TEAM17 GROUP PLC
ANNUAL REPORT AND ACCOUNTS 2023
A LIFETIME OF PLAY
TEAM17 GROUP PLC, A LEADING GLOBAL
INDEPENDENT (“INDIE”) GAMES LABEL
DEVELOPER AND PUBLISHER OF PREMIUM
VIDEO GAMES AND APPS.
Strategic Report
01 Highlights of the year
02 Chair’s Statement
04 Group Chief Executive Officer’s Review
08 Group Strategy and Business Model
10 Chief Financial Officer’s Review
16 Divisional Reporting
28 ESG Report: People First
32 ESG Report: Our Impact on the Environment
34 Principal Risks & Uncertainties
Corporate Governance
37 Board Engagement with Stakeholders
40 Board of Directors
42 Directors’ Report
44 Corporate Governance Report
49 Audit Committee Report
50 Remuneration Committee Report
Group Financial Statements
55 Independent Auditors’ Report to the Members
of Team17 Group Plc
63 Consolidated Statement of Profit or Loss
63 Consolidated Statement of Comprehensive Income
64 Consolidated Statement of Financial Position
65 Consolidated Statement of Changes in Equity
66 Consolidated Statement of Cash Flows
67 Notes to the Consolidated Financial Statements
Company Financial Statements
103 Company Statement of Financial Position
104 Company Statement of Changes in Equity
105 Notes to the Company Financial Statements
DIVISIONAL REPORTING
Team17 Games Label
/ Indie Games Label
The Games Label is a
global games label, creative
partner and developer of
premium video games.
FIND OUT MORE ON PAGES
16-19
astragon
/ Working Simulation
astragon is a leading
developer, publisher and
distributor of sophisticated
‘working’ simulation games.
FIND OUT MORE ON PAGES
20-23
StoryToys
/ Edutainment
StoryToys is a world-class
developer and publisher of
educational entertainment
apps for children.
FIND OUT MORE ON PAGES
24-27
Team17 Group plc Annual Report and Accounts 2023
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
HIGHLIGHTS
2023 Operational Highlights
2023 Financial Highlights
• Revenues grew 12% to £159.1 million (FY 2022:
£142.3 million) with 17 new games and apps released
in the period (FY 2022: 12) alongside 6 existing games
released on additional platforms (FY 2022: 6).
• Revenues from the back catalogue grew 10%, accounting
for 71% of Group revenues (FY 2022: 73%), while the
Group’s first-party IP represented 35% of total revenues
(FY 2022: 40%).
• Games Label showed revenue growth of 12%, launching
11 new games (FY 2022: 11) including the multi award-
winning 2023 game Dredge, which has sold over one
million units, along with Blasphemous 2, Headbangers:
Rhythm Royale, Killer Frequency, Moving Out 2 and
Trepang 2. In addition, five existing games were
released on new platforms. Games Label’s content
portfolio now comprises over 900 digital revenue lines
(FY 2022: over 700 digital revenue lines).
• astragon delivered revenue growth of 5%, launching
3 new games (FY 2022: 3) – Tram Simulator, ABRISS
and Howl – as well as one additional existing first-party
IP game released on additional platforms and 16 paid
DLCs4 across its existing IP. It completed the acquisition
of Independent Arts Software GmbH (“IAS”) in April
2023, expanding the working simulation development
team to accelerate the creation and launch of a new
first-party IP game.
• StoryToys posted revenue growth of 26%. It developed
and launched 3 new apps, including BarbieTM Color
Creations, LEGO® DUPLO® DISNEY - MICKEY AND
FRIENDS and Marvel HQ and 327 apps updates across
its existing titles (FY 2022: 216). Active subscribers
continue to grow and now exceed 320,000 (FY 2022:
over 300,000).
• 2023 was a strong year for gaming awards across
the Group, with multiple awards for Dredge (including
Best Indie Game – IGN & Windows Central, Best Setting
– PC Gamer) and Blasphemous 2 (including Best Game
– IndieDevDay2023, Best Game Rising Star Award –
TGBUS), with Moving Out 2 winning Best Strategy Game
(Playstation Universe) and LEGO® DUPLO® DISNEY
(Google Play Best of 2023, Best for Families,
Honourable Mention).
• A thorough review of the Games Label strategic
direction (now re-focussed on its core indie games
roots), cost base structure and processes was
completed in the last quarter of 2023.
• Headcount reduced to 348 as at 31 December 2023
(FY 2022: 392), reflecting the impact of the Games
Label restructuring review and increased utilisation
of an outsourced studio resourcing model.
• Continued to strengthen the Board and leadership
team, bringing in operational depth and video gaming
experience. Frank Sagnier joined the Board as Chair,
with Debbie Bestwick moving to a Non-Executive
Director role, also joined by Peter Whiting. Steve Bell
joined as Group Chief Executive Officer. Other additions
include a Group People & Culture Director and Group
Investor Relations Director.
£159.1m
Revenue
(FY 2022: £142.3m)
£57.5m
Gross Profit
(FY 2022: £69.6m)
+12%
Revenue Growth
(FY 2022: +54%)
£29.9m*
Adjusted EBITDA1
(FY 2022: £48.8m)
(£1.1m)
£28.7m
(Loss)/Profit Before Tax
(FY 2022: £28.7m)
Adjusted Profit Before Tax1
(FY 2022: £47.1m)
(2.6p)
£42.8m
Basic Earnings per Share
(FY 2022: 16.5p)
Cash and Cash Equivalents
(FY 2022: £50.8m)
87%
Operating Cash
Conversion3
(FY 2022: 108%)
17.5p
Adjusted Earnings per
Share2
(FY 2022: 27.8p)
*£41.0 million excluding title impairments
The review of the carrying value of intangible assets resulted in one-off non-cash
charges of £11.1 million relating to games title impairments and a £20.9 million
charge goodwill impairment charge relating to the acquisition of The Label Inc.
1. A full description of Alternative Performance Measures, the rationale for their use, and
reconciliation between adjusted and reported statutory measures can be found within
the Chief Financial Officer’s Report on page 13.
Adjusted profit before tax excludes acquisition-related costs and adjustments,
amortisation and impairment of acquired intangible assets, share-based compensation
and one-off Games Label restructuring costs from the statutory measure whilst
adding back development cost amortisation eliminated through acquisition fair value
adjustments.
Adjusted profit after tax excludes the same items as adjusted profit before tax
removing corporation tax net of any tax effects on these items.
Adjusted EBITDA can be calculated from adjusted profit after tax by adding back all
remaining finance income and costs, tax, depreciation, amortisation and impairment
except for those on development costs.
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 basic or diluted).
3. Operating cash conversion is defined as cash generated from operating activities
adjusted to add back payments made to satisfy pre-acquisition liabilities recognised
under IFRS 3 “Business Combinations”, divided by earnings before interest, tax,
depreciation and amortisation (“EBITDA”)
4. Downloadable content.
Team17 Group plc Annual Report and Accounts 2023 01
Strategic Report
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
CHAIR’S STATEMENT
I have been involved in the games
industry for over 25 years and have
long admired the Team17 Group as a
business, as well as the passion and
dedication of the team behind the
name. When the opportunity arose to
join the Group as Chair, I was delighted
to accept and to support on the next
phase of its growth.
The Group has an enviable track record
of discovering innovative new games,
bringing them to market, and nurturing
many of them into enduring, quality
franchises. As a leading Indie games
developer and publisher, the Group has
built a solid foundation for the business
to scale upon. I am excited to be part of
this journey going forward.
I would like to personally thank Chris Bell
for his significant contribution to the
Group throughout his tenure as Chair.
Chris joined the business pre-IPO to
provide guidance and insight during
the process of transitioning from a
private to public business, which has
been invaluable. I have had the pleasure
of working with Chris as we undertook a
thorough handover, and I wish him every
success with his future endeavours.
In the year ended 31 December 2023,
the Group generated revenues of
£159.1 million (FY 2022: £142.3 million),
gross profit of £57.5 million (FY 2022:
£69.6 million) and adjusted EBITDA of
£29.9 million (FY 2022: £48.8 million).
Despite our strong revenue performance,
we are disappointed to deliver this level
of adjusted EBITDA alongside a reported
statutory loss, both of which were
significantly impacted by one off
non-cash impairment charges. More
detail is provided later in the Chief
Financial Officer’s review. We feel these
results fall short of our own expectations
and do not reflect the potential of the
Group. We have proactively sought to
realign our underlying cost base and
development costs to support an
improvement in the future underlying
trading performance of the Group.
