EXPANDED FOOTPRINT
DELIVERING GROWTH
Team17 Group plc
Annual Report and Accounts 2022
Team17 Group plc is a global games label, creative
partner and developer of independent (‘indie’)
premium video games and developer of educational
entertainment (‘edutainment’) apps for children
and a leading working simulation games developer
and publisher.
We are a leading video games label and creative
partner of own IP and third-party developer IP
helping to develop and publish genre agnostic
games to a wide age range of players globally.
Strategic Report
Corporate Governance
Group Financial Statements
01 Highlights
02 Chair’s Statement
29 Corporate Governance Statement
42 Independent Auditor’s Report to the Members of
33 Board of Directors
Team17 Group plc
04 Group Chief Executive Officer’s Review
34 Audit Committee Report
08 Group Strategy and Business Model
35 Remuneration Committee Report
10 Our Portfolio
39 Directors’ Report
16 Chief Financial Officer’s Review
20 ESG Report: People First
22 ESG Report: Our Impact on the
Environment
24 Principal Risks & Uncertainties
26 Section 172 Statement
50 Consolidated Statement of Profit and Loss
51 Consolidated Statement of Comprehensive Income
52 Consolidated Statement of Financial Position
53 Consolidated Statement of Changes in Equity
54 Consolidated Statement of Cash Flows
55 Notes to the Consolidated Financial Statements
Company Financial Statements
85 Company Statement of Financial Position
86 Company Statement of Changes in Equity
87 Notes to the Company Financial Statements
Team17 Group plc operates across three distinct divisions:
StoryToys
Edutainment
Team17 Games Label
Indie Games Label
astragon
Working Simulation
Team17 Group plc
Annual Report and Accounts 2022
Highlights
A year of progress
Revenue
£137.4m
(2021: £90.5m)
Gross Profit
£69.6m
(2021: £45.5)
Gross Profit Margin
51%
(2021: 50%)
Profit Before Tax
£28.7m
(2021 £29.1m)
Adjusted Profit Before Tax*
+52%
+53%
£47.1m
(2021: £35.0m)
Adjusted EBITDA*
£48.8m
(2021: £35.8m)
Adjusted Earnings per Share*
+1pps
27.8p
(2021: 22.1p)
Operating Cash Conversion*
-1%
108%
(2021: 101%)
Basic Earnings per Share
Cash and Cash Equivalents
16.5p
(2021: 18.3p)
-10%
£50.8m
(2021: £55.3m)
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+35%
+36%
+26%
+7%
-8%
2022 Operational Highlights
> Completed three strategic acquisitions in
January 2022 – Hell Let Loose (‘HLL’) (IP and
assets), astragon (‘working’ simulation games)
and The Label (USA-based indie publisher).
> Organic underlying like for like revenues grew
Post Balance Sheet Events
> StoryToys extended commercial agreements
with existing partners and signed new license
agreements with major global children’s
entertainment and toy companies, Mattel,
and Sesame Workshop.
3% to £93.2m (2021: £90.5m) with an additional
£44.2m in revenue from the business acquisitions
completed over the last 18 months.
> Games Label’s FARMSIDE, published by
Team17 USA in FY22, was subsequently
launched by Apple Arcade in February 2023.
> On 28 March 2023, Debbie Bestwick MBE
announced her intention to step down from
her position as Chief Executive once a suitable
successor has been found and then transition to
a Non-Executive position on the Board.
> On 28 April 2023, astragon completed the
strategic acquisition of the German games
development studio Independent Arts
Software GmbH.
> Group’s own IP now represents 41% of total
revenues (2021: 22%) benefiting from the
acquisition of HLL and astragon’s own IP
working simulation portfolio.
> Team17 Games Label’s owned and third-party
IP portfolio continues to grow, delivering over
700 digital revenues lines (2021: c.500).
> StoryToys saw continued growth in payable
active subscribers which now exceed 300,000
(2021: over 180,000).
> astragon delivered one major own IP new title
release with Construction Simulator launched in
Q3, breaking astragon’s all-time own IP day one
concurrent users record on Steam.
> Strengthened Group senior leadership team
with the addition of Julia Pfiffer and Tim
Schmitz, joint CEOs of the astragon business.
> Group headcount grew to 392 at year end
(2021: 265) with 53 joining as a direct result
of the acquisitions.
* Alternative Performance Measures
The Directors believe that these measures provide meaningful additional
information to support the statutory financial information and provide an
understanding of the underlying business trading performance and profitability.
Definitions can be found in the Chief Financial Officers Report.
Annual Report and Accounts 2022 01
Team17 Group plc
Chair’s Statement
“ We are privileged to have a
hugely talented and vibrant
senior management team
working closely together
to deliver on our strategic
ambitions.”
Chris Bell
Chair
18
new releases in total
across the Group in 2022
“ As expected with Team17, our people have
played a pivotal role in delivering these
results, and I would like to personally
thank all our team members across
the Group.”
I am pleased to report that Team17 Group plc has continued
its growth trajectory across FY22, underpinned by a
combination of organic growth initiatives and the positive
impact from the acquisitions of StoryToys, astragon, and
Team17 USA (formerly The Label).
As expected with Team17, our people have played a pivotal
role in delivering these results, and I would like to personally
thank all our team members across the Group for their
outstanding contribution to our business over the last 12
months. Our senior teams have worked tirelessly to bring
our expanded family together under one roof and I’m pleased
to say that they have all settled well into the business.
It is the unwavering focus on our core business objectives
that has enabled the enlarged Group to deliver such a strong
financial performance, with revenues for the period up 52%
to £137.4m (2021: £90.5m) and an increase in Adjusted
EBITDA to £48.8m (2021: £35.8m), both ahead of market
expectations, as highlighted in the trading update announced
in January 2023.
We are privileged to have a hugely talented and vibrant
senior management team working closely together to deliver
on our strategic ambitions. Our continued investment in the
business since our 2018 IPO has enabled us to expand both
operationally and on a global scale. We now operate across
7 regional hubs, supporting activities that span multiple
gaming genres, platforms, and demographics. The Team17
Games Label (‘Games Label’) has expanded at pace and
our commitment to producing high quality content remains
the cornerstone of our business strategy.
development, retention, and succession planning are all key
areas of focus, and it is this ongoing emphasis on people-
focused forward planning that enables us to attract and
retain the right talent to deliver on our strategic ambitions.
We have also undertaken an internal Board review in 2022
alongside ongoing succession planning at the senior
management level and subsequently identified specific
areas to focus on throughout the coming year.
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Our forward-looking, community-focused approach also
flows into our ESG and responsible business commitments.
Our green initiatives are driven by an employee-led Green17
group first established in 2020, and in 2022 we adopted the
Greenhouse Gas Protocol to guide our emissions disclosures.
We continue to evaluate our environmental management
and reporting systems and recently established a new ESG
Board Committee to be led by Penny Judd, one of our
Independent Non-Executive Directors, which will increase
the visibility and focus on these important matters going
forwards.
The Group has made a solid start to 2023, carrying on
our positive momentum and underpinning the Board and
management team’s confidence in our ability to deliver
on our strategic ambitions.
As outlined in the early part of 2022, the Group has very
limited operational and financial exposure to both Ukraine
and Russia, and despite the uncertain macroeconomic
backdrop, the Board believes the associated geopolitical
uncertainty is unlikely to have a material impact on Group
performance.
Under the expert guidance of Debbie Bestwick MBE and the
broader senior team, the evolution of the Group has been
marked. Our investment in the core business has seen us
expand the Games Label, which controls a content portfolio
comprising over 700 digital revenue lines, acquired two
successful third-party titles to add to its own IP portfolio
over the last two years, and now also includes Team17 USA
acquired in January 2022. The Games Label is actively
exploring future opportunities to fully exploit mobile
subscription channels, be this through expanding its existing
model via additional third-party titles or leveraging existing
Team17 IP.
As previously reported on 28th March 2023, Debbie Bestwick
MBE announced her intention to step down from her position
as Chief Executive once a suitable successor can be found
and then transition to a Non-Executive position on the
Board. On behalf of the Board and the Company, I would
like to thank Debbie for her absolute devotion to Team17
and know that without her almost limitless enthusiasm for
the business, we simply would not be where we are today.
We all collectively wish her the very best in all her future
endeavours and look forward to continuing to benefit from
her unrivalled knowledge when she joins the Board as a
Non-Executive Director.
On behalf of the Board of Directors, I would like to thank
every member of the individual teams across the Group for
their unwavering dedication to our business during 2022. The
significant operational progress we deliver year after year
continues to underpin our ambitions to further extend our
reach across the international digital entertainment arena.
Chris Bell
Chair
18 May 2023
StoryToys, our world-class developer and publisher of
educational entertainment apps for children, that was
acquired in July 2021, continues to benefit from being part
of a larger group and is being supported to accelerate its
own growth ambitions. Acquired in January 2022, astragon,
our sophisticated ‘working’ simulation games division, has
enabled Team17 to broaden our reach into a highly prized
segment of the games arena, delivering iconic own IPs, the
Firefighting, Police, Bus Simulator games, and launching
the latest update to its largest title, Construction Simulator.
All these pleasing performances are, of course, underpinned
by the exceptional talent of our people which continues to
grow with the addition of new talent as a direct result of the
acquisitions. As a Board, we are keenly focused on ensuring
the Company creates the ideal working environment to
nurture talent, alongside ensuring our remuneration policies
align with those of our peers. To this end, our ‘Employee
Benefit Trust’ has ensured all our UK and European
team members are offered the opportunity to become
shareholders in the Company with free share options, and
our Reward & Recognition and Employee Engagement
internal surveys have provided invaluable feedback to
ensure our teams feel connected to the business. Career
02
Team17 Group plc
Annual Report and Accounts 2022
Annual Report and Accounts 2022 03
Team17 Group plc
Group Chief Executive
Officer’s Review
“ 2022 was unquestionably a
transformational year with a strong
performance for the Group. Personally,
I feel it was characterised by the delivery
of our highly selective M&A strategy,
alongside our team’s successful lifecycle
management across our portfolio. Last
year we collectively focused in on our
long-term strategy on a division-by-
division basis and doubled down on
future pipeline roadmaps.”
Debbie Bestwick MBE
Group Chief Executive Officer
Construction Simulator
delivered highest new
release title revenue
for the Group in 2022
“ It’s a privilege to work with the leadership
team within the Group, as well as their
individual teams; they are passionately
committed to the Group’s values, core
business model, and future ambitions.”
Introduction
2022 marked our fifth year as a listed company, our eighth
consecutive year as a growth business and a little over a
decade since I stepped up to take the reins as CEO after
completing an MBO of the company then known as ‘the
people who made Worms’. We are proud of our long-term
track record of consistent growth, and specifically since
listing on AIM, with revenue and adjusted EBITDA now more
than 200% of the levels recorded in 2018, with compound
average growth rates over that time of 34% and 33%
respectively.
Today we are unrecognisable from the company a decade
ago and I’m very proud of what we have collectively
achieved in that time. I want to take the opportunity to
thank all our people and development/business partners
for their fantastic support since our IPO and over the last
decade. Both myself and the leadership team across the
Group have never taken that support for granted. We now
have one of the strongest leadership teams in the games
sector and it’s a privilege to work with every one of them.
More than ever they are wholly focused on delivering upon
our collective ambitions and growth plans, while remaining
true to our Group core values.
2022 was a transformational year for the Group. In January,
we completed our strategic business acquisitions of astragon,
The Label (USA) alongside acquiring the HLL IP. This intense
period of M&A activity at the beginning of the year, building
on the two acquisitions in the prior year, would not have
been possible had it not been for the investment in people
within Team17’s Games Label and strength and resilience of
our existing back catalogue and proven track record in
integrating previous acquisitions. Our internal structure has
been transformed with a strengthened senior leadership
team, additional divisions and technological capabilities,
and a reinvigorated, ambitious vision for the future rooted
in the overarching synergy of our company culture and
core values.
Following a solid performance in the first half of the year,
primarily driven by the back catalogue portfolio performance,
in a heavily weighted second half of the year, the Group
released ten new games as well as six existing games
launched onto wider platforms from the Games Label and
astragon as planned. I’m pleased to report the Group has
maintained its consistent record of outperforming prior
years and delivering improved levels of revenue and adjusted
EBITDA with another record year.
The Group benefited from positive contributions from all
three of its Q1 2022 acquisitions as well as the additional first
half impact of StoryToys (acquired in July 2021), generating
total revenues up 52% to £137.4m (2021: £90.5m). Of this
£93.2m came from existing business on a like for like basis
and an incremental £44.2m from business acquisitions.
Gross profit increased by 53% to £69.6m (2021: £45.5m),
and adjusted EBITDA grew 36% to £48.8m (2021: £35.8m).
Despite allocating significant capital to fund M&A activity in
early 2022, the Group continues to enjoy a strong balance
sheet, ending the year with cash and cash equivalents of
£50.8m (2021: £55.3m). Management will seek to continue
to leverage the highly cash-generative nature of the business
to drive further organic growth across all Group divisions
and continues to evaluate selective M&A targets.
We have been particularly delighted to welcome on board
our new divisional CEOs, all of whom are experts in their
respective fields and bring a wealth of knowledge from
across the breadth of the digital entertainment industry.
The Group’s total headcount as at 31 December 2022 stood
at 392 team members (2021: 265) which includes 53 as a
result of the acquisitions in 2022 and 74 new team members
added across the Group during the period. Overall, the
headcount has grown by 48% on FY21 and boasts a first-
class blend of skills and experience that will be vital in
enabling us to execute on our ambitious growth objectives
moving forwards.
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In addition to expanding our talent pool and diversifying our
customer offering, the acquisitions have significantly grown
Team17’s international footprint, with hubs now in Dublin,
Germany, Canada, and the US, working alongside our existing
UK studios in Wakefield and Manchester and commercial
hub in Nottingham. This rapid growth is a testament to the
success of our model, experienced leadership, and the
resilience of the global digital entertainment industry
despite a challenging macro environment.
As we move further into 2023, our emphasis will remain on
supporting our business teams to continue to scale and
develop excellent first and third-party IP whilst leveraging
the collective knowledge and experience of the Group’s
internal structure to grow their businesses organically
and continually evaluate selective M&A opportunities.
Additionally, with the integration of the acquisitions now
largely complete, we look forward to turning our focus to
sharing best practice on development, title launches, life
cycle management and exploiting synergy opportunities
across the Group as the divisions continue to flourish both
as businesses in their own right, and as integral components
in the underlying fabric of the Group.
Our Key Business Priorities
Despite the Group’s transformation in the last 12 months,
the core pillars of our business model, which have enabled
us to deliver the excellent results we have seen over the last
five years, remain unchanged. As a team, we are as keenly
focused as ever on delivering on our collective business
priorities:
• Maximising the benefits of the Group’s structure
through each of our new business divisions to expand
our reach, strengthen our pipelines, and develop our
strategic partnerships with platforms, license partners
and developers;
• Leveraging Group footprint and synergy opportunities
to drive long-term organic growth;
• Expanding our audience by continually improving the
quality and diversity of our content portfolio;
• Investing further in our underlying Group infrastructure
to accelerate the performance of our business divisions
and support our overarching growth ambitions;
• Maintaining our core focus on promoting our ‘People
First’ Company culture and nurturing our next
generation of in-house industry expertise; and
• Routinely evaluating selective M&A opportunities to
support the future growth of the Group.
04
Team17 Group plc
Annual Report and Accounts 2022
Annual Report and Accounts 2022 05
Team17 Group plc
Group Chief Executive
Officer’s Review continued
Operational Review
The Games Label continues to demonstrate the strength of
Team17’s signature expertise in back catalogue management.
Year-on-year growth has been consistently strong – a
testament to the success of our industry-leading approach
to lifecycle management. The Games Label released eleven
new games alongside three existing titles released on wider
platforms in the year. New games included the eagerly
anticipated Marauders and Thymesia, along with additional
content and updates for the popular Hell Let Loose, and
Golf With Your Friends franchises.
Following the integration of Team17 USA the Games Label is
actively seeking opportunities to leverage its wealth of
in-house knowledge in subscription-based mobile gaming
to launch existing Team17 IP on mobile platforms, as well as
additional third-party titles. Team17 USA has itself delivered
its planned core updates release schedule, with the latest
Wimblegolf update for What the Golf? gaining particular
traction.
astragon has performed exceptionally well in its first year as
part of the Group, driving further sales momentum from
own IP titles, including the popular Construction Simulator
and Police Simulator: Patrol Officers, amongst others.
Physical distribution remains an important revenue stream
across astragon’s portfolio with titles such as Farming
Simulator continuing to experience significant customer
adoption in Germany.
In the second half, astragon launched the latest version of
its best-selling own IP title Construction Simulator, as well
as Bus Simulator: City Ride on mobile and Switch – the first
mobile launch for the franchise. In addition, it released
Police Simulator: Patrol Officers on consoles following its
initial launch in 2021 on Steam’s Early access. Firefighting
Simulator – The Squad, which was first launched in 2020 on
PC, was also released on console towards the end of the year.
FY22 sees StoryToys’ first full-year contribution to the
Group as a fully embedded business division. We have been
delighted to see active subscribers and subscriptions
revenues flourish in the period, thanks in part to strong
traction for LEGO DUPLO® Marvel, first released in FY21,
and the Hulk and Iron Man updates that have launched
following the initial release. As previously announced, the
extension of StoryToys’ contract with LEGO Group to
produce multiple future apps has helped to further
strengthen this successful partnership for the business.
StoryToys’ remains focussed upon nurturing its strategic
brand relationships to continue to build out its portfolio of
apps and deliver the highest quality possible for its young
audience going forwards.
Our People
As ever, our people are at the centre of everything we do.
Following the disruption of the Covid pandemic over the
past two years, FY22 represented the first financial year
largely unaffected by lockdowns and social distancing
measures. While we have been delighted to welcome our
people back into offices both here in the UK and overseas,
we remain sensitive to the wishes of some colleagues to
continue to embrace hybrid and remote working, recognising
the benefits this flexibility presents to the business.
Within the Games Label, a review has recently been initiated
to re-align the UK studio operating business model to ensure
it is equipped to meet fluctuating work demands, and the
continually evolving needs of our development partners
and growth in own IP, remaining agile and cost effective.
Whilst any impact to headcount in specific roles is expected
to be minor, where possible we will look to identify other
opportunities for individuals within the wider Group.
Investing in and developing our people has always been a
priority for the Group. With our expanded headcount and
senior leadership team, we have an excellent platform
upon which to continue to grow our team’s skill sets and
accelerate professional development across the Group
to nurture our next generation of industry experts.
Competition to recruit and retain talent has always been
competitive in gaming, and, like our peers, Team17 Group
has not been immune to the higher levels of attrition. The
levels we experienced and that peaked towards the end of
2021 were a direct function of industry pressure. We have
taken considerable steps over the last twelve months to
increase our engagement with our people and act on their
feedback, implementing a number of initiatives to ensure
the Group remains an exciting and attractive place to work.
The Group headcount now totals 392 (2021: 265), and we
were pleased to see attrition remain below market levels
in FY22.
As announced in March 2022, following the acquisitions we
introduced a Group-wide employee free share award using
our existing Employee Benefit Trust (‘EBT’). This is currently
open to every UK and European member of our team so
that they can become a shareholder and benefit from joining
us in our journey as we grow the value of the Group over time.
We will continue to externally benchmark our employee
remuneration and benefits package to further incentivise
and retain our talented teams.
LEGO®, DUPLO®, the LEGO logo and
the DUPLO logo are trademarks and/
or copyrights of the LEGO Group.
©2022 The LEGO Group. All rights
reserved. © 2022 MARVEL
06
Team17 Group plc
Annual Report and Accounts 2022
Games Label
Top 5
Hell Let Loose and Golf With
Your Friends both in top five
titles by revenue in 2022
StoryToys
>300,000
active payable subscribers
As a Group, we have been particularly proud of the strides
we have made in furthering our collective Diversity, Equality
& Inclusion (‘DE&I’) agenda over the last year. Change starts
at the top, and we are delighted that both our expanded
senior leadership team and Board of Directors have a
balanced male and female representation. Recognising the
importance of creating community spaces for our people
to connect and socialise, we have established a number of
popular employee-led groups. We believe these groups will
play a vital role in helping to instil an overarching culture of
collaboration and inclusivity across the Group’s divisions
and look forward to seeing them continue to thrive in the
years to come.
Green initiatives have also been at the forefront of our ESG
strategy. Green17, an employee-led group established in
2020, meets monthly to promote and address environmental
issues and we are now spreading this initiative across our
businesses within the Group, supply chain partnerships, and
customer base. Improving disclosure in this area has been a
particular focus, and our emissions reporting is calculated
using the Greenhouse Gas Protocol, a standard defined by
the World Resources Institute and World Business Council for
Sustainable Development (‘WRI’ and ‘WBCSD’).
Market Overview
During 2020 and 2021, the global games market continued
to see year-on-year growth despite the marked macro
challenges and supply-chain constraints presented by the
pandemic. In FY22, according to the NewZoo Global Games
Market Report January 2023, the overall games market
declined by 4%, with global revenues down from $193bn
to $184bn. While pandemic headwinds gradually subsided
during 2022, including pressures associated with the
global chip shortage, we remain mindful of the continuing
macro socio-economic uncertainty, particularly given the
considerable rise in the cost of living, both in the UK
and abroad.
As a developer and publisher of mid-price games and apps
that combine our signature high-quality with excellent
customer value, we believe Team17 is uniquely placed to
weather the challenges posed by the inflationary pressures
seen in 2022 and anticipated to extend further into 2023.
Unlike many of our peers who employ premium pricing
strategies, at Team17 we have worked hard to ensure our
portfolio has remained inclusive and accessible to our
broad customer base, which has in turn helped to build
further resilience into the business. The gaming sector has
historically performed well during economic hardships, but
we do not take the loyalty of our customers for granted and
continue to work hard to create engaging content.
Team17’s growing subscription revenue model, particularly
in StoryToys, is also expected to help insulate the business
from cost-of-living related headwinds, with subscription-
based products offering consumers an attractive way to
manage discretionary spending and spread costs on a
monthly basis at a time when disposable income is under
pressure.
Outlook
FY22 represented an inflection point for Team17 with all
acquisitions now embedded in the Group and performing
well, alongside Team17 Games Label. We enter 2023
confident in our growing back catalogue portfolio as well
as our pipeline of new releases and updates, both of which
provide a diverse and stable platform for growth.
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Post year end StoryToys signed new licence agreements;
LEGO® DUPLO® DISNEY Mickey and Friends, entered into
a new agreement with Mattel for multiple future titles,
extended their agreement with Marvel Entertainment to
include a new Marvel HQ hub and signed a new agreement
with Sesame Workshop. All of this helps to support their
growth ambitions to diversify and broaden the licence base
and will deliver some initial benefit in 2023, but like all their
apps, lifecycles will add greater upside in future years’ value.
Games Label’s FARMSIDE, published by Team17 USA in
FY22, was launched by Apple Arcade in February 2023
with solid top 5 engagement levels based on week one
early game session levels and a 4.2 out of 5-star rating. This
year will also see the sequels to Blasphemous and Moving
Out (both original titles have already surpassed seven
figure unit sales levels) along with an exciting and diverse
new IP line up including the titles Gord, Trepang 2, Dredge
and many more.
astragon will introduce a number of season passes to select
owned IP within their niches and bring much in demand high
quality DLC during 2023; alongside expanding their
third-party label and bringing new IPs to market in future
years.
Management continues to review and assess potential
acquisition opportunities looking at both title IP and
businesses that fit within the Group from a financial and
importantly cultural fit as identified through its now tried
and tested M&A due diligence process.
Over the last year our exceptional senior leadership teams
have worked incredibly hard to integrate Team17’s three
business divisions into the Group family we see today. Going
forwards, management’s primary focus is on leveraging our
expanded talent base, industry reach, and technological
capabilities as well as capitalising on sharing best practice
and synergy opportunities that now present themselves.
I would like to thank all the individual teams across the
Group for their outstanding contributions and commitment
to the business, without which, the success we experienced
in FY22 simply would not have been possible. I look forward
to seeing the Group continue to move from strength to
strength as we work together to execute on our ambitious
growth strategy for 2023 and beyond.
Although we have no influence over the global macro-
economic factors having an ongoing impact in the world
through 2023, we remain cognisant of these factors and
collectively as a Group will continue to focus on what we can
control within our business and look forward to continuing
the focus on delivering great gaming experiences for our
customers and in turn delivering increased shareholder value.
