is dependent
on the availability of key skills and experience across its
workforce. Loss of key personnel could adversely affect and
impact the Group’s ability to meet its strategic ambitions.
• Although there will inevitably be some level of staff
turnover, the Board believes that the variety of work
available for staff along with its strong collaborative
environment, high quality leadership and competitive
benefits packages make Team17 a place where talented
individuals want to build their careers. The Group also
has a proactive and direct approach to recruitment
where possible and is particularly focussed on
partnering with a number of academic institutions
providing a graduate intake each year. The Group is
proud of how it continues to successfully develop staff
internally and also maintains a succession plan to
mitigate the impact should any key personnel choose to
leave. Investment has been made in the HR leadership
and talent acquisition to support identifying, developing
and retaining our staff.
IT cyber security/disaster recovery – no change
from 2019
The business is dependent on the security, integrity and
operational performance of the systems and products it
offers as well as the platform partners we work with. A
security breach or major system failure could significantly
impact the business and its ability to execute on its plans.
•
The Group has invested in its IT team and
infrastructure, implementing additional cyber security
processes and policies and continues to regularly
review its IT and security provisions to ensure they are
industry leading and in line with best practice. It has
put in place business continuity and disaster recovery
procedures with scheduled regular testing such that
should an event occur, the disruption to the Group can
be managed and impact minimised as far as possible.
Intellectual property – no change from 2019
The core assets of the Group are the intellectual property it
owns and that of the third-party developers on whose behalf
it publishes. Any infringement to this intellectual property
by unauthorised third parties may prove damaging and
adversely impact the Group’s performance.
•
The Group legally protects its own and third-party
partner intellectual property. It also proactively scans
for any potential infringements and rigorously
challenges these where appropriate.
▲
Financial / Economic Risks
Currency risk – no change from 2019
The Group’s cost base is predominantly in Pounds Sterling
(GBP) whilst its revenue is generated globally, with the
largest share being received in US Dollars (USD). As such
there is a risk that the Group’s financial performance could
be adversely affected by unfavourable movements in foreign
exchange.
• While the longer-term risks of transacting globally
cannot be avoided, the Group continually reviews its
foreign exchange exposure and where appropriate it
can put in place forward contracts to minimise
exposure where it makes commercial sense. Pricing in
different markets is regularly reviewed and can be
flexed if required to minimise margin pressure.
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Brexit – reduced from 2019
Following the exit of the European Union there continues
to be uncertainty around the longer term post exit impact
on the UK economy and some disruption to supply chains
could impact physical sales of games although these are
a low proportion of total sales. The exit from the EU may
impact the Group’s ability to hire and retain staff from
EU countries which may deplete the available talent
resource pool.
• The Group has a global digital customer base which
provides a natural mitigation against individual
market legislation or localised economic impacts and
considers the operational risks of disruption to be
low, however remains proactive in monitoring
legislative changes to its industry.
Covid-19 – reduced from 2019
The ongoing Covid pandemic impacts companies,
employees, suppliers and customers on a worldwide basis
and provides uncertainty over the ability for companies
to operate. As a result, it may impact suppliers and
customers behaviours due to the isolation measures
taken by individual governments as well as thew disease
impact of the virus on the general population. The
restrictions implemented to manage the virus impacts the
Group’s ability to work within the three physical offices
and therefore potentially the staff’s ability to develop
and promote new titles and the back catalogue portfolio.
Consumer behaviour may also be adversely affected whilst
the pandemic restrictions continue which could reduce the
growth rates forecasted for the global gaming market.
•
The Group has demonstrated its ability to work from
home and continues to actively manage the well-
being of each of its employees whilst restrictions
apply. Policies and processes are in place to support a
return to work with safety of our team of paramount
importance. The Group will continue to monitor the
situation regarding the wider impact of the virus both
on internal productivity as well as the ongoing impact
on supply chain roll out of the new console
technology and the socio-economic impact on
consumers as vaccines and more effective disease
management is rolled out across the world.
Team17 Group plc
Annual Report and Financial Statements 2020
23
BOARD OF DIRECTORS
LEADING WITH
INTEGRITY
Debbie Bestwick MBE
Chief Executive Officer
Mark Crawford
Chief Financial Officer
Chris Bell
Non-Executive Chair
Mark joined the Team17 Board in April
2020 having been interim Chief Financial
Officer since November 2019. Mark has
over 30 years’ experience with a decade at
Executive and Board level and is a qualified
Chartered Management Accountant. He
joined Team17 from TravelUp, a privately-
owned online travel business, where he
was Chief Financial Officer from 2018.
Previously, Mark was Chief Financial
Officer of TP Group plc, an AIM-listed
specialist technology, energy and defence
business, and prior to that held a number
of positions with large corporates,
including Glaxo Pharmaceuticals, PepsiCo
Restaurants, Gondola Restaurants plc and
more recently Kingfisher plc, supporting
their major pan-European supply chain
and logistics transformation programme.
Debbie Bestwick is an industry leader
with over 30 years’ experience in the
games industry and is one of the founding
members of Team17. Initially leading
Team17’s Sales and Marketing department,
Debbie went on to become responsible for
all of the commercial and legal aspects of
the business, working globally with top tier
games distributors, publishers, developers,
and licence partners. Debbie became
joint CEO in 2009 and sole CEO in 2010,
leading the Company through its 2011
management buy-out and subsequent
sale of a minority stake to LDC in 2016.
Debbie was awarded an MBE for services
to the video games industry in 2016, was
joint winner of the Entrepreneur of the
Year UK Disruptor category in 2017 and
was awarded the inaugural Outstanding
Contribution to the UK Games Industry
at the 2017 Golden Joystick Awards.
Previously, Debbie has been honoured with
the Hall of Fame award at the European
Women in Games Conference 2015 and
MCV Person of the Year award in 2015 and
voted AIM Entrepreneur of the Year in
2020. Debbie was central to establishing
Team17’s Games Label which has become
a key growth driver for Team17.
Chris joined the Board of Directors in
2018, prior to Team17’s IPO on AIM. Chris
has, since 2015, been Senior Independent
Director for The Rank Group plc, where he
is Senior Independent Director and sits on
the Audit Committee and the Nominations
Committee, as well as the Remuneration
Committee and the Safer Gambling
Committee. Chris is Non-Executive Chair
of two AIM-listed companies: XL Media
plc, Inc and OnTheMarket Plc, both of
which he took to market and on which he
serves on key governance committees.
Chris has also been a Non-Executive
Director of the Royal Air Force Charitable
Trust Enterprises since 2016. Chris joined
Ladbroke Group plc in 1991, becoming
Managing Director of its Racing Division
in 1995. In 2000, he became Chief
Executive of Ladbrokes Worldwide and
joined the Board of the rebranded Hilton
Group plc, becoming Chief Executive of
Ladbrokes plc, following the sale of the
Hilton International Hotel division, until
2010. He has also served as Non-Executive
Director at Spirit Pub Company plc (2011
to 2015), Gaming Realms plc (2017 to 2018)
and as Senior Independent Director at
Quintain Estates and Development plc
(2010 to 2015). Prior to joining Ladbrokes
plc (formerly Hilton Group plc and
Ladbrokes Group plc), Chris held senior
marketing positions at Allied Lyons plc.
Team17 Group plc
Annual Report and Financial Statements 2020
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Penny Judd
Non-Executive Director
Jennifer Lawrence
Non-Executive Director
Martin Hellawell
Non-Executive Director
Penny joined the Team17 Board in 2018
in advance of the successful IPO on AIM.
Penny has over 30 years’ experience
in Compliance, Regulation, Corporate
Finance and Audit. Penny is currently
Chair of FTSE 250 listed Plus500 Ltd. She
is also a Non-Executive Director of AIM-
listed Alpha Financial Markets Consulting
plc and TruFin plc and serves as Senior
Independent Director and Chair of the
Audit Committee of both companies.
Penny was, until June 2016, a Managing
Director and EMEA Head of Compliance at
Nomura International plc, a position she
held for three years. Prior to this, Penny
worked at UBS Investment Bank for nine
years and held the position of Managing
Director, EMEA Head of Compliance.
Penny also acted as Head of Equity
Markets at the London Stock Exchange
and qualified as a Chartered Accountant.
Jen was appointed Non-Executive
Director in February 2019. Jen has a
wealth of experience, as Executive People
Director for Card Factory plc, Jen is jointly
responsible for the successful financial
and operational running of the business.
With over 8,000 colleagues employed
nationwide, Jen is responsible for ensuring
the employment base is aligned with
delivering the strategic objectives. Jen
works closely with the Remuneration
Committee Chair at Card Factory on all
Remuneration matters and therefore
brings first-hand experience to Team17.
Prior to joining Card Factory, Jen held
senior HR roles with Costcutter, TDX Group,
Boots and Boots Opticians. Jen is Chair
of Team17’s remuneration committee.
Martin was appointed Non-Executive
Director in September 2019 and became
Senior Independent Non-Executive
Director in March 2021. Martin has
significant experience across the capital
markets arena with a particular focus on
both technology and high games label
growth businesses. Martin is currently
Chair of Softcat plc (“Softcat”), a leading
provider of IT infrastructure products
and services. He joined Softcat in
2006 as Managing Director. During his
tenure, Martin guided Softcat through a
significant period of growth culminating
in its successful IPO in November 2015.
Prior to Softcat, Martin worked at
Computacenter plc, where he was part of
the team that oversaw Computacenter’s
IPO in 1998. In August 2019, Martin was
also appointed Chair of Raspberry Pi
Trading Limited and in April 2021, was
appointed Chair of musicMagpie PLC.
Team17 Group plc
Annual Report and Financial Statements 2020
25
CORPORATE GOVERNANCE
The Board remains committed to effective and robust corporate governance and continues
to analyse and improve its governance procedures and policies.
The Board has agreed to apply the QCA Code and considers itself to be compliant currently. The disclosures required
by the QCA Code are made throughout this report as noted in the table below:
QCA Code Principle
Section Covered in the Annual Report
Establish a strategy and business model which promotes
long-term value for shareholders
CEO & strategic review on pages 5 to 7 & business model
on pages 8 and 9
Seek to understand and meet shareholder needs and
expectations
Take into account wider stakeholder and social
responsibilities and their implications for long-term success
Embed effective risk management, considering both
opportunities and threats, throughout the organisation
Maintain the Board as a well-functioning, balanced team led
by the Chair
Ensure that between them the Directors have the
necessary up-to-date experience, skills and capabilities
Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement
Corporate Governance Report below on pages 26 to 29
s172 table outlined below on page 28
Risks and Uncertainties on pages 22 and 23
Board biographies on pages 24 and 25, Corporate
Governance Report on pages 26 to 29 and Nominations
Committee notes on page 29
Biographies are outlined on pages 24 and 25
Corporate Governance Report on page 26 to 29
Promote a corporate culture that is based on ethical values
and behaviours
Environmental, Social, and Governance (“ESG”) report
outlined on pages 18 to 21
Maintain governance structures and processes that are fit
for purpose and support good decision-making by the
Board
Communicate how the Company is governed and is
performing by maintaining a dialogue with shareholders
and other relevant stakeholders
Committee reports within the Corporate Governance
pages on 26 to 29
Outlined in s172 table on page 28
The website disclosures required by the QCA Code can be found at https://www.team17group.com/aim-rule-26/
corporate-governance. A copy of the QCA Code is available from the QCA website www.theqca.com
The Board
Full biographies of the Directors can
be found on pages 24 and 25. At the
date of this report, the Board
comprises two Executive Director
and four independent Non-Executive
Directors, one of which is the
Non-Executive Chair.
• Debbie Bestwick was appointed as
a Director under a service contract
dated 17 May 2018. This contract
may be terminated by 6 months’
notice by either party.
• Mark Crawford was appointed as a
Director under a service contract
dated 20 April 2020. This contract
may be terminated by 6 months’
notice by either party.
• Christopher Bell was appointed
as Chair under a letter of
appointment dated 1 May 2018.
Such appointment may be
terminated by 3 months’ notice
by either party.
• Penny Judd was appointed as a
Non-Executive Director under a
letter of appointment dated 1 May
2018. Such appointment may be
terminated by 3 months’ notice
by either party.
•
Jennifer Lawrence was appointed
as a Non-Executive Director under
a letter of appointment dated
24 February 2019. Such
appointment may be terminated
by 3 months’ notice by either party.
• Martin Hellawell was appointed
as a Non-Executive Director under
a letter of appointment dated
2 September 2019. Such
appointment may be terminated
by 3 months’ notice by either party.
Team17 Group plc
Annual Report and Financial Statements 2020
26
The Chair and the CEO have separate
and clearly defined roles. The Chair
is responsible for overseeing the
Board and governance and the CEO
is responsible for implementing the
stated strategy of the Company and
for its operational performance.
the Company Secretary. Directors
are provided with appropriate and
timely information, including Board
papers distributed in advance of
the meetings. Those papers include
reports from the executive team
and other operational heads.
The Chair is committed to ensuring
that the Board comprises sufficient
Non-Executive Directors to establish
an independent oversight which is
challenging and constructive in its
operation. The Board believes that
all of the Non-Executive Directors
are of sufficient experience
and quality to bring an expert
and objective dimension to the
Board. The Company ensures
that the Non-Executive Directors
are enabled to call on specialist
external advice where necessary.
Directors are expected to attend
Board and Committee meetings
and to devote enough time to the
Company and its business in order
to fulfil their duties as Directors.
Board Meetings
The Board meets on a regular basis
throughout the calendar year and
as required on an ad hoc basis with
a mandate to consider strategy,
operational and financial performance
and internal controls. In advance
of each meeting, the Chair sets
the agenda, with the assistance of
Richard Almond of Almond & Co is
the Company Secretary and attends
all Board meetings as well as advising
on corporate governance matters.
The Company Secretary produces full
minutes of each meeting, including a
log of actions to be taken. The Chair
then follows up on each action at the
next meeting, or before if appropriate.
Matters Reserved for
the Board
Matters reserved for the decision of
the Board include:
• approving the Group’s strategic
aims and objectives;
• reviewing performance against
the Group’s strategic aims,
objectives and business plans;
• overseeing the Group’s operations;
• approving changes to the Group’s
capital, corporate, management or
control structures;
• approving results announcements
and the Annual Report and
financial statements;
• approving the dividend policy;
• approving any significant changes
in accounting policies;
• approving the treasury policy;
• approving the Group’s risk appetite
and principal risk statements;
• reviewing the effectiveness of the
Group’s risk and control processes;
• approving major capital projects and
material contracts or arrangements;
• approving all circulars, prospectuses
and admission documents;
• ensuring a satisfactory dialogue
with shareholders;
• establishing Board committees and
approving their terms of reference;
• approving delegated levels of
authority;
• approving changes to the Board
and its committees;
• determining the remuneration
policy for the Directors and other
senior executives;
• providing a robust review of the
Group’s corporate governance
arrangements; and
• approving all Board mandated
policies.
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▲ Board and Committee Attendance
Director
Position
Christopher Bell
Non-Executive Chair
Debbie Bestwick
Chief Executive Officer
Mark Crawford1
Chief Financial Officer
Penny Judd
Non-Executive Director
Jennifer Lawrence
Non-Executive Director
Martin Hellawell
Non-Executive Director
Board
Max possible
attendance
Meetings
attended
Committee
Nominations Audit and Risk Remuneration Independence
112
112
72
8
8
8
11
11
7
8
7
8
4
4
n/a
4
4
4
2
n/a
n/a
2
2
2
63
n/a
n/a
3
63
3
P
n/a
n/a
P
P
P
1 Mark Crawford appointed 20 April 2020.
2 There were three sub-committees of the Board meetings to approve (1) RNS, (2) Annual Report and Letter of Representation and (3) Trading Update and Subsidiary Accounts and
only required the Non-Executive Chair and Executive Directors to attend. Mark Crawford only attended one sub-committee of the Board meetings post his appointment on
20 April 2020.
3 There were three remuneration sub-committee meetings to approve Grant of Share Awards and only required Christopher Bell and Jennifer Lawrence to attend.