£159.1m
Group revenues for the year ended
31 December 2023
The Group continues to boast a strong
balance sheet, with £42.8 million of cash
and cash equivalents at 31 December
2023 (FY 2022: £50.8 million). The
senior team is firmly focused on
ensuring the Group’s cash position
is leveraged effectively to expand
the business’ existing operational
capabilities and support enhanced
revenue generation across the Group.
The performance of astragon and
StoryToys highlights the importance of
quality M&A as a pillar in the Group’s
strategy to complement the existing
business as and when compelling
opportunities arise.
In a market where launching new IP is
challenging, the Group is, more than
ever, the partner of choice thanks to its
experience, know-how and proven
track record of working alongside
independent developers to create
long-running, successful projects and
franchises. There are plenty of talented
developers who will look for a trusted
partner for their games. Major releases
such as Hell Let Loose (full release
launched at the end of FY 2021),
Blasphemous 2 and Dredge (both
launched in FY 2023) are just a few
examples of successes we have
brought to market.
From game design to production
processes and technology, we assist
talented developers in optimising their
game’s quality while providing the full
suite of publishing services and
leveraging our extensive relationships
in the global gaming eco-system to
maximise success.
Last year saw quite a few changes at
the Group, and we entered 2024 with
several new team members ready to
support the business on its next stage
of growth. During 2023, Chris Bell,
Martin Hellawell and Jennifer Lawrence
stepped down from the Board. Debbie
Bestwick also stepped down as CEO of
the business and has transitioned to a
Non-Executive Director role. As founder
and former CEO, as well as the biggest
shareholder, Debbie will continue to
help guide the business, albeit on a
more strategic level. Chris, Martin and
Jennifer worked alongside Debbie
during the period after the Group’s IPO,
and the Group would not be where it is
today without their valuable insights
and contributions.
The renewed Board will bring deeper
insights and knowledge from their
games industry experience, guiding
management to scale the business and
build on the strong foundations in place.
The Group has created a uniquely
diversified portfolio of games and IP
over the last 30 years, which reaches
and engages with a growing global
audience. The team has successfully
expanded its footprint through a number
of highly targeted acquisitions, which
further strengthened its commercial
position. These acquisitions are delivering
new customer segments and gaming
genres, alongside providing a reliable
contribution to Group revenues. In
addition, the Group has also grown its
back catalogue, which represents 71%
of total Group revenues, demonstrating
its ability to successfully manage
product lifecycle.
More people than ever are playing
games, with 3.3 billion1 gamers in 2023
rising to an estimated 3.8 billion by 2026,
supporting a global games market
generating revenues of $184 billion1 in
2023 expected to rise to $205 billion1
by 2026. This growth is underpinned
by increasing demand for interactive
entertainment, advancements in
technology, growth in new geographies,
expanding demographics, and the rise
of new gaming platforms and business
models.
At the same time, the number of games
coming to the market is currently
growing at a faster rate than revenues,
and the quality of the top games is
getting higher. Competition for gamers’
time and disposable income is intense,
and the current headwinds from the cost
of living crisis clearly remain an obstacle.
1. https://newzoo.com/resources/blog/explore-the-
global-games-market-in-2023
We have proven
talent across the
senior management
team, and I look forward
in particular to working alongside
our Group CEO Steve Bell, an
entrepreneur with a proven pedigree
for scaling and managing businesses.
With Steve – and supported by our
outstanding divisional leaders – I believe
the team is well positioned to guide the
Group forwards, to maximise our growth
potential. I have been particularly
impressed with the thoroughness and
rigour demonstrated by the senior
management team and am confident
with the strategic plans that have been
put together for FY 2024 and beyond.
Following Michael Pattison’s departure
as CEO of our Games Label, Ann Hurley,
a highly experienced games industry
veteran, has been overseeing the
division on an interim basis. Supported
by a global search agency to review a
range of potential candidates, Ann has
formally been confirmed as General
Manager for the Games Label on a
permanent basis with immediate effect.
In her role she will continue to lead the
great team we have in place to deliver
on our near-term release roadmap.
Publishing games remains a highly
competitive and complex process.
Today’s market is now highly
challenging, with consumers splitting
their time between gaming and other
entertainment activities, alongside the
pressures created by the ongoing cost
of living crisis reducing historic levels of
discretionary spending. Set against this
backdrop, the Group’s track record of
successfully bringing products to
market should ensure it remains well
positioned to continue to gain market
share over the coming years.
We look forward to driving and
scaling the business in the medium
term through both organic growth
and, where appropriate, selective,
value-accretive acquisitions.
Frank Sagnier
Chair
16 May 2024
“ THE GROUP HAS AN ENVIABLE
TRACK RECORD OF DISCOVERING
INNOVATIVE NEW GAMES, BRINGING
THEM TO MARKET, AND NURTURING
MANY OF THEM INTO ENDURING,
QUALITY FRANCHISES.”
FRANK SAGNIER, CHAIR
02 Team17 Group plc Annual Report and Accounts 2023
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Corporate Governance
Group Financial Statements
Company Financial Statements
GROUP CHIEF EXECUTIVE OFFICER’S REVIEW
Introduction
I was excited to join Team17 Group plc
as the Group’s Chief Executive Officer
designate in September 2023, and
since my arrival I have been hugely
impressed by the talent and enthusiasm
that defines our team. We are proudly
committed to producing market leading,
engaging, high-quality Indie games,
working simulation experiences and
edutainment apps that appeal to a
broad demographic across multiple
genres. The shared drive of our people to
deliver this has been evident to me from
the very outset of my time at the Group.
The market backdrop this year has
been immensely challenging, with
exceptional competition in the sector
throughout the year. In this context, we
delivered a strong revenue performance
with Group revenues of £159.1 million
(FY 2022: £142.3 million).
Profits came in below our initial
expectations, with gross profit of
£57.5 million (FY 2022: £69.6 million),
and adjusted EBITDA of £29.9 million
(FY 2022: £48.8 million), driven by
certain games within the Games Label
not meeting internal expectations. The
outcome also reflects the result of the
review of the carrying value of intangible
assets which led to an impairment
charge on some launched games and
on some games currently under
development. Reported profit before
tax was significantly impacted by one
off non-cash impairment charges which
resulted in a reported loss of £1.1 million
(FY 2022: £28.7 million profit). More
detail is provided later in the Chief
Financial Officer’s review.
“ THE GAMES LABEL HAS
RE-FOCUSSED BACK TO ITS
CORE INDIE GAMES ROOTS.”
“ 3 OF THE TOP 5 GAME
REVENUES ACROSS THE
GROUP COME FROM
FIRST-PARTY IP GAMES.”
In the second half of the year, we
undertook a comprehensive review of
our cost base within the Games Label,
which was completed in November
2023. Whilst this unfortunately resulted
in redundancies, we believe our cost
base is now aligned to our core Indie
strategy, and the business is now even
better placed to capitalise on future
opportunities while continuing to
optimise our existing pipeline.
The Group retains a strong balance
sheet, with £42.8 million of cash and
cash equivalents at 31 December 2023
(FY 2022: £50.8 million).
The senior team is firmly focused on
effectively leveraging the business’
operational capabilities to support
enhanced revenue generation across
the Group. The successful addition of
astragon and StoryToys to the Group,
highlights the importance of identifying
quality acquisitions that complement
the existing business as and when
compelling opportunities arise.
As at 31 December 2023, the Group
had 348 employees (FY 2022: 392),
spread across 8 locations in 5 countries.
Over the course of FY 2023, we
invested in our senior leadership team,
including the recruitment of a Group
People & Culture Director and Group
Investor Relations Director, and now
benefit from a strengthened divisional
management structure to support all
team members across all locations.
Operational Review
The Games Label launched 11 new
games in the period, including the
hugely successful Dredge, which has
sold over one million copies to date and
has received high praise from critics
and players alike. More generally, the
average review score on Steam for our
5 bestselling new releases during FY
2023 was 91%. Other major releases
included Moving Out 2, Blasphemous 2,
Killer Frequency, Trepang 2, Gord and
Headbangers – Rhythm Royale, along
with additional content for games
including Golf With Your Friends. The
Games Label also released multiple
content updates for its existing
portfolio, demonstrating the strength
of its back catalogue and the focus of
the team on maximising the lifecycle of
games within the portfolio.