Debbie Bestwick MBE
Chief Executive Officer
18 May 2023
Annual Report and Accounts 2022 07
Team17 Group plc
Group Strategy and Business Model
A Unique Portfolio Driven Growth Engine
Our Business Model Applies Across the Group
Team17’s Expanded Global Footprint
Seamless implementation across the Group
whether creating our own IP, working with third
party development partners or developing app
IP under global brand licence agreements.
Expertise acquiring complementary businesses
to expand our core model, and both broaden
our IP portfolio and age appeal of our titles.
Groupwide Strategic Priorities
Maintain Market
Leading Positions
Broaden IP/License
Portfolio Assets
> Leader across niche
> ’Greenlight’ process
> Own IP creation
> Grow global licences
> Ongoing IP investment
markets
> Attract & retain talent:
– Team members
– Licence partners
– Developers
> Consistency drives
success
Leverage Skills &
Capabilities to
Drive Growth
> Share lifecycle
management skills
> Monetise partner
relationships
> Broaden platform
approach from apps
to console
Allocate Capital into
Dev & M&A Investment
> Future pipeline
underpinned by
development investment
> Grow profitable own
IP portfolio
> Enlarged verticals
through business
acquisitions
> Leverage shared services
Hub Offices
Developer Partner Locations
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7
Global hub
locations
392
Group headcount
(31 Dec 2022)
+90%
Proud to work for
their business*
* Recent engagement surveys
in Games Label & StoryToys
Streetsmart Lifecycle Management
Streetsmart Lifecycle Management continued
Our Approach
Maximising ROI
Portfolio Development
Portfolio Growth Engines
Enhances Shareholder Value
> Genre agnostic games and apps
> Agnostic platform approach
– PC /Console
– Mobile Streaming
> Monetisation channels
– Upfront premium
– IAP/Subscription
– PDLC
> Wide age range 2–60+ years
appeal
> Mix of own IP & third party
IP titles
> Established internal and external
development resource
> World class publishing and
lifecycle management capability
> Building broad evergreen
franchises across the Group
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Delivering high
quality product
to passionate
audiences
Influencer/
community
led launch
plans
Edutainment
Games Label
“ Specialists in
developing and
publishing
edutainment
games for pre-
school children
with licenced
global brands”
Maximising
ROI
“ Specialists in
developing and
publishing AA
and indie games”
Develop
‘evergreen’
franchises
with sequels
Market
penetration
via strong
platform
relations
Working Simulation
“ Specialist in own IP
working simulation
game development
and publishing”
Paid and
free
DLC releases
Street-smart
commercial
team manage
promotions
Identify IP
Create, Licence
or Aquire
Develop
IP Product
Incubation
Enhance
IP Product
Improvement
Publish
Go-to-Market
Execution
Extend
Lifecycle
Management
> Building portfolio value over time:
– Content pipeline development
– Lifecycle management and
DLC packs
– Monetising broadening
platform base
– Extending the customer age
range/genres
> Portfolio now reflects a range
of app/game lifecycle profiles
> Not “hit driven” and growing
over time
> Continuous growth, with best
in class profitability and cash
generation
> Diversified back catalogue with
extended lifecycle management
delivering growth
> Highly de-risked portfolio
business model
> Low investment, high ROI
> Unique combination of
development and publishing
capabilities attract best talent
and partners
Cumulative Group Portfolio Growing Since IPO
StoryToys, The Label and astragon
mostly impacted in 2022
Back Catalogue
Additions to Back Catalogue
Aquired Back Catalogue
New Release
Acquired Company New Release
2018
2019
2020
2021
2022
Annual Report and Accounts 2022 09
Team17 Group plc
Hear more about
the business from
the team
“ Your child can have the time
of their life playing this game
if they’re a big fan of anything
Disney and Pixar! Great for
kids on their iPads.”
Disney Colouring World
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StoryToys / Edutainment
StoryToys is a world-class developer
and publisher of educational
entertainment apps for children
We bring the world’s most popular characters, worlds,
and stories to life for children, making apps to help
them learn, play, and grow.
> Our apps enable children to enjoy
fun screen time while developing
healthy digital habits at a young age
> Our best-in-class interactive
experiences are created by a
diverse team of writers, artists,
musicians, programmers, and
designers
> We bring magical worlds to life,
sparking curiosity and stimulating
imagination at the touch of a
fingertip through engaging digital
activities
Licensing
Our track record ensures we are
children’s brands’ first choice when it
comes to meaningfully extending
their toy, film, or literary content into
the digital domain.
We are actively expanding and
strengthening our licensing
partnerships, and have already
licensed content from key brands,
including: The LEGO Group, Disney,
Pixar, Marvel Entertainment, Penguin
Books, and Dick Bruna.
Strategy
We carefully select and develop
our brand partnerships, building an
ecosystem of highly complementary
apps to deliver excellent customer
value, grow our loyal user base, and
maximise revenue potential.
Revenue Model
We take a long-term approach to
product development, launching
apps as ‘Minimum Lovable Products’
and continuously adding new content
and features. As a result, initial
revenue is modest, but growth is
significant year-over-year.
Our apps are free to download and
comprise two revenue streams,
in-app purchases, and a growing
subscription model, which provides a
steady income source that increases
over time through renewals.
People
We are proud to have a highly
accomplished product team with
a proven track record of creating
exceptional children’s content.
Comprising c.60 talented individuals,
and largely based in Dublin, Ireland,
the team operates under a hybrid
working model.
+150m
downloads globally
+76%
increase in team size
+70%
subscription growth
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11
Hear more about
the business from
the team
Expanded own IP content
portfolio with the acquisition
of Hell Let Loose
Team17 Games Label / Indie Games Label
Team17 Games Label is a global
games label, creative partner and
developer of premium video games
Games Label
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We are a leading games publisher with a clear focus on
developing and launching the best and most eclectic indie
games to serve our players, whatever their gaming preferences.
We have launched a mix of internally developed and published
games across all major platforms. In addition to our in-house
IP, we are also a creative partner for independent developers,
providing end-to-end support in the game creation process,
and bringing more great games to a passionate audience.
Revenues
We seek to continually improve our
portfolio of high-quality game titles
by maintaining an active and varied
release schedule across our portfolio,
with over 120 games launched.
Maintaining this balance provides
a predictable revenue stream that
underpins the business. Back
catalogue titles, new releases, new
content for existing games, and
working with subscription partners
all drive the Games Label’s revenues.
Careful lifecycle management means
we can optimise revenues across all
lifecycle stages.
In 2022, Team17 USA was created
following the acquisition of The
Label, creating a platform with
expertise in developing and
subsequently monetising mobile
subscription titles. As well as bringing
new games to market, Team17 USA
is well positioned to leverage titles in
the Group’s back catalogue for the
mobile audience.
People
The heart of Team17 is its people.
The Games Label has grown to
include 292 talented and experienced
individuals hybrid-working across
three locations in the UK and one
in the USA, with a strengthened
leadership team in place boasting
>150 years of combined gaming
industry experience. All of us share a
passion for gaming and developing
engaging and captivating content for
our loyal customers.
Strategy
We continue to work with the
worldwide development community
to identify compelling new games
and help bring them to market. Our
publishing and studio teams support
our partners to make sure our third-
party titles find their audience and
maximise their commercial potential.
This is complemented by ongoing
support for our own IP, whether it be
launching new games, or releasing
new downloadable content for
existing games.
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Annual Report and Accounts 2022 13
Team17 Group plc
+150
years’ combined experience
in the gaming industry
amongst the leadership team
5
new releases with 80%+
Steam user scores in 2022
+700
digital revenue lines
Hear more about
the business from
the team
astragon has a diversified
business model with
own IPs, third-party
and distribution
astragon / Working Simulation
astragon is a leading developer, publisher
and distributor of sophisticated ‘working’
simulation games
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We are a leading games publisher, developer, and distributor
of working simulation games, targeting a broad audience from
young enthusiasts to technical experts and casual gamers. Next
to our own IP brands, we act as the go-to partner for third-party
publishing and title distribution.
Revenue Model
As well as income from game sales,
we follow up with free updates and
paid DLCs to continuously generate
new value from our content and drive
longer term revenues. The length of
the development cycle varies from
game to game. We launched our
first own-IP title over a decade ago
and continue to launch major new
instalments and updates to keep the
content engaging for our customers.
People
We are proud to have a highly skilled
team. Our leadership team alone
boasts over 124 years of experience
in the industry and our internal team
of 54 work alongside dedicated
development partners embracing
a hybrid working model, with the
central office based in Dusseldorf.
Our well-known IPs include
Construction Simulator, Police
Simulator, Bus Simulator and
Firefighting Simulator, all of which
focus on non-violent cooperative
gameplay with detailed, technical,
and realistic environments across PC,
console, and mobile devices.
Brand-Licensing
We work with leading brands to develop
engaging simulation games and are
constantly seeking to strengthen our
licensee relationships, with key partners
including household names such as
Caterpillar, Mercedes-Benz and Volvo.
Strategy
We remain focused on developing
engaging content to expand our
audience, strengthening our existing
IPs, and securing new licensing
partnerships. We recently launched
Railroads Online! into early access
from our third-party publishing
portfolio, demonstrating our
commitment to broadening our
operational reach and diversifying
our revenue base.
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Annual Report and Accounts 2022 15
Team17 Group plc
+60
global brand licence partners
4
own IP brands in portfolio
+124
years’ games industry
experience within our
leadership team
Chief Financial Officer’s Review
Transformational year with
the enlarged group delivering
a 52% increase in revenues
The organic underlying performance in the period from the
Games Label together with the second half contribution from
StoryToys (acquired July 2021) resulted in 3% growth with
combined like for like revenues of £93.2m (2021: £90.5m).
Overall, the resulting revenue for the Group was a very
pleasing performance against the backdrop of a games
market reported to have declined by over 4% in 2022
compared to 2021 according to the NewZoo Global Games
Market Report January 2023.
New release revenues were £38.8m (2021: £20.1m),
representing 28% of total Group revenues demonstrating
the continued additions to the Group’s portfolio with new
games introduced across the Group as well as existing titles
launched on wider platforms. The back catalogue continues
to grow and now benefits from the additions through the
acquired businesses, with revenues of £98.6m (2021: £70.4m),
representing 72% of total Group revenues.
Own IP titles represented 41% of total Group revenues in
the period (2021: 22%) which includes the Hell Let Loose
title that converted from third-party to own IP following the
acquisition in January 2022, alongside the own IP simulation
games within astragon. Four of the top five Group franchise
titles by revenue are now owned IP.
Gross Profit
Gross profit grew by 53% to £69.6m (2021: £45.5m), with a
slight increased gross margin percentage of 51% (2021: 50%).
Gross margin partly reflects the impact of royalty savings
after the acquisition of Hell Let Loose, now an important
part of the Group’s own IP portfolio, but also the addition
of the mix of margins across the divisions within the
enlarged Group. Year on year underlying movements in
gross margin are expected and result from the combination
of the sales mix between own IP, third-party IP and sales
channels, the age profile of the titles within our portfolio
and the ongoing support provided to titles post full launch
where costs are fully expensed.
The development pipeline has increased significantly in
FY22 combining new titles in production across the
divisions within the enlarged Group alongside ongoing
development of major new content updates. Notably, the
addition of astragon in January with larger development
costs for new own IP titles alongside its other own IP title
updates added additional development costs. As a result,
the total capitalised development costs in the period
increased to £26.0m (2021: £9.3m), and the underlying
Games Label development costs increased to £18.3m
(2021: £9.1m) reflecting a continued and growing
investment in the games development pipeline of the
division for future years’ growth.
“ We kick-started 2022 with the
acquisitions in January of astragon
and The Label, alongside the IP
of Hell Let Loose.”
Mark Crawford
Group Chief Financial Officer
Performance Overview
The Group has performed well in the last year against a
backdrop of a challenging macro-economic and competitive
market environment leading to Group results that exceeded
both management and market expectations. We continue
to focus on our core activities of identifying, developing
and publishing high-quality games. The Group now benefits
from the strength of the underlying Games Label, which
includes the recently acquired Hell Let Loose IP and The
Label, alongside StoryToys and astragon giving the Group a
wider and growing portfolio with owned and third-party IP
content appealing to all ages and genres across multiple
platforms and sales channels.
Revenue
With the addition of the acquisitions made in January 2022
and a full year contribution from StoryToys, the Group saw
revenues increase by 52% to £137.4m (2021: £90.5m) for
FY22. StoryToys contributed full year revenues of £10.9m
(2021: £4.2m post acquisition in July 2021) and astragon
delivered an impressive £33.9m (2021: £Nil). The Games
Label, which now includes Team17 USA, contributed
£92.6m (2021: £86.3m) in revenues. In total, £44.2m (2021:
£4.2m) incremental revenues came from the impact of
business acquisitions in 2022.
Revenues increased 52% to
£137.4m
Adjusted EBITDA
£48.8m
Capitalised expenditure on development costs supports
future growth through investment in the enlarged games
and apps pipeline. Team17’s amortisation policy means that
a high proportion of the capitalised development costs for
a title are written off in the 12 months after the title is
launched. The amortisation charge will vary year to year in
accordance with the timing and quantity of titles launched
alongside the level of development costs capitalised.
Administrative Expenses
Excluding the total acquisition related adjustments, costs
and amortisation included in administrative expenses of
£14.9m (2021: £4.5m), underlying administrative expenses
were £22.9m (2021: £12.8m), partly reflecting the enlarged
Group infrastructure. Of these, underlying costs of £16.2m
related to the like for like business cost base, representing
increases which were driven by a combination of three
factors 1) people cost increases driven by incremental
headcount, salary benchmarking and cost of living
increases 2) marketing costs to support title and content
update releases as well as attendance at global live events
which increased as pandemic restrictions relaxed and 3)
general inflationary pressures on other administration
costs. The balance of £6.7m (2021: £1.0m) resulted from the
incremental impact of the administration costs of the
businesses acquired.
Overall, the Group’s headcount has increased as a result
of additional investment in the Games Label as well as the
new business acquisitions and has therefore grown to
392 as of 31 December 2022 (2021: 265). This includes
53 additional team members directly resulting from the
acquisitions at the start of the year alongside a net increase
of 74 new team members across the Group throughout the
year. Average headcount for the Group increased by 33%
to 351 during the year (2021: 263).
Total Revenue £m
2022
2021
2020
Gross Profit £m
2022
2021
2020
Gross Profit Margin %
2022
2021
2020
47.0
90.5
83.0
45.5
39.1
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137.4
69.6
51.0
50.0
Alternative Performance Measures (‘APMs’)
The Directors believe that the reported APMs provide
meaningful performance information to aid the
understanding of the underlying business trading
performance and profitability. Although these are not
GAAP measures as defined by IFRS, they have been
applied to provide an accurate comparison as well as
provide readers of the accounts a clear understanding
of the underlying profitability of the business and more
consistent comparisons over time.
The Group remained debt free at the end of the year
(except for the lease liabilities included under IFRS 16).
A breakdown of the adjusting factors is provided in the
table below:
Adjusted EBITDA
Adjusted EBITDA, which excludes acquisition related
adjustments and fees, amortisation on acquired intangible
assets, share-based compensation, amortisation of
capitalised development costs and tax was £48.8m
(2021: £35.8m) which represents an increase of 36% year
on year. The Adjusted EBITDA margin, expressed as a
percentage of revenue, was 36% (2021: 39%), reflecting
the changes in revenues, gross margin and administration
expenses outlined above.
Profit Before Tax
Share Based Compensation1
Acquisition Related Adjustments
& Fees
Amortisation on acquired intangible
assets
Adjusted Profit Before Tax
Taxation (net of impacts on
adjustments)
Adjusted Profit After Tax
Adjusted Basic EPS2
FY22
£’000
FY21
£’000
28,665
29,109
(93)
1,004
9,206
1,580
9,339
3,307
47,117
35,000
(7,457)
(6,264)
39,660
28,736
27.8p
22.1p
1 Share based compensation includes employers national insurance contributions
due on the exercising of the share options
2 The calculation of adjusted earnings per share is based on the adjusted profit after
tax divided by the weighted average number of shares (either basis or diluted)
16
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Annual Report and Accounts 2022
Team17 Group plc
Annual Report and Accounts 2022
17
Chief Financial Officer’s Review
continued
Hell Let Loose IP was acquired
on 6 January for an initial
consideration of £31m
Adjusted EBITDA
Profit Before Tax
Finance costs (net)3
Depreciation
FY22
£’000
FY21
£’000
28,665
29,109
3,948
134
(including (gain)/loss on disposals)
1,085
760
Adjustments4
Adjusted EBITDA
15,076
5,842
48,774
35,845
3 Finance costs is the net of finance income and costs from the Statement of
Consolidated Income after deducting £2.3m (2021: £0.6m) of acquisition related
interest costs
4 Adjustments are defined as share-based compensation and all acquisition related
adjustments and fees as outlined in the adjusted PBT reconciliation above
Incurred non-cash share-based compensation credit of
£0.1m (2021: £1.0m charge) relating to options that were
granted to staff under a variety of schemes, which will be
satisfied by shares held in the EBT (outlined in the section
below on Share Issues). The credit balance reflects the
reduction in the national insurance accrual which is based
on the share price and number of outstanding share options
at the balance sheet date after the market correction in
2022 and 1.0m of options exercised in the year. The
combination of these factors has led to a reversal of the
accrual creating a negative charge for the year.
Acquisition related adjustments and fees affecting profit
include £9.2m (2021: £1.6m) of one-off costs directly
associated with the acquisitions. This is made up of
£0.9m (2021: £0.1m) of fair value movements in respect of
contingent consideration payments, £3.8m (2021: £Nil)
of management incentive payments linked to the strong
performance of the acquisitions in the year. In addition, it
includes £1.1m (2021: £1.4m) of acquisition costs and other
acquisition related adjustments and £3.4m (2021: £0.1)
relates to finance costs in respect of contingent
consideration.
Amortisation on intangible assets (excluding capitalised
development costs) increased by £7.0m to £10.3m
(2021: £3.3m) reflecting the significant increase in levels of
recent acquisitions made.
Operating Cash Conversion
Operating cash conversion was 108% (2021: 101%) and is
defined as adjusted cash from operations divided by EBITDA.
Cash from operations as per the cash flow statement is
adjusted by £1.0m (2021: £3.7m) for the effects of paying
pre-acquisition liabilities recognised at acquisition. Adjusted
cash generated from operations during the period was
therefore £57.2m (2021: £38.8m) and EBITDA was £52.9m
(2021: £38.5m).
Profit Before Tax
Profit Before Tax was £28.7m (2021: £29.1m), reflecting the
gross margin gains partially offset by increased operational
costs and acquisition-related costs that are required to be
taken through the profit and loss account, as outlined in the
table above. Adjusted Profit Before Tax, which adjusts for
items outlined in the APMs section above, increased in the
period by £12.1m to £47.1m (2021: £35.0m), representing a
35% increase year on year.
The tax charge decreased to £5.2m (2021: £5.4m), with an
effective tax rate after Video Games Tax Relief (‘VGTR’) of
18% (2021: 18%), also reflecting the impact of future tax rate
changes on deferred tax charges and the combined effect
of tax on profits from becoming an international Group.
Earnings Per Share (“EPS”)
Basic EPS was 16.5 pence (2021: 18.3 pence) reflecting the
impact of one-off acquisition-related adjustments and fees
(net of tax) of £8.0m (2021: £1.5m), described in the APMs
section above, as well as the increase in weighted average
shares resulting from the shares issued in connection with
equity placing in January 2022.
Basic adjusted EPS, which reflects the adjustments noted in
the APMs section and is calculated using adjusted profit
after tax was 27.8 pence (2021: 22.1 pence), representing an
increase of 26%.
Statement of Financial Position
Team17 continues to manage a strong balance sheet,
remaining highly cash generative with an operating cash
conversion of 108% (2021: 101%), and net cash inflow from
operations of £49.4m (2021: £31.0m). Overall, there was
a net decrease in cash and cash equivalents of £4.5m
(2021: £6.2m), taking into account payments for capitalised
development costs and acquisition payments net of funds
received as part of the share placing during the year.
Net cash and cash equivalents at 31 December 2022 were
£50.8m (2021: £55.3m) which included £3.0m (2021: £3.1m)
held in the Employee Benefit Trust (‘EBT’) which is used to
support employee share awards and incentivise Team17
team members. During the year, we updated our policy to
ensure that every UK and European team member of the
Group is offered free share options to enable them to
become shareholders.
The Board expects the Group to remain highly cash
generative in 2023 before any payments for any M&A
activity.
Goodwill and other intangible assets now total £234.1m
(2021: £81.3m) and are reviewed for indicators of impairment
annually. As at 31 December 2022, the net book value of
goodwill was £113.4m (2021: £41.4m), reflecting the addition
to goodwill associated with the acquisitions of The Label
and astragon of £66.0m (2021: £19.4m). Brands now
represent £63.8m (2021: £24.0m) through the addition
of the Hell Let Loose IP and the acquired businesses. The
current net book value of capitalised development costs at
year end is £26.8m (2021: £9.8m) through the addition of
£26.0m (2021: £9.3m) of capitalised development costs.
Acquisitions in the Year
As reported in January 2022, the Group completed three
strategic acquisitions:
On 6 January 2022, Team 17 Digital Limited acquired the
Hell Let Loose IP (all rights and assets) adding this existing
third-party title to the Group’s own IP content portfolio.
The cash element of the acquisition was funded from the
Group’s existing cash reserves. The Hell Let Loose IP has
performed well within the Group’s portfolio and resulted
in meeting the 2022 contingent consideration target with
the cash payment due in 2023. One final contingent
consideration payment remains linked to performance
targets relating to 2023.
Adjusted EBITDA* £m
2022
2021
2020
35.8
30.3
48.8
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Adjusted Profit Before Tax* £m
2022
2021
2020
Adjusted Earnings Per Share** p
2022
2021
2020
35.0
29.8
22.1
18.2
Adjusted Cash Generated from Operations* £m
2022
2021
2020
38.8
35.4
47.1
27.8
57.2
* The Group uses Alternative Performance Measures (“APMs”) to provide
a more valuable insight to the underlying trading performance of the
business which are not standard measures.
** The calculation of adjusted earnings per share is based on the adjusted
profit after tax divided by the weighted average number of shares (either
basic or diluted)
astragon acquired on
13 January for an initial
consideration of £63m
Also on 6 January 2022, Team 17 Digital Limited acquired
The Label, a USA based Indie publisher specialising in mobile
subscription games content to complement and become an
intrinsic part of the core Games Label. The cash element of
the acquisition was funded from the Group’s existing cash
reserves. In 2022, The Label met the first of three annual
contingent consideration targets and is due to be settled with
cash and shares payment in 2023, the remaining contingent
consideration relates to performance in 2023 and 2024.
On 13 January 2022, Team17 Group plc acquired astragon
Entertainment GmbH, a globally renowned publisher,
developer, and distributor of working simulation games,
based in Germany. The acquisition was funded directly
from the proceeds of a successful equity fund raise on
18 January 2022. In the first year of ownership by the
Group, astragon has delivered an outstanding performance
resulting in an elevated anticipated final earn out payment
and heavily first year-weighted Management Incentive Plan
award, both of which are due for payment in 2023.
Share Issues
At 31 December 2022, the Group’s issued share capital
comprised 145,593,271 ordinary shares of £0.01 each. A
total of 14,120,049 new shares were issued during the year
which included 972,727 shares issued for the exercise of
Debbie Bestwick’s IPO options, 2,136,323 issued as part of
the initial consideration made in shares for the acquisitions
of Hell Let Loose IP and The Label, as well as 11,010,999
ordinary shares placed at £7.14 per share to raise £78.6m
gross proceeds to support the acquisition of astragon.
A total of 313,500 share options were issued during the
year to the Executive Directors and the Team17 Games
Label CEO with a three-year vesting period with performance
criteria. A further 131,300 share options have been issued to
our people under a variety of schemes which will be satisfied
by shares held in the EBT.
The Group continues to manage a broadening Deferred
Bonus Share Plan for its senior management as well as a
Team17 Games Label All-Employee Share Incentive Plan
(‘SIP’), which is a UK employee SIP with matching shares,
and this continues to be well supported by the UK team
members making monthly contributions.
During FY22, all UK and European team members of the
Group were given the option to become shareholders
through share option grants with a three-year vesting
period. This scheme remains in place to be offered to all
new joiners as we continue to invest in growing our teams
across the Group. This scheme is funded by the EBT and
therefore does not result in the issue of shares to satisfy
the options.
Events After the Reporting Date
On 28 March 2023, Debbie Bestwick MBE announced her
intention to step down from her position as Chief Executive
once a suitable successor can be found and then transition
to a Non-Executive position on the Board.