Team17 Group plc
Annual Report and Financial Statements 2020
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CORPORATE GOVERNANCE (CONTINUED)
Board Engagement with Stakeholders
In compliance with s172 of Companies Act 2006, the Board recognises the importance of engagement with its
stakeholders and its value to the long-term success of the Group. We have identified our stakeholders as set out below
to outline why we consider those groups important, the key focus areas for the Company and our highlight areas in
this report that these are covered:
Stakeholder
Group
Our
Teamsters
Customers
Importance & Engagement
Our people, we call them Teamsters, are at the heart of our business in every way.
They are key to the creativity, drive and passion that makes Team17 unique as a
developer of our own and third-party games. They are key to ensuring the delivery
not just of the very high-quality games we publish but to continue to deliver our
relentless drive to remain agile and entrepreneurial on our journey as a world-class
British Games Label competing on the global digital marketplace.
Other References in
this Report
ESG Report on
pages 18 to 21
Our direct customers are the growing number of platform providers that enable us
to publish our own and third-party titles for digital sales across the globe. We
engage in continuous communication at all levels with platform providers in the UK,
Asia and America to understand their needs and direction, share our plans and
continue to nurture collaborative commercial partnerships.
Business Model
pages 8 and 9 and
Portfolio pages 10
and 11
Our commercial team’s relationships and understanding of the fast evolving digital
marketplace is critical to ensure that we can position our Games Label titles with
the right platforms to maximise exposure and mutual commercial success
“to grow together”.
Investors/
Shareholders
Strong and supportive investor base whose ongoing support is key to continuing
our growth trajectory and realising the ambitions of the Company.
Throughout the year the Chief Executive and Chief Financial Officer met with
shareholders both following the full-year results in March 2020 and the half-year
results in September 2020. Presentation material was posted on the Company
website to share with a wider shareholder base.
In addition to these meetings, both the Executives supported numerous
conference calls hosted by their in-house broker as well as two other investment
banks, each open to multiple investors with a mix of current shareholders and
non-shareholders. These meetings covered the UK, Europe and USA.
We review all the feedback from investor interactions which is shared with
the Board.
Relatively small yet important group of partners that we use for localisation,
platform conversion and Q.A. These relationships play a crucial part in the
delivery on time and to the highest quality for our games. Our strong and
long-term relationships with regular reviews allow for healthy supplier
relationships based on openness and trust.
Suppliers
Business Model on
pages 8 and 9
Third-party
Development
Partners
These have become a significant part of the Team17 family with long-term
relationships across 13 different nationalities across the world. We treat these
in the same way we treat our Teamsters, working together to develop amazing
games to excite and thrill gamers in all corners of the world.
Business Model on
pages 8 and 9
Develop relation links and review of these key relationships at Board level for new
partners and ongoing relationships.
Community We have expanded from two to three locations within the UK in 2020, and we aim to
play an active role in the community in which we live and work.
We are also part of the global community with our third-party development partners.
We continue to support local communities with charitable donations to organisations
within those communities managed by our volunteer Charity Committee.
ESG Report on
pages 18 to 21
Business Model on
pages 8 and 9
Team17 Group plc
Annual Report and Financial Statements 2020
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Corporate Culture
The Board places significant
importance on the promotion of
ethical values and good behaviour
within the Company and takes ultimate
responsibility for ensuring that
these are promoted and maintained
throughout the organisation and
that they guide the Company’s
business objectives and strategy.
The central role that sound ethical
values and behaviour plays within
the Company is enshrined in the
Employee Handbook, which promotes
this culture through all aspects of
the business, from initial recruitment
and hiring to career advancement.
The Employee Handbook also sets
out the Company’s requirements
and policies on such matters as
whistleblowing, communication and
general conduct of employees.
Annual General Meeting
The AGM is currently planned to be
held at 9:00a.m on Thursday 10 June.
The Notice of AGM, setting out the
resolutions proposed, is contained
in a separate document and is
available on the Company’s website
https://www.team17group.com.
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Committees
The Board has in place Audit,
Nomination and Remuneration
Committees, which comply with the
stated terms of reference for each
committee. The reports of the Audit
and Remuneration Committees can
be found on pages 31 to 37. The Board
committees are comprised solely of
Non-Executive Directors with the CEO
and CFO invited to attend committee
meetings as considered appropriate
by the Chair of the committee.
Nomination Committee
The Nomination Committee leads
the process for Board appointments
and makes recommendations to the
Board. The Nomination Committee
shall evaluate the balance of skills,
experience, independence and
knowledge on the Board and, in the
light of this evaluation, prepare a
description of the role and capabilities
required for a particular appointment.
The Nomination Committee meets as
and when necessary, but at least once
a year. The Nomination Committee
comprises Debbie Bestwick, Chris
Bell, Penny Judd, Jennifer Lawrence,
Martin Hellawell and is chaired
by Chris Bell. During 2020, the
Nomination Committee specifically
were involved in the search and
decisions relating to the appointment
of Mark Crawford as permanent CFO
following an extensive market-wide
search using external advisers.
Election and Re-election of
the Directors
As Mark Crawford was appointed since
the most recent AGM he will be offered
for election. The Board operates a
staged retirement by rotation process
for existing Directors and therefore
Chris Bell and Jennifer Lawrence
will stand for re-election this year.
Support for Directors
Each Director has access to the advice
and support of the Company Secretary,
who ensures compliance with the
Board’s procedures and advice as to
applicable rules and regulations. The
Company also provides professional
training for the Directors where
necessary (at the Company’s expense).
Internal Control
The Board is ultimately responsible
for maintaining the Company’s
risk framework system of internal
control and for reviewing the
effectiveness of such system. No
system can be perfect, but the
Board considers the Company’s
systems manage risks appropriately
in order that the Company can
achieve its business objectives.
Board Evaluation
The Board considers it important
to evaluate its performance and at
each meeting of the Board includes
an agenda item to evaluate whether
the meeting was successful. During
the year the Board concluded a
comprehensive search and review
in order to secure a permanent
Chief Financial Officer and as a
result of this review, Mark Crawford
was made permanent in April 2020.
In addition, Martin Hellawell was
made Senior Independent Non-
Executive Director in March 2021.
The Board is now well established,
comprised of a Chair, three Non-
Executive Directors and two Executive
Directors. The Board conducts a
formal evaluation process of its
performance and application in line
with the QCA Code recommendations.
Team17 Group plc
Annual Report and Financial Statements 2020
29
AUDIT COMMITTEE REPORT
Introduction
As the Chair of the Audit Committee,
I am pleased to present the report
for the year ended 31 December
2020. The Terms of Reference for the
Committee were created at
admission and are reviewed
annually. The report outlines the
work undertaken by the Committee
over the past year fulfilling our
responsibilities to provide effective
governance over the Group’s
financial activities.
Members of the Committee
Together with myself as Chair, the
members of the Committee continue to
be Christopher Bell, Martin Hellawell
and Jennifer Lawrence. The Committee
has a wealth of knowledge from
multiple industry sectors and alongside
myself as a Chartered Accountant, its
members also sit on various other
Boards for other public Companies,
details of which can be seen in the
Board profiles on pages 24 and 25. The
Committee met twice during the year
with all members in attendance and
also attended by the Chief Executive
and Chief Financial Officers by request
of the Committee to facilitate
discussions of the financial statements
and internal controls. The auditors
PricewaterhouseCoopers LLP were
invited and attended both meetings.
Outside the formal audit review
meetings, various other meetings were
held throughout the year to review
accounting policies, the finance system
and general updates with the CFO.
Role and Responsibilities of
the Committee
The Audit Committee has the primary
responsibility of monitoring the
quality of internal controls and risk
management to ensure that the
financial performance of the Group is
properly measured and reported on.
In order to ensure it meets its
obligations, the Committee’s key
responsibilities include:
• Monitoring and reviewing the
Group’s financial statements
relating to the performance,
reporting judgements and
disclosures specifically in relation
to the interim and Annual Reports
• Ensuring compliance to the
relevant accounting standards
and reviewing the consistency of
the methodology applied
• Reviews the internal controls and
risk management approach
covering key areas including the
financial systems, treasury and risk
register/disaster recovery plans.
• Overseeing the relationship with
the external auditors, reviewing
performance and advising the
Board members on the auditors’
appointment, independence and
remuneration as well as reviewing
audit and non-audit services
• Reviewing and discussing the
findings of the audit with the
external auditor
• Ensuring that the Group’s
approach to whistle-blowing and
fraud protection are monitored
and fit for purpose.
Activities During the Year
The Audit Committee continually
assesses whether suitable accounting
policies have been adopted and
whether appropriate estimates and
judgements have been made by
management. As part of the audit
process, the Committee also reviews
accounting papers prepared by
management, and reviews reports by
the external auditors.
These included ongoing reviews of
accounting policies and key
judgements for:
• Revenue recognition
• Capitalised development costs
and their useful life
• Ongoing review of performance
measures and KPIs
• Valuation of goodwill and
intangible assets
• Taxation
• Going concern
Alongside the audit activities the
Committee oversees the risk
processes and reporting within the
business and has overseen the
implementation of an improved
delegated authority system for
approving Company spending. In
addition, new financial management
controls have been implemented
during the year to further reduce
fraud risk within the business.
The whistleblowing policy has been
reviewed in the year to ensure it is
suitable for the business and is made
available on the Company intranet.
Finance System Upgrade
During 2020, the Group undertook a
review of its existing financial systems
and approved investment to upgrade
the current systems to a globally
recognised cloud-based ERP solution
in order to meet the future demands
of the Group with more efficient
processes and improved analysis to
support commercial decision-making
as it continues to grow in order to
meet organic and acquisition strategic
goals. The Audit Committee pays a key
role as a sponsor to the finance
system project and has been involved
in the initial review and decisions
made to work with a selected provider
and continues to be engaged in the
progress of this fundamental and key
infrastructure project.
Going Concern
Given the ongoing impact of the
global Covid-19 pandemic, the Audit
Committee continues to review the
going concern analysis made by
management including reviews of
the severe but plausible downside
scenarios to the Group’s cash flow
projections in order to ensure that the
Group is able to withstand ongoing
and potentially prolonged adverse
impact of the pandemic on the
Group’s ability to trade.
External Audit
The Audit Committee approves the
appointment and remuneration of
the Group’s external auditors. They
also ensure that they are satisfied
with the external auditors’
independence in relation to any other
non-audit work undertaken by them.
PricewaterhouseCoopers LLP are
recommended for reappointment
in accordance with the Companies
Act 2006.
Penny Judd
Chair of the
Audit Committee
17 May 2021
Team17 Group plc
Annual Report and Financial Statements 2020
30
Long Term Incentive Plan
(LTIP)
The CEO was granted a one off
LTIP award at the time of Admission
and this has now vested by reference
to the strong EPS and Total
Shareholder Return performance of
the Company over the three years to
31 December 2020.
Following the vesting of this award
the Company has determined that,
for 2021 onwards the policy should
be for annual awards to Executive
participants under the LTIP. Grant
levels will be determined by the
Committee each year. Participants
may receive a payment on vesting
equivalent to the value of dividends
payable over the vesting period.
There is flexibility for the Committee
to use discretion to override a
formula-driven outcome and adjust
the LTIP outturn.
Malus and Clawback provisions apply
for up to two years in line with the
policy, and a recovery and
withholding mechanism applies in
the event of a material misstatement
of the Group’s accounts and also for
other defined reasons.
This report will be submitted to an
advisory shareholder vote at our
2021 AGM.
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REMUNERATION COMMITTEE REPORT
We believe that we are well
positioned for future growth and
wish to ensure that the management
team is appropriately incentivised
with stretching incentive
arrangements to reward them
appropriately for the delivery of the
next stage of the strategy.
Executive Remuneration
A simple Executive remuneration
structure is maintained by balancing
base salary, pension and benefits
(car allowance and private family
medical insurance), with a
performance-related bonus and
LTIP share awards.
Base Salary
The Committee reviews salaries
annually and any increases are
effective from 1 April each year.
Current base salaries are £400,000
and £200,000 for the CEO and
CFO respectively.
Pension & Benefits
Executive Directors receive a pension
contribution of 5% of salary. Other
benefits are in line with the policy.
Performance-related Bonus
Annual bonus payments are based
on performance against challenging
targets which are aligned to the
Group’s strategic objectives and are
designed to deliver shareholder
value. Targets are based on the
Company’s adjusted EBITDA
performance, and consideration is
given to individual performance.
The maximum earning opportunity
is 125% and 100% of salary for the
CEO and CFO respectively, with 50%
awarded for on-target performance,
and up to a maximum of a further
50% when the Company achieves its
stretch performance targets.
Annual Statement from the
Chair of the Remuneration
Committee
I am pleased to present the report of
the Remuneration Committee for the
year ended 31 December 2020. This
report is divided into four sections: (1)
the Directors’ Remuneration Policy
section which provides the framework
for Executive Remuneration; (2) the
Annual Report on Remuneration
which summarises the work of the
Committee and our approach to
Directors’ remuneration; (3) the
Annual Statement which outlines
the remuneration outcomes to
31 December 2020; and (4) the
proposed operation of the policy for
the upcoming year.
Directors’ Remuneration
Policy
The Committee is focused on setting
a remuneration policy to take into
account the importance of talent to
the success of the Company in an
industry where talented and
resourceful individuals are in high
demand and are relatively mobile.
Team17 promotes a culture based on
sound ethical values, and rewards
behaviours that support such values.
Non-Executive Remuneration
To attract and retain a high-calibre
Chair and Non-Executive Directors,
fee levels are set as appropriate for
the role and responsibility of each
Non-Executive Director position
with reference to market levels in
comparably sized public companies.
Our Chair and Non-Executive
Directors are paid a single annual
fee in cash for all of each of their
responsibilities.
During the year the Committee
undertook a review of the
remuneration policy with the
assistance of Korn Ferry. This
recognised that the policy had not
changed since Admission, during
which time the business had
performed against the strategy and
that the scope and complexity of the
business has expanded significantly.
Team17 Group plc
Annual Report and Financial Statements 2020
31
REMUNERATION COMMITTEE REPORT (CONTINUED)
Remuneration Scenarios for Executive Directors
The remuneration opportunity provided to the CEO and CFO under the Remuneration Policy at different levels of
performance for the financial year.
£3000k
£2500k
£2000k
£1500k
£1000k
£500k
£0k
£3000k
£2,746k
LTIP with 50% Share price growth
£2500k
LTIP
Annual Bonus
£2000k
Fixed Pay
£1,296k
£446k
£1500k
£1000k
£500k
£0k
£221k
£421k
£721k
Below Target
On Target
Maximum
Below Target
On Target
Maximum
Chief Executive Officer
Chief Financial Officer
Minimum performance:
Comprising the minimum remuneration receivable (i.e. fixed pay only made up of base
salary, pension allowances and an estimate for benefits for the 2021 financial year.)
On-target performance:
Comprising fixed pay, annual bonus and LTIP of 50% of the maximum opportunity.
Maximum performance:
(excluding and including
share price growth)
Comprising fixed pay, an annual bonus of 100% of the maximum opportunity (125% and 100%
of salary respectively for the CEO and CFO) and 100% vesting of LTIP awards (300% and 100%
of salary for the CEO and CFO respectively). The maximum performance scenario also
illustrates potential pay-out under the LTIP with a 50% share price growth.
Team17 Group plc
Annual Report and Financial Statements 2020
32
Consideration of Employment
Conditions Elsewhere in
the Group
The Committee considers pay and
employment conditions across the
Company when reviewing the
remuneration of the Executive
Directors and other senior
employees. The Remuneration Policy
for the Executive Directors is
designed with regard to the policy
for the workforce as a whole. The
Committee is kept updated through
the year on general employment
conditions and it approves the
budget for annual salary increases
and bonuses.