StoryToys’ content portfolio continued
to expand this year, with the launch of
new apps, such as Marvel HQ in May
and BarbieTM Color Creations in July,
and a further 327 app updates across
nine apps, including Iron Man Target
Game, which was added to the Marvel
HQ app in October. Additionally, we
have increased the number of platforms
on which our products are available,
with users now able to access BarbieTM
Color Creations and LEGO® DUPLO®
WORLD via Apple Arcade. StoryToys
strengthened its licensing partnerships
with leading, international brands in the
period, notably adding Mattel to its
existing roster, which to date includes:
The LEGO Group, Disney, Pixar, Marvel
Entertainment, Penguin Books, and
Dick Bruna. These partnerships are a
testament to StoryToys’ strong track
record and growing reputation as an
established, reliable partner for
international companies looking to
expand their trusted and iconic brands
into the edutainment space.
astragon’s working simulation games
continued to perform strongly in FY
2023, driven by the launch of additional
content across numerous games,
including Police Simulator – Crime
Scene Update and Firefighting
Simulator – The Squad. In addition,
ABRISS – Build to Destroy, an
atmospheric physics-destruction
building game developed by Randwerk
Games and published by astragon, was
launched across all platforms in FY 2023,
receiving positive user reviews as well
as critical acclaim, having been awarded
the title of Best Graphic Design at
the German Computer Game Awards.
FY 2023 also saw the successful
introduction of season passes, 16 paid
DLCs across first-party IP games and
the introduction of five new brand
licenses.
3 of the top 5 game revenues across the
Group come from first-party IP games
and within the top 10 selling games
there is a spread of games from each
division with 5 from Games Label, 3
from astragon and 2 from StoryToys,
demonstrating the breadth of the
portfolio across the Group. The top ten
selling games represent 60% of total
revenues in FY 2023, which compares
with 65% in FY 2022.
17
new games and apps released
in 2023, with Dredge being the highest
selling title across the Group
“ I AM EXCITED TO EXPLORE HOW
MY EXPERIENCE WITHIN DIGITAL
MARKETING CAN FURTHER SUPPORT
DISCOVERABILITY OF OUR CONTENT
IN AN EVER EXPANDING AND RAPIDLY
EVOLVING MARKETPLACE.”
STEVE BELL, CHIEF EXECUTIVE OFFICER
04 Team17 Group plc Annual Report and Accounts 2023
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Group Financial Statements
Company Financial Statements
GROUP CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED
“ OUR SENIOR LEADERSHIP TEAMS
BRING WELL OVER 200 YEARS
OF SPECIALISED SECTOR AND
MARKET EXPERTISE.”
The Team
The quality of our games is testament
to the exceptional talent and depth of
experience across our business. The
team’s unwavering dedication and
technical prowess are essential to
developing games that immerse and
captivate their audiences. I have
particular respect and understanding
for the creative process, gained from my
own experience working for over 25
years across the branding and digital
marketing arena, which has enabled an
instant connection to the team. I have
been extremely impressed by their
ability to craft compelling narratives
and to design captivating user journeys
that are both seamless and intricately
detailed. Each game and content
release showcases the immense passion
of those in the Group and their
commitment to continually enhance the
games within our broader portfolio.
The Group benefits enormously from
its dedicated divisional leaders – Ann,
Emmet, Tim and Julia – who, along with
their senior leadership teams, bring well
over 200 years of specialised sector
and market expertise as well as industry
relationships. This is crucial in identifying
key trends in their respective market
segments, and in delivering unique and
captivating content to their distinct
target audiences, from multi-genre
Indie games in the Games Label, to
working simulation experiences in
astragon, and children’s edutainment
apps in StoryToys. This agility in the face
of rapidly evolving market dynamics
ensures the Group is able to capitalise
on new opportunities and stay ahead of
the curve when it comes to producing
innovative, exciting content for our
diverse customer base.
Our leadership team will also benefit
from the valuable industry experience
offered from our new Board members,
especially our Chair, Frank Sagnier,
and from the strategic rigour and
gaming knowledge Debbie Bestwick
will provide in her new role as a
Non-Executive Director.
2023 was one of the most competitive
and challenging years seen in the
games industry in terms of high-quality
launches and aggressive product
discounting, set against the well
documented cost of living crisis. Like its
peers in the sector, the Games Label
felt the pressure associated with these
challenges acutely. Combining the
external market conditions with an
internal strategic review, the Group
made the difficult decision to initiate a
reorganisation of the division in October,
resulting in a reduction in headcount.
Management is confident that the
business’ cost base is now aligned with
the Group’s long-term focus, enabling it
to better leverage both fixed and
flexible resources and invest in the
games and teams of the future.
At a broader, Group level, the business
remains cognisant of the inherently
higher attrition levels observed across
the games industry, and the detrimental
impact this can have on preserving the
quality and drive of our teams if not
managed proactively. To this end, we
continue to implement internal
programmes and processes, outlined in
the ESG report on page 28, to ensure
high retention levels and a positive
working environment for our people.
Strong communication is integral to the
culture within the Group, both in terms
of employee engagement but critically
in terms of superior market execution.
We are committed to keeping pace with
changing expectations within workplaces
to facilitate a range of office, home-
based, and hybrid working, and support
multiple flexible working arrangements
for our people. However, we have
implemented various initiatives to
preserve a collaborative, collegiate
environment amongst our teams. We
have regular town hall meetings –
online and in-person events for both
team members and their families – and
multiple social groups that are all
supported by management. In addition,
our employee-led environmental
groups, including Green17 in the UK,
continue to raise awareness and drive
the Group’s ESG strategy. More details
on our environmental initiatives can be
found in the Environmental section on
page 32.
Strategy and Business Priorities
I firmly believe the Group provides a
differentiated and compelling investment
proposition within the games industry.
Alongside the development of high-
quality, engaging games and apps,
we have a track record of consistently
leveraging the strength of our back
catalogue to drive additional, reliable
revenue streams from our existing
content portfolio. In addition, the Group
benefits from a distinct divisional
structure, wherein each of the distinct
business offerings is headed by talented
industry leaders who are all experts in
their respective fields.
As we seek to move the business
forward, I will be focusing on five core
strategic pillars, namely:
• Building relationships; to be the
leading Indie publisher, nurturing
world-class partnerships with
developers, platforms or licenses.
• Creating evergreen brands; to focus
on our original first-party IP games
while fully leveraging our lifecycle
management skills.
• Powering up; to foster greater
collaboration between teams and
divisions, fully harnessing our
collective skills and strengths to
optimise efficiencies.
• Attracting talent; to deliver our
strategic and financial ambition by
nurturing a culture that enables
ambition, creativity and belonging.
• Leveraging our pioneering minds; to
drive growth into new markets,
audiences & IP organically and
through M&A.
StoryToys and astragon are focused on
developing and bringing the highest
quality working simulation games and
edutainment apps to our users, the
latter collaborating with some of the
best known and most loved brands in
the world.
“ THE GROUP’S FIRST-PARTY IP
REPRESENTED 35% OF
TOTAL REVENUES.”
“ WE ARE BACK ON FORM IN 2024, WITH A SOLID SLATE
OF GAMES AND APPS, OUR EXCEPTIONAL BACK CATALOGUE
AND A CLEAR PLAN FOR GROWTH ACROSS THE GAMES LABEL,
ASTRAGON AND STORYTOYS. THE YEAR HAS STARTED WELL.”
We have already developed
collaboration and cross-selling
opportunities between our divisions,
and the potential for additional
synergies and sharing of resources,
best practice and industry relationships
will only accelerate as the business
grows. Driving operational efficiencies
across the Group has always been a key
business focus, and I believe there is
still much more to be gained from our
broader operational footprint. A key
part of my role as Group CEO will be
finding ways to capitalise on these
priorities to drive further innovation
and efficiencies across all segments of
the business, drawing on my experience
of acquiring, integrating and further
developing businesses in my previous
role. We have invested in “Group-wide”
functions to step up our performance,
drive greater levels of efficiencies and
reposition the business back to strong
growth and improved profitability over
the mid-term.
We have taken considerable steps to
strengthen our rigour around
commercial governance and controls,
in particular new game development
costs. This includes implementing a
more comprehensive contract review
process, updating our milestone
payments process, and ensuring more
rigorous internal procedures are in place.
Outlook
The Group has made a pleasing start to
FY 2024, although we remain mindful
of the challenging near-term competitive
landscape; we know of a number of
high-quality new games releases that
have been delayed into the current
calendar year; the cost of living pressure
continues to impact discretionary
spending across the board; and
geopolitical uncertainty continues to
weigh on global markets more broadly.