As previously announced, on 28 April 2023 astragon
Entertainment GmbH completed the strategic acquisition
of 100% of the share capital of Independent Arts Software
GmbH, a games development studio based in Germany.
Details of these can be found in note 30.
Mark Crawford
Chief Financial Officer
18 May 2023
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Annual Report and Accounts 2022
Annual Report and Accounts 2022 19
Team17 Group plc
ESG Report: People First
The team remains
the heartbeat
of our business
Introduction
2022 marked the beginning of an exciting new chapter
in the history of Team17 Group plc. Following the
acquisitions of StoryToys and astragon, as well as the
expansion of Team17’s existing Games Label through the
addition of Team17 USA, Team17 now has three distinct
but complementary divisions each led by highly
experienced leadership teams sitting under an overarching
Group umbrella. We have been delighted to see these
businesses fully settle into the wider Group’s ecosystem
over the past year, with the significant rewards brought by
our enlarged operational footprint and extended audience
reach providing clear evidence of the sound strategic
rationale behind the acquisitions.
The integration of the teams from StoryToys and astragon
has been successfully completed, with the Group now
comprising 392 team members (at 31 December 2022)
based across 7 locations in 5 countries. Despite operating
from offices all around the world, our diverse and vibrant
team is united by a shared passion to deliver the highest
quality digital entertainment products to our increasingly
global customer base.
The Group supports all working set-ups – office based,
hybrid, and fully remote models – particularly following
the widespread changes to working patterns brought
about by the pandemic. On account of this, we have
renewed our emphasis on ensuring all team members feel
equally engaged and inspired, regardless of their set-up,
and on cultivating an inclusive, collaborative, and dynamic
working environment.
Top
Debbie Bestwick MBE and Mark Crawford
meet some of the StoryToys’ team in their
Dublin studio
Middle
Group of Teamsters enjoying
Team17 Fest 2022 in Nottingham
Bottom
Left: Police Simulator: Patrol Officers
booth at gamescom 2022
Right: Celebrating 5 years at astragon
Entertainment
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Team17 Group plc
Annual Report and Accounts 2022
The Games Label has produced a dedicated hybrid working
guide, empowering the team to make the flexible model
work for them, while providing helpful advice on optimum
home-working and office-working ratios to facilitate the
most effective performance for specific roles across the
division. Where possible, we encourage team meetings and
ideas sessions to be held in-person to make best use of
face-to-face time.
StoryToys invested in a new communications tool in 2022,
helping to ensure remote working set-ups do not impact
inclusion and communication within the team. Emmet
O’Neill, CEO leads monthly company meetings for all team
members, providing business updates and insights into
market trends, as well as celebrating both team and individual
successes. New product demos are also previewed in these
meetings, enabling the whole team to be involved in the
development process.
At astragon, the team organises daily departmental check-ins,
and there are monthly company-wide presentations and
town halls to maximise team engagement. Additionally, the
division holds quarterly in-person professional development
workshops, as well as weekly socials for the whole team.
astragon also hosts “office week” once a quarter, ensuring
all team members have the opportunity to engage and
interact in person.
Wellbeing and Culture
As a progressive, people-first employer, we firmly believe
that providing both physical and mental wellbeing support
to our workforce is an essential responsibility on the part of
the Group. To this end, we introduced a number of new
initiatives in 2022, which included Mental Health First Aider
training in partnership with Mind Fitness within the Games
Label. 14 members of the team volunteered for training and
are now qualified Mental Health First Aiders. They meet
monthly to discuss the ongoing provision of mental
wellbeing support to the wider team and identify any areas
for improvement, as well as organising bi-annual Mental
Health Awareness Keynote talks, which are proving
extremely popular.
As the Group’s operational footprint has grown, so too has
our focus on company socials as a means to connect team
members from all segments of the business in a relaxed
and informal setting, paving the way for stronger cross-
divisional ties as well as lifelong friendships. This year, the
Games Label hosted its inaugural Team17 Fest in Nottingham.
With a fantastic turnout of over 300 attendees, Team17
teamsters and their families enjoyed food, cocktails,
inflatables, live music and a silent disco. In the summer,
StoryToys organised a company BBQ in Dublin, and astragon
hosted summer and winter parties at its studio in Dusseldorf,
Germany. astragon also invited all team members on a trip
to the Phantasialand theme park and organised a company
party in Wiesbaden following the release of Construction
Simulator. Many other events were held over the course the
year, including Halloween pumpkin carving competitions,
numerous launch parties, and a celebration in recognition
of the Platinum Jubilee.
Our employee-led social activities continue to thrive; further
evidence of the vibrant and inclusive company culture that
is intrinsic to Team17’s core DNA and evident across the
various teams within the Group. A range of hugely diverse
social groups have been set up for everything from
boardgames and Warhammer to team cinema trips.
Attracting and Retaining Talent
We recognise the need to create and maintain an attractive
working environment in what is a highly competitive
landscape. To that end, we are constantly striving to attract
new people to Team17, as well as ensuring we are adequately
incentivising and retaining our exceptional existing talent.
We have seen our overall headcount increase by 74 at year
end, in addition to the 53 that joined at the start of the year
as a result of the acquisitions. Across the Group, we have
seen staff turnover return to pre-pandemic levels, and it
now sits below the industry average.
We continue to offer competitive salaries, benchmarked
against our industry peers, alongside market-leading perks
for our people, including an annual bonus scheme, inclusion
in the Company pension plan and an invitation to participate
in the Team17 Group Share Scheme, along with a lively
calendar of social events. Furthermore, across the enlarged
Group, we have established talent mobility schemes, enabling
our team members to experience other businesses and
locations across the breadth of our operational footprint.
We also place a strong emphasis on encouraging
professional development, seeking to support our people
to expand and bolster their skill sets to ensure Team17
remains at the cutting edge of gaming innovation. The
Group continues to implement a number of initiatives to
support our people’s career progression, including our
three-month management training programme, Kitbag,
which aims to furnish our next generation of leaders and
managers with the skills and tools to propel the business to
the next level. In 2022, 82 of the team were promoted
internally, representing 23% of the team at Team17 Games
Label, 11% within StoryToys, and 23% at astragon.
Several senior team members across Team17 hold positions
on external industry panels, further embedding Team17 at
the core of the industry as we consolidate our position
as a market leader in the digital entertainment sector.
Additionally, the Team17 Games Label continues in its role
as a corporate ambassador for Women in Games, an
organisation seeking to support, empower and celebrate
talented women working in the games industry.
Equality, Inclusivity and Diversity
Team17 firmly believes in inclusivity for all. We pride ourselves
on having created a nurturing and supportive culture that
brings together brilliant individuals from all walks of life in
a dynamic and empowering work environment. Our people
bring their own unique personalities, backgrounds, work
styles, and experiences to our business, which is in turn
reflected in the diversity of our customers and the audiences
we serve. As Team17 continues to grow and evolve, we
remain committed to further increasing representation
across the Group and harnessing the benefits of our vibrant
and diverse talent pool to drive even greater creativity
and innovation throughout all business divisions and
revenue lines.
At 31 December 2022, the Group comprised 26% female team
members, 72% male team members and 2% non binary. We
remain committed to continually improving gender balance
across the Group and are proud to see this reflected in our
Board of Directors and Group’s Senior Management Team,
both of which have an equal gender split.
As a progressive, people-first employer, we
firmly believe that providing both physical
and mental wellbeing support to our
workforce is an essential responsibility on
the part of the Group
Our employee-led networks and working groups have been
established to create community spaces for our people to
connect and socialise. The networks continue to be a great
success, with our LGBT17+ group at the Team17 Games Label
proving particularly popular and leading our celebrations
for Pride in 2022. We continue to encourage these groups,
seeing them as a vital means to bring together people with
similar interests both within our distinct businesses and
across the broader Group.
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Charity and Community
Team17 has long been a proud supporter of both local and
international charity projects and hosted a number of
fundraising activities over the year. All charitable activities
in the Games Label are overseen by its employee-led
Charity Committee.
In 2022, astragon made a donation to support Ukrainian
refugees, while StoryToys subsidised the cost of its
educational apps for Ukrainian families, helping to provide
some minor relief and vital early-years development tools
for families caught up in the conflict.
Team17 Games Label’s Charity Committee hosted multiple
events in 2022 in support of numerous charities, including
Medecins Sans Frontiers, the British Heart Foundation,
Mind, the Samaritans, and The Trussell Trust, as well as
smaller local charity projects such as Child’s Play, The
Mustard Tree and Cauldwell Children.
Striving for Continued Improvement
As a Group, we strive to ensure our working environment
remains as open and transparent as possible, providing
space for frank and honest feedback from all our people,
across all levels of seniority, and recognising the importance
of listening and responding to our teams’ views about the
future trajectory of the Group.
Alongside regular subsidiary and Group-level feedback
meetings, we make a concerted effort to maintain regular
dialogue with the team through a range of company-wide
announcements and communications channels. Furthermore,
in 2022 we received the results of our inaugural employee
engagement survey in Team17 Games Label. The feedback
from the report was positive and we followed up with a
shorter mid-year survey which showed improvements in
overall employee engagement levels, as well as extremely
pleasing feedback regarding the safe and supportive work
environment, and in the number of people who would
recommend Team17 Games Label as a place to work.
An inaugural survey for StoryToys and a second for our
Team17 Games Label will be taking place in 2023, providing
additional insights and opportunities to identify areas for
improvement as Team17 continues to grow and evolve. We
plan to extend the engagement survey to the astragon
team in 2023 and will look to update the ESG section of the
Group’s corporate website with a summary of these results
as they become available.
Annual Report and Accounts 2022 21
Team17 Group plc
ESG Report: Our Impact on the Environment
Our Focus for 2022
Progress in 2022
The focus over the past year on environmental matters
covered the following:
> Achievement of PAS 2060 status certifying
Team 17 Digital’s carbon neutrality covering
74% of the Group’s Scope 1 & 2 emissions.
> MSCI ESG rating score improved from BB to
BBB, work is ongoing to help drive further
improvement.
> Working through this PAS 2060 exercise
and working with the ratings agencies has
helped us understand better our impact on
the environment. This has directed us where
to look for energy savings projects, how
to optimise recycling opportunities and the
best travel methods to reduce our impact
on the environment.
> With most of our emissions related to energy,
we have purchased offsets through a United
Nations project that moves energy production
from coal to clean hydropower. This reduces
the use of fossil fuels, reduces pollution, and
creates new jobs.
> Development of our longer-term environmental
strategy including the appointment of a
designated ESG Reporting Manager.
> Recognising the growing importance of ESG
matters for all of our stakeholders, the Board
recently established a Board level ESG
Committee led by our Independent Non-
Executive Director Penny Judd. Looking
forward into 2023, the Committee will add
additional focus on ESG and will look to
gather feedback on progress on key
initiatives across the Group.
> A key aim for 2022 has been looking at ways
to broaden our stakeholder engagement with
green issues. We organised beach cleans for
team members to get involved with, where
they spent a day cleaning a local beach,
reducing pollution and improving the local
environment. We are also looking in 2023 to
mirror the employee-led group Green17 with
a similar group for our developer partners.
Carbon Neutrality
During the year we have successfully achieved carbon
neutrality status for Team 17 Digital’s FY21 emissions,
independently verified against the PAS 2060 standard.
In addition to Scope 1 emissions that are direct greenhouse
gas emissions, occurring from sources that are controlled
or owned by the company and Scope 2 emissions that are
indirect greenhouse gas emissions associated with the
purchase of electricity. This carbon neutrality also covers
scope 3 emissions which included emissions from the
following categories: Purchased goods and services;
business travel; employee commute and fuel and energy
related (staff working from home). In total the emissions
under PAS 2060 were 417 CO2e tonnes which have been
fully offset. With most of our emissions related to energy,
we have purchased offsets through a United Nations
project that moves energy production from coal to clean
hydropower. This reduces the use of fossil fuels, reduces
pollution, and creates new jobs.
Our certificate of compliance for Team 17 Digital for carbon
neutrality can be found here:
https://www.team17groupplc.com/esg/.
Net Zero
As a result of our PAS 2060 audit, we concluded we will not
be able to make further significant savings in our total
Scope 1 emissions at this stage. Accordingly, to show our
understanding and continue our journey towards net zero
we have purchased carbon removal credits to cover the
whole of the Group’s 17 tonnes Scope 1 emissions in 2022.
Given that global efforts are currently aiming at achieving
net zero by 2050, we are developing our plans to achieve
this goal across Scope 1-3 emissions, but we continue to
work on ways that we can improve on this target.
Green Deposit Scheme
Team17 has utilised HSBC’s Green Deposits to support its
environmental goals by allocating funds to finance eligible
businesses and projects that promote the transition to a
low-carbon, climate resilient and sustainable economy.
Future Goals
As part of the PAS 2060 exercise undertaken during the
year, Team17 has identified carbon reduction plans that
address our already relatively low scope 1 & 2 emissions.
Initially these focus on energy usage, reductions in air
conditioning equipment usage and automatic switch-off of
computers overnight but longer term we want to better
understand the impact of travel on our carbon footprint
and make appropriate adjustments. Team 17 Digital Limited
was carbon neutral for 2021 by offsetting our emissions
through a United Nations project in China focussing on
creating hydropower.
We will carry out similar offsets in the future whilst also
exploring carbon removal opportunities as we plan our
future strategy toward net zero.
“ From first being introduced to the Green17 team
it was clear to see their passion for sustainability
and their dedication to making a positive impact
on the environment.”
Blacksalt Games, DREDGE developer
Net Zero
Our journey to net zero commenced by understanding the
different ways and the resultant costs of carbon being
removed from the atmosphere – our future strategy will be
to reduce our emissions first and once these emissions have
been reduced as far as possible, we will plan how to
develop carbon removal projects to compensate for the
remaining emissions. These carbon removal projects to
balance our emissions will be developed on a Scope-by-
Scope basis as our emissions develop over time.
Raising Awareness of the Difference in Emissions for
Different Modes of Travel
Having calculated our emissions for home working,
commuting and different modes of transport, we will raise
awareness with all of our team members of the emissions
implications of different modes of travel. By carrying out
this exercise we will be able to continue to develop our
hybrid working policy and achieve the right balance
between home and office working and take account of the
emissions implications in developing our travel policy.
Roll out to Subsidiary Companies and our Developer
Partners
The PAS 2060 certified status achieved by Team 17 Digital
Limited for FY21 year is to be rolled out to all Group
companies covering our FY22 emissions. We have already
started this exercise and through the process it will enable
benchmarking to be made between our respective divisions
and offices.
The rollout of findings will also be spread to our developer
partners during FY23. We anticipate sharing our learning
but also working with our development partners to share
best practice, reduce emissions and improve sustainability
throughout our supply chain.
How We Will Achieve This
Spreading our Learning
A key element of our environmental strategy is developing
an engagement with a broader stakeholder base. We have
already built a strong engagement model for Teamsters
with Green17 within the core Games Label division, and plan
to role this model out to each of the divisions as well as our
development partners in 2023 and subsequently to the rest
of our supply chain and potentially look at inclusion within
our games in the future.
Office Comparison and Benchmarking
Team17 have reviewed office requirements post Covid
and will review ongoing office space requirements to
reflect new hybrid working arrangements. We will also
be comparing environmental metrics across each of our
office locations to identify best practice in each area.
“ Team17 are an active and valued
member of UKIE’s Sustainability Group
and are leading the way in tackling
their impact on the environment.”
UKIE, 2023
Identification of a Unifying Cause to Focus on by
Carrying out a Stakeholder Engagement Exercise
We recognise the importance of bringing our Teamsters,
developer partners, supply chain and gamers together. We
will look to identify a specific environmental theme which is
important to each of these stakeholders and then support
this going forward via our future offsetting.
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Align ourselves with Sustainable Development Goals
Green17 is very appropriately named considering there are
17 Sustainable Development Goals. With the importance of
our relationships with our developer partners, we have
selected the following 3 goals to align ourselves with:
– SDG 17 ‘Partnerships for the Goals’,
– SDG 16 ‘Peace, Justice, and Strong Institutions’
– SDG 13 ‘Climate Action’.
Ratings Agencies
We have been working with rating agencies and specifically
MSCI to ensure that they have access to information relating
to social and governance initiatives and practices within the
Group and are pleased with an initial improvement in the
rating from BB to BBB but look forward to seeing our
rating scores improve further in future.
Scope 1 and 2 Emissions
The Scope 1 and 2 emissions have increased in 2022 due to
astragon and StoryToys being included in the 2022 figures
with StoryToys for a part year in 2021.
Scope 1
Scope 2
Total
UK proportion of energy usage
reported
2022
CO2e
tonnes
2021
CO2e
tonnes
17
126
143
11
98
109
84%
95%
Energy consumption used to calculate
above emissions (kWh)
725,213 510,233
Average number of employees
Emissions per FTE (CO2e tonnes)
Emissions per FTE (kWh)
362
0.4
263
0.4
2,003
1,940
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
location-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.
We have undertaken work as part of our PAS 2060 exercise
to identify emissions and review options to reduce these
emissions. During 2022 we reduced the energy consumption
of our server rooms and are looking at further energy
saving projects in 2023.
https://www.gov.uk/government/collections/government-
conversion-factors-for-company-reporting
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Annual Report and Accounts 2022
Annual Report and Accounts 2022 23
Team17 Group plc
Principal Risks & Uncertainties
Effectively Managing our Risks
Team17 Group plc successfully operates in a competitive and
dynamic market environment. Through its ambitious M&A
activity, the Group has added a number of strategic and
highly complementary acquisitions. An enlarged senior
leadership team actively manages the individual risks of
Team17’s divisions which are subsequently collated into a
combined Group risk register that is regularly reviewed by
the Board. The identified risks are kept up to date with the
Group’s operations and wider market environment and are
appropriately scored with financial impact and mitigations
reviewed.
The key business and financial risks for the Group are:
Strategic Risks
Market growth, disruption and competition – no change
from 2021
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.
• Alongside the core Team17 Games Label’s existing market
presence, the acquisitions of StoryToys, astragon, and The
Label have broadened the Group’s scope and competitive
positioning. The diversification has broadened the Group’s
portfolio and hedged the business from a genre and
geographic perspective. Furthermore, in addition to the
in-house development of games and apps, the Group
continues to drive a rigorous ‘greenlight’ process to secure
new IP. The Group also implements a comprehensive
lifecycle management process to ensure maximum revenue
generation from its broadening back catalogue portfolio of
games and apps. In combination, these factors give the
Group confidence that it will continue to secure, develop,
and release popular games and optimise their commercial
success across the wider Group.
• The Group continually undertakes reviews of the industry
in relation to the relevant market segments to pre-empt
and account for any market shifts.
Technological change – no change from 2021
The industry continues to see technological advancement,
driven by the continued shift to digital distribution, the
launch of new platforms and consoles, and the development
of middleware such as Unity and Unreal. We envisage the
continued drive for technological improvements and the
need for the Group to be responsive to these changes in
order to maintain our competitive edge.
• The Group maintains a proactive business approach with
new entrants to the market to understand and evaluate the
opportunity. The Group has a track record of being one of
the first to market with new platforms and distribution
channels. It continues to adopt a platform agnostic
approach to ensure the business has no undue reliance on
any one specific platform provider.
• The Group continues to invest in professional development
to ensure its team has the right skills to be at the forefront
of technological advancements and is agile and adaptable
to any changes, viewing them not as obstacles but as
opportunities upon which to capitalise.
Dependence on concentrated customer base – reduced
from 2021
The Group’s products rely on 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.
• The Group maintains a platform agnostic approach to its
relationships with distribution platforms to reduce over
reliance on any one channel. Through recent strategic
acquisitions we have diversified both our geographical
reach and our audience demographics, further reducing
our end exposure via any one particular channel.
Additionally, the recent acquisitions provide additional
routes to market, with titles now sold across premium,
mobile, and subscription channels.
• In addition to focusing on diversifying sales channels, the
Group continues to invest in maintaining strong and deep
commercial relationships with its existing partners, and in
delivering consistent high-quality IP content across its
growing portfolio. To that end, we are building a stronger,
more experienced sales team with a keen focus on back
catalogue management, new releases, and developing
relationships with smaller platforms.
Dependence on key titles to generate significant share of
Group revenue – reduced from 2021
Historically, the Group has 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 its financial results.
• The Group has significantly expanded its portfolio with
recent M&A activity, through the acquisitions of astragon,
StoryToys and The Label, as well the acquisition of key IP,
such as Golf With Your Friends and Hell Let Loose that
strengthen the underlying portfolio profitability. This,
alongside the launch of new titles across the Group, has not
only expanded the portfolio reducing its reliance on
specific titles or franchises but also the Group’s ability to
develop and extend the life cycles of its franchises in-house
continues to provide a more balance portfolio.
• The Group’s robust ‘greenlight’ process is also designed to
enable it to swiftly identify exciting new IP and act
dynamically to continue to grow the portfolio.
• The addition of key new IP through the ‘greenlight’ process
and strategic acquisitions continues to mitigate the risk of
an overreliance on specific titles.
Commercial launch pipeline – new in 2022
The success of our new game and app launches are important
to the underlying performance of the business and can be
subject to risk factors including delays with developers,
competition with external title releases, restricted access to
the end user or the closure of platforms and/or retailers.
• The Group understands the importance of maintaining
strong and close partnerships with its developers. To this
end, the Group plans buffer times to allow for potential
project delays. The Group also ensures multiple products
are progressing towards launch simultaneously.
• On a game-by-game basis, the Group implements a
structured process for scheduling release dates, taking into
account market conditions as well as competitor release
dates. Products are also robustly evaluated through the
‘greenlight’ process to minimise delivery risk.
• A key part of the strategy is to secure experienced and
established senior leadership teams within any acquired
businesses, ensuring continuity of leadership and focus
with a shared ambition for growth. The Group rewards
them with longer-term incentives through Earn Out and
LTIP schemes.
• The Group undertakes monthly joint CEO review meetings
chaired by the Group CEO to discuss financial results, risks
and opportunities, and to share experiences across the
Group. The intention is for the Board to meet with each of
the CEO’s and their senior teams throughout 2023.
Financial / Socio-Economic Risks
Currency fluctuations – increased risks from 2021
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”), followed
by Euros after the acquisitions of StoryToys and astragon. As
such there is a risk that the Group’s financial performance
could be adversely affected by unfavourable movements in
foreign exchange.
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• The Group has significant income and costs in multiple
currencies and as such is impacted by fluctuations in
exchange rates. The Group receives a significant amount of
USD and Euros and the majority of expenditure remains in
GBP. The Group continues to assess ways to mitigate this
risk in FY23 with currency forwards/options to manage the
exposure to USD and Euro income.
• While the longer-term risks of transacting globally cannot
be avoided, the Group continually reviews its foreign
exchange exposure and where appropriate it explores
implementing 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.
Socio-Economic Risks – increased risks from 2021
The risks previously associated with Brexit and Covid
continue to decrease and are now seen as part of the
ordinary course of business. The rate of inflation impacting
the cost of living, has continued to rise over the course of
2022 and is currently higher in 2023 than at any time in the
recent past in a number of key markets, including the UK, EU
and USA. This may result in an impact on consumer spend
and also impacts staff costs. This is outside the control of the
Group and although inflation is forecast to fall in FY23 it
remains significantly higher than average.
• The Group has implemented policies and procedures that
support the team as we embrace hybrid working structures
post pandemic, as well as investing in resources in
technology to fully support and facilitate flexible working.
• The Group recognises the current worldwide rise in costs,
and the pressure on households around rent, energy and
general costs of living and the reduction of overall
disposable income. Whilst our games aren’t as exposed as
“premium games”, we believe the pressure on costs is
something the Group needs to monitor closely in 2023.
• In light of the cost-of-living crisis, the Group is focused on
ensuring the retention and support of our team members.
The Group has implemented support payments across the
divisions and put in place internal structures to provide
team members with access to support as financial
pressures increase.
Operational Risks
The ability to recruit and retain key and
skilled team members – no change from 2021
The Group’s ability to deliver against its business plan is
contingent 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.
• The Group has implemented a number of procedures to
engage dynamically with its employee base and act on
constructive feedback to improve our workplace. We
undertake employee engagement surveys, working groups
and carry out ongoing salary benchmarking exercises to
ensure our core salaries remain competitive in addition to
our highly competitive benefits packages.
• The Group strives to build a reputation of being an
attractive employer brand and to ensure our reward and
recognition practices remain competitive. Going forwards,
the Group will be investing in an improved Talent
Acquisition system. The Group also continues to sponsor
overseas talent where skills and experience cannot be
sourced within the UK and processes are in place to
facilitate this.