Consideration
of Shareholder Views
The Company is committed to
engagement with shareholders and
will seek shareholders’ views in
advance of making significant
changes to its Remuneration Policy
and how its implemented. We
consulted with our major
shareholders during the year in
relation to changes to the CEO’s
package.
Recruitment
The Company aims to attract and
retain a talented and diverse
workforce. When setting
remuneration packages for new
Executive Directors, pay will be set in
line with the remuneration policy.
Several factors will be considered,
including: the geography in which
the role competes or is recruited
from; the candidate’s experience and
skills; and the remuneration levels of
other Executives and colleagues in
the business.
In exceptional circumstances there
may be a need to buy-out unvested
awards from a previous employer
and this may be done on a like-for-
like basis.
The Remuneration Committee is
mindful that the Company should
avoid paying more than is necessary
to recruit the desired candidate.
Service Agreements and
Payments for Loss of Office
Non-Executive Directors
The Non-Executive Directors have
entered into letters of appointment
with the Company for an initial term
of three years, unless terminated
earlier by either party providing
three months’ prior written notice.
Executive Directors
The Executive Directors have a
service contract requiring 6-months’
notice of termination from either
party. In the event of termination for
cause (e.g. gross misconduct) neither
notice nor payment in lieu of notice
will be given, and the Executive
Director will cease to perform their
services immediately.
Treatment of other elements of the
policy (including short and long-term
incentives), will vary depending
on whether a Director is defined
as a “good” or “bad” leaver. The
Remuneration Committee has the
discretion to determine whether a
Director is a good leaver, reasons for
good leaver treatment include, but
are not limited to, death, ill-health,
injury or disability and retirement.
Annual Report on
Remuneration Committee
This section describes the operation
and activities of the Remuneration
Committee, how executives were
paid during the year and the
operation of the Remuneration
Policy for the upcoming year.
Committee Membership and
Role of the Committee
The Terms of Reference for the
committee were created at
admission and are reviewed
annually. The Remuneration
Committee comprises the four
Non-Executive Directors all of whom
are considered by the Board to be
independent.
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The current members of the
Committee are as follows:
•
Jennifer Lawrence (Chair)
• Christopher Bell
• Penny Judd
• Martin Hellawell
The full committee met three times
over the year. The primary role for
the committee is to review and set
the remuneration of the Executive
Directors and senior management.
Key responsibilities include:
• Setting and monitoring the
remuneration of the Executive
Directors and Senior Management
Team which includes salary,
annual performance related
bonus and any LTIP
arrangements.
• Approval of the Team17 overall
annual performance-related
bonus payments and annual
salary review.
• Approval of all share award plans
and subsequent issue of share
awards to staff.
Key Activities During the Year
Mark Crawford was appointed as
Chief Financial Officer, following a
successful period as interim CFO and
became a member of the Executive
Board on 20 April 2020. When setting
his remuneration package, several
factors were considered, including
the geography in which the role
competes; his experience and skills;
and the remuneration levels of other
Executives and colleagues in the
business.
External Advisers
The Remuneration Committee
received independent advice from
Korn Ferry during the year.
Team17 Group plc
Annual Report and Financial Statements 2020
33
REMUNERATION COMMITTEE REPORT (CONTINUED)
Annual Statement (Unaudited Information)
Directors’ Remuneration for the Year Ended 31 December 2020
The following table sets out the total remuneration for Executive and Non-Executive Directors for 2020, showing 2019
remuneration for comparison.
All figures shown in £’000
Debbie Bestwick
Mark Crawford3
Christopher Bell
Penny Judd
Jennifer Lawrence4
Martin Hellawell4
Salary
and fees
Benefits1
Pension
Annual
bonus
Total fixed
pay
LTIP2
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
327
321
147
–
100
100
55
55
55
47
45
15
1
23
7
–
–
–
–
–
–
–
–
–
16
16
7
–
–
–
–
–
–
–
–
–
327
321
147
–
–
–
–
–
–
–
–
–
7,308
–
–
–
–
–
–
–
–
–
–
–
344
360
161
–
100
100
55
55
55
47
45
15
Total
variable
pay
7,635
321
147
–
–
–
–
–
–
–
–
–
Total
remuneration
7,979
681
308
–
100
100
55
55
55
47
45
15
1 Benefits total represents the taxable value of benefits paid. Benefits provided to Executive Directors include: family private health cover and car allowance.
2 The LTIP figure represents the vested amount for the award granted to Debbie Bestwick on 23 May 2018 covering the performance period ending 31 December 2020. The value
is calculated based on the average share price over the final 3 months of the performance period, of 751.26p.
3 Mark Crawford was appointed 20 April 2020.
4
Jennifer Lawrence and Martin Hellawell both joined part way through 2019.
Basis for Annual Report Bonus Payments
Targets are based on the Company’s adjusted EBITDA performance, and consideration is given to individual performance.
The maximum annual bonus opportunity for the year was 100% of salary for the CEO, and 73.5% of salary for the CFO
to reflect his appointment to the Board part way through the performance year.
Performance during the year resulted in the CEO and CFO being awarded the maximum annual bonus amount.
Directors’ Participation in the LTIP
Details of the numbers of shares held by the Executive Directors under the LTIP are set out in the table below.
Director
Date of
grant
Awards held
on 1 January
2020
Awards made
during
year
Awards
vested
during year
Awards lapsed/
forfeited during
year
Awards held on
31 December
2020
End of
performance
period
Debbie Bestwick
23/5/18
972,727
–
Mark Crawford
10/9/20
–
20,057
–
–
–
–
972,727
31/12/20
20,057
31/12/23
Exercise
period
23/5/21
–22/5/28
9/9/23
–8/9/30
Team17 Group plc
Annual Report and Financial Statements 2020
34
LTIP Award Vesting by Reference to Performance to 31 December 2020
As part of the IPO process, Debbie Bestwick was granted an Initial LTIP Award of 972,727 nil-priced shares, as outlined
in the Admission Document. The three-year performance period for the Initial LTIP Award ended on 31 December 2020
and will vest on 23 May 2021.
The Initial LTIP Award is subject to performance targets whereby:
a) 75% of the Award is subject to cumulative adjusted EPS (“AEPS”) targets, with a maximum pay-out only being
provided on exceptional performance; and
b) 25% of the Award is subject to meeting annualised absolute total shareholder return targets.
The performance conditions which applied to the Award are summarised below:
Performance measure
Weighting
Threshold
Maximum
Targets
Vesting at
maximum
performance
Proportion of
award
to vest
AEPS
TSR
75%
25%
23.4p
8%
28.6p
15%
729,545
243,182
100%
100%
Directors’ Interests and Executive Directors’ Shareholding Requirements
During employment, Executive Directors are encouraged to build and maintain a shareholding equivalent to 200% of
base salary for the CEO and 150% of base salary for the CFO, accumulated over a period of 3-5 years through personal
investment and retained vested LTIP shares.
The table below summarises Directors’ current shareholding, including shares subject to a deferral or holding period
and performance conditions, and whether or not the shareholding requirement has been met.
Director
Executive Directors
Debbie Bestwick
Mark Crawford
Non-Executive Directors
Christopher Bell
Penny Judd
Jennifer Lawrence
Martin Hellawell
Beneficially owned at
31 December 2019
Beneficially owned at
31 December 2020
Interests in LTIP awards
(subject to performance
conditions)
Shareholding at
31 December 2020 as a
% of base salary
29,154,162
n/a
29,154,162
6,791
972,727
20,057
90,909
24,242
0
0
90,909
24,242
1,864
0
none
none
none
none
>200%
27%
n/a
n/a
n/a
n/a
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Annual Report and Financial Statements 2020
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REMUNERATION COMMITTEE REPORT (CONTINUED)
Performance Graph and Table
The chart below shows the Total Shareholder Return (“TSR”) performance of £100 invested in the Company from
23 May 2018 to 31 December 2020 against the AIM 100 and FTSE 250 indices. These indices are considered to be an
appropriate comparison as the Company is a constituent of the AIM100 and would be in the FTSE 250 Index if it was
a Premium Listed Company. The chart below shows the outstanding TSR performance of the Company since
Admission.
400
300
200
100
0
23 May 18
31 Dec 18
31 Dec 19
31 Dec 20
Team17 Group
FTSE AIM 100
FTSE 250
Implementation of Policy in 2021
There are changes proposed to the Directors’ Remuneration Policy in 2021 following the strategic review of our
remuneration policy.
Base Salary
The Committee reviewed the base salary for the CEO during the year. This has been the first review since Admission,
during which time the CEO’s salary has not materially changed.
The Company has performed very well and grown in scale and complexity over this period. Recognising the
performance of the CEO and that the salary is low by market standards, the Committee has determined that the salary
should be increased from £329,025 to £400,000.
The base salary for the CFO, who was appointed during the year at a market competitive salary level will remain
unchanged at £200,000.
Annual Bonus
The annual bonus will be based on a range of stretching Adjusted EBITDA targets, subject to a cap of 125% and 100%
of base salary for the CEO and CFO respectively, payable in cash. The upper limit for the CEO’s bonus opportunity has
been increased from 100% to 125% of salary as part of the overall review of remuneration. The Committee is satisfied
that the stretching nature of the performance targets, building from an all-time-high level of EBITDA, supports this
higher bonus opportunity.
Team17 Group plc
Annual Report and Financial Statements 2020
36
Executive Director LTIP
The award level for the CEO for 2021 will be equivalent to 300% of base salary (based on the share price at the date of
grant) and it is intended that the award level will then reduce to 150% of salary for 2022 and 2023. The higher
percentage award level for the first year recognises the lack of awards over the past two years, the fact the
performance measures are extremely stretching by market standards and that the salary, even after the increase, is
still positioned at the lower end of the market range.
The award level for the CFO will be 100% of base salary.
Awards are released subject to continued employment and satisfaction of challenging performance conditions
measured over three years.
The 2021 annual LTIP award award will be based on a stretching range of EPS performance measured over the three
years to 31 December 2023. 25% of the award is payable for threshold performance at a CAGR of 10%, with full vesting
at a CAGR of 30%. This range reflects the ambitious business strategy will require a significant improvement in our
profitability building from an all-time-high position in 2020.
Non-Executive Director Remuneration
Following a review by the Board, the annual base fees payable to the Non-Executive Directors remain unchanged. A
summary of the fees is shown below.
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Fee at
31 December 2020
Fee with effect from
1 April 2021
% increase
100,000
45,000
n/a
10,000
100,000
45,000
10,000
10,000
0%
0%
n/a
0%
Non-Executive Director
Chair
Non-Executive Director base fee
Senior Independent Director fee
Committee Chair fee
Signed for and on behalf of the Board by
Jennifer Lawrence
Chair of the
Remuneration Committee
17 May 2021
Team17 Group plc
Annual Report and Financial Statements 2020
37
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The Directors present their report and the audited financial statements of Team17 Group plc (the “Company”) and its
subsidiaries (together the “Group”) for the year ended 31 December 2020.
Principal Activity
The principal activity of the Company is that of a holding Company.
The principal activity of the Group (the Company and its subsidiaries) is the development and publishing of owned and
third-party IP video games for the global digital and physical market.
Future Developments
Trading for the period from 31 December 2020 to the date of this document has been positive and is consistent with
the Board’s expectations and profitability and cash generation remain encouraging.
The Group has continued to release new games during 2020, with further releases planned during the course of 2021,
more details can be found in the Strategic Report on page 6. Through its Greenlight process the Group continues to
review and sign new titles to its games label, in addition to maximising the revenue opportunity provided by its
substantial back catalogue.
The acquisition of the Golf With Your Friends IP in January 2021 underlines part of the Company’s strategy to make
value enhancing acquisitions that will support the growth ambitions alongside organic growth and the Board expects
this to be an ongoing part of the growth strategy.
Results and Dividends
The profit for the year, after taxation, amounted to £21.6m (Year ended 31 December 2019: £16.6m).
The Directors have not recommended the payment of a dividend (2019: £Nil).
Directors
The Directors who served the Company during the year and up to the date of signing the financial statements were:
Chris Bell
Debbie Bestwick
Mark Crawford (appointed 20 April 2020)
Martin Hellawell
Penny Judd
Jennifer Lawrence
Full details of the Board members’ profiles can be found on pages 24 and 25
Going Concern
Management has produced forecasts which have been reviewed by the Directors. These demonstrate the Group is
forecast to generate profits and cash in the year ending 31 December 2021 and beyond and that the Group has
sufficient cash reserves to enable the Group to meet its obligations as they fall due for a period of at least 12 months
from when these financial statements have been signed.
As such, the Directors are satisfied that the Company and Group have adequate resources to continue to operate for
the foreseeable future. For this reason, they continue to adopt the going concern basis for preparing these financial
statements.
Team17 Group plc
Annual Report and Financial Statements 2020
38
Directors’ Responsibilities Statement
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable laws and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the directors
have prepared the Group financial statements in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the European Union and Company financial statements in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising
FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law).
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that
period. In preparing the financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable international accounting standards in conformity with the requirements of the Companies
Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union have been followed for the Group financial statements and United Kingdom
Accounting Standards, comprising FRS 102 have been followed for the Company financial statements, subject to any
material departures disclosed and explained in the financial statements;
• make judgements and accounting estimates that are reasonable and prudent; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group
and Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company
and enable them to ensure that the financial statements comply with the Companies Act 2006.
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The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
Financial Risk Management
See Principal Risks and Uncertainties on pages 22 and 23.
Section 172 Statement
Compliance with s172 of Companies Act 2006 is detailed on page 28.
Directors’ confirmations
In the case of each director in office at the date the directors’ report is approved:
• so far as the director is aware, there is no relevant audit information of which the group’s and company’s auditors
are unaware; and
• they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any
relevant audit information and to establish that the group’s and company’s auditors are aware of that information.
Team17 Group plc
Annual Report and Financial Statements 2020
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DIRECTORS’ REPORT CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2020
Significant Shareholdings
At 31 December 2020, the Company had been notified in accordance with the Disclosure Guidance and Transparency
Rules, of the following interests holding 3% or more of the issued share capital in Team17 Group plc.
Shareholder
Debbie Bestwick (UK)
Aberdeen Standard Investments (Standard Life) (Edinburgh)
JP Morgan Asset Mgt (London)
Janus Henderson Investors (London)
BlackRock Investment Mgt (London)
Berenberg Bank (London)
AGEON Asset Mgt (Edinburgh)
(Source: Orient Capital Shareholder register 31 Dec 2020)
No. Ordinary Shares held
29,154,162
12,733,759
6,463,844
6,063,209
6,028,233
5,213,935
4,316,237
% of issued
22.18
9.69
4.92
4.61
4.59
3.97
3.28
Corporate Responsibility in Employment
Team17 now operates in three locations in the UK and with third-party development partners from around the world and
seeks to be socially responsible and maintain a positive impact on the communities it operates in. We have invested in
our working environments, most notably the new office in Wakefield towards the end of 2019 in order to provide the
best possible place to work and grow with access to the highest standards in facilities and technology.
As a growing business we have invested in our employees both to identify and recruit new talent and also to develop and
retain. This continued focus to build our teams alongside training, development and well-being is at the heart of our
people strategy, more detail can be found in the people section on pages 18 to 21. We have a diverse team and do not
tolerate discrimination of any kind.
Our Teamsters play a fundamental role to shape our corporate responsibility culture through voluntary teams looking at
employee engagement, charitable donations and environmental/sustainability targets and activities. More details are
outlined in pages 18 to 21.
Website
The Directors are responsible for ensuring the Annual Report and financial statements are made available on a website.
Financial statements are published on the Group’s website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Group’s website is the responsibility of the Directors.
The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.