However, the vision for the Group
remains clear – to accompany our
gamers through a lifetime of play,
creating pioneering and captivating
experiences that enrich and inspire
players around the world. This will be
achieved through the release of new
games and apps, as well as continuing
to innovate lifecycle management
strategies, supported by the launch of
additional content updates across the
portfolio to capitalise on the existing
audience demand for our games.
In addition, an action plan is in place to
accelerate revenue and profit growth,
which includes increasing the proportion
of revenues from first-party IP over time,
sharpening our greenlight process, more
innovative marketing and publishing
models, while pursuing an active
M&A agenda.
We have a strong pipeline of new
games and apps scheduled for launch
in FY 2024 and beyond, and we will
continue to develop and launch
additional content across the existing
portfolio.
We remain confident that the Group
can deliver an improved underlying
trading performance in FY 2024 and is
well positioned for growth over the mid
to long term. We look forward to
updating all stakeholders on our
progress as the year continues.
Steve Bell
Group Chief Executive Officer
16 May 2024
Amongst our peers, the Games Label
remains a market leader within the
Indie games community, developing
games in-house while also acting as
a co-developer and publisher for
independent developers looking for a
partner to support them in bringing
games to market. We have an
exceptional game scouting team, which
continuously assesses vast numbers of
game submissions through the Games
Label’s greenlight process.
Whilst we had seen an increase in the
budgets of games we developed in the
Games Label over the last couple of
years, during the second half of FY
2023 we sought to realign our strategy
to focus on our core strength of
developing and publishing Indie games.
While we will continue to invest in our
established and highly profitable larger
first-party IP franchises, the focus of
new third-party game releases will in
future be firmly in the Indie space,
where we believe we can make the
highest returns from our investment.
This return to our historic strengths
should ensure that only the very best
games make it through our extensive
quality control processes and into our
launch schedule.
I am excited to explore how my
experience within digital marketing can
further support discoverability of our
content in an ever expanding and
rapidly evolving marketplace.
The Group has long been an advocate
of first-class lifecycle management as a
means to expand and enhance returns
on its back catalogue of existing titles,
ensuring the generation of sustained
revenues through the launch of
engaging new content and continuous
improvements to user experience. This
core component of the business model
is as important as it has ever been,
driving multi-year revenue generation
and underpinning profits well into the
future. Following multiple game and
app launches over the course of FY
2023, in the Games Label alone our
back catalogue has grown, to over 900
digital revenue lines (“DRL”) (FY 2022:
over 700 DRL), which will continue to
expand in the years to come.
06 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 07
Strategic Report
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
GROUP STRATEGY AND BUSINESS MODEL
WHO WE ARE
OUR ATTRACTIVE INVESTMENT CASE
• IP and talent in place to deliver accelerated
growth
Team17 Group plc is a leading global publisher and
developer of Indie games, listed on the London
Stock Exchange in 2018. The Group consists of three
complementary but distinct value creators:
• Proven franchise creation and lifecycle
management capabilities
• Dependable back catalogue
• Team17 Games Label: Experts in premium Indie games
• Track record of market-beating growth
• astragon: Experts in first-party IP working
simulation games
• StoryToys: Experts in edutainment apps for children
with licensed global brands
• Strong balance sheet and cash generation
• M&A optionality
A LIFETIME OF PLAY
Delivering high quality product
to passionate audiences
Identify IP
Create, license
or acquire
StoryToys
Edutainment
Team17 Games
Label
Indie games
ACTION PLAN FOR GROWTH
Accelerating growth
1. Double down on Indie focus
2. Prioritise evergreen franchises to drive
back catalogue
3. Progressive Participation Marketing
4. Innovative publishing models
5. M&A
Increasing % revenues from first-party IP
35%
17%
2019
2023
Improving profitability & ROI
Prioritising investment in higher margin areas
1. Increase sales mix of first-party IP
2. Sharpened greenlight process
3. New Games Label investment limits
4. Tightened cost controls
d
e
n
i
a
t
e
r
s
e
l
a
s
e
g
a
r
e
v
a
%
Size of bubble
proportionate to
Group sales mix
Third-party
physical
distribution
Third-party
IP publishing
apps
Licensed
branded
apps
First-party
IP with
co-developer
Internal
first-party
IP
Games Label
Extend IP
Lifecycle
management
Develop IP
Product
incubation
UNIQUELY POSITIONED TO BECOME THE INDIE POWERHOUSE
A top Indie publisher with huge market share potential
astragon
Working simulation
Publish IP
Go-to-market
execution &
marketing
Enhance IP
Product
improvement
• Our vision is to create pioneering and captivating
• We support our unparalleled diverse Indie back
experiences that enrich and inspire players around
the world
catalogue with world class lifecycle management
capabilities
• We are experts in identifying, developing, publishing,
• Genre and platform agnostic games and apps
Global, multi-platform reach
Strong cross-genre
IP franchises
Exceptional back catalogue
• Platform agnostic
• 35% sales from first-party IP
• 71% sales
• Sales span six continents
• >100 titles generate sales1
• Growing 10%1
• 8 global hubs
• 15 franchise sales2 >£10m,
four >£45m, one >£100m
• Consistently fed by new release
pipeline
Diversified portfolio
Compelling proposition
for developers
Strong balance sheet
• Hard core gamers to casual users
• Multi-platform reach
• Enhance IP, growth and scale
and enthusiasts
• A lifetime of play: ages 2 to 60+
• No game >15% revenues
• Access to insight-driven data
• Financial resources
though M&A
distributing & licensing a mix of first-party & third-party
IP games
• Premium games portfolio with over 100 titles across
all platforms
1. 2023
2. Lifetime sales to April 2024
08 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 09
Strategic Report
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
CHIEF FINANCIAL OFFICER’S REVIEW
Performance Overview
FY 2023 was a challenging and highly
competitive year for the gaming sector.
Against this backdrop, the Group
increased revenue by +12% compared
to the prior year. This growth was
generated solely through revenues
from existing businesses. The Group
saw strong sales growth delivered
through a combination of new releases
alongside continued strengthening and
broadening of the back catalogue.
However, reported results were impacted
by lower margins, weak cost controls
and one-off non-cash impairment
charges meaning that the Group
delivered an overall loss before tax of
£1.1 million (FY 2022: £28.7 million profit).
Towards the back end of FY 2023,
management identified a number of
operational issues within the Games
Label and implemented a series of
more rigorous cost controls and
strategic initiatives to address areas
that had impacted the profitability of
the division. A thorough review of the
strategic direction of the Games Label,
its cost base structure and processes
was completed in the last quarter of
FY 2023, resulting in a restructuring
program that impacted both headcount
and cost control processes. Most notably,
the Games Label has re-focussed back
to its core Indie games roots, resulting
in changes to games scouting and
increased rigour around development
spend. These changes were
implemented to ensure that the Games
Label can return to its historical track
record as a consistent performer and
one of the leading developer and
publishers of Indie games.
“ STRONG BALANCE SHEET AND
RENEWED RIGOUR AROUND COST
CONTROLS AND WORKING PRACTICES
UNDERPINS OUR FOCUS ON
PERFORMANCE DELIVERY IN
2024 AND BEYOND.”
MARK CRAWFORD, CHIEF FINANCIAL OFFICER
“ 100% OF THE REVENUES IN THE PERIOD
WERE GENERATED FROM EXISTING
BUSINESSES, WITH ALL THREE DIVISIONS
CONTRIBUTING IN LINE WITH EXPECTATIONS.”
Revenue
100% of the revenues1 in the period
were generated from existing
businesses, with all three divisions
contributing in line with expectations
and delivering a pleasing uplift in
trading across the Black Friday and
festive seasonal periods resulting in
Group revenues up 12% to £159.1 million
(FY 2022: 142.3 million). The Games
Label contributed £103.6 million
(FY 2022: £92.8 million) growing 12%
and astragon delivered £36.0 million
(FY 2022: £34.1 million) showing
growth of 5% against a very strong
revenue comparative in FY 2022 whilst
StoryToys revenue grew 26% with
revenues of £19.5 million (FY 2022:
£15.4 million).