• The market for talent remains highly competitive, and the
Group must continue to monitor its offering relative to its
peers in order to retain talent.
IT cyber security – no change from 2021
The security of the system remains of vital importance to the
business. We depend on the systems being secure and
robust to support ongoing business operations. A security
breach or major system failure could significantly impact the
business and its ability to execute on plans.
• We recognise the Group’s performance is dependent on
the integrity and operational performance of the systems
and products it offers as well as the platform partners the
Group works with.
• The Group has invested in the IT team and infrastructure
and has stringent cyber security processes in place
including upgraded firewalls, antivirus software, third-party
security monitoring services alongside improvements to
phishing and brand protections around email and domain
names. We continue to invest in and improve our disaster
recovery and IT cyber security procedures, including
third-party monthly online security interactive programs to
continue training and awareness.
Intellectual property – no change from 2021
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 IP.
• The Group actively scans the markets for possible
infringement and tests and challenges the system where
appropriate to test for breach weaknesses. We have also
strengthened the internal IT team tasked with the continuous
review and improvement of our IP protection processes.
• The Group has also engaged the advice of an external IP/
trademark legal team who are specialists in the gaming
sector.
Managing the impact of M&A activity – no change from 2021
The impact of acquisitions could distract the core business in
the pre and post-acquisition phase, and the growth in capital
requirements alongside a larger employee base could
adversely impact the financial results of the Group.
• Due diligence work is extensive to ensure the financial and
cultural profiles of prospective acquisitions align with that
of the Group – namely that targets are profitable and cash
generative, that they display growth ambitions/opportunity,
and most importantly that their company culture matches
that of the wider Group.
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Team17 Group plc
Annual Report and Accounts 2022
Annual Report and Accounts 2022 25
Team17 Group plc
Section 172 Statement
Board Engagement with Stakeholders
In compliance with s172 of the 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 highlighted areas in this
report where these are covered:
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Stakeholder
Group
Our Team
Importance & Engagement
People are at the core of everything at Team17 and we have sought to build a
business that recognises and supports this. With the acquisition of astragon
and The Label in 2022 and StoryToys in 2021, we have worked to fully integrate
the team members and to embrace them into the broader Group structure
whilst respecting their individual underlying business and team cultures.
We have ensured we are able to attract and retain talent through robust
salary benchmarking as well as supporting the team through regular events,
supportive social groups, and employee-led panels that help guide the Group
as it moves into 2023. Both StoryToys and the Games Label have undertaken
employee engagement surveys, and the results of these and on-going surveys,
which will include all parts of the Group are fed into reviews to share best
practice and implement change accordingly.
Across the Group, and through our work, we attract a diverse range of
highly talented people that are driven to share our mission of creating and
publishing games and apps that appeal to all ages. These individuals expect
transparency and openness from the Group, and we make sure this is
provided through regular events including town hall meetings, email
communication and team level meetings.
Furthermore, we actively promote social events for our team – which we see
as central to ensuring the entire team feels motivated and engaged.
Players/Customers
Fundamentally, the success of our business depends on demand from players
across a wide age range playing our games.
We have a dedicated community management team which maintains a direct
relationship with them through public gaming notice boards, building long-
term trust through engagement and delivering game improvements through
gamer feedback.
This team embraces feedback and reports it to the appropriate team to
ensure our products continue to evolve dynamically to address any issues
our customers may be facing and to ultimately deliver game improvements.
At StoryToys, children benefit from the apps we create, helping their
development and learning through play. Clearly their parents are critical in
the relationship with our business, and we have developed a dedicated parent
centre in our apps to help parents understand the educational content and
to suggest further activities that can be undertaken as an extension of the
learning or play.
In addition, the relaxation of restrictions following the Covid related
lockdowns has allowed us to return to leading industry events, such as
Gamescom, where members of the teams from Games Label and astragon
represented the Group and had face-to-face interaction with our customers,
suppliers, development partners, and peers alike.
Other References
in this Report
People report on
pages 20 to 21
Stakeholder
Group
Platform Partners
Importance & Engagement
Other References
in this Report
Our customer reach has expanded in 2022, and now includes a significantly
wider demographic of gamers as well as additional games platforms for
console and mobile sales, digital store fronts for PC sales, and established
retail and distribution partners for physical product sales.
Group Strategy
and Business
Model on
pages 8 and 9
Group Strategy
and Business
Model on
pages 8 and 9
We maintain constant dialogue with partners in both the commercial and
technical teams to understand business needs, and to communicate our plans
with them for future releases and content updates. Our sales and marketing
teams engage with their counterparts to share our content line-up in order to
maximise their potential and the revenue opportunity for both partners.
The relationships and understanding of our sales team across all publishing
and distribution disciplines are critical to ensuring we can position our own IP,
third-party products, and distribution titles with the right partners and
platforms to maximize awareness and mutual commercial success.
Licensors
Certain games/apps within the Group portfolio license content from key
global brands which forms a core part of their success.
Within StoryToys and astragon, the teams have developed long-term
relationships with key brands and have launched very successful products
with these partners. We recognise the importance of building on the trust of
these ongoing relationships.
We maintain regular communication with all core licensing partners spanning
all aspects of the business, and we remain responsive to their requirements.
Group Strategy
and Business
Model on
pages 8 and 9
Investors/
Shareholders
The Group has a strong and supportive investor base whose ongoing support
is key to continuing our growth trajectory and realising the ambitions of the
Company. We were pleased to welcome new shareholders to the register in
January 2022 through an oversubscribed Placing to raise funds for the
acquisition of astragon.
Throughout the year the Chief Executive Officer and Chief Financial Officer
met with shareholders, both following the full-year results in March and the
half-year results in September, as well as proactive engaging outside of the
key financial calendar events.
The Company recognises the importance of engaging all investors. To that
end, we held an open forum via webcast for all investors to receive a
comprehensive update directly from the management team at the half-year
results. Presentation material was also posted on the Company website to
engage with a wider shareholder base.
Our Annual General Meeting affords all shareholders the opportunity to hear
from the Company directly and to ask questions.
The Board welcomes the opportunity to engage with all shareholders at
these events.
We review all the feedback from investor interactions and share it with the
Board.
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Annual Report and Accounts 2022
Annual Report and Accounts 2022 27
Team17 Group plc
Section 172 Statement
continued
Corporate Governance Statement
Stakeholder
Group
Suppliers
Importance & Engagement
Other References
in this Report
Whilst the majority of the development process is supported by our in-house
teams specifically for the Games Label and StoryToys, we do work with a
number of external specialists to support parts of the games development
process to ensure high quality and cost-effective delivery of our published
games and manage development workload requirements throughout the year.
At astragon, we work very closely to maintain long standing relationships
with dedicated third-party development partners on each of the own-IP
simulation titles.
We also engage with middleware and game engine partners to ensure our
games fully utilise available technology – this same approach also applies to
platform holders through their technology teams.
The supplier relationships are typically well-established and long-term, and
we review all agreements regularly to ensure they remain healthy and
beneficial to the business and also to ensure they are aligned to the Group’s
business policies.
Third-party Partners These relationships form a significant part of the Group, and we have
developed long-term relationships with individuals across the world reflecting
this. Our game scouting teams maintain an exceptional network of contacts,
dedicated to identifying future development and publishing opportunities.
Existing development partners are overseen by our developer relations team,
with day-to-day interactions led by producers in our external development
team and product marketing managers in our publishing unit. This facilitates
an open and trusting relationship with a player / product-first mindset designed
to bring great gaming experiences to the players of our third-party games.
We conduct an annual developer survey to understand their experience with
Team17 and use this to drive continuous improvement across the business.
Our senior executives maintain regular dialogue with our third-party partners
which reflects the importance of these relationships. Third-party partners are
treated in the same way as our own people within the Group; we work
together with them to develop games to excite our global audience.
Group Strategy
and Business
Model on
pages 8 and 9
Local Community
Following the acquisitions made in 2022, we now operate across 7 regional
hubs. We endeavour to continue to play an active role in each local
community our team live and work in.
People report on
pages 20 to 21
We support local communities through activities and donations. Within the
Games Label, an employee-led committee has been established to identify
local charities to support. Across the wider Group, we continue to donate to
international charities, which included supporting Ukrainian refugees in 2022.
Dear Shareholder,
I am pleased to present the Corporate Governance
Statement as Chair of the Board of Directors of Team17
Group plc. As Chair, it is my responsibility to ensure that the
Company has both sound corporate governance and an
effective Board. The Board acknowledges the importance
of high standards of corporate governance and have chosen
to comply with the principles set out in the Corporate
Governance Code for Small and Mid-size Quoted
Companies as issued by the QCA (the “QCA Code”).
Board discussions are conducted openly and transparently,
which creates an environment for rigorous and robust
debate. During the year, the Board has constructively and
proactively challenged management on Group’s strategies,
proposals, operating performance and key decisions, as
part of its ongoing work to assess and safeguard the
position and prospects of the Group.
The Directors of the Company recognise the value of good
corporate governance in every part of the business. The
Board considers that compliance with the QCA Code
enables us to serve the interests of all our key stakeholders,
including our shareholders, and promotes the maintenance
and creation of long-term value in the Company. This report
describes our approach to governance, including information
on relevant policies, practices and the operation of the Board
and its Committees.
The Chair and the Chief Executive Officer have separate and
clearly defined roles. The Chair is responsible for overseeing
the Board and the Chief Executive Officer is responsible for
implementing the stated strategy of the Company and for
its operational performance.
In carrying out its governance role, the Board’s main task
is to drive the performance of the Group. The Board must
also ensure that the Group complies with all its contractual,
statutory and any other obligations, as well as the
requirements of any regulatory body.
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 financial
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 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 as appropriate.
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The Board
Board Composition
Full biographies of the Directors can be found on page 33.
At the date of this report, the Board comprises two
Executive Directors and four independent Non-Executive
Directors, one of which is the Non-Executive Chair.
Almond & Co acts as the Company Secretary and attend 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 of the Board then follows up on each action at the
next meeting, or before if appropriate.
• Christopher Bell – Independent Non-Executive Chair
Joined May 2018
• Debbie Bestwick MBE – Chief Executive Officer
Joined May 2018
• Mark Crawford – Chief Financial Officer
Joined April 2020
• Penny Judd – Independent Non-Executive Director
Joined May 2018
• Jennifer Lawrence – Independent Non-Executive Director
Joined February 2019
• Martin Hellawell – Independent Senior Non-Executive
Director
Joined September 2019
Matters Reserved for the Board
Matters reserved for the decision of the Board include, but
are not limited to:
• 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;
Full details of the support to charities can be found in the People Report.
Board/Committee Attendance
We are part of the global gaming community, with members of the senior
team at astragon holding positions on industry panels in Germany. Team 17
Digital is a corporate ambassador for Women in Games, and StoryToys is
represented on the immersive Skillnet Steering Committee and also provides
advice to colleagues on syllabus design.
28
Team17 Group plc
Annual Report and Accounts 2022
Christopher Bell
Position
Independent
Non-Executive Chair
Debbie Bestwick MBE Chief Executive Officer
Mark Crawford
Chief Financial Officer
Penny Judd
Jennifer Lawrence
Martin Hellawell
Independent
Non-Executive Director
Independent
Non-Executive Director
Independent Senior
Non-Executive Director
Board Committees
Max Possible
Attendance
Meetings
Attended
Nomination
Audit
& Risk
Remuneration
Independence
6
6
6
6
6
6
6
6
6
6
6
6
–
N/A
N/A
–
–
–
2
N/A
N/A
2
2
2
3
N/A
N/A
3
3
3
Y
N/A
N/A
Y
Y
Y
Annual Report and Accounts 2022 29
Team17 Group plc
Corporate Governance Statement
continued
Matters Reserved for the Board continued
• 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.
Committees
The Board has in place Audit, Nomination and Remuneration
Committees, which comply with the stated terms of reference
for each committee. Detailed reports on the Audit and
Remuneration Committees can be found on pages 34 to 38.
Recently, the Board made the decision to establish an ESG
Committee to be Chaired by Penny Judd to oversee the
Group’s ESG matters going into 2023.
Nominations Committee
Chris Bell chairs the Nomination Committee. Debbie Bestwick
MBE, Penny Judd, Jennifer Lawrence and Martin Hellawell
are the other members of the committee.
Nominations Committee meetings are held as required
and provide a formal and transparent procedure to the
appointments of new directors to the Board. The Nominations
Committee evaluates 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. On an
ongoing basis the Board continue to drive succession
reviews at a Group and senior management level to ensure
that the appropriate planning and development is in place.
Supervisory Bodies & Management
The Group now operates with an enlarged senior
management team made up of the CEO’s of each division
meeting with the Group CEO and CFO on a monthly basis to
discuss and review the overall performance across the
group and share best practice and experiences.
Internal Control
The Board is ultimately responsible for maintaining and
reviewing the Company’s risk framework system of internal
control that review financial and operational risks within
each division to produce a Group risk register that is reviewed
by the Board. The Board believes that the risk register
process manages risks appropriately in a way which allows
the Company to achieve its business objectives. These
systems are reviewed every six months.
30
Team17 Group plc
Annual Report and Accounts 2022
Corporate Culture & Systems
Compliance with the QCA code continued
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 Group’s business objectives and
strategy. The Group has clearly defined policies that help
define these values and can be found at the Group’s website
www.team17groupplc.com and any acquired businesses that
join the Group are aligned to these policies.
Support
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).
Election
The Board proposes that all Directors will stand for
re-election this year at the Company’s AGM.
Diversity and Inclusion
The Group has a range of employment policies covering such
issues as diversity, harassment and discrimination and equal
opportunities that are available to everyone in the business.
Annual General Meeting
In addition to these engagements, the Company holds
an Annual General Meeting (AGM) each year to allow
shareholders to vote on resolutions to proposed by the
Company’s directors. This year’s AGM is currently planned
to be held at 9:30a.m on Thursday 22 June 2023. The Notice
of AGM, setting out the resolutions proposed, is contained
in a separate document and is available on the Company’s
website www.team17groupplc.com.
Compliance with the QCA code
The Chair’s role is to lead the Board of Directors and to be
responsible for ensuring that the Company adheres to and
applies the standards of corporate governance. The Board
and Committees meet regularly as described above. The
executive team are directed to the day-to-day management
and are accountable to the rest of the Board. The Directors
believe that the QCA Code provides the Company with the
framework to help embed the governance culture that exists
within the organisation as part of building a successful and
sustainable business for all of its stakeholders.
A summary of how the Group currently complies with the
QCA Code is set out below and is updated at least annually
in the manner recommended by the QCA Code.
Principle 1: Establish a strategy
and business model which
promotes long-term value for
shareholders
Principle 2: Seek to understand
and meet shareholder needs
and expectations
Principle 3: Take into account
wider stakeholder and social
responsibilities and their
implications for long-term
success
Principle 4: Embed effective
risk management, considering
both opportunities and threats,
throughout the organisation
The Company develops and publishes games across multiple platforms and through
its games label, which focuses on the premium high-quality independent gaming
market, it partners with independent developers across the world, from lone
developers to large creative studios, to provide a full partnership offering which
spans development, publishing and lifecycle management. The Company has a
stringent ‘greenlight’ process which works to identify the best creative ideas and
global talent.
The Company seeks to maximise long-term revenues through building gaming
franchises with longevity and has a significant back catalogue that contributes a
large majority of its revenues.
An overview of the Group’s business strategy can be found on pages 8 to 9, and
commentary of progress in the last year against this can be found in the strategic
reviews on pages 2 to 7 and 16 to 19.
Section 172 Statement on pages 26 to 28.
The Group takes ESG very seriously and the Board is conscious of the impact that
the Group’s activities may have in their areas.
A detailed report on how the Company has taken into account wider stakeholders
can be found in the s172 statement outlined on pages 26 to 28.
The Board has overall responsibility for the determination of the Group’s risk
management objectives and policies and has also established an Audit Committee,
further details of which are set out below.
A risk register is created within each division under the leadership of the individual
CEOs and then reviewed by the Board on a six-monthly basis looking to identify
changes to existing risks, new risks and then looking at mitigating factors. Specific
actions are captured so that progress can be monitored against each material risk
across the Group.
The key risks and uncertainties are noted on pages 24 and 25.
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Principle 5: Maintain the Board
as a well-functioning, balanced
team led by the Chair
The Board currently comprises six Directors: the Non-Executive Chair, one Senior
Non-Executive Director, two Non-Executive Directors and two Executive Directors.
All of the Non-Executive Directors, Chris Bell, Penny Judd, Jennifer Lawrence and
Martin Hellawell are considered by the Board to be independent. The Board meets
regularly and there are processes in place to ensure that each Director is at all times
provided with such information as is necessary for him or her to discharge their duties.
The Board is also supported by the Committees, details of which can be found on
pages 30, 34 and 38.
The Non-Executive Directors were selected with the objective of increasing the
breadth of skills and experience of the Board and bringing independent judgment
to the Board. The Company believes that the make-up of the Board as a whole
represents a suitable balance of independence and detailed knowledge of the
business so as to ensure that it is able to fulfil its role and responsibilities as effectively
as possible.
All Directors are subject to re-election by shareholders at the Annual General Meeting
and any Directors appointed during a financial year must be formally elected at the
Annual General Meeting following their appointment.
Annual Report and Accounts 2022 31
Team17 Group plc
Corporate Governance Statement
continued
Board of Directors
Principle 6: Ensure that between
them the Directors have the
necessary up-to-date experience,
skills and capabilities
Principle 7: Evaluate Board
performance based on clear
and relevant objectives, seeking
continuous improvement
Biographies of each Director are outlined on page 33.
The Directors believe that the Board has the appropriate balance of diverse skills and
experience in order to deliver on its core objectives.
The Board considers the evaluation of its own performance to be a key step for
improvement and during the year, a Board evaluation process was led by the Chair in
which a questionnaire was circulated by Almond & Co the independent specialist
Company Secretary for the Group to each Director. On completion of the questionnaire
by each Director, a report was finalised and sent to the Board for discussion.
In the immediate years from IPO, the Chair conducted informal evaluations.
The formal board evaluation process during the year measured, in line with the QCA
Code, the Board’s ability to:
– Deliver Growth;
– Maintain a Dynamic Management Framework;
– Build Trust.
The results were positive, revealing several areas of strength in the Board’s
operations. There are, in addition, identified areas for improvement for which the
Board has agreed several actions and measurements.
As this was the first formal evaluation conducted for the Company, the results were
compared against previous informal evaluations and in future will be set against
formal evaluations.
The Chair of the Board led a subsequent review of the findings with action plans
against specific areas of feedback/suggestions.
Principle 8: Promote a corporate
culture that is based on ethical
values and behaviours
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 are made available to everyone in
the business.
Principle 9: Maintain
governance structures and
processes that are fit for
purpose and support good
decision-making by the Board
Principle 10: Communicate how
the Company is governed and is
performing by maintaining a
dialogue with shareholders and
other relevant stakeholders
The Group has clearly defined policies that help define these values and any acquired
businesses that join the Group are aligned to these policies.
The governance structures are appropriate, devolving to several committees as set
out in the Committee reports on pages 30, 34 and 38.
The Group places a strong emphasis on the standards of good corporate governance
and maintaining an effective engagement with its shareholders and key stakeholders,
which it considers to be integral to longer term growth and success.
The principal methods of communication with shareholders are the Annual Report &
Accounts, the interim and full-year results announcements, the Annual General Meeting
and the website. The website is updated regularly with information regarding the
Group’s activities and performance, and users can register to be alerted of new
announcements, reports and events, including Annual General Meetings.
The Company’s reports and presentations and notices of Annual General Meetings
will be made available on the website when available, as will the results of voting at
shareholder meetings.
The website disclosures required by the QCA Code can be found at www.team17groupplc.com/aim-rule-26.
Approved by order of the Board
Richard Almond
Company Secretary
18 May 2023
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Team17 Group plc
Annual Report and Accounts 2022
Chris Bell
Independent Non-Executive Chair
Chris joined the Board of Directors in
2018, prior to Team17’s IPO. Chris has a
wealth of executive and board level
experience across the gaming, retail and
technology sectors. He currently serves
as Non-Executive Chair of AIM-listed
OnTheMarket plc, having overseen the
company’s IPO in 2018 and now sits on
its Remuneration, Audit and Nomination
committees. Chris has been a Non-
Executive Director of the Royal Air
Force Charitable Trust Enterprises since
2016, and as of February 2022, has been
Chair of Codere Group SA, a Spanish-
based LATAM-focused gambling
business, for which he also sits on key
governance committees. After holding
senior marketing positions at Allied
Lyons plc, 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
Hilton Group plc. Following the sale of
the Hilton International Hotel Division,
Chris served as Chief Executive of
Ladbrokes plc until 2010. Chris has also
held Non-Executive Director positions at
Spirit Pub Company plc (2011 to 2015),
Gaming Realms plc (2017 to 2018),
served as a Senior Independent Director
at Quintain Estates and Development
plc (2010 to 2015) and Rank Group plc
(2015 to 2021), alongside a number of
other plc board positions.
Penny Judd
Independent Non-Executive Director
Penny joined the Team17 Board in 2018
in advance of the successful IPO on AIM
and is Chair of Team17’s Audit Committee.
Penny has over 30 years’ experience
in Compliance, Regulation, Corporate
Finance and Audit. She is also a
Non-Executive Director of AIM-listed
LendInvest, Alpha Financial Markets
Consulting plc and TruFin plc and
serves as Senior Independent Director
and Chair of the Audit Committee of
both latter companies. She was previously
Non-Executive Chair of FTSE250 listed
Plus500. 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.
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Mark Crawford
Group Chief Financial Officer
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.
Martin Hellawell
Senior Independent Non-Executive
Director
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 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.
Jennifer Lawrence
Independent Non-Executive Director
Jen was appointed Non-Executive
Director in February 2019. Jen has a
wealth of experience as Chief People
and Transformation Officer for Card
Factory plc, and 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.
Annual Report and Accounts 2022 33
Team17 Group plc
From top left:
Debbie Bestwick MBE
Chris Bell
Penny Judd
From top right:
Mark Crawford
Martin Hellawell
Jennifer Lawrence
Debbie Bestwick MBE
Group Chief Executive Officer
Debbie 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, MCV Person of the Year award in
2015, was voted AIM Entrepreneur of the
Year in 2020 and awarded the highly
prestigious Develop Star Award in 2021.
Debbie was central to establishing
Team17’s Games Label which has
become a key growth driver for Team17.
Audit Committee Report
Remuneration Committee Report
Introduction
As the Chair of the Audit Committee, I am pleased to
present the report for the year ended 31 December 2022.
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
in fulfilling our responsibilities to provide effective
governance over the Group’s financial activities.
Members of the Committee
Alongside me as Chair, the members of the Committee
continue to be Chris Bell, Martin Hellawell and Jennifer
Lawrence. The Committee has a wealth of knowledge from
multiple industry sectors and its members also sit on various
Boards for other public Companies, details of which can
be seen in the Board profiles on page 33. The Committee
met twice during the year with all members in attendance
and also attended by the Group Chief Executive and Chief
Financial Officer by request of the Committee to facilitate
discussions of the financial statements and internal controls.
The auditors PricewaterhouseCoopers LLP (PwC) were
invited and attended both meetings. Outside the formal
audit review meetings, various other meetings were held
throughout the year to review accounting policies, updates
on acquisition accounting, the finance system and for
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 with the relevant accounting
standards and reviewing the consistency of the
methodology applied.
• Reviewing the internal controls and risk management
approach covering key areas including the financial
systems, treasury, risk register and disaster recovery
plans.
• Overseeing the relationship with the external auditors,
reviewing their 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 auditors.
• Ensuring that the Group’s approach to whistleblowing 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
• Purchase price allocation and acquisition accounting
• Taxation
• Going concern
Alongside the audit activities the Committee oversees the
risk processes and reporting within the business which has
been enlarged to cover the wider group post the acquisitions
at the start of 2022 and includes the wider implementation
of 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.
Finance System Upgrade
Work has progressed throughout 2022 with elements of
the new system implemented alongside user acceptance
testing. The full system rollout within Team 17 Digital
Limited is due to go live in 2023.
Going Concern
Given the continued challenging external market combined
with recent acquisitions within the Group impacting
financial forecasts, the Audit Committee has reviewed and is
satisfied with the detailed going concern analysis made by
management including reviews of the reasonable downside
scenarios to the Group’s cash flow projections.
External Audit
During the second half of the 2022, a formal market review
was undertaken for the audit services for the Group. This
included an initial review with a number of potential audit
firms of various scale which was narrowed down to a final
detailed pitch and a formal review process with three firms
including PwC as the incumbent audit firm. The review was
led by an internal team made up of the CFO and group
finance team supported by myself as Audit Chair.