The Group and Company financial statements on pages 47 to 84 were approved by the Board of Directors
on 17 May and signed on its behalf by:
Debbie Bestwick MBE
Chief Executive Officer
Team17 Group plc
Annual Report and Financial Statements 2020
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF TEAM17 GROUP PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
In our opinion:
• Team17 Group plc’s group financial statements and company financial statements (the “financial statements”) give
a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December 2020 and of the
Group’s profit and the Group’s cash flows for the year then ended;
• the group financial statements have been properly prepared in accordance with international accounting standards
in conformity with the requirements of the Companies Act 2006;
• the company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting
Standard applicable in the UK and Republic of Ireland”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual
Report”), which comprise: the consolidated and company statements of financial position as at 31 December 2020;
the consolidated statement of comprehensive income, the consolidated statement of cash flows, and the consolidated
and company statements of changes in equity for the year then ended; and the notes to the consolidated financial
statements and the notes to the company financial statements, which include a description of the significant
accounting policies.
Separate opinion in relation to international financial reporting standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union
As explained in note 2 to the financial statements, the Group, in addition to applying international accounting
standards in conformity with the requirements of the Companies Act 2006, has also applied international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
In our opinion, the group financial statements have been properly prepared in accordance with international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Our Audit Approach
Overview
Audit Scope
• The Group Engagement Team has performed a full scope audit of two components within the Group. The audited
components accounted for 100% of consolidated revenue and 100% of consolidated profit before tax.
Key Audit Matters
• Valuation of capitalised development costs (Group)
• Impact of COVID-19 (Group and Company)
Materiality
• Overall Group materiality: £900,000 (2019: £750,000) based on 5% of 3 year average profit before tax and
exceptional items.
• Overall Company materiality: £807,000 (2019: £675,000) based on 1% of total assets restricted by an allocation of
overall Group materiality.
• Performance materiality: £672,000 (Group) (2019: £562,500) and £605,250 (Company) (2019: £506,250).
Team17 Group plc
Annual Report and Financial Statements 2020
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF TEAM17 GROUP PLC (CONTINUED)
REPORT ON THE AUDIT OF THE GROUP FINANCIAL STATEMENTS
The Scope of our Audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the Directors made subjective judgements, for example in
respect of significant accounting estimates that involved making assumptions and considering future events that are
inherently uncertain.
Key Audit Matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the
audit of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Valuation of capitalised development costs (group)
There are a number of risks associated with capitalised
development costs. There is a risk that capitalised
development costs are incorrectly valued on the closing
balance sheet. This could be due to the carrying value of
capitalised costs not being supported by the future cash
inflows generated from product sales or the capitalised
costs have been allocated against the incorrect game.
The Group incurred £7.5 million of capitalised product
development costs during the year ended 31 December
2020, relating to games the Group develops to sell
through its various channels. The net book value of
such capitalised costs as at 31 December 2020 was
£6.3 million.
There is also judgement around the useful economic life
of a game and whether the amortisation period is
appropriate. Generally, the Group applies the reducing
balance method for amortisation over two years for their
games portfolio as it is considered to match the
amortisation of development costs associated with the
asset to the timing of economic consumption of the
benefits of the assets.
To address the highlighted risks we have performed the
following procedures. We agreed a sample of capitalised
product development costs to source documentation,
including invoices and timesheets, and determined that
they had been allocated to the correct project, and are
appropriate to capitalise. We have performed detailed
testing of the impairment judgements taken by
management and concur that the games involved have
either been discontinued (and are therefore clearly
impaired) or are not generating the level of return to
support the full carrying value. We are satisfied that the
total level of provisioning across the relevant titles is
materially correct.
We have verified the mathematical accuracy of
management’s amortisation calculation. We have also
assessed the reasonableness of management’s
amortisation policy considering the past sales
performance of the Group’s games portfolio to evaluate
the reasonableness of the useful life and the reducing
balance method of amortisation. We have challenged
management whether the method used to amortise
development costs is consistent with industry practice and
recommended that they reassess this accounting estimate
regularly, as it is possible that the economic benefits from
them could begin to materially outlive the existing useful
economic life of two years. We have also reviewed and
challenged any specific areas where the amortisation
policy has not followed the general policy to ensure that
the useful life applied is consistent with the period over
which the anticipated cash flows of the game are expected
to be derived.
Team17 Group plc
Annual Report and Financial Statements 2020
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Key audit matter
How our audit addressed the key audit matter
Impact of COVID-19 (group and company)
The ongoing and evolving COVID-19 pandemic is having
a significant impact on the global economy and the
economies of those countries in which the Group’s end
users buy video games. There is significant uncertainty
as to the duration of the pandemic and what its lasting
impact will be on those economies. The Directors have
considered the potential impact on the Group of the
ongoing COVID-19 pandemic. In relation to the on-going
application of controls, processes and governance the
Directors have not observed a significant impact to the
running of the business since lockdown measures were
introduced in the UK in March 2020. In relation to the
Group’s going concern assessment, the Directors
adjusted the cash flow forecasts for the period to the end
of June 2022 to reflect a severe but plausible downside
scenario resulting from the direct and indirect
consequences of COVID-19 including, for example, delays
in releases of games, reductions in demand and no
releases.
Based on the Directors assessment and our audit
procedures thereon as described below, we consider going
concern to be a normal risk for this engagement. We
obtained and reviewed the management accounts for the
financial year to date and checked that these were
consistent with the starting point of the results we have
audited. We also checked the arithmetical accuracy of
management’s forecasts for the period to the end of June
2022. We evaluated management’s downside scenarios,
including a very severe but plausible scenario, and
challenged their adequacy and underlying assumptions,
including the level and period of reduction in sales. We
assessed the composition of costs within the forecasts to
evidence that they were prepared on a consistent and
appropriate basis. We evaluated the level of forecast
liquidity and management’s assessment that there would
likely be a sufficient level of working capital throughout
the period to the end of June 2022. Our conclusion in
respect of going concern is included in the “Conclusions
related to going concern” section below. We have also
considered the impact of remote working on internal
control environment and having nothing to report.
How We Tailored the Audit Scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the Group and the Company, the accounting
processes and controls, and the industry in which they operate.
The Group has a central finance function covering all six legal entities included in the consolidated group financial
statements. We identified two entities, including the parent company, which, in our view, required an audit of their
complete financial information, either due to their size or their risk characteristics. This gave us the evidence we
needed for our opinion on the group financial statements as a whole. The audited components accounted for 100% of
consolidated revenue and 100% of consolidated profit before tax.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – group
Financial statements – company
Overall materiality
£900,000 (2019: £750,000).
£807,000 (2019: £675,000).
How we determined it
5% of 3 year average profit before tax and
exceptional items.
1% of total assets restricted by an
allocation of overall group materiality.
Rationale for benchmark applied The key objective of the Group is to deliver
underlying profitable growth to increase
long-term shareholder value. As a result of
the strong growth achieved, we believe a
three-year average of profit before tax and
exceptional items is an appropriate
benchmark to use in assessing materiality.
The Company is a non-trading holding
company. The entity’s assets relate
solely to their ownership of the
subsidiary trading companies and
thus reflect the Company’s purpose.
Company materiality has been
restricted to ensure it is not greater
than 90% of the Group’s financial
statement materiality.
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF TEAM17 GROUP PLC (CONTINUED)
REPORT ON THE AUDIT OF THE GROUP FINANCIAL STATEMENTS
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group
materiality. The materiality allocated against each component was £807,000. Certain components were audited to a
local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining
the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and
disclosures, for example in determining sample sizes. Our performance materiality was 75% of overall materiality,
amounting to £672,000 for the group financial statements and £605,250 for the company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls – and concluded that an amount in the middle of
our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our
audit above £44,000 (group audit) (2019: £37,500) and £40,350 (company audit) (2019: £33,750) as well as
misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions Relating to Going Concern
Our evaluation of the Directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going
concern basis of accounting included:
• Obtaining management forecasts for the period to June 2022 and evaluating management’s downside scenarios,
including a severe but plausible scenario, and challenging their adequacy and underlying assumptions, including
the level and period of reduction in sales
• Assessing the composition of revenue and costs within the forecasts to evidence that they were prepared on an
appropriate basis.
• Evaluating the level of forecast liquidity and management’s assessment that there would likely be a sufficient level
of working capital for the foreseeable future.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group’s and the Company’s ability to continue as a
going concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
Group’s and the Company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the members with respect to going concern are described in the
relevant sections of this report.
Reporting on Other Information
The other information comprises all of the information in the Annual Report other than the financial statements and
our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a
material misstatement of the financial statements or a material misstatement of the other information. If, based on
the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report based on these responsibilities.
Team17 Group plc
Annual Report and Financial Statements 2020
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With respect to the Strategic Report and Directors’ Report , we also considered whether the disclosures required by
the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report
and Directors’ Report for the year ended 31 December 2020 is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the
course of the audit, we did not identify any material misstatements in the Strategic Report and Directors’ Report.
Responsibilities for the Financial Statements and the Audit
Responsibilities of the directors for the Financial Statements
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation
of the financial statements in accordance with the applicable framework and for being satisfied that they give a true
and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease
operations, or have no realistic alternative but to do so.
Auditors’ Responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined in the Auditors’ responsibilities for the audit of the financial statements section,
to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with
laws and regulations related to the Companies Act 2006, the AIM Rules and tax legislation, and we considered the
extent to which non-compliance might have a material effect on the financial statements. We also considered those
laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies
Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and determined that the principal risks were related to over-
statement of revenue and profits. Audit procedures performed by the engagement team included:
• Discussions with management, including consideration of known or suspected instances of non-compliance with
laws and regulation and fraud.
• Understanding and evaluation of management’s processes controls designed to prevent and detect irregularities.
• Reviewing minutes of meetings of those charged with governance.
• Challenging assumptions and judgements made by management in their significant accounting estimates, in
particular in relation to the valuation of development costs (see related key audit matters below); and
• Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
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Annual Report and Financial Statements 2020
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF TEAM17 GROUP PLC (CONTINUED)
REPORT ON THE AUDIT OF THE GROUP FINANCIAL STATEMENTS
There are inherent limitations in the audit procedures described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the
sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of This Report
This report, including the opinions, has been prepared for and only for the company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly agreed by our prior consent in writing.
Other Required Reporting
Companies Act 2006 Exception Reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• certain disclosures of members’ remuneration specified by law are not made; or
• the company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Andy Ward (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Leeds
17 May 2021
Team17 Group plc
Annual Report and Financial Statements 2020
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Finance income
Finance costs
Profit before tax
Taxation
Profit and total comprehensive income attributable to owners of the
parent for the period
Earnings per share
– Basic (pence)
– Diluted (pence)
All amounts relate to continuing operations.
Note
5
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
82,969
61,794
(43,823)
(32,257)
39,146
29,537
(12,979)
(10,581)
26,167
18,956
112
(43)
232
(18)
26,236
19,170
(4,292)
(2,551)
6
8
8
9
21,944
16,619
10
10
17.0
16.8
12.9
12.9
There was no other comprehensive income in the year and therefore a Statement of Other Comprehensive Income
has not been presented.
The notes on pages 51 to 74 are an integral part of these consolidated financial statements.
Team17 Group plc
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
COMPANY REGISTRATION NUMBER: 11205116
Assets
Non-current assets
Intangible fixed assets
Property, plant and equipment
Right-of-use assets
Deferred tax asset
Total non-current assets
Current assets
Trade and other receivables
Tax receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity attributable to owners of the parent
Share capital
Share premium
Merger reserve
Other reserves
Retained earnings
Total equity
Non-current liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Tax payables
Lease liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
As at
31 December
2020
£’000
As at
31 December
2019
£’000
Note
12
13
14
19
15
16
20
20
20
20
20
18
19
17
18
42,921
39,925
1,353
1,378
–
1,478
1,513
248
45,652
43,164
16,430
11,487
670
61,470
78,570
124,222
–
41,853
53,340
96,504
1,315
44,084
1,313
44,084
(153,822)
(153,822)
159,296
158,864
52,476
103,349
29,710
80,149
1,320
76
2,126
3,522
17,206
–
145
17,351
20,873
124,222
1,464
26
3,007
4,497
10,198
1,538
122
11,858
16,355
96,504
The notes on pages 51 to 74 are an integral part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 17 May 2021 and were
signed on its behalf by:
Debbie Bestwick MBE
Chief Executive Officer
Team17 Group plc
Annual Report and Financial Statements 2020
48
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Equity attributable to shareholders of the Group
Share
capital
£’000
Share
premium
account
£’000
Note
Merger
reserve
£’000
Other
reserves
£’000
Retained
earnings
£’000
Total
equity
£’000
At 1 January 2019
1,313
44,084 (153,822) 158,864
12,170
62,609
Profit and total comprehensive income for the
period
Share based compensation
Total transactions with owners
At 31 December 2019
Profit and total comprehensive income for the year
Issue of shares on exercise of options
Issue of shares on acquisition of subsidiary
Share based compensation
Total transactions with owners
At 31 December 2020
21
21
20
21
–
–
–
–
–
–
–
–
–
–
–
–
16,619
16,619
921
921
921
921
1,313
44,084 (153,822) 158,864
29,710
80,149
–
1
1
–
2
–
–
–
–
–
–
–
–
–
–
–
–
432
–
432
21,944
21,944
–
–
822
822
1
433
822
1,256
1,315
44,084 (153,822) 159,296
52,476 103,349
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Annual Report and Financial Statements 2020
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
Cash generated from operations
Tax paid
Net cash inflow from operations
Cash flow from investing activities
Acquisition of subsidiaries (net of cash acquired)
Purchase of property, plant and equipment
Sale of property, plant and equipment
Capitalisation of development costs
Interest received
Net cash outflow from investing activities
Cash flows from financing activities
Interest paid
Receipt of lease incentive
Repayment of lease liabilities
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Note
22
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
35,415
(7,125)
28,290
25,063
(2,494)
22,569
(814)
(338)
43
–
(1,265)
43
(7,512)
(3,215)
112
232
(8,509)
(4,205)
(43)
–
(121)
(164)
(17)
48
(54)
(23)
19,617
41,853
61,470
18,341
23,512
41,853
13
12
8
8
16
Team17 Group plc
Annual Report and Financial Statements 2020
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1. General Information
The principal activity of Team17 Group plc (the “Company”) is that of a holding company and the principal activity of
the Company and its subsidiaries (together, the “Group”) is the development and publishing of video games for the
digital and physical market. The Company is a public company limited by shares and incorporated and domiciled in
United Kingdom. The address of its registered office is 3 Red Hall Avenue, Paragon Business Park, Wakefield, WF1 2UL.
The registered number of the Company is 11205116.
2. Significant Accounting Policies
Basis of Preparation
The Group financial statements have been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 (‘IFRS’) and the applicable legal requirements of the
Companies Act 2006. In addition to complying with international accounting standards in conformity with the
requirements of the Companies Act 2006, the consolidated financial statements also comply with international
financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
The Group financial statements have been prepared on the historical cost basis with the exception of certain items
which are measured at fair value as disclosed in the principal accounting policies set out below. These policies have
been consistently applied to all years presented unless otherwise stated.
The consolidated financial information has been prepared on a going concern basis, under the historical cost
convention, presented in sterling and has been rounded to the nearest thousand (£’000). The principal accounting
policies adopted are set out below.
New and Amended Standards Adopted by the Group
There were no new standards impacting the Group for the reporting period commencing 1 January 2020.
In the previous year commencing 1 January 2019, the Group applied the following standards and amendments for the
first time:
• IFRS 16, ‘Leases’;
• Annual Improvements to IFRS Standards 2015 – 2017 Cycle as applicable and;
• Interpretation 23 ‘Uncertainty over Income Tax Treatments’ as applicable.
Going Concern
Management has produced forecasts that have also been sensitised to reflect a severe but plausible worst case
scenarios as a result of the Covid-19 pandemic and its impact on the global economy, which have been reviewed by the
directors. These demonstrate the Group is forecast to generate profits and cash in the year ending 31 December 2021
and beyond and that the Group has sufficient cash reserves to enable the Group to meet its obligations as they fall
due for a period of at least 12 months from the date of signing of these financial statements.