Overall Group first-party IP revenues
were £55.9 million (FY 2022:
£56.4 million) reflecting a solid
performance on games such as Hell Let
Loose which remains one of the Group’s
top selling individual games together
with astragon’s Construction Simulator
and Police Simulator. Third-party game
revenues grew 20% to £103.3 million
(FY 2022: £85.8 million). There were
pleasing performances across the
portfolio led by the standout third-party
game Dredge which was released on
30 March 2023. Growth was also seen
in new release revenues to £45.5 million
(FY 2022: £38.8 million) in FY 2023, a
growth of 17%, coming from games
including Trepang 2 and Blasphemous 2
alongside the aforementioned Dredge.
In a highly competitive market that was
reported to have grown2 at <3% in the
calendar year 2023, the Group’s back
catalogue continues to strengthen,
growing at 10% with revenues of
£113.6 million (FY 2022: £103.5 million)
representing 71% (FY 2022: 73%) of
total revenues. This growth is testament
both to the quality of the Group’s
portfolio, and the team’s skills in
lifecycle management.
Gross Profit
Gross profit in the year fell to £57.5 million
(FY 2022: £69.6 million). The reported
gross margin fell to 36% from 49%,
having been impacted by a number of
factors, some one-off in nature. These
included: a one-off impairment charge;
a higher proportion of third-party
revenue; higher development cost
amortisation charges; and higher
expensed development costs which
include the studio related one-off
restructuring costs. These are dealt
with in turn below.
A full review was undertaken of the
value of intangible assets held on the
balance sheet which included both
released games with a residual net
book value as well as future games. As
a result of the review, an impairment
charge of £11.1 million was made in
FY 2023. This one-off non-cash charge
correspondingly reduced the intangible
assets value held on the balance sheet
at year end.
As outlined in our November 2023
trading update, whilst the Group
delivered revenues in line with
expectations, a higher proportion of
third-party games (which generate
higher levels of royalty payments)
impacted gross margins in the period.
Revenues from astragon’s first-party IP
simulation games represented 47% (FY
2022: 44%) of the Group’s first-party IP
revenues and unlike the Games Label
first-party IP games, these attract a
royalty paid to astragon’s dedicated
development partners, which in turn
further reduced the overall gross profit
margin.
Development cost amortisation
charges grew to £12.7 million (FY 2022:
£9.3 million). This results from an
increase in capitalised development
costs within astragon (which has
typically larger development spend by
game, similar to that invested in the
Games Label’s first-party IP games),
together with an increase in development
budgets for some larger third-party
games within the Games Label division.
Revenue £m
23
22
21
159
142
93
Divisional Revenue Split £m, 2023
Games Label
astragon
StoryToys
104
36
19
IP Revenue Split £m, 2023
Third-party
First-party
103
56
Title Revenue Split £m, 2023
New releases
Back catalogue
46
114
“ REVENUES FROM NEW
RELEASES GREW 17%.”
10 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 11
1. Due to a change in accounting policy, revenue recognition on digital sales through Apple and Google app stores is now recognised gross of any platform fees charged
where historically the net amount was recognised. For these platforms only, the platforms are deemed to be an agent in the transaction under IFRS15, this change has no
impact on profits in either the current or prior year, however, does impact both gross margin and adjusted EBITDA margin percentages, see note 2
2. NewZoo global games report January 2024 Update
Strategic Report
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
Gross Profit £m
Adjusted EBITDA £m
23
22
21
58
23
70
22
46
21
30
49
36
The Group’s overall amortisation policy
is to charge back a high proportion of
the capitalised development costs within
the first twelve months after launch
(Games Label 70% in year 1 and astragon
50% in year 1) and correspondingly the
annual amortisation charge reflects not
only the level of historic investment
but also the timing and quantity of
games launched in the period and in
the prior year.
The final driver of gross margin pressure
came from expensed development
costs which were also elevated in the
year. This reflected increased support
costs post launch including investment
in free DLC within the Games Label;
post launch support to live games such
as Hell Let Loose. In addition, expensed
development costs included £1.0 million
out of a total £1.2 million costs associated
with the restructuring within the
Games Label.
Capitalised development costs
IAS 38 requires development costs to
be capitalised during the process of
creating a game until its launch. If a
game is launched on Early Access, then
the incremental costs of developing the
title to full release are also capitalised.
Development costs that were
capitalised in the year increased to
£32.2 million (FY 2022: £26.1 million)
of which £22.5 million (FY 2022:
£18.3 million) related to Games Label,
£7.1 million (FY 2022: £6.3 million)
related to astragon and £2.6 million (FY
2022: £1.4 million) related to StoryToys.
As outlined above, the review of
intangible assets resulted in £11.1 million
of the carrying value of capitalised
development costs being impaired. As
a result of the capitalisation, the
one-off impairment and development
cost amortisation charges, capitalised
development costs on the balance
sheet at the end of the period stood at
£35.1 million (FY 2022: £26.8 million).
The levels of investment in capitalised
development costs have increased
significantly over the last two years.
This resulted in part from the
acquisitions – astragon in particular has
a higher investment per game, similar
to the levels of Games Label’s first-
party IP investment. Further increases
resulted from the shift by the Games
Label over the last two years to larger
third-party game development
investments, a move which took the
business away from its core Indie-
focused business model and one that,
as outlined above, has been reversed
towards the end of FY 2023. As a result
of that reversal, the majority of third-
party game investments are expected
once more to fall in or below the range
£1.0 million to £1.5 million. A small
number of games may exceed that
range should they meet the relevant
internal investment hurdles. Investment
in the Games Label’s first-party IP
(which is entirely internal) will be higher,
as has been the case historically. These
changes are expected to result in lower
investment in development costs within
the Games Label.
Within StoryToys, our strategy has been
to broaden our licence partners and
subsequent apps, and within astragon,
our focus has been to grow our content
portfolio with new first-party IP
simulation games. In the short term,
reductions in investment in the Games
Label will be offset by increased
investment in the two other divisions,
enabling both StoryToys and astragon
to continue to deliver on their growth
ambitions.
Administrative Expenses
Total costs in the period increased to
£57.6 million (FY 2022: £37.8 million).
Within this total are acquisition-related
adjustments, costs and amortisation of
£9.2 million (FY 2022: £15.2 million) and
a £20.9 million (FY 2022: nil) one-off
non-cash impairment of goodwill charge
relating to The Label Inc., following the
annual review of the carrying value on
all acquisitions. This is covered in more
detail below.
Marketing costs were elevated in H1
2023 in particular, however, tighter
controls were implemented in H2 2023
to help reduce the overall increase in
spend in the year to £0.8 million and
importantly to ensure that these costs
are better aligned to the Indie model
and reduced in FY 2024 and beyond.
Some FX cost pressure was experienced
in year compared with a positive FX
tailwind in FY 2022.
However other costs including
premises, professional fees and travel
& entertainment were lower than the
prior year demonstrating tighter
controls in place particularly in the
latter part of the year.
Staff costs within administrative
expenses were lower in the period
reflecting the fact that performance
bonus payments were not made within
the Games Label nor at Group level.
They include £0.2 million out of a total
£1.2 million costs associated with the
restructuring within Games Label.
Headcount for the Group at year end
reflects the impact of the Games Label
restructuring review as well as reflecting
the move to increase the utilisation of
an outsourced studio resourcing model
in areas such as QA (game testing),
localisation and console porting. As a
result, the total headcount for the
Group at 31 December 2023 was 348
(31 December 2022: 392) with the
average headcount higher at 380 (FY
2022: 351) resulting from the timing of
the restructuring within the Games
Label team.
The annualised cost reduction impact
of the restructuring within the Games
Label business administrative expenses
is anticipated to be £0.7 million.
Additional savings in studio headcount
costs have been partly offset by
increased spend on outsourced
providers. The restructuring was
completed mid-November so had a
relatively small impact on operational
costs in the period. The associated
one-off costs of the restructuring are
not included within the adjusted
EBITDA measure which is covered in
more detail in the Alternative
Performance Measures below.
The headcount totals also reflect the
addition of 45 employees that joined
the astragon business following the
acquisition of Independent Arts
Software GmBH (“IAS”) earlier in the
year together with growth in headcount
across astragon and StoryToys to
support the broadening of the content
portfolio in both businesses.
Following the annual impairment
review, the goodwill associated with
the acquisition of The Label Inc.
(re-named Team17 USA) was impaired.
The impairment charge of £20.9 million
is marginally offset by the release of
£2.6 million contingent consideration
previously held on the balance sheet
relating to earn-out targets for FY 2023
not being met. Both items reflect the
reduced performance of the business
compared with expectations at the
time of the acquisition. Over the last
two years the mobile subscription
market has seen increased competition
reducing the ongoing performance
income received for launched games as
well as reduced third-party new mobile
games being secured for development.