As a result of the review and on the basis of both service
and cost, it was decided and approved by the Audit
Committee to retain PwC as the Group’s external audit firm
who delivered a highly competitive proposal on all areas of
the brief. A new PwC lead partner has now taken over
following the normal rotation within the PwC team.
The Audit Committee is satisfied that no other non-audit
work was undertaken by the external auditors.
Penny Judd
Chair of the Audit Committee
18 May 2023
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 2022. 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 2022; and 4. the proposed
implementation of the policy for the upcoming year.
This report will be submitted to an advisory shareholder
vote at our 2023 AGM.
1. Director’s 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 Group Plc 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 base fee plus an additional fee for other Board
responsibilities performance, fees are paid in cash.
Executive Remuneration
A straightforward Executive remuneration structure is
maintained by balancing base salary, pension and benefits
(which include car allowance and private medical insurance)
with a performance related bonus and LTIP share awards.
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 further 50% when
the Company achieves its stretch performance targets.
Long Term Incentive Plan (LTIP)
The Company makes annual awards to Executive participants
under the LTIP. Awards are released subject to continued
employment and satisfaction of challenging performance
conditions measured over three years.
Grant levels will be determined by the Committee each
year. There is flexibility for the Committee to use discretion
to override a formula-driven outcome and adjust the LTIP
outturn. In line with the policy, Malus and Clawback
provisions apply for up to two years, 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 2023 AGM.
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:
C
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£1,600k
£1,400k
£1,200k
£1,000k
£800k
£600k
£400k
£200k
£0k
£1,508k
LTIP with 50% share price growth
£1,078k
LTIP
Annual Bonus
Fixed Pay
£880k
£650k
£488k
£346k
Minimum
On Target Maximum Minimum On Target Maximum
Chief Executive Officer
Chief Financial Officer
Base Salary
The Committee reviews salaries annually, with reference to
market levels in comparably sized public companies. Any
increases are normally effective from 1st April each year,
unless by reason of exception.
Minimum
Performance:
Pension & Benefits
Executive Directors will receive a pension contribution of
up to 8% of salary matching individual contributions. 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.
Comprising the minimum remuneration
receivable (i.e. fixed pay only made up
of base salary, pension allowances and
an estimate for benefits for the 2023
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 (150% 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.
34
Team17 Group plc
Annual Report and Accounts 2022
Annual Report and Accounts 2022 35
Team17 Group plc
Remuneration Committee Report continued
This section describes the operation of the Remuneration
Policy 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.
1. Jennifer Lawrence (Chair)
2. Christopher Bell
3. Penny Judd
4. Martin Hellawell
The committee met three times over the year as outlined on
page 29. The primary role for the Committee is to review and
set the remuneration of the Executive Directors and also
review the divisional senior management remuneration.
Key responsibilities include:
1.
Setting and monitoring the remuneration of the
Executive Directors and divisional Senior Management
Team which includes salary, annual performance related
bonus and any LTIP arrangements;
2. Approval of the Team17 overall annual performance
related bonus payments and annual salary review; and
3. Approval of all share award plans and subsequent issue
of share awards to staff.
Key Activities During the Year
External Advisers
The Remuneration Committee has received independent
advice from Korn Ferry and Gallagher.
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 throughout 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 major shareholders’ views in
advance of making significant changes to its Remuneration
Policy and how it is implemented. The Chair of the
Committee will attend the Annual General Meeting to hear
the views of shareholders on the Remuneration Policy and
to answer any questions in relation to remuneration.
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 entered into letters of
appointment with the Company for an initial term of three
years, rolling thereafter unless terminated earlier by either
party providing three months’ prior written notice.
Executive Directors
The Executive Directors have a service contract requiring
six 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 an Executive is a good leaver. Reasons for good
leaver treatment include, but are not limited to, death,
ill-health, injury or disability and retirement.
2. Annual Report on Remuneration
3. Annual Statement (Unaudited information)
The current members of the Committee are as follows:
Mark Crawford
Directors’ Remuneration for the Year Ended 31 December 2022
The following table sets out the total remuneration for Executive and Non-Executive Directors for 2022, showing 2021
remuneration for comparison.
All figures shown
in £000
Debbie Bestwick MBE
2022
Christopher Bell
Penny Judd
Jennifer Lawrence
Martin Hellawell
Salary
and
fees
420
382
283
200
108
100
59
55
59
55
59
52
Benefits1
Pension
25
20
10
12
–
–
–
–
–
–
–
–
21
19
16
10
–
–
–
–
–
–
–
–
Annual
Bonus
392
238
211
100
–
–
–
–
–
–
–
–
LTIP2
–
–
85
–
–
–
–
–
–
–
–
–
Total
fixed
pay
466
421
309
222
108
100
59
55
59
55
59
52
Total
variable
pay
Total
Remuneration
392
238
296
100
–
–
–
–
–
–
–
–
858
659
605
322
108
100
59
55
59
55
59
52
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2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Notes to the table
1. Benefits total represents the taxable value of benefits paid. Taxable benefits provided to Executive Directors include: private health cover and car allowance
2. The LTIP figure represents the value of the award for the completed performance period ending 31 December 2022, based on the average share price over the final 3
months of the year (these vest in September 2023)
Basis for Annual Bonus Payments
Targets are based on the Company’s adjusted EBITDA performance, and consideration is given to individual performance.
The maximum annual bonus opportunity was 125% of salary for the CEO, and 100% of salary for the CFO, with 50%
awarded for on-target performance.
Performance during the year resulted in the CEO and CFO being awarded a bonus of 75% of the maximum opportunity
reflecting the successful integration and performance of the acquisitions completed at the beginning of the year which
combined with the existing business delivered the results of the enlarged group.
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
Awards
held on
1 January
2022
Awards
made
during
year
Awards
vested
during
year
Awards
lapsed/
forfeited
during year
Awards
held on 31
December
2022
End of
performance
period
Date
of grant
Debbie Bestwick MBE
8 July 2021
150,943
–
Debbie Bestwick MBE 30 June 2022
–
159,000
Mark Crawford
10 Sept 2020
20,057
Mark Crawford
8 July 2021
25,157
–
–
Mark Crawford
30 June 2022
–
75,000
–
–
–
–
–
–
–
–
–
–
150,943 31 Dec 2023
159,000 31 Dec 2024
20,057 31 Dec 2022
25,157 31 Dec 2023
75,000 31 Dec 2024
Exercise
Period
10 years
from grant
10 years
from grant
10 years
from grant
10 years
from grant
10 years
from grant
36
Team17 Group plc
Annual Report and Accounts 2022
Annual Report and Accounts 2022 37
Team17 Group plc
Remuneration Committee Report continued
Directors’ Report
For the year ended 31 December 2022
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 Director’s 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 MBE
Mark Crawford
Non-Executive Directors
Christopher Bell
Penny Judd
Jennifer Lawrence
Martin Hellawell
Beneficially
owned at
31 December 2021
Beneficially
owned at
31 December 2022
Interests in LTIP
awards (subject to
performance
conditions)
Shareholding at
31 December 2022 as
a % of base salary
29,154,162
30,266,945
11,434
16,412
309,943
120,425
>200%
24%
90,909
24,242
1,864
10,000
90,909
24,242
1,864
24,000
None
None
None
None
n/a
n/a
n/a
n/a
4. Implementation of Policy in 2023 (Unaudited)
There are no changes proposed to the Directors’ Remuneration Policy in 2023 following the strategic review of our
remuneration policy in the previous year.
The base salaries for the Group CEO and CFO received an increase of 4%, taking them to £440,960 and £312,000
respectively, effective 1 April 2023. The Committee has agreed this increase for 2023 to be at a lower level than the
average budgeted salary increases for employees across the Group.
Executive Director LTIP
The award level for 2023 will be equivalent to 150% and 100% of base salary for the Group CEO and CFO respectively
(based on the share price at the date of grant).
Awards are subject to continued employment and based on a stretching range of adjusted EPS performance measured
over the three years to 31 December 2025. 25% of the award is payable for a threshold performance at a CAGR of 4%,
with full vesting at a CAGR of 15%. This range reflects the continued ambitious growth strategy to drive revenue and
profit growth above market levels.
Non-Executive Director Remuneration
Following a review by the Board, the annual base fees payable to the non-executive directors have been increased in
line with the Executive Directors by 4% effective 1 April 2023.
Fee at
31 December 2022
Fee with effect
from 1 April 2023
% increase
109,000
49,100
10,900
10,900
113,360
51,064
11,336
11,336
4
4
4
4
Non-Executive Director
Chairperson
Non-Executive Director base fee
Senior Independent Director
Committee Chairperson fee
Signed for and behalf of the Board by
Jennifer Lawrence
Chair of the Remuneration Committee
18 May 2023
38
Team17 Group plc
Annual Report and Accounts 2022
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 2022.
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 independent
(‘indie’) premium video games for the digital and physical market, developer of educational entertainment apps for
children and a leading working simulation games developer and publisher.
Business Review and Future Developments
Trading for the period from 31 December 2022 to the date of this document has been positive and is consistent with the
Board’s expectations for the year, and profitability and cash generation remain encouraging.
The Group has released two new titles within the Games Label including Dredge which made a positive start when
launched at the end of March. In addition, there are new title releases planned during the course of 2023 across the wider
businesses, and 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 and now wider back catalogue.
Ongoing organic growth combined with successful targeted M&A activity 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 £23.5m (2021: £23.7m).
The Directors have not recommended the payment of a dividend (2021: £Nil).
Directors
The Directors who served the Company during the year and up to the date of signing the financial statements were:
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Christopher Bell
Debbie Bestwick MBE
Mark Crawford
Martin Hellawell
Penny Judd
Jennifer Lawrence
Full details of the Board members’ profiles can be found on page 33.
Directors’ Indemnity and Insurance
The Group provide for Directors and Officers’ liability insurance in respect of the Group and its Directors which was
maintained throughout the financial year ended 31 December 2022.
Disclosures
Emissions Data
Charitable Donations
Details of the Group’s greenhouse gas emissions, energy consumption and energy
efficiency action can be found on pages 22 and 23 of this report.
Over the course of the previous financial year, Team17 has made Donations to
various charities across the Group, details of which can be found on page 21 of this
report.
Political Donations
The Group has not made any this year.
Fostering Relationships with key
stakeholders & s172 statement
Details of how the Group fosters and manages relationships with key stakeholders
can be found in the s172 statement on pages 26 to 28 of this report.
Going Concern
Management has produced a Group forecast that has also been sensitised to reflect a severe but plausible downside
scenario, which has been reviewed by the Directors. This demonstrates the Group is forecast to generate profits and cash
in the year ending 31 December 2023 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 release of these results.
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.
Annual Report and Accounts 2022 39
Team17 Group plc
Directors’ Report continued
For the year ended 31 December 2022
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 UK adopted international accounting standards and the
Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework”, and applicable law).
Under company law, 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 UK adopted international accounting standards have been followed for the Group financial
statements and United Kingdom Accounting Standards, comprising FRS 101 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 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 keeping adequate accounting records that are sufficient to show and explain the Group’s
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.
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 24 and 25.
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.
Significant Shareholdings
At 31 December 2022, 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
Ms Debbie Bestwick MBE (UK)
Liontrust Asset Mgt (London)
Janus Henderson Investors (London)
Aberdeen Standard Investments (Standard Life) (Edinburgh)
BlackRock Investment Mgt (London)
Octopus Investments (London)
Baillie Gifford & Co (Edinburgh)
Anicom Gestion (Brussels)
Berenberg Bank (London)
AEGON Asset Mgt (Manchester)
Source: Orient Capital Shareholder register 31 December 2022.
40
Team17 Group plc
Annual Report and Accounts 2022
No. Ordinary
Shares held
% of issued
30,266,945
20.79
8,684,657
7,954,496
7,906,572
6,696,441
5,672,149
5,574,888
5,218,750
5,177,585
4,788,572
5.97
5.46
5.43
4.60
3.90
3.83
3.58
3.56
3.29
Corporate Responsibility in Employment
Team17 now operates in three locations in the UK, one in Germany, one in Dublin, USA and Canada together 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.
As a growing business we have invested in our teams both to identify and recruit new talent and also to develop and
retain. This continued focus to build our teams alongside training, development and wellbeing is at the heart of our people
strategy, more detail can be found in the People section on pages 20 to 21. We have a diverse team and do not tolerate
discrimination of any kind.
Our team members 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 on pages 20 to 23.
Research and Development
The vast majority of the Group’s capital investment is to develop its own and third-party co-developed titles that are
released in future years. As such there is no significant investment in research and development.
Employee Policy
The Group has a range of employment policies covering such issues as diversity, harassment and discrimination and equal
opportunities. The Group continues to give full and fair consideration to applications for employment and promotion with
selection conducted based on merit against objective criteria that avoid discrimination of any form and taking consideration
for diversity and equal opportunity as well as those specifically made by disabled persons. Appropriate arrangements are
made for the continued employment and training, career development and promotion of disabled persons employed by
the Group, including making reasonable adjustments where required. In the event of any colleague becoming disabled
during their career within the Group, every effort is made to ensure their continued employment and engagement with
the business.
Employee Involvement
The Group provides all team members with the relevant information on matters that concern them, holding regular
communication updates within each division to allow this information flow and engagement to ensure feedback can be
captured to aid decision making on matters involving team members. Details of the employee engagement are included in
the People Report on pages 20 to 21 and also in the Section 172(1) statement on pages 26 to 28. Feedback relating to the
engagement survey results are shared with the Directors and reviewed at Board meetings, often inviting the CEO’s of the
division to discuss the results and planned actions.
100% of the Group’s team members either participate in employee share schemes or have share options as a result of the
initiative in March 2022, to offer every employed team member across the Group free shares. The Group also looks to use
its Employee Benefit Trust (‘EBT’) to reward and recognise team members across the Group, details of the EBT can be
found on page 18 of this report.
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.
C
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Signed for and on behalf of the Board by
Debbie Bestwick MBE
Group Chief Executive Officer
18 May 2023
Annual Report and Accounts 2022 41
Team17 Group plc
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 2022 and of the group’s
profit and the group’s cash flows for the year then ended;
Key audit matters
• Calculation of the fair value of the consideration in the acquisition of astragon Entertainment GmbH and The Label Inc.
(group)
• Calculation of the fair value of intangible assets acquired in astragon Entertainment GmbH and The Label Inc. (group)
• Licence revenue recognition (group)
• the group financial statements have been properly prepared in accordance with UK-adopted international accounting
• Impairment of Investments in Subsidiaries (parent)
standards as applied in accordance with the provisions 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, including FRS 101 “Reduced Disclosure
Framework”, 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 2022; the
Consolidated Statement of Profit or Loss, the Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Cash Flows, the Consolidated and Company Statements of Changes in Equity for the year then ended; and
the notes to the financial statements, which include a description of the significant accounting policies.
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.
Materiality
• Overall group materiality: £1,850,000 (2021: £1,250,000) based on approximately 4% of adjusted profit before tax
(2021: 5% of three-year average of profit before tax).
• Overall company materiality: £1,650,000 (2021: £2,094,000) based on approximately 1% of total assets, capped at
£1,650,000 being an allocation of group materiality (2021: 1% of total assets).
• Performance materiality: £1,350,000 (2021: £937,500) (group) and £1,237,500 (2021: £1,570,500) (company).
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.
Our audit approach
This is not a complete list of all risks identified by our audit.
Overview
Audit scope
• We identified Team 17 Digital Limited and astragon Entertainment GmbH which required a full scope audit based on
their financial significance to the group and a full scope audit of Team17 Group Plc (the company).
• In addition, we performed specific audit procedures at two non-significant components.
• The audits of Team 17 Digital Limited and Team17 Group Plc were undertaken by the group audit team. The group
audit team also performed the audit over the consolidation and financial statement disclosures.
• The audit of astragon Entertainment GmbH was performed by a local component auditor, Ebner Stolz, based in
Dusseldorf, Germany. The group audit team issued formal instructions, had a number of virtual and in-person
meetings and performed a review of their working papers.
• The balances on which we performed audit procedures accounted for 88% of group revenue, 91% of group profit
before tax and 96% of group net assets (determined on an absolute basis). Our audit scope provided sufficient
appropriate audit evidence as a basis of our opinion on the group financial statements as a whole.
Valuation and Occurrence of capitalised development costs, which was a key audit matter last year, is no longer included
because the treatment of such costs remains consistent with the prior year in determining costs to be capitalised. The
calculation of the consideration and the valuation of the intangible assets acquired in StoryToys and the acquisition of
Golf With Your Friends intellectual property, which were key audit matters last year, are no longer included as they were
only relevant on acquisition in the prior year. The equivalent key audit matters are included below for the acquisitions
which occurred during the current year. Otherwise, the key audit matters below are consistent with last year.
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Independent Auditors’ Report to
the Members of Team17 Group plc continued
Report on the Audit of the Financial Statements
Key audit matter
How our audit addressed the key audit matter
Key audit matter
How our audit addressed the key audit matter
Calculation of the fair value of the consideration in
the acquisition of astragon Entertainment GmbH and
The Label Inc. (Group)
Team17 acquired 100% of the share capital of astragon
Entertainment GmbH (astragon) on 13 January 2022.
The acquisition consideration consisted of an initial cash
payment of £63.0m (€75.0m) and a £1.8m (€2.1m)
completion payment. Further payments of up to £19.3m
(€23.0m) are payable in cash if astragon meets certain
targets during FY21 and FY22 following completion of the
acquisition. Based on this, contingent consideration of
£6.0m was recognised at the date of acquisition.
Team17 acquired 100% of the share capital of The Label
Inc. on 6 January 2022. The acquisition consideration
consisted of an initial cash payment of £13.2m ($18.0m),
issue of shares of £4.6m ($6.3m), with a further maximum
payment of £11.8m ($16.0m) payable via a mix of cash and
shares based on certain targets being met within three
years following completion of the acquisition. Based on
this, contingent consideration of £6.5m was recognised
at the date of acquisition. The amounts payable in relation
to the acquisitions include a number of different elements.
Management has performed an analysis of each element
and this exercise involves significant judgement.
Refer to the accounting policies in Note 2 and Note 12
of the consolidated financial statements.
Calculation of the fair value of intangible assets
acquired in astragon Entertainment GmbH and The
Label Inc. (Group)
As a result of the acquisition of astragon Entertainment
GmbH (astragon), the Group recorded intangible assets,
consisting of Brands of £2.0m, Acquired Apps of £21.7m
and Goodwill of £45.4m as stated in note 12.
As a result of the acquisition of The Label Inc. (The Label),
the Group recorded intangible assets, consisting of
Customer and Developer Relationships of £4.7m and
Goodwill of £20.6m as stated in note 12.
In determining the fair value of the identifiable intangible
assets as part of the acquisitions, management has made
significant judgements around the valuation models.
Refer to the accounting policies in Note 2 and Note 12
of the consolidated financial statements.
Our audit procedures included the following:
Licence Revenue Recognition (Group)
Our audit procedures included the following:
– Obtained relevant purchase documents and
management’s assessment and performed audit
procedures over the different elements of the
consideration;
– Assessed management’s significant judgements and
estimates in relation to the valuation of the contingent
consideration based on the achievement of earn out
targets;
– Verified key inputs into the fair value of the consideration,
to corroborating evidence;
– Re-performed the calculations of the contingent
consideration and compared these to management’s
calculated values.
Based on the procedures performed, we concluded that
the calculations of the fair value of the consideration in
the acquisition of astragon and The Label are free from
material misstatement.
Our audit procedures included the following:
– Obtained relevant purchase documents and considered
management’s identification of intangible assets and
assessed this for completeness;
– Evaluated management’s significant judgements and
estimates of intangible assets acquired, utilising our
valuations specialists to assess the methodology and key
assumptions (such as discount rates) used, where relevant;
– Verified key inputs into the valuation models, to
corroborating evidence;
Based on the procedures performed, we concluded that
the valuation of the intangible assets acquired in astragon
and The Label are free from material misstatement.
We considered licence revenue recognition as a key audit
matter given the level of complexity and judgement
involved in understanding the revenue and how key terms
and conditions in the group’s revenue contracts may
impact the timing of revenue recognition. Under IFRS 15,
Revenue from Contracts with Customers, judgement is
required in determining whether revenue is recognised
when, or as, the entity satisfies a performance obligation,
and in allocating the consideration where multiple
performance obligations exist.
Management assesses each licence contract at inception
to determine the appropriate basis to recognise revenue,
in particular whether the contract provides the customer
with a “right to access” or “right to use” intellectual property
under IFRS 15. Contracts are also assessed to identify
whether or not they contain multiple performance
obligations. These determinations can involve management
exercising significant judgement, which can have a material
impact on revenue. Revenues are then recognised as the
performance obligations are satisfied.
The Group’s accounting policy on licence revenue
recognition is shown in note 2 of the consolidated
financial statements and related disclosures are included
in note 5.
– On a sample basis, we selected revenues related to
licence contracts from a full revenue listing and tested
the timing and accuracy of amounts recognised by
performing the following;
– Confirmed a valid contract existed with the customer by
reference to evidence such as written agreements and
read the contract terms to ensure that these supported
the basis of revenue recognition;
– Considered whether the identification of the relevant
performance obligations within the contract was
appropriate;
– Determined whether the transaction price had been
appropriately allocated to the relevant performance
obligations based upon the contractual terms of the
associated contract;
– Challenged the key judgements as to whether the
performance obligations had been satisfied by obtaining
corroborating evidence
Based on the procedures performed, we concluded
that licence revenue recognition is free from material
misstatement.
Impairment of Investments in Subsidiaries (Parent)
Our procedures included the following:
The Company’s investments in subsidiaries balance is
£250.8m (2021: £179.5m). Investments are assessed for
impairment if impairment indicators exist. If such
indicators exist, the recoverable amounts of the
investments in subsidiaries are estimated in order to
determine the extent of the impairment loss, if any.
– Obtained management’s impairment assessment for
each investment;
– Assessed management’s value in use model for each
investment by performing the following:
– Verified the mathematical accuracy of the models;
Given the magnitude of the investment balance, we have
considered the risk of impairment of these assets.
The Company’s accounting policy on investments is
shown in note 2 of the Company financial statements and
related disclosures are included in note 6 of the Company
financial statements.
– Utilising our valuation specialists to test the key
assumptions being the long term growth rate and the
discount rate;
– Considered other external factors, such as the market
capitalisation of the Company;
Based on the procedures performed, we concluded that
the valuation of the investment in subsidiaries balance is
free from material misstatement.
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Annual Report and Accounts 2022 45
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Independent Auditors’ Report to
the Members of Team17 Group plc continued
Report on the Audit of the Financial Statements
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’s accounting process is structured around a group central finance function located across Wakefield and
Nottingham, which maintains accounting records and controls for the majority of the group. The group also has a local
finance function in Dusseldorf, Germany responsible for the accounting records for astragon and a local finance
function in Dublin, Ireland responsible for the accounting records for StoryToys (the acquisition in the prior year). Both
of the local finance functions report into the group central finance function.
In establishing the overall group audit strategy and plan, we determined whether for each component within the group
we required an audit of its complete financial information (‘full scope audit’), or whether specific audit procedures to
address a certain risk characteristic or financial statement line item would be sufficient. We identified three components
being the parent company, Team 17 Digital Limited and astragon Entertainment GmbH, which were subject to a full
scope audit.
As the group audit team, we determined the level of independent involvement needed with the local component
auditor of astragon to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our
opinion on the consolidated financial statements as a whole. We issued formal written instructions to the local component
audit team setting out the work to be performed by them and maintained regular communication throughout the audit
cycle. These interactions included participating in the planning and clearance meetings, holding regular video and
conference calls, visiting the local component audit team in Dusseldorf, Germany as well as reviewing work papers and
assessing matters reported.
We performed certain specified audit procedures across two non-significant components to gain sufficient audit
coverage over certain balances in the consolidated financial statements. The balances covered at these components
included the following: prepayments, accruals and deferred income and licence revenue. In addition to procedures
performed on specific reporting entities, work was performed by the group audit team over the consolidation, including
consolidation entries relating to equity, goodwill, acquisition accounting and over financial statement disclosures.
In total, the audit work performed provided coverage over 88% of group revenue, 91% of group profit before tax and 96%
of group net assets (determined on an absolute basis). At the group level, we also carried out other risk assessment
procedures on the components not covered by the procedures described above.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk
on the group’s financial statements, and we remained alert when performing our audit procedures for any indicators of
the impact of climate risk. Our procedures did not identify any material impact as a result of climate risk on the group’s
and company’s financial statements.