As such, the directors are satisfied that the Group has adequate resources to continue to operate for the foreseeable
future. For this reason they continue to adopt the going concern basis for preparing these financial statements.
Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by
the Company (its subsidiaries). Control is achieved where the Company has the power over the investee, is exposed, or
has rights, to variable returns from its involvement with the investee and has the ability to use its power to affect its
return. The financial statements of the subsidiaries are prepared for the same reporting period as the parent
company, using consistent accounting policies.
All transactions and balances between group companies are eliminated on consolidation, including unrealised gains
and losses on transactions between group companies. Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. Profit
or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from
the effective date of acquisition, or up to the effective date of loss of control, as applicable.
Team17 Group plc has provided a guarantee under section 479c of the Companies Act 2006 to Yippee Entertainment
Limited for the Company to take the exemption from audit.
Team17 Group plc
Annual Report and Financial Statements 2020
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2. Significant Accounting Policies continued
Business Combinations and Goodwill
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by
the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets
transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset
or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. Assets
acquired and liabilities assumed are measured at their acquisition-date fair values.
Goodwill represents the future economic benefits arising from a business combination that are not individually
identified and separately recognised. Goodwill is initially measured at cost, being the excess of the consideration
transferred over the fair value of the Group’s share of the identifiable net assets acquired. If the fair value of the
consideration is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase,
the difference arising is negative goodwill which is recognised directly in the Statement of Comprehensive Income.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed
for indicators of impairment every six months and tested for impairment either annually or when an indicator of
impairment is identified. Impairment testing is performed by comparing the higher of fair value less costs to sell and
the value in use to the value of the asset. If this review demonstrates that impairment has occurred, this is expensed
to the income statement. Goodwill is allocated to cash generating units for the purpose of impairment testing, with
the allocation being made to those cash generating units that are expected to benefit from the business combination
in which the goodwill arose.
Intangible Assets Acquired in a Business Combination
The cost of such intangible assets is their fair value as at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
An asset is only recognised if the following conditions are met:
• It meets the definition of an intangible asset under “IAS 38 Intangible Assets”;
• the asset is separable or arises from contractual or legal rights;
• sufficient information exists to measure reliably the fair value of the asset.
Internally Generated Intangible Assets
Intangible assets are measured on initial recognition at cost. Internally generated intangible assets, excluding
capitalised development costs, are not capitalised and expenditure is recognised in the Statement of Comprehensive
Income when it is incurred.
Development Costs
These are internally generated intangible assets arising from the Group’s development activities and are recognised
only if all of the following conditions are met:
•
• completion of the intangible asset is technically feasible so that it will be available to generate economic benefits;
• the Group intends to complete the intangible asset and has the ability to generate probable future economic
it meets the definition of an intangible asset under “IAS 38 Intangible Assets”;
benefits that will flow to the Group;
• the expenditure attributable to the intangible asset during its development, can be measured reliably; and
• the Group has adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset.
Costs continue to be recognised as an intangible asset throughout the development of a title up until its release.
Where development costs incurred do not meet the recognition criteria set out above, expenditure is recognised as an
expense in the period in which it is incurred.
Development costs on third party games are disposed of at the date that Team17 ceases to generate revenue from the
games.
Team17 Group plc
Annual Report and Financial Statements 2020
52
Amortisation
The useful lives of intangible assets are assessed as either finite or indefinite and at the year end date other than
Goodwill no intangible assets are accorded an indefinite life.
Intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period.
Amortisation is calculated over the estimated useful lives of the assets as follows:
• Brands – 10-13 years straight line
• Development costs – typically 85% reducing balance over 2 years
Amortisation of development costs commences upon completion of the asset. Changes in the expected useful life
or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by
changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
The amortisation expense on intangible assets with finite lives is recognised in the Statement of Comprehensive
Income in cost of sales for development costs and administrative expenses for brand costs.
Impairment of Non-Financial Assets
The Group assesses every six months whether there is an indication that an asset may be impaired. If any indication
exists, or when impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An
asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. It is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of
those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used.
The Group bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each
of the Group’s CGUs to which the individual assets are allocated.
Impairment losses of continuing operations are recognised in the Statement of Comprehensive Income in those
expense categories consistent with the function of the impaired asset.
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if
there has been a change in the assumptions used to determine the asset’s recoverable amount since the last
impairment loss was recognised.
The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed
the carrying amount that would have been determined, net of depreciation or amortisation, had no impairment loss
been recognised for the asset in prior years. Such reversal is recognised in the Statement of Comprehensive Income
unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.
Trade and Other Receivables
Trade and other receivables are initially recorded at fair value and thereafter are measured at amortised cost. To
measure the expected credit losses, trade and other receivables have been grouped based on shared credit risk
characteristics and the days past due. Trade receivables and contract assets are written off where there is no
reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst
others, the failure of a debtor to engage in a repayment plan with the group, and a failure to make contractual
payments for a period of greater than 90 days past due.
Team17 Group plc
Annual Report and Financial Statements 2020
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2. Significant Accounting Policies continued
Revenue Recognition
Revenue includes income from the release of full games and early access versions of self-published games. The Group
designs, produces and sells video games based on its own and third party intellectual property to digital and physical
distributors, who are considered to be the Group’s customers when assessing revenue recognition. The majority of
the Group’s revenue is in the form of royalties received from third party distributors who have a license to sell the
Group’s games to consumers. Revenue is recognised at the point at which the distributor sells the content to the
consumer. The transaction price is the amount the group is entitled to in accordance with the contractual
arrangement with the third party.
The Group also receives revenue where the Group agrees to make a game available to a third party platform for their
customers to download for an agreed period of time for a fixed fee and with minimal future performance obligations
required by the Group. These contracts are determined as right to use contracts in accordance with IFRS 15 and the
fixed fee is recognised on the date the game is first made available on the third party platform. Any additional revenue
earned based on volume of sales in these contracts are recognised as usage-based royalties when usage occurs. If any
contract includes a break clause then the revenue recognised excludes the amount that would be foregone if the
break clause was exercised. The remaining revenue is recognised once the break clause has expired.
Lease Arrangements
A lease liability reflecting future lease payments and a right-of-use asset for lease contracts are recognised at the
lease commencement date. The value of the assets and liabilities recognised is calculated from the total of the future
lease payments discounted for the rate implicit in the lease or incremental borrowing rate at the inception of the
lease. Interest on the lease liability is calculated on a monthly basis and recognised in the Statement of
Comprehensive Income. The right-of-use assets recognised are depreciated over the length of the lease and the
depreciation is included in the Statement of Comprehensive Income. Lease incentives affect the total of the future
lease payments and therefore are included within the right-of-use assets and lease liabilities recognised at the
commencement date.
The incremental borrowing rate is decided on through discussion with our bankers and comparison to other
businesses in the industry.
In applying IFRS 16 for the first time on 1 January 2019, the Company used the following practical expedients
permitted by the standard:
• accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as
short-term leases; and
• using hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
The Group also elected not to reassess whether a contract is, or contains a lease at the date of initial application
(1 January 2019). Instead, for contracts entered into before the transition date the group relied on its assessment
made applying IAS 17 and Interpretation for Determining whether an Arrangement contains a Lease.
At the application of IFRS 16 ‘Leases’, the Group was required to calculate the initial assets and liabilities of leases
discounted by the incremental borrowing rate. Since the IPO, as the Group does not have any interest-bearing debt,
management performed market research on rates offered to similar businesses in the industry and applied an
incremental borrowing rate between 2.5% – 3.5% dependent on the length and type of asset being leased.
Pensions
The Group operates a defined contribution pension scheme. The assets of the scheme are held and administered
separately from those of the Group. Contributions payable for the year are charged in the Statement of
Comprehensive Income. Differences between contributions payable in the year and contributions actually paid are
shown as either accruals or prepayments in the balance sheet. The Group has no further payment obligations once
contributions have been paid.
Team17 Group plc
Annual Report and Financial Statements 2020
54
Taxation
Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as
reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense
that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
Group’s liability for current tax is calculated using tax rates and laws that have been enacted or substantively enacted
by the period end date.
Video Games Tax Relief (‘VGTR’)
VGTR tax credits are included within current tax. They are only recognised where the Directors believe that a tax credit
will be recoverable. This is based upon the Group’s experience of obtaining the required certification to facilitate its
titles in development to qualify for VGTR and success of previous submitted claims. An estimate is made throughout
the year, and a tax receivable off-set against the income tax liability recognised, based on qualifying expenditure
during the year.
Deferred Tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit,
and is accounted for using the statement of financial position liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each period end date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates and laws that are expected to apply in the period when the liability is settled
or the asset is realised. Deferred tax is charged or credited in the Consolidated Statement of Comprehensive Income,
except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with
in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities when they relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
Exceptional Items
IAS 1 requires material items to be disclosed separately in a way that enables users to assess the quality of a Group’s
profitability. In practice, these are commonly referred to as “exceptional” items, but this is not a concept defined by
IFRS and therefore there is a level of judgement involved in determining what to include in underlying profit. We
consider items which are non-recurring and significant in size or in nature to be suitable for separate presentation.
Share Based Compensation
The Company has awarded share options to various employees and directors. These shares are separated into the
following types of schemes:
• Directors LTIPs – These include performance criteria and the fair value of these options has been estimated using a
Monte Carlo Simulation model to estimate the fair value of the awards.
• Employee share options – The only performance criteria included on these options is for the employee to remain
in employment of the company for a specified period of time. The fair value has been estimated based on the share
price at award date.
The fair value of these options are recognised as an expense in the Statement of Comprehensive Income over the
vesting period of the options with a corresponding credit included within retained earnings. Employers national
insurance due on the share options are included over time within the Statement of Comprehensive Income based on
the estimated number of shares expected to vest multiplied by the balance sheet date share price whilst the credit is
included within trade and other payables. The accumulated share option value is adjusted for any lapsed share
options on a monthly basis.
Team17 Group plc
Annual Report and Financial Statements 2020
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2. Significant Accounting Policies continued
Right-of-Use Assets
Right-of-use assets are recognised where the Group is a lessee. The amount recognised as an addition is the total of
the future lease payments discounted for the incremental borrowing rate at the date of application. Depreciation is
calculated on a straight-line basis over the length of the contract taking into consideration any break clauses included
within the lease.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value. The cost
includes the original price of the asset and the cost attributable to bringing the asset to its current working condition
for its intended use. Depreciation, down to residual value, is calculated on a straight-line basis over the estimated
useful life of the asset which is reviewed on an annual basis.
Depreciation is calculated over the estimated useful lives of the assets as follows:
• Leasehold improvements
• Plant and equipment
• Fixtures & fittings
• Motor vehicles
– straight line over the life of the lease
– 3 years straight line
– 6 years straight line
– 5 years straight line
An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in
the Statement of Comprehensive Income in the year the item is de-recognised.
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial Assets
Initial Recognition and Measurement
In accordance with IFRS9, ‘Financial Instruments’ the Group has classified its financial assets as ‘Financial assets at
amortised cost’. The Group determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at fair value through the
Statement of Comprehensive Income, transaction costs that are attributable to the acquisition of the financial asset
and expected credit losses based on historical collection experience of similar assets.
Subsequent Measurement
The subsequent measurement of financial assets depends on their classification as described below:
Financial Assets Carried at Amortised Cost
This category applies to trade and other receivables due from customers in the normal course of business. All
amounts which are not interest bearing are stated at their recoverable amount, being invoice value less provision for
any expected credit losses. These assets are held at amortised cost.
The group classifies its financial assets as at amortised cost only if both of the following criteria are met:
(i) the asset is held within a business model with the objective of collecting the contractual cash flows; and
(ii) the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal outstanding.
Financial assets at amortised cost comprise current trade and other receivables due from customers in the normal
course of business and cash and cash equivalents.
The Group does not hold any material financial assets at fair value through other comprehensive income or at fair
value through the Statement of Comprehensive Income. The Group does not hold any derivatives and does not
undertake any hedging activities.
Team17 Group plc
Annual Report and Financial Statements 2020
56
Trade receivables are initially recognised at their transaction price. The group does not expect to have any contracts
where the period between the transfer of the promised goods or services to the customer and payment by the
customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time
value of money. Other financial assets are recognised initially at fair value plus transaction costs that are directly
attributable to the acquisition of the financial asset. Trade and other receivables are subsequently measured at
amortised cost less provision for expected credit losses.
Cash and Cash Equivalents
Cash and short-term deposits in the Statement of Financial Position comprise cash at banks and on hand and short
term deposits held with banks with a maturity of three months or less from inception. Included within cash and cash
equivalents is cash owned by the EBT. The EBT cash is not readily available for use by the Group to meet its everyday
operating costs but can be spent for the benefit of the employees and as such is an appropriate cash equivalent.
For the purpose of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and
short-term deposits as defined above, net of outstanding bank overdrafts as they are considered an integral part of
the Group’s cash management.
Subsequent Measurement
Impairment of Financial Assets
The Group assesses on a forward looking basis the expected credit losses associated with its financial assets
measured at amortised cost. The Group applies the simplified approach to providing for expected credit losses
prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables. To
measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics
and the days past due. For other financial assets at amortised cost, the Group determines whether there has been a
significant increase in credit risk since initial recognition. The Group recognises twelve month expected credit losses if
there has not been a significant increase in credit risk and lifetime expected credit losses if there has been a
significant increase in credit risk.
Expected credit losses incorporate forward looking information, take into account the time value of money when there
is a significant financing component and are based on days past due; the external credit ratings of its customers; and
significant changes in the expected performance and behaviour of the borrower.
Financial assets are written off when there is no reasonable expectation of recovery. Where receivables have been
written off, the Group continues to engage in enforcement activity to attempt to recover the receivable due. Where
recoveries are made, these are recognised in the Statement of Comprehensive Income.
Financial Liabilities
Initial Recognition and Measurement
All financial liabilities are recognised initially at fair value net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using
the effective interest rate method (EIR). Gains and losses are recognised in the Statement of Comprehensive Income
when the liabilities are derecognised as well as through the (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included in finance costs in the Statement of Comprehensive
Income.
This category generally applies to interest-bearing loans and borrowings.
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Annual Report and Financial Statements 2020
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2. Significant Accounting Policies continued
Derecognition of Financial Assets and Liabilities
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
derecognised when:
• The rights to receive cash flows from the asset have expired, or
• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement, and either
(a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of
the assets.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised
in the Statement of Comprehensive Income.
Offsetting of Financial Instruments
Financial assets and financial liabilities are offset with the net amount reported in the Statement of Financial Position
only if there is a current enforceable legal right to offset the recognised amounts and intent to settle on a net basis,
or to realise the assets and settle the liabilities simultaneously.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. Provisions are measured using the directors’ best
estimate of the expenditure required to settle the obligation at the period end date.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,
when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.
Operating Segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker has been identified as the Board of Directors. The Group supplies
a single product range into a single marketplace and so there is considered to be only one segment. On transition to
IFRS the chief operating decision maker has begun to utilise IFRS based measures to monitor performance. No
differences exist between the basis of preparation of the performance measures used by the Board of Directors and
the figures in the Group financial information.
Foreign Currency
Foreign currency transactions are translated into the functional currency of the respective Group entity, using the
exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses
resulting from the settlement of such transactions and from the remeasurement of monetary items denominated in
foreign currency at year-end exchange rates are recognised in the Statement of Comprehensive Income.
Employee Benefit Trust
As the Company is deemed to have control of its Employee Benefit Trust (“EBT”), it is treated as a subsidiary and
consolidated for the purposes of the combined and consolidated financial statements. The EBT’s assets (other than
investments in the company’s shares), liabilities, income and expenses are included on a line-by-line basis in the
consolidated financial statements. The EBT’s investment in the Company’s shares is deducted from equity in the
Consolidated Statement of Financial Position as if they were treasury shares. The gain or loss on transfer of the shares
from the EBT to employees is recognised within equity.