The Team17 USA business continues to
be an important part of the Games
Label, offering strategic expertise to
identify, develop and bring to market
mobile subscription games from
third-party developers but importantly
also provides a route for the Games
Label’s own back catalogue portfolio
where the potential exists to bring key
games to mobile subscription platforms.
The first of the Games Label games
entered this development pipeline
towards the end of FY 2023.
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 financial
statements a clear understanding of the
underlying profitability of the business
and more consistent comparisons over
time. A breakdown of the adjusting
factors is provided in the table below:
(Loss) / Profit before tax
Impairment of goodwill
Development cost amortisation eliminated through FV adjustments
Share based compensation1
Games Label restructuring costs
Acquisition related costs & adjustments
Amortisation on acquired intangible assets
Acquisition related costs
Earn out fair value
Other fair value adjustments
Interest & FX on contingent consideration
Adjusted profit before tax
Finance income and costs net of acquisition
related costs and adjustments
Depreciation and loss on disposal of tangible assets
Amortisation of intangible assets (excluding
development costs and acquired intangibles)
Adjusted EBITDA
Taxation (net of impacts on adjustments)
Adjusted profit after tax
Adjusted basic EPS2
Adjusted EBITDA
Adjusted Profit
After Tax
FY23
£’000
FY22
£’000
FY23
£’000
FY22
£’000
(1,080)
28,665
(1,080)
28,665
20,879
(3,791)
417
1,209
13,759
1,360
(5,086)
–
1,023
28,690
(106)
1,289
–
29,873
–
(976)
(93)
–
10,300
4,708
883
238
3,392
47,117
556
1,085
16
48,774
(3,467)
25,223
20,879
(3,791)
417
1,209
13,759
1,360
(5,086)
–
1,023
28,690
n/a
n/a
n/a
(7,457)
39,660
17.5
–
(976)
(93)
–
10,300
4,708
883
238
3,392
47,117
n/a
n/a
n/a
27.8
Note: amortisation and impairment on development costs are included in the calculation of both adjusted EBITDA and adjusted profit after tax.
1. Share-based compensation charges 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 basic or diluted).
12 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 13
Strategic Report
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
Adjusted EPS p
Cash and Cash Equivalents £m
23
22
21
17.5
23
27.8
22
22.1
21
43
51
55
Earnings Per Share (“EPS”)
Basic EPS was (2.6) pence (FY 2022:
16.5 pence) and reflects the impact of
one-off acquisition-related adjustments
and fees (net of tax) described in the
APMs table above as well as being
materially impacted by the non-cash
impairment charges. Basic adjusted
EPS, reflecting the APM adjustments
noted above and calculated using the
adjusted profit after tax was 17.5 pence
(FY 2022: 27.8 pence).
Statement of Financial Position
The Group remains highly cash
generative with an operating cash
conversion of 87% (FY 2022: 108%),
and a net inflow of cash from operations
of £41.4 million (FY 2022: £49.4 million).
As a result of the outflow of acquisition-
related payments for IAS (£1.8m), cash
earn-out payments in the period for
astragon, Team17 USA, HLL and IAS
(£18.6 million) and investment in
capitalised development costs
(£32.2 million), there was an overall
net decrease in cash and cash
equivalents to £42.8 million (FY 2022:
£50.8 million) which includes £2.9 million
(FY 2022: £3.0 million) held in the
Employee Benefit Trust.
The EBT remains an important fund
established at IPO to support employee
share awards and incentivise team
members across the Group. All UK and
EU employees across the Group
continue to be awarded share options
on joining, noting that the use of the
EBT ensures that this avoids the issue
of new shares to satisfy these and other
employee options.
Adjusted EBITDA reflects the EBITDA
of the Group in a steady state, without
the impact of acquisition-related costs
which vary year on year based on
acquisition activity. In addition, we
include the impact of amortisation and
impairment of development costs as
this reflects the primary costs incurred
by the Group in generating revenue. In
the current year, restructuring costs
have also been excluded as this is also
considered a one-off cost impact which
is not reflective of the underlying
performance of the Group.
Adjusted profit before tax reflects the
profitability of the Group, adjusted for
the impact on profit of acquisition-
related costs which vary year on year
based on acquisition activity. This is
also adjusted for the goodwill
impairment which arose in the year
which is not a recurring cost to the
Group.
Share-based compensation charges of
£0.4 million (FY 2022: £0.1 million credit)
relate to options that were granted to
the Executive Directors, the senior
leadership team and other members of
the team under a variety of schemes
which other than in the case of the
Executive Directors will be satisfied by
shares held in the Employee Benefit
Trust (“EBT”). The charge in the period
was impacted by a credit which relates
to the Executive options granted in 2021
that have failed to meet the minimum
performance criteria. The credit in the
prior year relates to the reversal of a
national insurance accrual made in FY
2021 reflecting a lower actual charge in
FY 2022.
Acquisition-related adjustments
created a net benefit in the period
compared to a cost impact in the prior
year with a credit of £2.7 million (FY
2022: £9.2 million debit) relating to
one-off costs directly associated with
the acquisitions made over the last two
years. Fair value movements in respect
of contingent consideration payments
gave rise to a £5.1 million credit (FY 2022:
£0.9 million cost).
There were no associated management
incentive payments in FY 2023 (FY 2022:
£3.8 million) and other acquisition costs
and fair value adjustments totalled
£1.4 million (FY 2022: £1.1 million).
Finance costs relating to contingent
consideration fell to £1.0 million
(FY 2022: £3.4 million) reflecting the
lower balances outstanding.
Adjusted EBITDA
Adjusted EBITDA was £29.9 million
(FY 2022: £48.8 million) reflecting the
pressure on gross margins and
administrative expenses and including
the non-cash title impairment charges
as outlined above. Adjusted EBITDA
excludes acquisition related adjustments
and fees, amortisation on and
impairment of acquired intangible
assets, share-based compensation,
one-off Games Label restructuring
costs and tax.
Loss Before Tax
The non-cash impairment charges
outlined above totalling £32.0 million
(FY 2022: £nil) had a significant impact
in the period resulting in a reported
pre-tax loss of £1.1 million (FY 2022:
£28.7 million profit). This also reflects
the reduced gross margins and the
acquisition-related costs that are
required to be taken through the profit
and loss account. Adjusted profit
before tax, adjusting for the items
outlined in the APMs table above, was
£28.7 million (FY 2022: £47.1 million).
The tax charge for the year was
£2.7 million (FY 2022: £5.2 million).
There were two significant non-taxable
items during the year that affected
loss before tax which were goodwill
impairment and fair value adjustments
on contingent consideration from
business acquisitions totalling
£18.3 million (FY 2022: negative
£0.9 million). Removing these from the
loss before tax gives an effective tax
rate for the year of 16% (FY 2022: 18%).
Goodwill and intangible assets now
total £210.0 million (FY 2022:
£234.1 million) following the
impairment reviews outlined above. As
at 31 December 2023, the net book
value of goodwill was £86.2 million (FY
2022: £113.4 million) which reflects the
impairment of goodwill associated with
Team17 USA. The value of the Group’s
brands now stands at £57.6 million (FY
2022: £63.8 million) which takes into
account the annual brand amortisation
charge. The current net book value of
capitalised development costs at year
end stands at £35.1 million (FY 2022:
£26.8 million).
There were no material trading-related
movements in working capital. Trade
and other payables reduced significantly
at the year end to £35.4 million (FY
2022: £52.3 million) primarily driven
by the reduction in contingent
consideration reflecting the final
anticipated earn-out payment due to
be made in the first half of FY 2024.
As a result of the ending of payments
related to past acquisitions, and subject
to the level of future M&A activity, the
Group expects to be cash generative in
FY 2024.
Acquisition in the Year
As previously announced on 28 April
2023, astragon Entertainment GmbH
completed the acquisition of 100% of
the share capital of Independent Arts
Software GmbH (“IAS”) for a maximum
payment of £3.1 million (€3.5 million)
subject to the seller and business
meeting certain requirements. IAS is a
games development studio based in
Germany and is now supporting
astragon’s strategic development of
first-party IP simulation games.
£42.8m
The Group continues to boast a strong
balance sheet, with £42.8 million of cash
and cash equivalents at the year end
Share Issues
As at 31 December 2023, the Group’s
issued share capital comprised
145,803,620 ordinary shares of £0.01
each (FY 2022: 145,593,271). A total
of 210,349 shares were issued during
the year as part of the FY 2022
earn-out relating to the acquisition
of Team17 USA.