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:
Overall materiality
£1,850,000 (2021: £1,250,000).
£1,650,000 (2021: £2,094,000).
Financial statements - group
Financial statements - company
How we determined it
Rationale for benchmark applied
Approximately 1% of total assets,
capped at £1,650,000 being an
allocation of group materiality (2021:
1% of total assets)
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.
Materiality has been capped at an
allocation of group materiality.
Approximately 4% of adjusted profit
before tax (2021: 5% of three-year
average of profit before tax).
The key objective of the group is to
deliver underlying profitable growth to
increase long-term shareholder value.
As a result of the growth achieved
after adjusting for the impact of
acquisitions, we believe that adjusted
profit before tax (being profit before
tax adjusted for the impacts of share
based compensation, amortisation on
acquired intangible assets, and
acquisition-related adjustments &
fees) as presented as an alternative
performance measure (APM) in the
annual report is an appropriate
benchmark to use in assessing
materiality.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across components was between £443,000 and £1,650,000 (with
£1,650,000 being used for the company for the purpose of the group audit). Certain components were audited to a
local statutory audit materiality that was also less than our overall group materiality.
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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 73% (2021: 75%) of overall
materiality, amounting to £1,350,000 (2021: £937,500) for the group financial statements and was 75% (2021: 75%) of
overall materiality, amounting to £1,237,500 (2021: £1,570,500) for the company financial statements.
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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 at the upper end 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 £92,000 (group audit) (2021: £62,500) and £82,500 (company audit) (2021: £56,250) 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 2024 and evaluating management’s severe but plausible downside
scenario. We have tested the mathematical accuracy of the forecasts and challenged the underlying assumptions in
the forecasts, including comparing performance against budget, in particular relating to revenue and expenses.
• 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 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.
46
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Annual Report and Accounts 2022
Annual Report and Accounts 2022 47
Team17 Group plc
Independent Auditors’ Report to
the Members of Team17 Group plc continued
Report on the Audit of the Financial Statements
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 directors 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.
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 2022 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 above, 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 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 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 overstatement of revenue and profits through posting of journal entries and bias in
significant accounting estimates and judgements. The group engagement team shared this risk assessment with the
component auditors so that they could include appropriate audit procedures in response to such risks in their work.
Audit procedures performed by the group engagement team and/or component auditors included:
• Discussions with management, including consideration of known or suspected instances of non-compliance with laws
and regulation and fraud;
• Understanding and evaluating management’s processes and controls designed to prevent and detect irregularities
and non-compliance with laws and regulation and fraud;
• Reviewing minutes of meetings of those charged with governance;
• Challenging assumptions made by management in the selection and application of significant accounting judgements
and estimates;
• Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations and
the consolidation journals; and
• Reviewing financial statement disclosures and testing to supporting documentation, where appropriate, to assess
compliance with applicable laws and regulations.
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 directors’ 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.
Rebecca Gissing (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Leeds
18 May 2023
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Consolidated Statement of Profit or Loss
For the Year Ended 31 December 2022
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2022
Revenue
Cost of sales
Gross profit
Other income
Administrative expenses
Operating profit
Finance income
Finance costs
Share of net profit of associates accounted for using the equity method
Profit before tax
Taxation
Profit for the year
Earnings per share
– Basic (pence)
– Diluted (pence)
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
137,444
(67,828)
69,616
469
(37,819)
32,266
34
(3,982)
347
28,665
(5,187)
90,509
(44,989)
45,520
–
(16,277)
29,243
10
(144)
–
29,109
(5,370)
23,478
23,739
16.5
16.4
18.3
18.2
Note
5
6
8
8
13
9
10
10
All amounts relate to continuing operations.
The notes on pages 55 to 93 are an integral part of these consolidated financial statements.
Profit for the year
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange gain/(loss) on translation of foreign operations
Total comprehensive income for the year
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
23,478
23,739
8,070
31,548
(100)
23,639
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Annual Report and Accounts 2022 51
Team17 Group plc
Consolidated Statement of Financial Position
As at 31 December 2022
Company Registration Number: 11205116
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2022
Equity attributable to shareholders of the Group
At 1 January 2021
Comprehensive income
Profit for the year
Other comprehensive expense for
the year
Total comprehensive income
Transactions with owners
Share based compensation
Total transactions with owners
Share
capital
£’000
Share
premium
account
£’000
Merger
reserve
£’000
Currency
translation
reserve
£’000
Note
1,315
44,084 (153,822)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(100)
(100)
–
–
24
Other
reserves
£’000
Retained
Earnings
£’000
Total
Equity
£’000
159,296
52,476 103,349
–
–
–
–
–
23,739
23,739
–
(100)
23,739
23,639
648
648
648
648
At 31 December 2021
1,315
44,084 (153,822)
(100)
159,296
76,863
127,636
Comprehensive income
Profit for the year
Other comprehensive income for
the year
Total comprehensive income
Transactions with owners
Issue of shares for a business
combination
Issue of shares for acquisition of IP
Issue of shares to satisfy share
options
Contributions of equity
Share based compensation
Total transactions with owners
–
–
–
6
15
10
110
–
141
–
–
–
–
–
–
–
8,070
8,070
–
11,779
4,649
–
–
76,263
–
–
–
–
88,042
4,649
–
–
–
–
–
–
23
23
23
23
24
–
–
–
–
–
–
–
–
–
23,478
23,478
–
8,070
23,478
31,548
–
–
4,655
11,794
–
–
444
444
10
76,373
444
93,276
At 31 December 2022
1,456
132,126
(149,173)
7,970
159,296
100,785 252,460
Assets
Non-current assets
Goodwill
Other intangible assets
Investments accounted for using the equity method
Property, plant and equipment
Right-of-use assets
Deferred tax asset
Total non-current assets
Current assets
Inventories
Trade and other 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
Currency translation reserve
Other reserves
Retained earnings
Total equity
Non-current liabilities
Lease liabilities
Contingent consideration
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
2022
£’000
As at
31 December
2021
£’000
Note
11
11
13
14
15
22
16
17
18
23
23
23
23
23
23
21
20
22
19
21
113,424
120,685
1,045
1,692
2,785
–
41,449
39,859
–
1,446
2,189
561
239,631
85,504
1,225
36,044
50,828
88,097
–
17,825
55,302
73,127
327,728
158,631
1,456
132,126
(149,173)
7,970
159,296
100,785
1,315
44,084
(153,822)
(100)
159,296
76,863
252,460
127,636
2,625
9,369
140
9,169
21,303
52,339
1,262
364
53,965
75,268
327,728
2,042
–
109
3,550
5,701
24,315
678
301
25,294
30,995
158,631
Certain comparative balances included within the consolidated statement of financial position have been reclassified as
disclosed in note 2.
The financial statements on pages 55 to 93 were approved by the board of directors and authorised for issue on 18 May
2023 and were signed on its behalf by:
Debbie Bestwick MBE
Group Chief Executive Officer
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Consolidated Statement of Cash Flows
For the Year Ended 31 December 2022
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2022
Cash generated from operations
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payment for acquisition of astragon Entertainment GmbH, net of cash acquired
Payment for acquisition of The Label Inc, net of cash acquired
Payment for acquisition of Touchpress Inc, net of cash acquired
Payments for contingent consideration
Payments for IP
Payments for other intangibles
Payments for property, plant and equipment
Payment of capitalised development costs
Interest received
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares
Interest paid
Principal elements of lease payments
Repayment of borrowings
Net cash inflow/(outflow) from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of exchange rates on cash and cash equivalents
Cash and cash equivalents at end of year
Note
25
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
56,187
(6,761)
35,081
(4,091)
49,426
30,990
(65,024)
(12,134)
–
(5,236)
(18,750)
–
(723)
(26,110)
34
–
–
(15,093)
–
(12,000)
(107)
(573)
(9,257)
10
(127,943)
(37,020)
76,397
(131)
(417)
(2,136)
73,713
–
(144)
(264)
–
(408)
(4,804)
(6,438)
55,302
330
50,828
61,470
270
55,302
14
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8
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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 independent (“indie’) premium
video games and development of educational entertainment apps for children and a leading working simulation games
developer and publisher. The Company is a public company limited by shares and incorporated and domiciled in England
(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
These consolidated financial statements have been prepared and approved by the Directors in accordance with UK
adopted international accounting standards (UK IFRS) and the applicable legal requirements of the Companies Act 2006.
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.
Reclassification of comparatives
The Group previously presented its Goodwill and Other intangible assets together as Intangible fixed assets on the
Consolidated Statement of Financial Position. Management considers it to be more relevant to separately disclose these
items following the business acquisitions in the year. Prior year comparatives as at 31 December 2021 have been restated
to conform with current year presentation.
New and amended standards adopted by the Group
There following standards and interpretations were applied for the reporting period commencing 1 January 2022 but have
not resulted in a change of accounting policies:
• Reference to the Conceptual Framework – Amendments to IFRS 3
• Annual Improvements to IFRS Standards 2018-2020
Going concern
Management has produced a Group forecast that has also been sensitised to reflect a severe but plausible downside
scenario, which has been reviewed by the Directors. This demonstrates the Group is forecast to generate profits and cash
for a period of at least 12 months from the signing of these consolidated financial statements and that the Group expects
to have sufficient cash reserves to enable the Group to meet its obligations as they fall due over this period.
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 consolidated 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.
Where the Company does not have control but has significant influence over the entity, the Company is considered to be
an associate. Investments in associates are accounted for by the equity method of accounting and are initially recognised
at cost, and the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss after the
date of acquisition. Significant influence is defined as the power to participate in decision making without the power to
control.
The Group’s share of the associates post-acquisition profits or losses are recognised in the Consolidated Statement of
Profit or Loss, and its share of post-acquisition movements in reserves is recognised in the Consolidated Statement of
Comprehensive Income. Where the Group’s interest has been reduced to £Nil, additional losses are provided for, and a
liability is recognised, only to the extent that the Group has incurred legal or constructive obligations or made payments
on behalf of the associate. Unrealised gains on transactions between the Group and its associates are eliminated to the
extent of the Group’s interest in associates.
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
2. Significant accounting policies continued
For any subsidiaries that the Company does not have control or significant influence of then the value of the investments
are initially recognised at initial cost. Subsequently these are recognised at cost less impairment.
Team17 Group plc has provided a guarantee under section 479A of the Companies Act 2006 to the following companies
for the year ending 31 December 2022:
• Team 17 Holdings Limited
• Team 17 Software Limited
• Yippee Entertainment Limited
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 this is less than the fair value of the net assets
of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the Consolidated
Statement of Comprehensive Income.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for
impairment every six months using a discounted cash flow method applied to business forecasts. If this review
demonstrates that impairment has occurred, this is expensed to the Consolidated Statement of Profit or Loss. Goodwill is
allocated to cash-generating units (“CGUs’) 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.
The following types of intangibles have been recognised :
• Brands
• Acquired apps
• Customer and developer relationships
Brands
Where an acquisition of IP does not fall under the scope of IFRS 3 “Business Combinations’, it is accounted for under IAS
38 “Intangible Assets’. The cost of such intangible assets is the purchase price plus any directly attributable cost of
preparing the asset for its intended use. 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.
Development costs
All internally generated intangible assets are measured on initial recognition at cost. Development costs are the only
identified category of internally generated intangible assets that meet criteria for capitalisation under IAS 38 Intangible
Assets. Costs that do not meet the criteria are recognised as an expense in the period when they are incurred.
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:
• it meets the definition of an intangible asset under IAS 38 “Intangible Assets’;
• 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 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 consist of internal salary costs, advances payable to external developers under development agreements and other
external payments. Costs are recognised as an intangible asset throughout the development 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 are disposed of at the date that Team17’s rights to distribute the games are sold or forfeited.
Amortisation
The useful lives of intangible assets are assessed as either finite or indefinite and at the year end date no intangible assets
are accorded an indefinite life other than goodwill.
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 to 15 years straight line
• Development costs – over the period of expected benefit
• Acquired apps – 2 to 15 years straight line
• Customer and developer relationships – 10 years straight line
• Other intangibles – 2 years straight line
Amortisation on development costs
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 Consolidated Statement of Profit or Loss in cost of sales
for development costs.
Amortisation on brands
The useful economic life of a brand asset is assessed at the point of acquisition based on forecasted benefits and then
reassessed each year for any changes to this life. Amortisation commences at the point of acquisition and is recognised in
the Consolidated Statement of Profit or Loss in administrative expenses for brand assets. Amortisation is calculated over
the estimated useful life of the brands which ranges from 10 to 15 years straight-line.
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
2. Significant accounting policies continued
Impairment of non-financial assets
The Group assesses at least every year 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 Consolidated Statement of Profit or Loss 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 Consolidated Statement of Profit or Loss 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 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.
Trade and other receivables are measured at amortised cost less provision for expected credit losses.
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.
Revenue Recognition
Revenue includes income from the release of full games, downloadable content (‘DLC’) and early access versions of
games. The Group designs, produces and sells video games based on its own and third-party intellectual property to both
end consumers and digital and physical distributors, who are considered to be the Group’s customers when assessing
revenue recognition.
Digital Revenue
The majority of the Group’s revenue is in the form of royalties received from third-party digital distributors who have a
licence to sell the Group’s own and third-party titles games to consumers or sales to physical distributors at a fixed price.
Revenue is recognised at the point at which the content is sold to the distributor or to the consumer and the performance
obligation is satisfied. The customer is considered the platform who supplies the title to the end consumer and a platform
for the game to run on and therefore revenue is recognised net of platform fees.
Licence Revenue
The Group 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. The third-party platform is considered to be the Group’s customer as they control the distribution
of the title to the consumer during the agreed period. These contracts are determined as right to use contracts in
accordance with IFRS 15 and the fixed fee is recognised on the date the content is delivered to and accepted by the
third-party. 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 at the later of, the initial
contract term has completed, termination clause has expired and all performance obligations have been met.
Subscription Revenue
The Group receives subscription revenue for annual or monthly access subscriptions. The Group has a performance
obligation with the subscriber to provide access to the game or application available over the period of subscription and
the customer reasonably expects that updates that significantly affect the IP will be issued. As such the performance
obligation is met over the course of the contract and the revenue is recognised as a right of access contract in line with
the length of the subscription. The customer is considered the platform who supplies the title to the end consumer and a
platform for the game to run on and therefore revenue is recognised net of platform fees.
Physical Revenue
Physical revenue is generated from the sale of physical products. Revenue is recognised when the performance of the
obligation is satisfied, which is normally when control of the goods is transferred to the customer at an amount that
reflects the consideration to which the Group expected to be entitled in exchange for those goods. Revenue is based on
the invoiced sale price of goods.
Certain contracts provide a customer with a right to return the goods within a specified period. The Group uses the
expected value method to estimate the goods that will not be returned because this method best predicts the amount of
variable consideration to which the Group will be entitled. For goods that are expected to be returned, instead of revenue,
the Group recognises a refund liability at the point of revenue recognition.
A right of return asset (and corresponding adjustment to cost of sales) is also recognised for the right to recover products
from a customer.
The Group provides retrospective volume rebates to certain customers once the value of products purchased during the
period exceeds a threshold specified in the contract. Rebates are offset against amounts receivable from the customer. To
estimate the variable consideration for the expected future rebates, the Group applies the most likely amount method for
contracts with a single-volume threshold and the expected value method for contracts with more than one value
threshold.
Revenue is recognised net of rebates and early settlement discounts. Rebates and early settlement discounts are
estimated based upon experience over an appropriate period and the relevant agreements with customers.
Royalties
Revenue from the distribution of third-party titles generates an onward royalty to licensors of intellectual property rights
included within the Group’s products, these royalties are recognised as a cost of sale in line with the timing of associated
revenues.
IFRS 16 ‘Leases’
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 incremental borrowing rate at the date of application. The incremental borrowing rate is
used as the interest rate implicit in the lease is not readily available. The incremental borrowing rate is decided on through
discussion with our bankers and comparison to other businesses in the industry. Interest on the lease liability is calculated
on a monthly basis and recognised in the Consolidated Statement of Profit or Loss.
The right-of-use assets created are depreciated over the length of the lease and the depreciation is included in the
Consolidated Statement of Profit or Loss. 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.
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.
Taxation
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
Consolidated Statement of Profit or Loss 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 recognised, based on qualifying expenditure during the year.
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
2. Significant accounting policies continued
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 consolidated 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.
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 IFRS 9 “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 Consolidated
Statement of Profit or Loss, transaction costs that are attributable to the acquisition of the financial asset.
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.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below:
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 Profit or Loss, 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 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 Consolidated Statement of Profit or Loss 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 Consolidated Statement of Profit or Loss 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.
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 Consolidated Statement of
Profit or Loss. 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.
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 – straight-line over the life of the lease
Plant and equipment
Fixtures and fittings
Motor vehicles
– 3 years straight-line
– 6 years straight-line
– 5 years straight-line
An item of property, plant and equipment is derecognised 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 derecognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying amount of the item) is included in the Consolidated
Statement of Profit or Loss in the year the item is derecognised.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in first-out principle and
includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs in bringing
them to their existing location and condition.
Financial assets carried at amortised cost
This category applies to trade and other receivables due from customers in the normal course of business and cash and
cash equivalents. 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.
The Group does not hold any material financial assets at fair value through other comprehensive income or at fair value
through the Consolidated Statement of Profit or Loss. The Group does not hold any derivatives and does not undertake
any hedging activities.
Other financial assets are recognised initially at fair value plus transaction costs that are directly attributable to the
acquisition of the financial asset.
Cash and cash equivalents
Cash and short-term deposits in the Consolidated 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 considered restricted cash.
For the purpose of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and short-term
deposits as defined above.
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 12-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 historic loss rates, 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 Consolidated Statement of Profit or Loss.
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
2. Significant accounting policies continued
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, tax payables, contingent consideration, lease liabilities
and previously included loans and other borrowings.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
effective interest rate (“EIR’) method. Gains and losses are recognised in the Consolidated Statement of Profit or Loss
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 Consolidated Statement of Profit or Loss.
After initial recognition, contingent consideration is subsequently measured at fair value through profit and loss. Liabilities
are remeasured to fair value at each balance sheet date and any movement in the value is recorded in the Consolidated
Statement of Profit or Loss.
Derecognition
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
Consolidated Statement of Profit or Loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount reported in the Consolidated 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 identified in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Group CEO and CFO. For reporting purposes,
operating segments are aggregated into reporting segments where operating segments:
• have similar economic conditions and characteristics;
• the nature of products, services, production processes, type and class of customer, distribution methods and regulatory
environments are the same;
• where the aggregation of operating segments provides information that enables users to evaluate the nature and financial
effects of the business activities in which the Group engages and the economic environments in which it operates.
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 trading activities such as the settlement of trading transactions and from the remeasurement of trading
monetary items denominated in foreign currency at year-end exchange rates are recognised in administrative expenses in
the Consolidated Statement of Profit or Loss. All other foreign exchange gains and losses are presented in the
Consolidated Statement of Profit or Loss in finance costs.
The results and financial position of foreign operations that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
• income and expenses for each Statement of Profit or Loss and Statement of Comprehensive Income are translated at
average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
• all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid,
the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of
the foreign operation and translated at the closing rate.
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 2022
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 foreseeable future transactions.
Adoption of new and revised standards
There are a number of standards and interpretations issued by the International Accounting Standards Board that are
effective for financial statements after this reporting period. The following have not been adopted by the Group in
preparing the consolidated financial statements for the year ended 31 December 2022:
• IFRS 17 “Insurance contracts” (effective 1 January 2023)
• Amendments to IAS 1 “Classification of liabilities as current or non-current (effective 1 January 2023)
• Amendments to IAS 1 and IFRS practice statement 2 “Disclosure of accounting policies” (effective 1 January 2023)
• Amendments to IAS 8 “Definition of accounting estimates” (effective 1 January 2023)
• Amendments to IAS 12 “Deferred tax related to assets and liabilities arising from a single transaction” (effective 1 January
2023)
• Amendments to IFRS 10 and IAS 28 “Sale or contribution of assets between an investor and its associate or joint venture
The application of the standards and interpretations not yet applied is not expected to have a material impact on the
Group’s financial performance or position, or give rise to additional disclosures in the consolidated financial statements.
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
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 and Impairment (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 and a review for indicators of impairment is completed by product at
each period-end date. The net book values of the development cost intangible assets at 31 December 2022 are
£26,830,000 (2021: £9,848,000). 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 calculated using the discounted cash flows method. For the purposes of assessing impairment,
assets are reviewed by project for which there are separately identifiable cashflows.
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.
Revenue Recognition (Judgement)
In applying IFRS 15, the Group is required to make a judgement on whether certain revenue contracts provide either a
right to use or right to access the IP. The Group considers that its revenue contracts to date provide a mix of right to use
and right to access the asset and all new contracts are reviewed against the criteria to ensure the correct treatment is
applied. Where contracts are determined to provide a right to use, revenue is recognised at the point where the performance
obligation is satisfied. Where a contract provides a right to access revenue is recognised over the contract term.
In determining the revenue recognition treatment, the Group also needs to assess whether they are acting as an agent or a
principal in each contract when providing goods or services to a customer. Each contract is different and where the Group
acts as an agent, the Group recognises revenue net of selling costs and when the Group is a principal it recognises
revenue gross of selling costs.
Performance obligations are reviewed on a contract by contract basis and there is judgement required in applying the
allocation of consideration across the elements of the contract.
Some revenue contracts with customers include a right to return physical games. A provision for returns is held within the
balance sheet for the expected value of returns after the balance sheet date based on sales recognised before the balance
sheet date. The value of the returns is estimated based on historical return rates from customers.
Measurement of acquisition consideration and acquired intangibles (Estimate)
Contingent consideration is due on several acquisitions of subsidiaries and IP based on certain financial targets being met.
In order to assess the fair value of this consideration, management have assessed the likelihood of targets being met. For
any earnouts based on future accounting periods, management have reviewed a risk weighted forecast for the periods.
This will be reassessed at each reporting date and any movements in the fair value of the consideration amount will be
recognised in the Consolidated Statement of Profit or Loss.
The value of the intangible assets acquired are estimated using forecasts and apply an appropriate discount rate for the
calculation. Management utilises external valuation support to assist with these estimations. Further details of these
discount rates for acquisitions that occurred during the year are included within notes 11 and 12.
Share based payment valuations (Estimate)
Included in the calculation of share based payments under IFRS 2 is an estimate of how many share options are expected
to vest at the end of the performance period. The group provides nil cost options to employees with a mixture of the
following performance criteria:
Performance criteria
Estimation method
Requirement to remain employed for the length of the
vesting period
Non-market performance targets such as EPS
Retention rates have been assessed and estimated by
business and these have been applied to the awards based
on the recipients of the awards.
Forecasts are reviewed for the performance period and
compared to the targets to estimate the likelihood of the
options vesting
4. Segmental analysis
The Group has three different operating segments within the business which are as follows:
• Games Label – Developing and publishing video games for the digital and physical market
• Simulation – Developing and publishing simulation games for the digital and physical market
• Edutainment – Developing educational entertainment apps for children
The chief operating decision maker (“CODM”) of the Group is considered to be Debbie Bestwick MBE and Mark Crawford,
the group executive directors. The CODM review’s the Group’s internal reporting in order to assess performance and
allocate resources. The CODM determines the operating segments based on these reports and on the internal reporting
structure.
The CODM considered the aggregation criteria set out within IFRS 8 “Operating Segments” where two or more operating
segments can be combined for reporting purposes so long as aggregation provides financial statement users with
information to evaluate the business and the environment in which it operates.
After assessing this criteria, the CODM deems it appropriate for all three operating segments to be aggregated and
reported as a single segment. Each segment develops and publishes games and apps using own and third-party IP
through similar distribution methods with similar margins in the same regulatory environments. Therefore all figures
reported in the annual report are reported as a single aggregated reporting segment.
Non-current assets are located in the following locations:
UK
EU
Rest of World
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
226,145
11,350
2,136
239,631
80,438
5,066
–
85,504
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
5. Revenue
All revenue was generated by the sale of goods.
7. Staff numbers and costs
The monthly average number of persons employed by the Group (including directors) during the year, was as follows:
Whilst the CODM considers there to be only one reportable segment, the Company’s portfolio of games is split between
internal IP (those based on IP owned by the Group) and third-party IP incurring royalties. Therefore to aid the readers
understanding of our results, the split of revenue from these two categories is shown below:
Internal IP
Third-Party IP
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
56,050
81,394
20,133
70,376
137,444
90,509
Development
Support
Non Exec Directors
Exec Directors
The aggregate payroll costs of these persons were as follows:
Four (2021: four) customers each contributed over 10% of the total revenue in 2022 with total revenue derived from these
customers being £89,446,000 (2021: £70,244,000).