New Standards and Interpretations Not Yet Adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December
2020 reporting periods and have not been early adopted by the Group. These standards are not expected to have a
material impact on the entity in the current or future reporting periods and on forseeable future transactions.
Team17 Group plc
Annual Report and Financial Statements 2020
58
Adoption of New and Revised Standards
At the date of authorisation of these financial statements, the Group is aware of the following revised IFRSs that have
been issued but are not yet effective:
• Definition of Material – Amendments to IAS 1 and IAS 8
• Definition of a Business – Amendments to IFRS 3
• Revised Conceptual Framework for Financial Reporting
3. Key Sources of Estimation, Uncertainty and Significant Accounting Judgements
The preparation of the Group’s consolidated financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities
affected in future periods.
In the process of applying the Group’s accounting policies, management has made the following key judgements and
estimates, which have the most significant effect on the amounts recognised in the consolidated financial statements:
Development Costs Capitalisation (Judgement)
The Group invests heavily in research and development. The identification of development costs that meet the criteria
for capitalisation is dependent on management’s judgement and knowledge of the work done together with any
agreements made with the rights holders of a specific game. Judgements are based on the information available at
each period end. Economic success of any development is assessed on a reasonable basis and a review for indicators
of impairment is completed by product at each period-end date. The net book values of the development intangible
assets including rights acquired at 31 December 2020 are £6,287,000 (2019: £2,803,000). Intangible assets are subject
to amortisation and reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable, for example, a decision to suspend a self-published title under development. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are reviewed by project for which there are separately identifiable cashflows.
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Revenue Recognition (Judgement)
In applying IFRS 15, the Group is required to make a judgement on whether certain revenue contracts containing a
license provide either a right to use or right to access the IP. Licenses that meet all three specific criteria as described
in paragraph 11.256 of IFRS 15 are considered to provide a right to access the IP. If any of these three criteria are not
met then the contract should be treated as a right to use the IP. The Group considers that all of their license contracts
to date provide a right to use the asset and all new contracts are reviewed against the criteria to ensure the correct
treatment is applied.
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Useful Life of Intangible Assets (Estimate)
Amortisation of intangible assets is calculated over the useful economic lives of the assets. The estimates of useful
economic lives are reviewed at least annually for any changes to this estimate. There were no changes required to
estimate useful economic lives during the year ended 31 December 2020 except as disclosed below.
The useful life of brands was initially estimated as between 10 and 13 years after looking at expected future revenues
from titles utilising those brands along with future releases planned.
The estimates of useful life for capitalised development costs are included as two years. The amortisation is also
weighted heavily towards the first year to reflect the sales curve of titles. This sales curve has been modelled after
looking at all titles in the Group’s portfolio and adjusting for outliers.
In December 2020, we launched Worms Rumble on PC, PlayStation 4 and the next generation PlayStation 5 console
and as part of this launch, revenue was secured under a license agreement with PlayStation which was recognised in
the period under IFRS 15. As a result of the licence deal combined with the launch on the next generation console,
first year revenues are expected to be more heavily weighted towards the launch date and we have therefore updated
our amortisation policy to better reflect this with a higher amortisation charge for this title being recognised in
December 2020. The total amortisation charges for this title over the first year after launch will remain in line with
the existing policy.
Team17 Group plc
Annual Report and Financial Statements 2020
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
4. Segmental Analysis
For management purposes the Group is considered to comprise only one segment for reporting to the chief operating
decision maker, that of the development and publishing of video games for the digital and physical market.
Three (2019: Four) customers each contributed over 10% of the total revenue in 2020 with total revenue derived from
these customers being £58,977,000 (2019: £46,068,000).
All non-current assets are located in the UK.
5. Revenue
All revenue was generated by the sale of goods.
The Group does not provide any information on the geographical location of sales as the majority of revenue is
through third party distribution platforms which are responsible for the sales data of consumers.
Whilst the chief operating decision maker considers there to be only one segment, the Company’s portfolio of games
is split between those based on IP owned by the Group and IP owned by a third party and hence to aid the readers
understanding of our results, the split of revenue from these two categories are shown below:
Internal IP
Third Party
6. Operating Profit
The following items are included in profit before tax:
Amortisation of development costs – cost of sales (note 12)
Amortisation of brands – administrative expenses (note 12)
Depreciation of property, plant and equipment (note 13)
Depreciation of right-of-use assets (note 14)
Loss on foreign exchange
Operating lease rentals
Auditors’ remuneration:
Fees payable to the Company’s auditors for the audit of Team17 Group plc
Fees payable to the Company’s auditors in respect of:
Audit of Company’s subsidiaries
Non-audit services
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
17,310
65,659
82,969
10,312
51,482
61,794
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
4,028
1,784
404
135
107
20
21
154
26
3,105
1,783
355
57
2
78
13
81
–
Non-audit services related to fees for assistance to the remuneration committee in 2019 that were not accrued for in
the prior year.
Team17 Group plc
Annual Report and Financial Statements 2020
60
7. Staff Numbers and Costs
The average number of persons employed by the Group (including directors) during the year, was as follows:
Staff and directors
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Social security costs on share options
Other pension costs
Share based compensation
The following tables sets out the Directors’ payroll costs:
Aggregate emoluments
Social security costs
Social security costs on share options
Company contributions to money purchase scheme
Share based compensation
Compensation for loss of office
Year ended
31 December
2020
No.
Year ended
31 December
2019
No.
233
173
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
10,415
1,093
840
389
822
8,509
697
177
286
921
13,559
10,590
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
1,208
1,267
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218
765
23
666
–
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152
163
25
863
152
2,880
2,622
Retirement benefits are accruing to 2 directors (2019: 1) under money purchase schemes.
Mark Crawford was appointed in November 2019 to act as Interim CFO. During the year £80,000 (2019: £33,000) was
paid to for his services prior to him joining the Group as permanent CFO in April 2020 under an employment contract.
These figures have not been included in the notes above.
Jo Jones resigned on 22 November 2019 – Following her departure, she received payments in lieu of her notice period
disclosed as compensation for loss of office in accordance with her contractual entitlement and retained 50% of her
LTIP share options that were awarded in 2018.
Team17 Group plc
Annual Report and Financial Statements 2020
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
7. Staff Numbers and Costs (continued)
The remuneration of the highest paid Director was:
Aggregate emoluments
Share based compensation
8. Finance Income and Costs
Finance income
Interest receivable
Finance costs
Interest payable on lease liabilities
Other interest payable
9. Taxation
Current tax:
Current year tax
Video Games Tax Relief claim
Adjustments in respect of prior period:
Video Games Tax Relief claim
Other
Deferred tax:
Origination and reversal of temporary differences
Total tax charge
Team17 Group plc
Annual Report and Financial Statements 2020
62
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
681
652
1,333
658
730
1,388
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
112
232
43
–
43
17
1
18
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
5,539
(1,018)
134
270
4,925
(633)
(633)
4,292
4,143
(423)
(133)
(653)
2,934
(383)
(383)
2,551
Reconciliation of total tax charge:
Profit before tax
Taxation using the UK Corporation Tax rate of 19% (2019: 19%)
Effects of:
Expenses not deductible for tax purposes
R&D Relief
Video Games Tax Relief
Adjustment in respect of prior periods
Change in deferred tax rate
Total tax charge
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
26,236
4,985
19,170
3,642
19
(97)
(1,018)
91
312
(87)
–
(423)
(581)
–
4,292
2,551
Deferred taxes at the balance sheet date have been measured using the enacted tax rate of 19% (2019: 17%).
10. Earnings Per Share
The calculation of the basic earnings per share is based on the profits attributable to the shareholders of Team17
Group plc divided by the weighted average number of shares in issue. The weighted average number of shares takes
into account treasury shares held by the Team17 Employee Benefit Trust. The diluted earnings per share uses the
same calculation however the number of shares in issue are adjusted to include shares considered to be dilutive under
the treasury stock method. An option is considered to be dilutive when the total proceeds per option is less than the
average share price for the period.
Profit attributable to shareholders £’000
Weighted average number of shares
Weighted average diluted number of shares
Basic earnings per share (pence)
Diluted earnings per share (pence)
Year ended
31 December
2020
Year ended
31 December
2019
21,944
16,619
129,398,375 129,246,382
130,607,624 129,253,947
17.0
16.8
12.9
12.9
The calculation of adjusted earnings per share is based on the profit attributable to shareholders as shown in the
Statement of Comprehensive Income plus additional costs added back during the year as shown in note 11. The
weighted average diluted number of shares includes share options considered to be dilutive under the treasury stock
method as described above.
Adjusted earnings (note 11) £’000
Weighted average number of shares
Weighted average diluted number of shares
Adjusted basic earnings per share (pence)
Adjusted diluted earnings per share (pence)
Year ended
31 December
2020
Year ended
31 December
2019
23,606
17,540
129,398,375 129,246,382
130,607,624 129,253,947
18.2
18.1
13.6
13.6
Team17 Group plc
Annual Report and Financial Statements 2020
63
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
11. Adjusted EBITDA
Profit attributable to shareholders
Share based compensation (note 21)
Adjusted earnings
Taxation (note 9)
Finance income (note 8)
Finance cost (note 8)
Amortisation of Brands (note 12)
Depreciation (notes 13 and 14)
Adjusted EBITDA
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
21,944
1,662
23,606
4,292
(112)
43
1,784
535
16,619
921
17,540
2,551
(232)
18
1,783
412
30,148
22,072
The share based compensation figure for the year ended 31 December 2020 includes the add back of £840,000 (2019:
£Nil) relating to Employers National Insurance contributions due upon exercise of the share options.
12. Intangible Fixed Assets
Cost
At 1 January 2019
Additions
At 31 December 2019
Additions
At 31 December 2020
Amortisation
At 1 January 2019
Charge for the year
At 31 December 2019
Charge for the year
At 31 December 2020
Net carrying amount
At 31 December 2020
At 31 December 2019
Development
costs
£’000
10,615
3,215
13,830
7,512
Brands
£’000
Goodwill
£’000
Total
£’000
21,983
21,083
–
21,983
–
–
21,083
1,296
22,379
–
–
–
–
–
53,681
3,215
56,896
8,808
65,704
12,083
4,888
16,971
5,812
22,783
21,342
21,983
7,922
3,105
11,027
4,028
15,055
4,161
1,783
5,944
1,784
7,728
6,287
2,803
14,255
16,039
22,379
21,083
42,921
39,925
Goodwill
The Group tests for impairment every six months, or more frequently if there are indicators that goodwill might be
impaired.
The recoverable amount of the cash generating unit (“CGU”) at 31 December 2020 is determined from the fair value
less costs of disposal of the underlying business units. No impairment is considered necessary at 31 December 2020.
The key assumption in calculating the fair value was the expected future cashflows at 31 December 2020.
Team17 Group plc
Annual Report and Financial Statements 2020
64
When estimating the fair value of the Group the Directors took account of current market expectations and recent
data from similar transactions.
Acquisition of Subsidiary
On 1 January 2020 Team17 Group plc acquired 100% of the issued shares in Yippee Entertainment Limited, for total
consideration of £1,363,000. The acquisition is expected to increase the studio capacity by adding a talented and
versatile team which will continue to be run by Mike Delves, an industry veteran with over 30 years’ experience. Details
of the purchase consideration, the net assets acquired and goodwill are as follows:
Purchase consideration
Cash consideration
Deferred consideration
Total cash consideration
Shares issued in Team17 Group plc
Total purchase consideration
The assets and liabilities recognised as a result of the acquisition are as follows:
Cash and cash equivalents
Property, plant and equipment
Receivables
Payables
Net identifiable assets acquired
Add: Goodwill
£’000
780
150
930
433
1,363
£’000
116
8
58
(115)
67
1,296
1,363
The goodwill is attributable to Yippee Entertainment Limited’s talented multi-award winning video game development
team. It has been allocated to the sole segment of the Group which is the production and publishing of video games.
None of the goodwill is expected to be deductible for tax purposes.
Acquisition related costs of £108,000 are included in administrative expenses in the Statement of Comprehensive
Income for the year ended 31 December 2019.
Financial performance of Yippee Entertainment Limited has not been disclosed as it was wholly immaterial to the year
ended 31 December 2020 results.
Deferred Consideration
The deferred consideration arrangement required the Group to pay the former owners of Yippee Entertainment
Limited up to a maximum of £150,000 by 31 December 2020 with no minimum. The full amount of £150,000 was paid
in December 2020.
Shares Issued in Team17 Group plc
The shares were issued as part of the consideration for the acquisition of Yippee and therefore merger relief has been
applied to the premium on the issue.
Trade and Other Receivables
The fair value of trade and other receivables at acquisition was £58,000 and the full amount was deemed to be collectible.
Team17 Group plc
Annual Report and Financial Statements 2020
65
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
13. Property, Plant and Equipment
Leasehold
improvements
£’000
Plant and
machinery
£’000
Fixtures and
fittings
£’000
Motor
vehicles
£’000
Cost
At 1 January 2019
Additions
Disposals
At 31 December 2019
On Acquisition
Additions
Disposals
125
829
(88)
866
–
18
(4)
960
247
(58)
1,149
8
318
(156)
133
189
(76)
246
–
2
(6)
At 31 December 2020
880
1,319
242
Depreciation
At 1 January 2019
Charge for the year
Disposals
At 31 December 2019
Charge for the year
Disposals
At 31 December 2020
Net book value
At 31 December 2020
At 31 December 2019
54
55
(88)
21
71
–
92
788
845
593
245
(58)
780
276
(129)
927
392
369
61
23
(50)
34
40
(5)
69
173
212
182
–
(81)
101
–
–
(80)
21
52
32
(35)
49
17
(45)
21
–
52
Total
£’000
1,400
1,265
(303)
2,362
8
338
(246)
2,462
760
355
(231)
884
404
(179)
1,109
1,353
1,478
Team17 Group plc
Annual Report and Financial Statements 2020
66
14. Right-of-Use Assets
Cost
Additions at 1 January 2019 (Adoption of IFRS 16 Leases)
Additions during the year
At 31 December 2019
Additions during the year
At 31 December 2020
Depreciation
At 1 January 2019
Charge for the year
At 31 December 2019
Charge for the year
At 31 December 2020
Net carrying amount
At 31 December 2020
At 31 December 2019
15. Trade and Other Receivables
Amounts Falling Due Within One Year:
Trade receivables
Accrued income
Other receivables
Prepayments
There are no impaired assets within trade and other receivables.
16. Cash and Cash Equivalents
Cash at bank and in hand
Cash equivalents
Buildings
£’000
103
1,467
1,570
–
Total
£’000
103
1,467
1,570
–
1,570
1,570
–
57
57
135
192
–
57
57
135
192
1,378
1,513
1,378
1,513
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31 December
2020
£,000
31 December
2019
£,000
1,514
13,875
452
589
1,366
8,926
720
475
16,430
11,487
31 December
2020
£,000
31 December
2019
£,000
58,314
3,156
61,470
37,887
3,966
41,853
Included within the cash equivalents balance above is £3,156,000 (2019: £3,186,000) owned by the EBT. This cash is not
readily available for use by the Group to meet its everyday operating costs but can be spent for the benefit of the
employees and as such is an appropriate cash equivalent.
The remaining cash equivalents balance of £Nil (2019: £780,000) represents an amount held by our solicitors for the
purchase of the shares of Yippee Entertainment Limited on 1 January 2020.
Team17 Group plc
Annual Report and Financial Statements 2020
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
17. Trade and Other Payables
Amounts falling due within one year:
Trade payables
Other payables
Taxation and social security
Accruals and deferred income
18. Lease Liabilities
Amounts falling due within one year
Amounts falling due in over one year
31 December
2020
£’000
31 December
2019
£’000
655
1,098
297
15,156
17,206
179
699
275
9,045
10,198
31 December
2020
£’000
31 December
2019
£’000
145
1,320
1,465
122
1,464
1,586
Interest expense during the year on the above lease liabilities included in finance costs was £43,000 (2019: £17,000).