A total of 294,535 (FY 2022: 313,500)
share options were issued during
the year to the Executive Directors
with a three-year vesting period with
performance criteria and a further
532,858 (FY 2022: 131,300) share options
were issued to other employees across
the Group also with a similar three-year
vesting period and performance criteria.
The Group has extended the use of
its Long-Term Incentive Plan with
performance criteria across its senior
divisional leadership team together
with the deferred bonus share plan for
senior management. The Games Label
continues to administer an All-Employee
Share Incentive Plan (“SIP”) which is a
UK employee SIP with matching shares
open to all UK employees and which
continues to be well supported.
Mark Crawford
Group Chief Financial Officer
16 May 2024
“ THE GROUP REMAINS HIGHLY CASH
GENERATIVE WITH AN OPERATING
CASH CONVERSION OF 87%.”
14 Team17 Group plc Annual Report and Accounts 2023
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Strategic Report
DIVISIONAL REPORTING
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
THE GAMES LABEL / INDIE GAMES LABEL
THE GAMES LABEL / INDIE GAMES LABEL
THE GAMES LABEL IS A GLOBAL GAMES
LABEL, CREATIVE PARTNER AND
DEVELOPER OF PREMIUM VIDEO GAMES.
Our Business Model
We launch a mix of internally developed and
published Indie games across all major platforms,
including mobile, serving and growing a community
of gamers of all ages and tastes. In addition to our
in-house IP, we are partners to new and returning
independent developers around the globe. Working
with studios ranging from one developer through to
much larger established outfits overseas, the Games
Label helps deliver games both through publishing
and development assistance, providing end-to-end
support in the game creation process which is
tailored and adapted to suit the skill-set of the teams
we are working with. The Games Label prides itself on
having a collection of the most passionate, engaged
industry specialists, invested in a games-first approach.
All of us share a passion for securing excellent content,
nurturing consumer loyalty and, above all, strengthening
our teams to prepare for continuous growth.
Our Strategy
We continually seek to improve our portfolio of
100+ high-quality games by maintaining an active
and varied release schedule across our catalogue,
heading towards our 150th release in 2024. Back
catalogue games, new releases and new content for
existing games drive the Games Label’s revenues.
Maintaining this balance between new releases
and back catalogue games provides a predictable
revenue stream that underpins the business. Careful
lifecycle management means we extend the life of a
game while optimising revenues at each stage. The
acquisition of The Label in 2022 (now Team17 USA)
enabled a new focus on mobile subscription-based
games, with two new releases in H1 2023.
Our Customers
The strength and diversity of product planned for
2024 includes a mix of brand new IP, internally created
as well as externally developed, and long-awaited
sequels with strong partners across a variety of genres
appealing to a wide range of gaming audiences of all
ages and tastes. Our games are enjoyed by gamers
around the globe, across all platforms, from PC and
console to mobile. Team17 USA will also enhance our
mobile presence by leveraging games and franchises
in the Group’s back catalogue to new and existing
audiences on mobile platforms.
“ THE GAMES LABEL PRIDES
ITSELF ON HAVING A
COLLECTION OF THE MOST
PASSIONATE, ENGAGED
INDUSTRY SPECIALISTS,
INVESTED IN A GAMES-FIRST
APPROACH.”
ANN HURLEY
GENERAL MANAGER, TEAM17 GAMES LABEL
Games Label
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Team17 Group plc Annual Report and Accounts 2023 17
Strategic Report
DIVISIONAL REPORTING
Strategic Report
THE GAMES LABEL / INDIE GAMES LABEL
WE ARE A LEADING GAMES PUBLISHER WITH
A CLEAR FOCUS ON DEVELOPING AND LAUNCHING
PIONEERING INDIE GAMES THAT PLAYERS AROUND
THE WORLD WILL LOVE FOR A LIFETIME,
WHATEVER THEIR GAMING PREFERENCES.
Games Label
900+
digital revenue lines
2023 Highlights:
• Our award-winning Dredge
game has sold over one million
units
• Popular sequels launched
with successful IPs such as
Blasphemous with The Game
Kitchen
• Consumer and media response
to our five bestselling new
releases in 2023 was 91%
positive on Steam
100+
active high-quality games
28% REVENUES FROM
FIRST-PARTY IP,
66% FROM BACK CATALOGUE
18 Team17 Group plc Annual Report and Accounts 2023
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DIVISIONAL REPORTING
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
ASTRAGON / WORKING SIMULATION
ASTRAGON / WORKING SIMULATION
ASTRAGON IS A LEADING DEVELOPER,
PUBLISHER AND DISTRIBUTOR
OF SOPHISTICATED ‘WORKING’
SIMULATION GAMES.
“ ASTRAGON HAS A DIVERSIFIED
BUSINESS MODEL WITH
FIRST-PARTY IPS, THIRD-PARTY
PRODUCTS AND AN EXTENSIVE
DISTRIBUTION NETWORK.”
JULIA PFIFFER AND TIM SCHMITZ
CHIEF EXECUTIVE OFFICERS, ASTRAGON
60+
global brand license partners
Our Business Model
In addition to revenue generated from game sales, we
pursue a strategy of providing both complimentary
updates and paid DLCs to consistently create fresh
value from our content and sustain extended-term
revenues. Our first-party IPs have a multi-year
development process, which can vary depending on
project scope and platform. We introduced our initial
first-party IP game more than a decade ago and
continue to unveil major new instalments and updates
to ensure content engagement among our diverse
customer base.
Our Strategy
We remain focused on developing engaging content to
expand our audience, strengthening our existing IPs, and
securing new licensing partnerships. Our core mission
revolves around being the best partner to global game
studios across the spectrum of project development,
production oversight, marketing strategies, sales
initiatives, and project funding. This commitment holds
true regardless of the platform, be it PC, console, or
mobile. The acquisition of the German development
studio Independent Arts Software this year allows us
to expedite the diversification of our product portfolio
and establish new first-party IP products.
Our Customers
The customer base for our video games is diverse,
spanning a wide spectrum of individuals, from young
enthusiasts to technical experts and casual gamers. We
take pride in our ability to cater to the varied preferences
of our audiences, offering a rich and inclusive gaming
experience that not only resonates with the seasoned
experts but also welcomes newcomers. This diversity
within our customer base is a testament to the
versatility of our products and our commitment to
delivering games that transcend traditional boundaries,
ensuring that every player, regardless of their gaming
background, finds joy and satisfaction.
20 Team17 Group plc Annual Report and Accounts 2023
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Strategic Report
DIVISIONAL REPORTING
Strategic Report
ASTRAGON / WORKING SIMULATION
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.
4
first-party IP brands in portfolio
2023 Highlights:
• Launch of ABRISS and Howl from
our third-party publishing portfolio,
demonstrating our commitment to
broadening our operational reach
and diversifying our revenue base
• Acquisition of German development
studio Independent Arts Studios
• Introduction of Season Passes
for Construction Simulator and
Bus Simulator
• Release of 16 paid DLCs across
our IPs
• Marketed and distributed more than
45 separate third-party releases
16
Paid DLC releases across our first-party IP games
22 Team17 Group plc Annual Report and Accounts 2023
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DIVISIONAL REPORTING
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
STORYTOYS / EDUTAINMENT
STORYTOYS / EDUTAINMENT
STORYTOYS IS A WORLD-CLASS DEVELOPER
AND PUBLISHER OF EDUCATIONAL
ENTERTAINMENT APPS FOR CHILDREN.
Our Business Model
StoryToys acquires licenses for popular kids’ brands and
creates engaging mobile apps and games featuring
these brands. The apps are free to download and
access basic content. Parents and caregivers can unlock
additional content through a recurring subscription or
one-time in-app purchases. Platforms like Apple and
Google deduct their fees, and StoryToys pays brand
owners royalties based on net revenues and the
agreed commercial terms.
Our Strategy
StoryToys forms strategic partnerships with brand
owners to license popular kids’ brands and has a diverse
portfolio of brands and licensed partners. We conduct
in-depth research to develop entertaining and enriching
mobile apps that address market opportunities. Our
comprehensive marketing strategy drives downloads,
and we regularly update content to keep users engaged.
Our Customers
StoryToys has a large global footprint, with our apps
available worldwide and localised in up to 28 languages.