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.
All committed revenue contracts in progress at the 31 December 2022 are expected to be completed and recognised in
revenue within one year or less. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts
is not disclosed. All brought forward accrued income and deferred income has been recognised or released during the year.
6. Operating Profit
Wages and salaries
Social security costs
Other pension costs
Share based compensation
The following items are included in profit before tax:
Cost of sales
Amortisation (note 11)
Administrative expenses
Amortisation (note 11)
Depreciation of property, plant and equipment (note 14)
Depreciation of right-of-use assets (note 15)
Loss on disposal of property, plant and equipment – administrative expenses
Acquisition fees
Fair value adjustment on contingent consideration
Finance costs
Loss on foreign exchange – finance costs
Auditors’ remuneration:
Fees payable to the Company’s auditors for the audit of Team17 Group Plc
Additional fees in respect of prior year audit
Fees payable to the Company’s auditors in respect of:
Audit of Company’s subsidiaries
During the year £Nil (2021: £Nil) was paid to the company’s auditors for non-audit fees.
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
9,277
5,296
10,316
625
461
–
863
884
3,334
413
311
27
1,131
–
1,513
598
187
80
283
75
–
275
The following tables sets out the payroll costs for the Directors of Team17 Group Plc:
Aggregate emoluments
Social security costs
Company contributions to money purchase scheme
Share based compensation
The social security costs includes the movement in the accrued social security costs for the exercise of share options. The
negative value has arisen due to the reduction in the tax base of the share based compensation during the year. Retirement
benefits are accruing to 2 directors (2021: 2) under money purchase schemes.
The remuneration of the highest paid Director was:
Aggregate emoluments
Share based compensation
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
683
(87)
596
660
363
1,023
Year ended
31 December
2022
No.
Year ended
31 December
2021
No.
196
149
4
2
351
202
55
4
2
263
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
17,846
1,594
827
533
10,012
1,415
434
648
20,800
12,509
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
1,654
(392)
44
(24)
1,282
1,243
486
29
525
2,283
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
8. Finance income and costs
10. Earnings per share
Finance income
Interest receivable
Finance costs
Interest payable on lease liabilities
Other interest payable
Interest on contingent consideration
Non-trading foreign exchange cost
9. Taxation
Current tax:
Current year tax
Video Games Tax Relief
Research & Development Relief
Adjustments in respect of prior periods:
Video Games Tax Relief
Other
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% (2021: 19%)
Effects of:
Expenses not deductible for tax purposes
R&D Relief
Video Games Tax Relief
Adjustment in respect of prior periods
Change in tax rate
Overseas tax on profits
Total tax charge
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
34
34
124
25
2,320
1,513
3,982
10
10
93
51
–
–
144
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
7,284
(455)
(75)
(453)
(127)
(987)
5,187
6,634
(652)
–
245
(651)
(206)
5,370
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
28,665
5,446
29,109
5,531
164
(75)
(455)
(580)
(372)
1,059
5,187
350
(101)
(652)
(406)
588
60
5,370
Deferred taxes at the balance sheet date have been measured using the enacted local tax rates of between 12.5% and 30%
(2021: 19%).
In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase
to 25%. This was substantively enacted on 24 May 2021 as part of Finance Bill 2021.
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 year.
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)
11. Intangible Assets
Year ended
31 December
2022
Year ended
31 December
2021
23,478
23,739
142,644,403 130,002,844
130,146,649
143,247,940
18.3
16.5
18.2
16.4
Development
costs
£’000
Brands
£’000
Acquired
apps
£’000
Customer
& developer
relationships
£’000
Goodwill
£’000
Other
intangibles
£’000
Cost
At 1 January 2021
Additions
Amounts arising on acquisitions
Translation on foreign operations
Disposals
At 31 December 2021
Additions
Amounts arising on acquisitions
Translation on foreign operations
Disposals
21,342
9,257
–
–
(1,002)
29,597
26,032
–
303
(440)
21,983
12,000
755
–
–
34,738
43,773
2,034
138
–
–
–
6,228
–
–
6,228
–
21,716
1,410
–
–
–
–
–
–
–
–
4,720
560
–
22,379
–
19,409
(339)
–
41,449
–
65,964
6,011
–
–
107
–
–
–
107
11
–
6
–
Total
£’000
65,704
21,364
26,392
(339)
(1,002)
112,119
69,816
94,434
8,428
(440)
At 31 December 2022
55,492
80,683
29,354
5,280
113,424
124
284,357
Amortisation
At 1 January 2021
Charge for the year
Disposals
At 31 December 2021
Charge for the year
Translation on foreign operations
Disposals
15,055
5,296
(602)
19,749
9,277
76
(440)
7,728
3,021
–
10,749
6,115
9
–
At 31 December 2022
28,662
16,873
–
311
–
311
3,669
164
–
4,144
–
–
–
–
516
12
–
528
–
–
–
–
–
–
–
–
–
2
–
2
16
23
–
41
22,783
8,630
(602)
30,811
19,593
284
(440)
50,248
Net carrying amount
At 31 December 2022
At 31 December 2021
26,830
63,810
25,210
4,752
113,424
9,848
23,989
5,917
–
41,449
83
105
234,109
81,308
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Annual Report and Accounts 2022 69
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For the Year Ended 31 December 2022
11. Intangible Assets continued
12. Business combinations
Brands – Hell Let Loose
On 6 January 2022, Team 17 Digital Limited acquired the Hell Let Loose IP from Black Matter Pty. Ltd., a company
incorporated in Australia for a maximum payment of £45.6m. This is made up of an initial cash payment of £18.8m and an
issue of shares valued at £11.8m with up to £15m of contingent consideration payable in cash if revenues from the IP
exceed certain targets in FY22 and FY23.
The calculation of the number of shares to be issued used the share price several days prior to the acquisition date which
has led to a £11.8m valuation of the share issue for accounting purposes. Deferred and contingent consideration has been
recognised at present value which has been calculated using a discount rate of 7.2%. Details of the consideration are as
follows:
Initial cash payment
Initial share issue
Contingent consideration
£’000
18,750
11,795
13,228
43,773
The purchase is not being accounted for as a business combination under IFRS 3 due to the assets being acquired
comprising a single group of assets under the concentration test as set out in “Definition of a Business (Amendments to
IFRS 3)” by the IASB issued in October 2018. As such the acquisition is considered an asset purchase under IAS 38
“Intangible Assets”. Amortisation is calculated over the assets’ estimated useful life using the following policy:
Hell Let Loose Brand
15 years straight-line
Brands – astragon
As part of the acquisition of astragon Entertainment GmbH, separately identifiable intangibles of £2.0m were recognised
relating to the astragon brand. This represents the value of the brand in the simulation game marketplace. Amortisation
on the astragon brand is calculated on a straight-line basis over the assets estimated useful life of 15 years.
astragon Brand
15 years straight-line
Acquired Apps
These represent the fair value of games and apps arising at acquisition. The assets are tested for impairment annually or
more frequently if there are indicators of impairment. Amortisation is calculated over the estimated useful life using the
following policy:
Acquired Apps
7 to 10 years straight-line
Goodwill
The Group tests for impairment annually, or more frequently if there are indicators that goodwill might be impaired.
The Group has 4 cash-generating units (“CGUs”) which are as follows:
• Team 17 Digital Limited
• StoryToys Limited
• astragon entertainment GmbH
• Team17 (USA) Inc
The recoverable amount of each of the cash-generating units (“CGUs”) at 31 December 2022 is determined from the value
in use. The key assumption in calculating the value in use was the expected future cash flows. The pre-tax discount rate
applied to the future cash flows was between 12.5% and 27.8%. A 5 year bottom up forecast for the years ending 31 December
2023 to 2027 inclusive has been created before applying long term growth rates of between 2% and 3%. The Directors
have assessed the sensitivity of the impairment test to reasonably possible changes in the key assumptions and noted that
no material impairment exists in any cases. Climate change is not expected to have a material impact on future cash flows.
No impairment was indicated when assessing the value in use of the Group’s intangible assets, therefore fair value less
costs of disposal was not assessed.
Other intangibles
These are made up of capitalised software and are amortised under the following policies:
Capitalised software
2 years straight-line
70
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Annual Report and Accounts 2022
Acquisition of astragon Entertainment GmbH
On 13 January 2022 Team17 Group Plc acquired 100% of the share capital of astragon entertainment GmbH (“astragon”)
for a maximum payment of £82.3m (€98.0m) subject to cash, net debt and working capital adjustments. The preliminary
purchase price for the acquisition is £63.0m (€75.0m) in cash. Further payments of up to £19.3m (€23.0m) are payable in
cash if astragon meets certain targets during FY21 and FY22 following completion of the acquisition. There was no minimum
due on the contingent consideration. The full results of the business have been included in the Consolidated Statement of
Profit or Loss for the year as there was no material results between the start of the year and the date of acquisition.
astragon is a publisher and distributor of sophisticated ‘working’ simulation games based in Germany. The acquisition allows
Team17 to enter a new and complementary simulation game category whilst with its strong back catalogue of evergreen
owned franchises and a solid pipeline of products in development. This will further expand Team17’s appeal to a wide
cross section of gamers, spanning multiple genres and age groups.
The initial payment totalled £64.8m (€77.1m) after including the estimated completion payment of £1.8m (€2.1m) covering
the acquired assets and liabilities. This initial payment was settled in cash. Contingent consideration consists of the earn-out
for the sellers included at fair value and payable based on the acquired business reaching certain results during FY21 and FY22.
Deferred and contingent consideration has been recognised at present value which has been calculated using a discount
rate of 14.5%. Details of the purchase consideration at initial recognition are as follows:
Initial recognition
Fair value adjustment
Balance outstanding at 31 December 2022
Initial
consideration
£’000
Deferred
consideration
£’000
Contingent
consideration
£’000
63,030
–
–
1,800
–
–
6,067
4,309
8,607
Total
£’000
70,897
4,309
8,607
The fair value of the purchase consideration takes into account the following assumptions and estimates:
• Earn-out targets – Management have assessed the likelihood of targets being met. For FY21 this is based on the trading
results for the year. For FY22 earn-out targets, at acquisition management have reviewed a risk weighted forecast for
the year. This was reassessed as at 31 December 2022 and the movement in the fair value of the consideration has been
recognised in the Consolidated Statement of Profit or Loss.
• Interest costs of £0.6m (2021: £Nil) from the unwinding of the 14.5% discount rate have been included in the
Consolidated Statement of Profit or Loss for the year.
The assets and liabilities recognised as a result of the acquisition are as follows:
Cash and cash equivalents
Acquired apps
Brand
Investments
Property, plant & equipment
Development costs
Right of use assets
Inventories
Trade and other receivables
Deferred tax liability
Lease liabilities
Trade and other payables
Bank loans
Net identifiable assets acquired
Add: Goodwill
Total Consideration
Book
value
£’000
Fair value
adjustment
£’000
Fair value
acquired
£’000
2,261
–
–
323
110
5,563
964
438
16,114
–
(964)
(8,605)
(2,101)
14,103
–
21,716
2,034
307
–
(5,563)
–
–
(1,777)
(5,333)
–
–
–
11,384
2,261
21,716
2,034
630
110
–
964
438
14,337
(5,333)
(964)
(8,605)
(2,101)
25,487
45,410
70,897
The goodwill is attributable to astragon’s experience in the simulation games and physical distribution markets. It has
been allocated to the sole segment of the business which is the identification, development and publishing of content
across an expansive range of genres and platforms. None of the goodwill is expected to be deductible for tax purposes.
Annual Report and Accounts 2022 71
Team17 Group plc
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
12. Business combinations continued
13. Investments
Acquisition of The Label Inc
On 6 January 2022 Team 17 Digital Limited acquired 100% of the share capital of The Label Inc through Team17 USA Inc (a
newly incorporated subsidiary setup solely to acquire this business) for a maximum payment of £29.6m ($40.3m) subject
to cash, net debt and working capital adjustments. The initial payment for the acquisition was £13.2m ($18.0m) in cash and
£4.6m ($6.3m) through the issue of shares. A further payment of up to £11.8m ($16.0m) is payable via a mix of cash and shares
based on the meeting of certain targets by the Company within three years following completion of the acquisition. There was
no minimum due on the contingent payment. The full results of the business have been included in the Consolidated Statement
of Profit or Loss for the year as there was no material results between the start of the year and the date of acquisition.
The Label is a USA based indie publisher specialising in mobile subscription games content and will further expand
Team17’s capabilities across the digital entertainment space, consolidating the Group’s position as a leading gaming and
entertainment business and providing a wealth of opportunities for significant further growth.
The initial payment of £17.9m ($24.3m) consists of £17.8m ($24.1m) consideration and £0.1m ($0.2m) deemed to be
remuneration from the acceleration of outstanding share options. Details of the purchase consideration are as follows:
Initial recognition
Fair value adjustment
Balance outstanding at 31 December 2022
Initial
consideration
£’000
Contingent
consideration
£’000
17,796
–
–
6,531
(3,582)
4,419
Total
£’000
24,327
(3,582)
4,419
Contingent consideration consists of the earn-out for the sellers included at fair value and payable based on the acquired
business reaching certain results. During the year £1.0m was paid to satisfy pre-acquisition liabilities recognised as part of
the acquisition under IFRS 3.
The fair value of the purchase consideration takes into account the following assumptions and estimates:
• Earn-out targets – Management have assessed the likelihood of targets being met. For FY22, FY23 and FY24 earn-out
targets, at acquisition management have reviewed a risk weighted forecast for the year. This will be (and has been for
FY22) reassessed at each reporting date and the movement in the fair value of the consideration amount has been
recognised in the Consolidated Statement of Profit or Loss.
• Interest costs of £0.7m (2021: £Nil) from the unwinding of the 8.4% discount rate have been included in the Consolidated
Statement of Profit or Loss for the year.
The assets and liabilities recognised as a result of the acquisition are as follows:
Cash and cash equivalents
Customer and developer relationships
Contract cost asset
Trade and other receivables
Deferred tax liability
Trade and other payables
Net identifiable assets acquired
Add: Goodwill
Total Consideration
Book value
£’000
Fair value
adjustment
£’000
Fair value
acquired
£’000
1,366
–
118
1,189
–
(888)
1,785
–
4,720
(118)
(357)
(1,416)
(841)
1,988
1,366
4,720
–
832
(1,416)
(1,729)
3,773
20,554
24,327
The goodwill is attributable to The Labels’ talented development team and experience in the mobile subscription market.
It has been allocated to the sole segment of the business which is the identification, development and publishing of content
across an expansive range of genres and platforms. None of the goodwill is expected to be deductible for tax purposes.
Acquisition fees
Total acquisition fees for the year ended 31 December 2022 of £863,000 (2021: £1,131,000) are included in administrative
expenses in the Consolidated Statement of Profit or Loss.
Results from acquisitions
In total, incremental revenues of £44.8m and profit before tax of £14.6m came from the impact of business acquisitions
reflecting the full year results of astragon and The Label and H1 results of StoryToys acquired on 1 July 2021.
72
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Annual Report and Accounts 2022
Details of the subsidiaries in which the Group holds 100% of the share capital are as follows and there has been no
movement during the current or previous year in the proportion of rights held except as disclosed below:
Registered
address
Principal place
of business
Proportion of
voting rights
and shares held
Activity
Name of company
Subsidiary undertakings
Team 17 Holdings Limited
Team 17 Software Limited
Team 17 Digital Limited
Mouldy Toof Studios Limited
3 Red Hall Avenue,
Wakefield, WF1 2UL, UK
3 Red Hall Avenue,
Wakefield, WF1 2UL, UK
3 Red Hall Avenue,
Wakefield, WF1 2UL, UK
3 Red Hall Avenue,
Wakefield, WF1 2UL, UK
Yippee Entertainment Limited 3 Red Hall Avenue,
Touch Press Inc.
StoryToys Limited
(acquired 2 July 2021)
Wakefield, WF1 2UL, UK
1013 Centre Road,
Suite 403-B,
Wilmington, Delaware,
19805, USA
Exchequer Chambers,
23 Exchequer Street,
Dublin 2, Ireland
UK
UK
UK
UK
UK
USA
100%
100%
100%
100%
100%
100%
Intermediate holding
company
Intermediate holding
company
Development and
publishing of video games
Dormant
Dormant
Intermediate holding
company
Ireland
100%
Development of
edutainment apps
Team17 (USA) Inc
(incorporated 15 December
2021)
1013 Centre Road,
Suite 403S, Wilmington,
Delaware 19805, USA
The Label Inc
(acquired 6 January 2022)
PO Box 309, Ugland House,
South Church Street,
George Town,
Grand Cayman KY1-1104,
Cayman Islands
USA
100%
USA
100%
astragon Entertainment GmbH
(acquired 13 January 2022)
Am Wehrhahn 33, 40211,
Duesseldorf, Germany
Germany
100%
Development and
publishing of video games
for the mobile market
Development and
publishing of video games
for the mobile market
Development and
publishing of simulation
video games
The Group has the following investments in associates all of which were acquired on 13 January 2022 and held through
astragon Entertainment GmbH. All investments in associates are measured using the equity method holding the
investment at cost plus share of profits/losses.
Name of Company
Registered
address
Weltenbauer Software
Entwicklung GmbH
Frankfurter Str 5, 65189
Wiesbaden
Principal place
of business
Germany
Rincon Design GmbH
GQA Games Quality GmbH1
GQA Games Quality Ukraine1
Gilbachstrasse 29a, 50672
Cologne
Dr.-Hans-Lebach-Str. 2,
15537 Erkner
Sichovikh Striltsiv Street,
21, office 501
04053, Kiev city
Germany
Germany
Ukraine
Proportion of
voting rights
and shares held
Activity
25.2%
ordinary
shares
Development of
simulation video games
20% ordinary
shares
Digital design work
50% ordinary
shares
Quality assurance services
for video games
50% ordinary
shares
Quality assurance services
for video games
1. GQA Games Quality GmbH owns 100% of the share capital of GQA Games Quality Ukraine. Both companies are not considered under control of Team17 Group Plc as the
remaining 50% of the share options are owned by the CEO of the business and the Group has no additional voting rights.
Annual Report and Accounts 2022 73
Team17 Group plc
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
13. Investments continued
The value of investments in associates held under the equity method are as follows:
At 1 January 2022
Acquisitions
Translation on foreign operations
Share of profit from associates
At 31 December 2022
14. Property, plant and equipment
Cost
At 1 January 2021
On acquisition
Additions
Disposals
At 31 December 2021
On acquisition
Additions
Currency translation
At 31 December 2022
Accumulated depreciation
At 1 January 2021
Charge for the year
Disposals
At 31 December 2021
Charge for the year
Currency translation
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
Year ended
31 December
2022
£’000
–
630
68
347
1,045
Total
£’000
2,462
9
533
(697)
2,307
110
752
12
3,181
1,109
413
(661)
861
625
3
1,489
1,692
1,446
Leasehold
improvements
£’000
Plant and
equipment
£’000
Fixtures and
fittings
£’000
Motor
vehicles
£’000
880
–
46
–
926
–
2
–
928
92
85
–
177
95
–
1,319
9
487
(676)
1,139
93
715
9
1,956
927
289
(640)
576
471
3
272
1,050
656
749
906
563
242
–
–
–
242
17
35
3
297
69
39
–
108
59
–
167
130
134
21
–
–
(21)
–
–
–
–
–
21
–
(21)
–
–
–
–
–
–
15. Right-of-use assets
Cost
At 1 January 2021
On acquisition
Additions
At 31 December 2021
On acquisition
Currency translation
At 31 December 2022
Accumulated depreciation
At 1 January 2021
Charge for the year
At 31 December 2021
Charge for the year
Currency translation
At 31 December 2022
Net carrying amount
At 31 December 2022
At 31 December 2021
16. Inventories
Finished goods
Buildings
£’000
Total
£’000
1,570
1,015
107
2,692
964
113
3,769
192
311
503
461
20
984
1,570
1,015
107
2,692
964
113
3,769
192
311
503
461
20
984
2,785
2,189
2,785
2,189
31 December
2022
£’000
31 December
2021
£’000
1,225
1,225
–
–
The balance represents the value of physically produced video games controlled by the company. During the year
£8,339,000 (2021: £Nil) was recognised through cost of sales during the year. Inventories are stated after provision for
impairment.
17. Trade and other receivables
Amounts falling due within one year:
Trade receivables
Accrued income
Other taxes receivable
Other receivables
Prepayments
Costs of fulfilling contracts
31 December
2022
£’000
31 December
2021
£’000
16,089
13,329
1,606
819
3,108
1,093
36,044
2,199
12,987
796
619
1,224
–
17,825
There are no (2021: No) impaired assets within trade and other receivables. Trade receivables are recognised net of
£879,000 (2021: £Nil) of rebates.
Since most of its customers are considered to have low default risk and the historical default rate and frequency of loss
are low, the expected credit loss allowance for trade receivables is nominal as at 31 December 2021 and 31 December 2022.
74
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Annual Report and Accounts 2022
Annual Report and Accounts 2022 75
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
18. Cash and cash equivalents
21. Lease liabilities
Cash at bank and in hand
Cash equivalents
31 December
2022
£’000
31 December
2021
£’000
47,875
2,953
15,213
40,089
50,828
55,302
Amounts falling due within one year
Amounts falling due in over one year
31 December
2022
£’000
31 December
2021
£’000
364
2,625
2,989
301
2,042
2,343
Included within the cash equivalents balance above is £2,953,000 (2021: £3,115,000) owned by the Team17 Employment
Benefit Trust. 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 considered restricted cash.
Included within cash equivalents at 31 December 2021 was £36,974,000 held by the Group’s solicitors for the purchase of
the Hell Let Loose IP and shares of The Label Inc. during January 2022.
19. Trade and other payables
Amounts falling due within one year:
Trade payables
Other payables
Contingent consideration
Taxation and social security
Accruals and deferred income
31 December
2022
£’000
31 December
2021
£’000
8,016
1,325
17,965
745
24,288
52,339
2,748
525
5,287
457
15,298
24,315
Contingent consideration of £9,369,000 (2021: £Nil) due in over one year is included in non-current liabilities.
20. Contingent consideration
Amounts falling due in under one year (note 19)
Amounts falling due in over one year
31 December
2022
£’000
31 December
2021
£’000
17,965
9,369
27,334
5,287
–
5,287
Included within trade and other payables is £17,965,000 (2021: £5,287,000) of contingent consideration as disclosed in
note 19. Contingent consideration is broken down as follows:
At 1 January
On acquisition
Fair value adjustment
Interest
Foreign exchange
Payment
At 31 December
31 December
2022
£’000
31 December
2021
£’000
5,287
27,607
884
2,320
1,234
(9,998)
27,334
–
6,612
–
–
124
(1,449)
5,287
The maximum value of outstanding contingent consideration at the year end was £48.8m (2021: £15.5m).
Interest expense during the year on the above lease liabilities included in finance costs was £124,000 (2021: £93,000). The
total cash outflow for leases during the year was £541,000 (2021: £408,000).
22. Deferred taxation
Recognised deferred tax asset:
At 1 January 2021 (restated)
On acquisition (restated)
Deferred tax recognised in profit or loss (restated)
At 31 December 2021 (restated)
Foreign exchange
Deferred tax recognised in profit or loss
At 31 December 2022
Recognised deferred tax liabilities:
At 1 January 2021 (restated)
On acquisition (restated)
Deferred tax recognised in profit or loss (restated)
At 31 December 2021 (restated)
On acquisition
Foreign exchange
Deferred tax recognised in profit or loss
At 31 December 2022
Other
short-term
timing
differences
£’000
Tax losses
£’000
–
780
(219)
561
228
(492)
297
752
(37)
828
1,543
–
(45)
1,498
Accelerated
depreciation
for tax
purposes
£’000
Arising on
intangible
fixed assets
£’000
Other
short-term
timing
differences
£’000
169
–
220
389
–
–
10
399
2,709
1,714
281
4,704
6,749
554
(1,687)
10,320
–
–
–
–
–
9
236
245
Total
£’000
752
743
609
2,104
228
(537)
1,795
Total
£’000
2,895
1,714
501
5,093
6,749
563
(1,441)
10,964
The overall deferred tax position is a liability of £9,169,000 (2021: liability of £2,989,000).
The 2021 comparatives have been restated to correct the split of deferred tax between deferred tax assets and deferred
tax liabilities.