The total cash outflow for leases during the year was £164,000 (2019: £23,000) net of a £Nil (2019: £48,000) lease
incentive received.
19. Deferred Taxation
Recognised deferred tax asset:
At 1 January 2019
Deferred tax recognised in profit or loss
At 31 December 2019
Deferred tax recognised in profit or loss
Offset against deferred tax liability
At 31 December 2020
Recognised deferred tax liabilities:
At 1 January 2019
Deferred tax recognised in profit or loss
At 31 December 2019
Deferred tax recognised in profit or loss
Offset from deferred tax asset
At 31 December 2020
Other short
term timing
differences
£’000
–
248
248
909
Total
£’000
–
248
248
909
(1,157)
(1,157)
–
–
Accelerated
depreciation
for tax
purposes
£’000
Other short
term timing
differences
£’000
Arising on
intangible fixed
assets
£’000
54
(7)
47
122
–
169
14
(13)
1
404
(1,157)
(752)
3,074
(115)
2,959
(250)
–
2,709
Total
£’000
3,142
(135)
3,007
276
(1,157)
2,126
Deferred taxes are recognised at the tax rate of 19% (2019: 17%) which was substantively enacted as at the Balance
Sheet date.
Team17 Group plc
Annual Report and Financial Statements 2020
68
20. Equity
Authorised, allotted, called up and fully paid
131,473,222 (2019: 131,288,276) ordinary shares of 1p each
31 December
2020
£’000
31 December
2019
£’000
1,315
1,315
1,313
1,313
The ordinary shares have voting, dividend and capital distribution rights. They are not redeemable.
On 1 January 2020 Team17 Group plc issued 114,000 ordinary shares of 1p each as part of the acquisition of Yippee
Entertainment Limited. On 10 July 2020 Team17 Group plc issued 70,946 ordinary shares of 1p each to satisfy share
options exercised.
Shares Held by Subsidiaries
At 31 December 2020, and included in these consolidated financial statements, the Team17 Employment Benefit Trust
(the “Trust”) holds 2,041,900 (2019: 2,041,900) shares in Team17 Group plc with a nominal value of £19,202 (2019: £20,419).
Share Capital
Represents the nominal value of the shares that have been issued.
Share Premium
Includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares
are deducted from the share premium, net of any related income tax benefits.
Retained Earnings
Includes all current and previous retained profits and losses.
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Merger Reserve
On 23 May 2018 the Company became the ultimate parent company of the Group. The merger reserve was created as
a result of the share for share exchange under which Team17 Group plc became the parent undertaking prior to the
IPO. Under merger accounting principles, the assets and liabilities of the subsidiaries were consolidated at book value
in the Group financial statements and the consolidated reserves of the Group were adjusted to reflect the statutory
share capital, share premium and other reserves of the Company as if it had always existed, with the difference
presented as the merger reserve.
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Other Reserves
Other reserves are made up of the following:
Merger Relief Reserve
Includes the premiums received on the issue of share capital in a share for share exchange on 23 May 2018. The
premiums on the shares issued as part of the acquisition of Yippee Entertainment Limited have also been included in
the merger relief reserve.
Capital Contribution
Includes the value of shares gifted to the Team17 Employment Benefit Trust on 23 May 2018 as part of the IPO.
Team17 Group plc
Annual Report and Financial Statements 2020
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
21. Share Based Compensation
The following share schemes have been awarded but not yet vested at 31 December 2020:
Share scheme name
Award date
Vesting date
Maximum number of
share options
outstanding
Exercise price
per share
option
Executive LTIPs – 2018
Free shares
23 May 2018
4 April 2019
Senior management share options
8 April 2019
23 May 2021
4 April 2022
8 April 2022
972,727
101,500
22,045
(Issue 1)
Senior management share options
18 December 2019
18 December 2022
17,392
(Issue 2)
Senior management share options
22 April 2020
21 April 2023
4,994
(Issue 3)
Senior management share options
6 May 2020
5 May 2023
12,287
(Issue 4)
Executive LTIPs – 2020
10 September 2020 9 September 2023
20,057
Share Incentive Plan
(See note below)
Monthly award
3 years from
award date
15,662
£Nil
£Nil
£Nil
£Nil
£Nil
£Nil
£Nil
£Nil
The maximum number of outstanding share options at 31 December 2020 was 1,166,644 (2019: 1,079,169). Of these
share options 173,860 (2019: 166,409) will be settled from shares already held by the Team17 Employment benefit trust.
The movement in the fair value of each share option is included within either Cost of sales or Administrative expenses
(depending on which employees the shares were issued to) in the Statement of Comprehensive Income and included
within Retained earnings in the Statement of Financial Position. In addition, employers national insurance accrued at
13.8% (2019: 13.8%) on the balance sheet share price multiplied by the number of shares expected to vest is included
within either cost of sales or administrative expenses and accruals in the Statement of Financial Position.
Included within the financial statements is the following:
Statement of Comprehensive Income
Share options charge
Employers national insurance
Statement of Financial Position
Accruals (cumulative balance)
Retained Earnings (cumulative balance)
31 December
2020
£’000
31 December
2019
£’000
822
840
921
177
1,662
1,098
1,017
2,105
177
1,283
Executive LTIPs
The fair value of services received in return for share options awarded is calculated based on the Monte-Carlo method
for valuing share options. The expense is apportioned over the vesting period and is based on the number of financial
instruments which are expected to vest and the fair value of those financial instruments at the date of the award. The
fair value of options is reassessed every six months to reflect the Group’s Cumulative AEPS position against the targets.
Team17 Group plc
Annual Report and Financial Statements 2020
70
Executive LTIPs – 2018
The executive directors were awarded share options during 2018 under the Team17 Group plc Long Term Incentive
Plan. These options only vest if certain performance criteria are met. The options are split into two parts with the
amount of Part A options that will vest depending on the Group’s Cumulative Adjusted Earnings Per Share (“AEPS”)
targets whilst part B depends on annualised absolute total shareholder return.
Underlying share price (£)
Award price (£)
Exercise price (£)
Vesting period
Estimate of part A options vesting
Estimate of part B options vesting
Expected volatility of the share price
Dividends expected on the shares
Risk free rate
Fair value at vesting date (£’000)
2.20
–
–
3 years
100%
100%
38%
0%
1%
1,952
During the previous year ended 31 December 2019 the rules for the share award issued to J Jones under the
18 December 2018 issue were modified to remove the performance criteria of the shares. The vesting date was also
modified to vest on the audit date changing the estimates of both part A and B shares to 100%. Additionally, the
quantity of shares available to vest were reduced to 70,946. These shares vested and were exercised during the year
ended 31 December 2020.
Executive LTIPs – 2020
Share options awarded to executive directors in 2020 under the Team17 Group plc Long Term Incentive Plan have a
slightly different performance criteria. Instead of splitting the awards into two parts, the performance criteria for
100% of shares are based on meeting the Group’s Cumulative AEPS target over three financial years.
Underlying share price (£)
Award price (£)
Exercise price (£)
Vesting period
Estimate of options vesting
Dividends expected on the shares
Risk free rate
Fair value at vesting date (£’000)
6.86
–
–
3 years
100%
0%
0.83%
138
Free Shares
During 2019 all staff employed by Team17 Digital Limited at 30 September 2018 were provided with share options. The
only criteria for these share options to vest is for the employees to remain in employment over the vesting period.
The fair value of these share options are calculated as the fair value at the award date multiplied by the number of
share options outstanding. The expense is apportioned over the vesting period. These share options will be settled
from shares already held by the Team17 Employment Benefit Trust.
Senior Management Share Options
During the year there were awards provided to senior management. These were issued at different points in the year.
As with the free shares, the only criteria for these share options to vest is for the employees to remain in employment
over the vesting period.
Team17 Group plc
Annual Report and Financial Statements 2020
71
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
21. Share Based Compensation continued
The fair value of these share options are calculated as the fair value at the award date multiplied by the number of
share options. The expense is apportioned over the vesting period. These share options will be settled from shares
already held by the Team17 Employment Benefit Trust.
Share Incentive Plan (SIP)
The Group operates a SIP for all employees. Under the SIP, the Group has made awards of matching shares which are
conditional on remaining employed with the Group for three years from the award date.
The fair value of these matching shares are calculated as the fair value at the award date multiplied by the number of
share options. The expense is apportioned over the vesting period. These share options will be settled from shares
already held by the Team17 Employment Benefit Trust.
22. Cash Generated from Operations
Cash flow from operating activities
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Loss on disposal of fixed assets
Share based compensation
Finance income
Financial expenses
Operating cash flow before changes in working capital
Increase in trade and other receivables
Increase in provisions
Increase in trade and other payables
Cash generated from operations
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
26,236
19,170
404
135
355
57
5,812
4,888
24
822
(112)
43
33,364
(4,908)
50
6,909
35,415
29
921
(232)
18
25,206
(3,351)
(113)
3,321
25,063
23. Commitments and Contingencies
The Group had no contracted capital commitments or contingent liabilities at 31 December 2020
(31 December 2019: £Nil).
24. Related parties
Ultimate Controlling Party
At 31 December 2020 there was not considered to be a single ultimate controlling party of Team17 Group plc.
Transactions with Related Parties
There were no transactions with related parties during the year ended 31 December 2020.
Transactions with Key Management Personnel:
The key management personnel of the Group are deemed to be the board of directors and details of their aggregate
remuneration can be found in note 7. Mark Crawford was appointed in November 2019 to act as Interim CFO. During
the year £80,000 (2019: £33,000) was paid to Stratfield Fairlane Ltd for his services prior to joining the Group as
permanent CFO in April 2020 under an employment contract.
Team17 Group plc
Annual Report and Financial Statements 2020
72
25. Financial Instruments
At 31 December 2020
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Lease liabilities
At 31 December 2019
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Lease liabilities
Note
15
16
17
18
Note
15
16
17
18
Loans and
receivables
£’000
Financial
liabilities at
amortised cost
£’000
Book value
£’000
Fair value
£’000
15,841
61,470
77,311
–
–
–
–
–
–
15,841
61,470
77,311
15,841
61,470
77,311
(15,309)
(15,309)
(15,309)
(1,465)
(1,465)
(16,774)
(16,774)
77,311
(16,774)
60,537
(1,465)
(16,774)
60,537
Loans and
receivables
£’000
Financial
liabilities at
amortised cost
£’000
Book value
£’000
Fair value
£’000
11,018
41,853
52,871
–
–
–
52,871
–
–
–
11,018
41,853
52,871
11,018
41,853
52,871
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(11,709)
(1,586)
(13,295)
(13,295)
(11,709)
(1,586)
(11,709)
(1,586)
(13,295)
(13,295)
39,576
39,576
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Trade and other receivables shown above comprises trade receivables, accrued income and other receivables as
disclosed in note 15.
Trade and other payables comprises of trade payables, other payables and accruals as disclosed in note 17.
Loans and receivables are non-derivatives financial assets carried at amortised cost which generate a fixed or variable
interest income for the Group. The carrying value may be affected by changes in the credit risk of the counterparties.
Management have assessed that for cash and short-term deposits, trade receivables, trade payables and other
current liabilities their fair values approximate to their carrying amounts largely due to the short-term maturities of
these instruments. Book values are deemed to be a reasonable approximation of fair values.
The fair value of all financial instruments is equivalent to their book value due to their short maturities.
Financial Risks
The Group monitors and manages the financial risks relating to the financial instruments held. The principal risks
include credit risk on financial assets, and liquidity. The key risks are analysed below.
Team17 Group plc
Annual Report and Financial Statements 2020
73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
25. Financial Instruments continued
Capital Risk Management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while
maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure
of the Group consists of debt, which includes the cash and cash equivalents and equity attributable to the equity
holders of the parent, comprising issued capital, reserves and retained earnings.
Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the Group. In order to minimise this risk the Group endeavours only to deal with companies which are demonstrably
creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum
exposure to credit risk is the value of the outstanding amount. Revenue invoiced by the Group results in trade
receivables which management consider to be of low risk, other receivables are likewise considered to be low risk.
However, certain customers comprise in excess of 10% of the revenue earned by the Group (see note 4). Credit risk on
cash and cash equivalents is considered to be small as the counterparties are all substantial banks with high credit
ratings. The maximum exposure is the amount of the deposit.
Financial Assets
The Group is not exposed to significant interest rate risk on the financial assets, other than cash and cash equivalents.
Cash and cash equivalents are exposed to interest rate risk as they are held at floating rates, although the risk is not
significant as the interest receivable is not significant.
Liquidity Risk
Cash and Cash Equivalents
Bank balances are held on short term / no notice terms to minimise liquidity risk.
Trade and Other Payables
Trade and other payables are non-interest bearing and are normally settled on 30 day terms.
26. Pensions
The Group operates a defined contribution scheme for its directors and employees. The assets of the scheme are held
separately from those of the Group in an independently administered fund.
The outstanding pension contributions at 31 December 2020 were £48,000 (31 December 2019: £38,000).
27. Post Statement of Financial Position Events
On 4 January 2021 Team17 Digital Limited acquired the Golf With Your Friends IP from Entertainment Holdings Pty Ltd
a company incorporated in Australia for £12,000,000. This consideration is made up of an initial cash payment of
£9,000,000 and deferred cash consideration of £3,000,000 due within 12 months of the acquisition date.
The acquisition underlines part of the Group’s strategy to make value enhancing acquisitions that will support the
growth ambitions alongside organic growth and the Board expects this to be an ongoing part of the growth strategy.
At the time when these financial statements are authorized for issue, the Group had not yet completed the accounting
for the acquisition and hence the fair values of assets acquired have not been disclosed.
Team17 Group plc
Annual Report and Financial Statements 2020
74
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
COMPANY REGISTRATION NUMBER: 11205116
Fixed assets
Investments
Deferred tax asset
Current assets
Trade and other receivables
Cash at bank and in hand
Creditors: amounts falling due within one year
Trade and other payables
Tax payables
Net current assets
Net assets
Capital and reserves
Called up share capital
Share premium account
Other reserves
Retained earnings
Total Equity
As at
31 December
2020
£’000
As at
31 December
2019
£’000
156,475
154,954
502
229
156,977
155,183
Note
8
9
10
46,661
46,425
2
–
46,663
46,425
11
12
12
12
12
(1,883)
(156)
(2,039)
(1,251)
(379)
(1,630)
44,624
44,795
201,601
199,978
1,315
44,084
154,245
1,957
1,313
44,084
153,813
768
201,601
199,978
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The company has taken advantage of the exemption permitted by section 408 of the Companies Act 2006 not to
produce its own profit and loss account. The profit for the year dealt within the accounts of the company was £367,000
(2019: £213,000).
The notes on pages 77 to 84 are an integral part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 17 May 2021, and were
signed on its behalf by:
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Debbie Bestwick MBE
Chief Executive Officer
Team17 Group plc
Annual Report and Financial Statements 2020
75
Called
up share
capital
£’000
1,313
–
–
Share
premium
account
£’000
44,084
–
–
–
–
1,313
44,084
153,813
–
–
1
1
–
–
–
–
–
–
–
432
Other
reserve
£’000
Profit
and loss
account
£’000
Total
Equity
£’000
153,813
(366)
198,844
213
921
768
367
822
–
–
213
921
199,978
367
822
1
433
1,315
44,084
154,245
1,957
201,601
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Equity attributable to shareholders of the company
At 1 January 2019
Profit and total comprehensive income
for the year
Share based compensation
At 31 December 2019
Profit and total comprehensive income
for the year
Share based compensation
Issue of shares on exercise of options
Issue of shares on acquisition of
subsidiaries
At 31 December 2020
Note
13
13
12
12
Team17 Group plc
Annual Report and Financial Statements 2020
76
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1. General Information
The Company incorporated and domiciled in United Kingdom and the principal activity of Team17 Group plc (the
“Company”) is that of a holding company. The address of its registered office is 3 Red Hall Avenue, Paragon Business
Park, Wakefield, WF1 2UL. The registered number of the Company is 11205116.
2. Significant Accounting Policies
Basis of Preparation
The Company financial statements have been prepared under the historical cost convention unless otherwise
specified within these accounting policies and in accordance with FRS 102, the Financial Reporting Standard applicable
in the UK and Republic of Ireland and the Companies Act 2006.
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its individual
Statement of Comprehensive Income in these financial statements. The Company’s overall result for the year is given
in the Statement of Changes in Equity.
The financial information has been prepared on a going concern basis and under the historical cost convention. The
principal accounting policies adopted are set out below. These policies have been consistently applied to all years
presented unless otherwise stated.
The financial information is presented in sterling and has been rounded to the nearest thousand (£’000).
Financial Reporting Standard 102 – Reduced Disclosure Exemptions
The company has taken advantage of the following disclosure exemptions under FRS 102:
• From preparing a statement of cash flows as required by paragraph 3.17(d) of FRS 102, on the basis that it is a
qualifying entity;
• From the financial instrument disclosures, required under FRS 102 paragraphs 11.42 to 11.48C and paragraphs 12.26
to 12.30, as the information is provided in the consolidated financial statement disclosures of Team17 Group plc;
• From disclosing the Company key management personnel compensation, as required by FRS 102 paragraph 33.7;
• From the requirement to present a reconciliation of the number of shares outstanding at the beginning and end of
the period as required by paragraph 4.12(a)(iv) of FRS 102; and
• From disclosing the Share Based Payment arrangements as required by paragraphs 26.18(b), 26.19 to 26.21 and
26.23 on the basis that is a qualifying entity.
A qualifying entity is defined as a member of a group that prepares publicly available financial statements, which give
a true and fair view, in which that member is consolidated. The company is a wholly owned subsidiary of Team17
Group plc, and is included in the consolidated financial statements of Team17 Group plc, which are publicly available.
Going Concern
Management has produced forecasts that have also been sensitised to reflect a severe but plausible worst case
scenarios as a result of the Covid-19 pandemic and its impact on the global economy, which have been reviewed by the
directors. These demonstrate the Group is forecast to generate profits and cash in the year ending 31 December 2021
and beyond and that the Group has sufficient cash reserves to enable the Group to meet its obligations as they fall
due for a period of at least 12 months from the date of signing of these financial statements.
As such, the directors are satisfied that the Company and the Group have adequate resources to continue to operate
for the foreseeable future. For this reason they continue to adopt the going concern basis for preparing these financial
statements.
Team17 Group plc
Annual Report and Financial Statements 2020
77
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NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
2. Significant Accounting Policies continued
Share Based Compensation
The Company has awarded share options to various employees and directors. These shares are separated into the
following types of schemes:
• Directors LTIPs – These include performance criteria and the fair value of these options has been estimated using a
Monte Carlo Simulation model to estimate the fair value of the awards.
• Employee share options – The only performance criteria included on these options is for the employee to remain in
the company for a specified period of time. The fair value has been estimated based on the share price at award date.
The fair value of these options are recognised as an expense in the Statement of Comprehensive Income over the
vesting period of the options with a corresponding credit included within retained earnings. Employers national
insurance due on the share options are included over time within the Statement of Comprehensive Income based on
the estimated liability due at exercise whilst the credit is included within trade and other payables. The accumulated
share option value is adjusted for any lapsed share options on a monthly basis.
Investments
Investments in subsidiaries are measured at cost less accumulated impairment. Share options have been issued to
employees of the Company’s subsidiary Team17 Digital Limited which offer shares in Team17 Group plc. The value of
these share options are included within Investments.
Trade and Other Receivables
Short term debtors are measured at transaction price, less any impairment.
Cash and Cash Equivalents
Cash and short-term deposits in the Statement of Financial Position comprise cash at banks and on hand and short
term deposits held with banks with a maturity of three months or less from inception.
Financial Instruments
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets
and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related
parties and investments in non-puttable ordinary shares.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for
objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in
the Statement of Comprehensive Income.
For financial assets measured at cost less impairment, the impairment loss is measured at the difference between an
assets carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that
the Company would receive for the asset if it were to be sold at the reporting date.
Trade and Other Payables
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are
measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the
effective interest method.
Revenue Recognition
Revenue represents income from group management charges on a monthly basis.
Pensions
The Company operates a defined contribution pension scheme. The assets of the scheme are held and administered
separately from those of the Company. Contributions payable for the year are charged in the Statement of
Comprehensive Income. Differences between contributions payable in the year and contributions actually paid are
shown as either accruals or prepayments in the balance sheet. The Company has no further payment obligations once
contributions have been paid.
Team17 Group plc
Annual Report and Financial Statements 2020
78
Taxation
Current Tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported
in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The liability for current tax
is calculated using tax rates and laws that have been enacted or substantively enacted by the period end date.
Deferred Tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit
and is accounted for using the Statement of Financial Position liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each period end date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates and laws that are expected to apply in the period when the liability is settled
or the asset is realised. Deferred tax is charged or credited in the Consolidated Statement of Comprehensive Income,
except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with
in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities when they relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
Share Capital
Share capital represents the nominal value of the shares that have been issued.
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Share Premium
Share premium includes any premiums received on the issue of share capital. Any transaction costs associated with
the issuing of shares are deducted from share premium, net of any related income tax benefits.
Merger Relief Reserve
Merger relief reserve which has been included in other reserves, includes any premiums received on the issue of share
capital in a share for share exchange.
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Retained Earnings
Retained current and prior period losses.
Foreign Currency
Foreign currency transactions are translated into the functional currency of the respective Group entity, using the
exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses
resulting from the settlement of such transactions and from the remeasurement of monetary items denominated in
foreign currency at year-end exchange rates are recognised in profit or loss.
Team17 Group plc
Annual Report and Financial Statements 2020
79
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
3. Key Sources of Estimation, Uncertainty and Significant Accounting Judgements
The preparation of the Company’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future
periods.
Investments in Group undertakings are stated at cost, unless their value has been impaired in which case they are
valued at the lower of their realisable value or value in use.
This calculation of value in use requires estimates to be made relating to the timing and amount of future cash flows
expected, and suitable discount rates based on the weighted average cost of capital adjusted to reflect the specific
economic environment.
4. Revenue
All revenue was generated from group management charges.
All revenue was generated in the United Kingdom.
5. Operating Profit
Remuneration paid to our auditors is stated in note 6 of the consolidated financial statements.
6. Staff Numbers and Costs
The average number of persons employed by the Company during the year was as follows:
Directors
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Other pension costs
Share based compensation
Compensation for loss of office
The following tables sets out the Directors’ payroll costs:
Aggregate remuneration
Social security costs
Company contributions to money purchase scheme
Share based compensation
Team17 Group plc
Annual Report and Financial Statements 2020
80
Year ended
31 December
2020
No.
Year ended
31 December
2019
No.
6
5
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
1,208
1,267
983
23
666
–
315
25
863
152
2,880
2,622
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
1,208
1,419
983
23
666
315
25
863
2,880
2,622
Retirement benefits are accruing to 2 directors (2019: 1 directors) under money purchase schemes. In addition long
term share incentive schemes are in place for 2 (2019: 1) directors.
During the year 1 (2019: Nil) director exercised share options.
Jo Jones resigned on 22 November 2019 – Following her departure, she received payments in lieu of her notice period
in accordance with her contractual entitlement and retained 50% of her LTIP share options that were awarded in 2018.
The remuneration of the highest paid Director was:
Aggregate emoluments
Share based compensation
7. Taxation
Current tax:
Current year tax
Adjustments in respect of prior periods
Deferred tax:
Origination and reversal of temporary differences
Total tax charge
Reconciliation of total tax charge:
Profit before tax
Taxation using the UK Corporation Tax rate of 19% (2019: 19%)
Effects of:
Expenses not deductible for tax purposes
Adjustments to tax charge in respect of prior periods
Change in deferred tax rate
Total tax charge
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
670
652
1,322
658
730
1,388
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
303
(126)
(273)
(96)
310
69
(229)
150
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
270
51
2
(126)
(23)
(96)
363
69
12
69
–
150
Team17 Group plc
Annual Report and Financial Statements 2020
81
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NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
8. Investments
Cost
At 1 January 2019
Additions
At 31 December 2019
Additions
At 31 December 2020
Net book value
At 31 December 2020
At 31 December 2019
£’000
154,853
101
154,954
1,521
156,475
156,475
154,954
Included in the additions balance is £1,363,000 (2019: £Nil) representing the total purchase consideration for the
acquisition of Yippee Entertainment Limited. The remaining additions of £158,000 (2019: £101,000) represents the
value of share options issued to employees employed by Team17 Group plc’s subsidiaries.
Name of company
Holding
Subsidiary undertakings
Team17 Holdings Limited
Ordinary Shares
Team17 Software Limited
Ordinary Shares
Team17 Digital Limited
Ordinary Shares
Mouldy Toof Studios Limited
Ordinary Shares
Yippee Entertainment Limited
Ordinary Shares
Proportion of
voting rights
and shares held
Activity
100%
100%
100%
100%
100%
Intermediate holding company
Intermediate holding company
Development and publishing of video
games for the digital market
Dormant
Development of video games for the
digital market
The investment in Team17 Digital Limited is held via Team17 Software Limited.
The registered office of all subsidiaries is 3 Red Hall Avenue, Paragon Business Park, Wakefield, WF1 2UL.
9. Deferred Taxation
Recognised deferred tax asset:
At 1 January 2019
Deferred tax recognised in profit or loss
At 31 December 2019
Deferred tax recognised in profit or loss
At 31 December 2020
Team17 Group plc
Annual Report and Financial Statements 2020
82
Other short
term timing
differences
£’000
–
229
229
273
502
Total
£’000
–
229
229
273
502
10. Trade and Other Receivables
Amounts falling due within one year:
Amounts owed by group undertakings
Other receivables
Prepayments
11. Trade and Other Payables
Amounts falling due within one year:
Trade payables
Other payables
Taxation and social security
Accruals and deferred income
12. Equity
Authorised, allotted, called up and fully paid
131,473,222 (2019: 131,288,276) ordinary shares of 1p each
31 December
2020
£’000
31 December
2019
£’000
46,545
46,287
1
115
22
116
46,661
46,425
31 December
2020
£’000
31 December
2019
£’000
68
43
38
1,734
1,883
46
–
109
1,096
1,630
31 December
2020
£’000
31 December
2019
£’000
1,315
1,315
1,313
1,313
The ordinary shares have voting, dividend and capital distribution rights. They are not redeemable.
On 1 January 2020 Team17 Group plc issued 114,000 ordinary shares of 1p each as part of the acquisition of Yippee
Entertainment Limited. On 10 July 2020 Team17 Group plc issued 70,946 ordinary shares of 1p each to satisfy share
options exercised.
Share Capital
Represents the nominal value of the shares that have been issued.
Share Premium Account
Includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares
are deducted from share premium.
Retained Earnings
Includes all current and previous retained profits and losses.
Team17 Group plc
Annual Report and Financial Statements 2020
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NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
12. Equity continued
Other Reserves
Other reserves are made up of the following:
Merger Relief Reserve
Includes the premiums received on the issue of share capital in a share for share exchange on 23 May 2018.
The premiums on the shares issued as part of the acquisition of Yippee Entertainment Limited have also been
included in the merger relief reserve.
Capital Contribution
Includes the value of shares gifted to the Team17 Employment Benefit Trust on 23 May 2018 as part of the IPO.
13. Share Based Compensation
Please see note 21 in the consolidated Team17 Group plc consolidated financial statements for further information on
the share based compensation charge in the year.
14. Related Parties
Transactions with Key Management Personnel
The key management personnel of the Group are deemed to be the board of directors and details of their aggregate
remuneration can be found in note 6. Mark Crawford was appointed in November 2019 to act as Interim CFO. During
the year £80,000 (2019: £33,000) was paid to Stratfield Fairlane Ltd for his services prior to joining the Group as
permanent CFO in April 2020 under an employment contract.
15. Pensions
The Company operates a defined contribution scheme for its directors and employees. The assets of the scheme are
held separately from those of the Company in an independently administered fund.
The outstanding pension contributions at 31 December 2020 were £Nil (2019: £Nil).
16. Ultimate Controlling Party
At 31 December 2020 there was not considered to be a single ultimate controlling party of Team17 Group plc.
Team17 Group plc
Annual Report and Financial Statements 2020
84
GROWING OUR BACK
CATALOGUE OF GAMES
▲
Announced for 2021
> Honey I Joined a Cult
> Hokko Life
> Narita Boy
> Greak: Memories
of Azur
> King Of Seas
> Super Magbot
> Rogue Heroes:
Ruins of Talos
> Epic Chef
▲
Recent Launches
2020
> Main Assembly
> Moving Out
> The Survivalists
2019
> Yooka-Laylee
Impossible Lair
> Golf With Your Friends
> Neon Abyss
(console version)
> Blasphemous
> Overcooked! All You
> Hammerting
> Ageless
Can Eat
> Crown Trick
> Going Under
> Hell Let Loose
> Worms Rumble
> Genesis: Alpha One
> Automachef
> Monster Sanctuary
▲
Our Back
Catalogue
1991
> Full Contact
> Alien Breed
2001
> Worms World Party
> Stunt GP
2002
> Worms Blast
> Worms for Sky Digital
2003
> Worms 3D
2004
> Worms Forts:
Under Siege
2005
> Worms 4 Mayhem
2006
> Worms Open Warfare
> Lemmings
> Army Men:
Major Malfunction
2007
> Lemmings
> Worms Open
Warfare 2
2008
> Worms: A Space
Oddity
2009
> Leisure Suit Larry:
Box Office Bust
> Worms 2:
Armageddon
> Alien Breed Evolution
2010
> Alien Breed: Impact
> Worms Reloaded
> Alien Breed 2: Assault
> Worms Battle Islands
> Alien Breed 3: Descent
2011
> Worms Ultimate
Mayhem
> Worms Crazy Golf
2012
> Worms for Facebook
> Worms Revolution
1992
> Project-X
> Assassin
> Alien Breed
Special Edition
1993
> Superfrog
> Body Blows
> Alien Breed II: The
Horror Continues
> F17 Challenge
> Overdrive
1994
> Arcade Pool
> Alien Breed:
Tower Assault
> Ultimate Body Blows
> Apidya
> Super Stardust
1995
> All Terrain Racing
> Alien Breed 3D
> Kingpin: Arcade
Sports > Bowling
> Worms
1996
> X2
> Worms
Reinforcements
> The Speris Legacy
> World Rally Fever
> Alien Breed 3D II:
The Killing Grounds
1997
> Worms: The
Director’s Cut
> Worms 2
1998
> Nightlong: Union
City Conspiracy
> Addiction Pinball
1999
> Worms Armageddon
> Phoenix
> Arcade Pool 2
2000
> No new launches
2013
> Alien Breed HD
> Superfrog HD
> Worms Clan Wars
> Worms 3
2014
> Worms
Battlegrounds
> Flockers
> Light
> The Escapists
> Overruled!
> Schrodinger’s Cat
and the Raiders
of the Lost Quark
> Hay Ewe
2015
> LA Cops
> (R)evolve
> Worms World Party
Remastered
> Beyond Eyes
> Sheltered
> The Escapists:
The Walking Dead
> Penarium
> Worms 4
2016
> OlliOlli2: XL Edition
> Not A Hero:
Super Snazzy Edition
> 10 Minute Tower
> Overcooked!
> Worms WMD
> Lethal VR
2017
> Yooka-Laylee
> Aven Colony
> Interplanetary:
Enhanced Edition
> The Escapists 2
2018
> Forged Battalion
> My Time At Portia
> Raging Justice
> Yoku’s Island Express
> Mugsters
> Overcooked! 2
> Sword Legacy: Omen
> Planet Alpha
> The Room
> Sheltered
Team17
3 Red Hall Avenue,
Paragon Business Park,
Wakefield, WF1 2UL
www.team17group.com