In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate will increase to
25%. At the balance sheet date, deferred taxes have therefore been measured using the tax rate at the date that the
deferred tax asset or liability unwinds of 12.5% to 32.5% (2021: 19%).
76
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Annual Report and Accounts 2022 77
Team17 Group plc
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
23. Share capital
Authorised, allotted, called up and fully paid
145,593,271 (2021: 131,473,222) ordinary shares of 1p each
31 December
2022
£’000
31 December
2021
£’000
1,456
1,456
1,315
1,315
The ordinary shares have voting, dividend and capital distribution rights. They are not redeemable.
On 11 January 2022 the Company issued 604,543 to the sellers of the Label and 1,531,780 shares to the sellers of Hell Let
Loose. These shares were valued at £7.70 per share.
On 18 January 2022 the Company placed an additional 11,010,999 shares at the price of £7.14 per share with gross
proceeds of £78.6m. Directly attributable fees of the placing totalled £2.2m for net proceeds of £76.4m.
Debbie Bestwick MBE, a director of Team17 Group Plc, received 972,727 share options on 23 May 2018 which fully vested
on 23 May 2021. These Nil cost options were then exercised and the shares were issued on 20 May 2022.
Shares held by subsidiaries
At 31 December 2022, and included in these consolidated financial statements, the Team17 Employment Benefit Trust (the
“Trust’) holds 1,867,522 (2021: 1,920,150) shares in Team17 Group plc with a nominal value of £18,675 (2021: £19,202).
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.
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
consolidated 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.
The premiums on the shares issued as part of historic share for share exchanges have been included in the merger relief
reserve. During the year premiums of £4,649,000 have been recognised as part of the acquisition of The Label.
Currency translation reserve
Currency movements arising on the revaluation of foreign subsidiaries into the presentation currency of the consolidated
accounts, GBP, are included in other comprehensive income and held in the currency translation reserve.
Other reserves
Other reserves are made up of the following:
Capital contribution
Includes the value of shares gifted to the Team17 Employment Benefit Trust on 23 May 2018 as part of the IPO.
24. Share based compensation
The following share schemes have been awarded but not yet vested at 31 December 2022:
Share scheme name
Award date
Vesting date
Maximum number
of share options
outstanding
Exercise price
per share
option
Executive LTIPs – 2020
10 September 2020 9 September 2023
20,057
Executive LTIPs – 2021
8 July 2021
7 July 2024
Executive LTIPs – 2022
29 June 2022
28 June 2025
Free shares (Multiple awards)
Nil cost options (Multiple awards)
Other LTIPs
See note
See note
See note
See note
See note
See note
Senior management LTIPs
29 June 2022
28 June 2025
Share Incentive Plan (See note below) Monthly award
3 years from
award date
176,100
313,500
110,368
110,166
12,535
49,718
27,688
£Nil
£Nil
£Nil
£Nil
£Nil
£Nil
£Nil
£Nil
The maximum number of outstanding share options at 31 December 2022 was 820,132 (2021: 1,335,490). Of these share
options 300,798 (2021: 166,606) will be settled from shares already held by the Team17 Employment Benefit Trust. All
share options have both and award and exercise price of £Nil and there are no dividends expected to be paid during the
option vesting period.
Share based payment charges are included within either cost of sales or administrative expenses (depending on which
employees the shares were issued to) in the Consolidated Statement of Profit or Loss and included within retained
earnings in the Consolidated Statement of Financial Position. In addition, social security costs are being accrued in the
balance sheet at the rate applicable to the recipient multiplied by the balance sheet share price multiplied by the number
of shares expected to vest. This is recognised over the vesting period within either cost of sales or administrative expenses
and accruals in the Consolidated Statement of Financial Position.
Included within the consolidated financial statements is the following:
Consolidated Statement of Comprehensive Income
Share options charge
Employers national insurance
Consolidated Statement of Financial Position
Accruals (cumulative employers national insurance balance)
Retained Earnings (cumulative balance)
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r
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31 December
2022
£’000
31 December
2021
£’000
l
S
t
a
t
e
m
e
n
t
s
444
(537)
(93)
170
3,197
648
356
1,004
1,373
2,753
At the date of award, in order to calculate the fair value of share options the likelihood of the options vesting is estimated.
This percentage based estimate is made up of:
• Assessment of meeting results based performance targets (where applicable)
• Assessment of the likelihood for remaining employed throughout the vesting period
The combination of these make up the estimate of options vesting percentage as shown in the tables below.
78
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Annual Report and Accounts 2022
Annual Report and Accounts 2022 79
Team17 Group plc
Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
24. Share based compensation continued
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 at each reporting date to reflect the Group’s position against the targets.
Share options awarded to Executive Directors in 2020 under the Team17 Group plc Long Term Incentive Plan have a
performance criteria based on meeting the Group’s Cumulative AEPS target over three financial years FY20 to FY22.
Award date
Vesting date
Underlying share price (£)
Vesting period
Estimate of options vesting
Risk free rate
Fair value at vesting date (£’000)
Performance targets
10 September 2020
8 July 2021
9 September 2023
7 July 2024
29 June 2022
28 June 2025
6.86
3 years
100%
0.83%
138
7.95
3 years
0%
0.83%
1,400
3.95
3 years
100%
0.83%
1,238
Group’s cumulative
AEPS targets
Group’s EPS Compound
annual growth targets
Group’s adjusted EPS
compound annual
growth targets
Performance period
FY20 to FY22
FY21 to FY23
FY22 to FY24
Free shares
There have been two separate issues of free share options to all staff employed by Team 17 Digital Limited. 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 is calculated as the fair value multiplied by the number of share options issued. The
expense is apportioned over the vesting period. These share options will be settled from shares already held by the
Team17 Employment Benefit Trust.
Award date
Vesting date
Underlying share price (£)
Estimate of options vesting
Fair value at vesting date (£’000)
Maximum number of options outstanding
4 April 2019
3 April 2022
29 April 2022
28 April 2025
2.825
52%
186
63,550
4.35
69%
157
48,391
Nil cost options
During the current and previous years there have been multiple awards provided to employees of the Group. These have
been issued at different points over the years as shown in the table below. 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. All of these options
have both an award and exercise price of £Nil.
The fair value of these share options is 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.
Award date
Vesting date
Underlying
share price
(£)
Estimate
of options
vesting
Fair value at
vesting date
(£’000)
Maximum number
of share options
outstanding
8 April 2019
8 April 2022
2.665
18 December 2019
18 December 2022 3.425
22 April 2020
21 April 2023
6 May 2020
5 May 2023
1 May 2021
30 April 2024
27 April 2022
26 April 2025
29 July 2022
28 July 2022
5.52
5.2
7.05
4.6
4.4
31 October 2022
30 October 2022
4.125
80%
100%
80%
80%
80%
80%
69%
69%
76
60
22
77
277
55
15
16
8,184
17,392
3,208
6,883
33,468
12,846
5,104
3,856
Senior management LTIPs
A further LTIP scheme was awarded during the year with no results based performance criteria. One third of the options
vest on each anniversary of the award date so long as the recipient remains employed however these options may not be
exercised until 3 years from the date of award.
Award date
Earliest exercise date
Underlying share price (£)
Estimate of options vesting
Fair value at vesting date (£’000)
Maximum number of options outstanding
29 June 2022
28 June 2025
3.95
80%
157
49,718
Other LTIPs
During the year, options were issued under the LTIP scheme. Unlike the LTIPs discussed above these had no performance
related targets to satisfy and instead vest over the length of the award so long as the recipient remains employed. The
options also have a vesting period of less than 3 years.
Award date
Vesting date
Underlying share price (£)
Estimate of options vesting
Fair value at vesting date (£’000)
Maximum number of options outstanding
23 November 2021
23 November 2021
22 November 2022 17 November 2023
6.40
52%
59
9,265
6.40
69%
21
3,270
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 is calculated as the fair value at the award date multiplied by the number of share
options multiplied by the estimate of options vesting. All SIP option schemes use an estimate of 69% for the estimate of
options vesting. The expense is apportioned over the vesting period. These share options will be settled from shares
already held by the Team17 Employment Benefit Trust.
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Annual Report and Accounts 2022 81
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
25. Cash generated from operations
27. Financial instruments
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 fixed assets
Loss on disposal of fixed assets
Fair value movement in contingent consideration
Share based compensation
Share of profits of associates
Finance income
Financial expenses
Operating cash flow before changes in working capital
(Increase)/Decrease in trade and other receivables
Increase in provisions
Increase/(Decrease) in trade and other payables
Increase in inventory
Cash generated from operations
26. Commitments and contingencies
The Group had no contracted capital commitments at 31 December 2022 (31 December 2021: £Nil).
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
28,665
29,109
At 31 December 2022
Note
625
461
19,593
–
884
443
(347)
(34)
3,983
54,273
(1,892)
31
4,510
(735)
413
311
8,630
36
–
648
–
(10)
144
39,281
509
33
(4,743)
–
56,187
35,081
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Contingent consideration in two to five years
Lease liabilities in under one year
Lease liabilities in two to five years
Lease liabilities in over five years
17
18
19
20
21
21
21
At 31 December 2021
Note
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Lease liabilities in under one year
Lease liabilities in two to five years
Lease liabilities in over five years
17
18
19
21
21
21
Financial
assets at
amortised
cost
£’000
Financial
liabilities at
amortised
cost
£’000
Financial
liabilities at
fair value
through
profit and
loss
£’000
Carrying
value
£’000
Fair value
£’000
30,236
50,828
–
–
–
–
30,236
50,828
30,236
50,828
–
–
–
–
–
(22,255)
–
(364)
(1,726)
(899)
(17,965)
(9,369)
–
–
–
(40,220)
(9,369)
(364)
(1,726)
(899)
(40,220)
(9,369)
(364)
(1,726)
(899)
81,064
(25,244)
(27,334)
28,486
28,486
Financial
liabilities at
amortised
cost
£’000
(restated)
Financial
liabilities at
fair value
through
profit and
loss
£’000
(restated)
Carrying
value
£’000
Fair value
£’000
–
–
–
–
16,342
55,302
16,342
55,302
Financial
assets at
amortised
cost
£’000
16,342
55,302
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–
–
(17,344)
(301)
(1,178)
(864)
(5,287)
–
–
–
(22,631)
(301)
(1,178)
(864)
(22,631)
(301)
(1,178)
(864)
71,644
(19,687)
(5,287)
46,670
46,670
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Trade and other receivables shown above comprises trade receivables, accrued income and other receivables as disclosed
in note 17. Trade and other payables comprises trade payables, other payables and accruals as disclosed in note 19.
Management have assessed that for cash and cash equivalents, trade and other receivables and trade and other payables
their fair values approximate to their carrying amounts largely due to the short-term maturities of these instruments. They
are included in the table above for completeness.
The fair value of contingent consideration has been calculated using discounted cash flows. These are considered as level
3 financial instruments (inputs for the assets or liabilities are not based on observable market data).
The 2021 comparatives in the table above have been restated to include contingent consideration as fair value through
profit and loss.
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 and interest rate risk on financial liability borrowings. The key risks are analysed
below.
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 borrowings, cash and cash equivalents and equity attributable to the
equity holders of the parent, comprising issued capital, reserves and retained earnings.
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Notes to the Consolidated Financial Statements continued
For the Year Ended 31 December 2022
Company Statement of Financial Position
As at 31 December 2022
Company Registration Number: 11205116
27. Financial instruments continued
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. The Group’s customers are considered to have low default risk, and
the historical default rate and frequency of loss are both low. Therefore, the lifetime expected credit loss allowance for
trade and other receivables is nominal at 31 December 2022. 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.
Currency risk
The Group receives and remits payments in Euros and US Dollars and manages this foreign currency risk by offsetting
payments and receipts along with transferring excess foreign currency balances into GBP at the earliest possible
opportunity.
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. Included within trade and other payables
within one year is £17,965,000 (2021: £5,287,000) of contingent consideration due within one year. Contingent consideration
in non-current assets is £9,369,000 (2021: £Nil) due in two to five years and £Nil (2021: £Nil) in over five years.
Trade and other payables
All other trade and other payables are non-interest bearing and are normally settled on 30-day terms.
Lease liabilities
Included within lease liabilities is £364,000 (2021: £301,000) of lease liabilities due within one year, £1,726,000 (2021:
£1,292,000) within two to five years and £899,000 (2021: £750,000) due in over five years.
28. Pensions
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
Net current assets
Net assets
Capital and reserves
Called up share capital
Share premium account
Other reserves
Profit and loss account
Total equity
As at
31 December
2022
£’000
As at
31 December
2021
£’000
Note
6
7
8
9
10
10
10
250,803
94
250,897
47,047
9,944
56,991
179,510
676
180,186
43,113
37,461
80,574
(20,533)
(59,556)
36,458
21,018
287,355
201,204
1,456
136,775
154,245
(5,121)
1,315
44,084
154,245
1,560
287,355
201,204
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 loss (2021: loss) for the year dealt with in the accounts of the Company was
£7,125,000 (2021: £1,045,000).
The financial statements on pages 55 to 93 were approved by the Board of Directors and authorised for issue on
18 May 2023, and were signed on its behalf by:
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.
Debbie Bestwick MBE
Group Chief Executive Officer
The outstanding pension contributions at 31 December 2022 were £201,000 (31 December 2021: £59,000).
29. Related parties
Ultimate controlling party
At 31 December 2022 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 2022 and there are no loan notes
outstanding with related parties at the 31 December 2022.
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.
30. Post balance sheet events
On 28 March 2023 Debbie Bestwick MBE announced her intention to step down from her position as Chief Executive Officer
of the Company once a suitable successor can be found. The intention is for Debbie to transition into a non-executive role,
remaining on the Board to provide ongoing mentorship, support and guidance to the Board and the senior management
team, ensuring the Group continues to benefit from her wealth of business and gaming sector experience.
On 27 April 2023 astragon Entertainment GmbH acquired 100% of the share capital in Independent Arts Software GmbH.
Independent Arts is a games development studio with 39 employees based in Germany. At the time when these financial
statements were authorised for issue, the Group had not yet completed the accounting for the acquisitions and assessed
the fair value of the consideration. The consideration is split up into two parts with an element of cash paid up front on
acquisition and an element of contingent consideration based on the Company meeting certain conditions. The acquisition
has been funded through the group’s cash position and there has been no debt raised.
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Company Statement of Changes in Equity
For the year ended 31 December 2022
Notes to the Company Financial Statements
For the Year Ended 31 December 2022
Equity attributable to shareholders of the company
1. General information
At 1 January 2021
Comprehensive income
Loss and total comprehensive income for
the financial year
Transactions with owners
Share based compensation
At 31 December 2021
Comprehensive income
Loss and total comprehensive income for
the financial year
Transactions with owners
Issue of shares for a business combination
Issue of shares for an acquisition of IP
Issue of shares to satisfy share options
Contributions of equity
Share based compensation
Total transactions with owners
At 31 December 2022
Called up
share
capital
£’000
Share
premium
account
£’000
Note
Other
reserve
£’000
Profit
and loss
account
£’000
Total
Equity
£’000
1,315
44,084
154,245
1,957
201,601
–
–
–
–
–
–
(1,045)
(1,045)
648
648
1,315
44,084
154,245
1,560
201,204
9
9
9
9
–
6
15
10
110
–
141
–
4,649
11,779
–
76,263
–
92,691
–
–
–
–
–
–
–
(7,125)
(7,125)
–
–
–
–
444
444
4,655
11,794
10
76,373
444
93,276
1,456
136,775
154,245
(5,121)
287,355
Team17 Group Plc (the “Company”) is incorporated and domiciled in England (United Kingdom) and the principal activity
of 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 transitioned from FRS 102 to FRS 101 with an effective date of 1 January 2021. There were no transition
adjustments required as a result of the transfer to FRS 101. The financial statements have been prepared under the
historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial
Reporting Standard 101 “Reduced Disclosure Framework” (“FRS 101”) 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 Company has taken advantage of the following disclosure exemptions under FRS 101:
• The requirements of IFRS 7 “Financial Instruments: Disclosures”
• The requirements of paragraphs 91-99 of IFRS 13 “Fair Value Measurement”
• The requirement in paragraph 38 of IAS 1 “Presentation of Financial Statements” to present comparative information in
respect of:
• Paragraph 79(a)(iv) of IAS 1;
• Paragraph 73(e) of IAS 16 “Property, Plant and Equipment”; and
• Paragraph 118(e) of IAS 38 “Intangible Assets”
• The requirements of paragraphs 10(d), 10(f), 16, 38A, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1
“Presentation of Financial Statements”
• The requirements of IAS 7 “Statements of Cash Flows”
• The requirements of paragraphs 30 and 31 of IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”
• The requirements of paragraph 17 and 18A of IAS 24 “Related Party Disclosures”
• The requirements in IAS 24 “Related Party Disclosures” to disclose related party transactions entered into between two
or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such
a member
• The requirements of paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36 “Impairment of Assets”
• The requirements of B64(d), (e), (g), (h), (j)-(m), (n)(ii), (o)(ii), (p), (q)(ii), B66 and B67 of IFRS 3 “Business Combinations”
• The requirements of 45(b) and 46-52 of IFRS 2 “Share-based payments”
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).
Going concern
Management has produced a Company forecast that has also been sensitised to reflect a severe but plausible downside
scenario, which has been reviewed by the Directors. This demonstrates the Company is forecast to generate profits and
cash for a period of at least 12 months from the signing of these financial statements and that the Company expects to
have sufficient cash reserves to enable the Company to meet its obligations as they fall due over this period.
As such, the Directors are satisfied that the Company 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.
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Notes to the Company Financial Statements continued
For the Year Ended 31 December 2022
1. General information 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 is 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.
Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment. The Company assesses at least every year
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 Company 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.
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.
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 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.
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.
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.
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.
For financial assets measured at cost less impairment, the impairment loss is measured at the difference between an asset’s
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.
Retained earnings
Includes all current and previous retained profits and losses.
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.
Other income
Other income represents income from group management charges recognised at the point the performance obligation is
satisfied.
Pensions
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under
which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company
has no further payment obligations.
The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts
not paid are shown in other creditors as a liability in the Statement of Financial Position. The assets of the plan are held
separately from the Company in independently administered funds.
Foreign currency
Foreign currency transactions are translated into the functional currency of the Company, 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.
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Notes to the Company Financial Statements continued
For the Year Ended 31 December 2022
3. Key sources of estimation, uncertainty and significant accounting judgements
5. Staff numbers and costs
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.
Impairment of investments (Estimate)
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 other key assumptions such as the discount rate and long term growth rate. Further details regarding the
estimates of the value in use for the business is included in note 11 of the consolidated financial statements covering the
value in use estimate for goodwill.
Measurement of acquisition consideration (Estimate)
Contingent consideration is due on several acquisitions of subsidiaries and IP based on certain financial targets being met.
In order to assess the fair value of this consideration, management have assessed the likelihood of targets being met. For
any earnouts based on future accounting periods, management have reviewed a risk weighted forecast for the periods.
This will be reassessed at each reporting date and any movements in the fair value of the consideration amount will be
recognised in the income statement.
The value of the intangible assets acquired are estimated using forecasts and apply an appropriate discount rate for the
calculation. Further details of these discount rates for acquisitions that occurred during the year are included within
consolidated notes 11 and 12.
Share based payment valuations (Estimate)
Included in the calculation of share based payments under IFRS 2 is an estimate of how many share options are expected
to vest at the end of the performance period. The group provides nil cost options to employees with a mixture of the
following performance criteria:
Performance criteria
Estimation method
Requirement to remain employed for the length of the
vesting period
Non-market performance targets such as EPS
Retention rates have been assessed and estimated by
business and these have been applied to the awards based
on the recipients of the awards.
Forecasts are reviewed for the performance period and
compared to the targets to estimate the likelihood of the
options vesting
4. Operating Profit
Remuneration paid to our auditors is stated in note 6 of the consolidated financial statements and has not been included
within the individual entity accounts.
The average number of persons employed by the Company during the year was as follows:
Support
Executive directors
Non-executive directors
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Other pension costs
Share based compensation
The following tables sets out the executive directors’ payroll costs:
Aggregate remuneration
Social security costs
Company contributions to money purchase scheme
Share based compensation
Year ended
31 December
2022
No.
Year ended
31 December
2021
No.
3
2
4
9
–
2
4
6
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
1,941
(345)
56
59
1,711
1,243
486
29
525
2,283
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
1,370
(428)
44
(24)
962
1,243
486
29
525
2,283
Retirement benefits are accruing to 2 executive directors (2021: 2 directors) under money purchase schemes. In addition,
long-term share incentive schemes are in place for 2 (2021: 2) executive directors.
During the year one (2021: Nil) director exercised share options as set out in note 10.
The remuneration of the highest paid Director was:
Aggregate emoluments
Share based compensation
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
683
(87)
596
660
363
1,022
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Notes to the Company Financial Statements continued
For the Year Ended 31 December 2022
6. Investments
Cost
At 1 January 2021
Additions
At 31 December 2021
Additions
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
£’000
156,475
23,035
179,510
71,293
250,803
250,803
179,510
Included in the additions balance is £70,897,000 representing the acquisitions of astragon Entertainment GmbH and
£22,912,000 included in 2021 representing the acquisition of StoryToys Limited. The remaining additions of £396,000
(2021: £123,000) represents the value of share options issued to employees employed by Team17 Group plc’s subsidiaries.
The list of subsidiaries and associates is included in note 13 to the consolidated financial statements.
7. Trade and other receivables
Amounts falling due within one year:
Amounts owed by group undertakings
Other receivables
Prepayments
31 December
2022
£’000
31 December
2021
£’000
45,983
271
793
47,047
42,926
20
167
43,113
9. Called up share capital
Authorised, allotted, called up and fully paid
145,593,271 (2021: 131,473,222) ordinary shares of 1p each
31 December
2022
£’000
31 December
2021
£’000
1,456
1,456
1,315
1,315
The ordinary shares have voting, dividend and capital distribution rights. They are not redeemable.
On 11 January 2022 the Company issued 604,543 to the sellers of the Label and 1,531,780 shares to the sellers of Hell Let
Loose. These shares were valued at £7.70 per share.
On 18 January 2022 the Company placed an additional 11,010,999 shares at the price of £7.14 per share with gross
proceeds of £78.6m. Directly attributable fees of the placing totalled £2.2m for net proceeds of £76.4m.
Debbie Bestwick MBE, a director of Team17 Group Plc, received 972,727 share options on 23 May 2018 which fully vested
on 23 May 2021. These Nil cost options were then exercised and the shares were issued on 20 May 2022.
10. Reserves
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. As part of the issue of shares on 11 January 2022, share premium of £92,691,000 was
added to the reserve.
Profit and loss account
Includes all current and previous retained profits and losses.
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.
During the current and previous year, amounts owed by group undertakings are interest free and repayable on demand.
11. Share based compensation
8. Trade and other payables
Amounts falling due within one year:
Trade payables
Amounts owed to group undertakings
Other payables
Current tax liabilities
Taxation and social security
Accruals and deferred income
31 December
2022
£’000
31 December
2021
£’000
208
9,713
8,865
31
54
1,662
99
51,282
5,287
28
96
2,764
20,533
59,556
Please see note 25 in the consolidated Team17 Group Plc consolidated financial statements for further information on the
share based compensation charge in the year.
12. Related parties
Ultimate controlling party
At 31 December 2022 there was not considered to be a single ultimate controlling party of Team17 Group Plc.
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 to the Group financial statements.
13. 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.
During the current and previous year, amounts owed to group undertakings are interest free and repayable on demand.
The outstanding pension contributions at 31 December 2022 were £9,000 (2021: £3,000).
92
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Advisors
Registered Office
Team17 Group plc
3 Red Hall Avenue
Paragon Business Park
Wakefield
West Yorkshire
WF1 2UL
Nominated Advisor
Houlihan Lokey
1 Curzon Street,
London, W1J 5HD
Broker
Berenberg
60 Threadneedle Street
London, EC2R 8HP
Financial Public Relations
Vigo Consulting
Sackville House
40 Piccadilly
London, W1J 0DR
Registrar
Link Group
Central Square
29 Wellington Street
Leeds, LS1 4DL
Auditors & Reporting Accountants
PricewaterhouseCoopers LLP
Central Square
29 Wellington Street
Leeds, LS1 4DL
Legal Advisors
Addleshaw Goddard
3 Sovereign Square
Sovereign Street
Leeds, LS1 4ER
94
Team17 Group plc
Annual Report and Accounts 2022
Designed & Produced by KW Partners www.kwpartners.co.uk
Team17 Group plc
3 Red Hall Avenue,
Paragon Business Park,
Wakefield, WF1 2UL
www.team17groupplc.com