While the US is our largest market, 80% of our users
are from outside the US, including in countries such
as Brazil, Indonesia, India, the UK, and Mexico. We
specialise in designing apps for preschool (ages 2 to 5)
and early childhood (ages 4 to 7). Our primary audience
is children, while parents and caregivers who download
and make purchases are our secondary audience. We
take pride in creating apps that kids love and that
parents feel good about.
“ STORYTOYS FORMS STRATEGIC
PARTNERSHIPS WITH BRAND
OWNERS TO LICENSE
POPULAR KIDS’ BRANDS AND
HAS A DIVERSE PORTFOLIO
OF BRANDS AND LICENSED
PARTNERS.”
EMMET O’NEILL
CHIEF EXECUTIVE OFFICER, STORYTOYS
+185m
downloads globally
24 Team17 Group plc Annual Report and Accounts 2023
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©2024 Marvel ©The LEGO Group
Strategic Report
DIVISIONAL REPORTING
Strategic Report
STORYTOYS / EDUTAINMENT
WE BRING THE WORLD’S MOST POPULAR
CHARACTERS, WORLDS, AND STORIES TO LIFE
FOR CHILDREN, MAKING APPS TO HELP THEM LEARN,
PLAY, AND GROW.
+26%
revenue growth year on year (2023 vs. 2022)
2023 Highlights:
• Launched LEGO® DUPLO®
DISNEY | MICKEY & FRIENDS in
partnership with The LEGO Group and
The Walt Disney Company. This game
encourages creative play and learning
for young children and provides families
with the perfect way to celebrate the
magic of Disney.
• Expanded our collaboration with Marvel
Entertainment by introducing the new
Marvel HQ app, an edutainment hub
designed for kids, featuring a range
of fun and age-appropriate activities,
videos, books, comics, and interactive
characters from the Marvel Universe.
• In our first partnership with Mattel Ltd,
we introduced BarbieTM Color Creations.
This app highlights diversity and offers
an ever-expanding virtual studio filled
with colouring pages, art tools, and
design challenges.
+72%
subscription renewals year on year
“MY KIDS LOVE STORYTOYS
GAMES. I RECOMMEND THEM
BECAUSE THEY REALLY ARE
SECOND TO NONE.”
HUNGRY CATERPILLAR PLAY SCHOOL
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© 2024 Disney
Group Financial StatementsCompany Financial StatementsCorporate Governance Strategic Report
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
ESG REPORT: PEOPLE FIRST
“ OUR PEOPLE FIRST APPROACH MEANS WE ARE
PROUD TO HAVE A COMMON UNDERSTANDING
THAT OUR SUCCESS RESTS ON THE DAY-TO-DAY
EFFORTS OF EVERY SINGLE TEAM MEMBER.”
INTRODUCTION
We have three divisions which are both
distinct and complementary. To create
the best environments for our people
we follow three paths: firstly, we have
strong local cultures, and each division
takes actions regarding their people
that reflect their own circumstances, the
personality of the business, their
priorities and where the energy of their
employees is. Secondly, we increasingly
look to share the best ideas across the
Group so that we learn from each other.
Finally, we work collaboratively to see
where it makes sense to implement
consistent processes and practices
across the Group.
In 2023, we have made progress on all
three paths, getting the best of a local
approach while also raising our game
across the Group.
The Group established a Group People
& Culture Director role in September
2023 to work with each division to help
make the whole better than the sum of
the parts.
Collectively, there is a future focus
towards the things we will strive to
achieve in 2024, with a strong bias for
action. We are committed to setting
better baselines for data. We will
leverage the power of being part of a
Group through the introduction of
common approaches, such as our
employee survey tool and metrics which
will set a baseline for further
improvement in 2025 and beyond.
We are also aligning on our well-
established drive for diversity, equity
and inclusion, building on the Group’s
existing commitment to development
and sustainable business practices. In
late 2023, a group of female executives
at the Group, including the former
Group CEO Debbie Bestwick MBE, set
up a podcast series, ‘The Purple Panel:
Empowering Women in Games
Leadership’. This podcast spotlights the
stories and perspectives of women
leading in the games industry and is
available on Apple. From independent
game developers to executives at major
studios, the series intends to showcase
the diverse range of voices, experiences,
and leadership styles of women in the
field. Each episode will feature
interviews with industry leaders, as well
as discussions on current topics and
challenges facing women in games
leadership roles.
The involvement with Women in Games,
both as a corporate sponsor and through
our employees who act as individual
ambassadors, adds another layer of
support and advocacy to the diversity
and inclusion initiatives in the broader
gaming industry. These ambassadors
play a crucial role in championing the
cause of gender equality and creating a
more inclusive environment.
Across the Group we already provide an
opportunity for all employees to be a
shareholder with the gift of shares after
joining. In each business there are
important conversations about goals,
performance, development and careers.
We also invest significant energy in
making sure teams are connected and
leaders hear what is on the minds of
employees – through town halls, formal
communications, employee groups,
surveys etc. We are also starting to see
people taking up opportunities with
divisions outside the one they joined.
To showcase this approach we have set
out below highlights for each division,
but you will see commonality in that
every division focuses on:
• Culture and communications
• Wellbeing
• Equality, inclusivity and diversity
• Charity and community
• Creating a great place to work for
current and future employees that
supports them to do their best work at
the same time as we deliver our
collective goals.
We have continued to invest in
opportunities for members of the Games
Label team to develop and broaden
their skills. This year saw the launch of
our LevelUp Hub, which allows us to
house very relevant learning content
specific to our business. Managers in
the Company have now completed
Kitbag, our bespoke management
training programme which ensures a
consistent approach to line management
and excellence across all levels of
management. We also recognise that
development is enriched through
attending conferences, talks and panel
discussions, such as Develop:Brighton,
a leading conference for developers to
stretch their thinking through curated
talks and panel discussions. This year,
the Games Label enabled multiple
individuals to join the conference
and report back to the studios on
everything they learned to support
their own and others’ development.
In addition, we have welcomed new
colleagues supported by improvements
in our talent acquisition processes. This
includes an interactive digital resource
to help potential candidates explore
more about working here.
All this work led to the HR team being
shortlisted for HR Team of the Year
(HR Excellence) in December 2023.
where colleagues discuss their own
experiences in relation to mental
wellbeing. From depression, to living
with ADHD, to the importance of
talking and therapy, the podcast has
helped normalise the conversation
around mental ill health within the
Games Label and has led to new
support networks amongst team
members through people discovering
others with shared experiences and
challenges.
We launched a number of initiatives
to ensure a psychologically safe
environment. This has included the
roll-out of our ‘Hacking Inclusion’
sessions which continue into 2024;
a bespoke session designed and
facilitated by external equality, diversity
and inclusion (“EDI”) experts to help
identify and address even the smallest
barriers to inclusion and equip people
with the tools to overcome them. We
were delighted to receive a
commendation for Best Wellbeing
Strategy at the This Can Happen annual
awards event in June 2023.
To continue to support an inclusive
culture and diverse team, we have
pushed forward on a number of fronts.
We have recently launched an online
way for connecting with gamers who
don’t yet work for the industry. Our
network groups continued to make
progress with well received support to
increase awareness around
neurodiversity; a Women in Games
lunch; sourcing expertise on LGBT
issues; and generally influencing and
building a sense of community.
GAMES LABEL EMPLOYEES
TOGETHER FOR AN ENGAGING
SESSION IN WAKEFIELD
GAMES LABEL
We place great importance on
ensuring an inclusive and connected
environment for everyone at the Games
Label and creating opportunities for
open and transparent communication
is key to this. Our employee-led
Teamster Engagement Committee,
“TEC”, continues to play an important
role in amplifying feedback and
suggestions from colleagues to senior
management. A member of TEC joins
the Senior Management meetings each
month to raise key feedback, and they
have also hosted a number of live Q&A
sessions with senior leaders throughout
the year. This has created greater
alignment across all levels on the
Games Label’s priorities.
Our annual engagement survey
continues to be an important way to
listen to the subjects that matter most
to our people.
The Games Label teams have expressed
their desire to build an even greater
sense of belonging across the business,
particularly as we continue to
successfully adapt and embed our
hybrid working model.
Opportunities to come together socially
have strengthened connections across
our teams, with events to celebrate the
launch of our games to off-site charity
fundraising activities such as the
Yorkshire Three Peaks challenge and a
beach clean with Surfers Against
Sewage, to our popular Studio
boardgame nights.
In the spring we held our inaugural
Studio Showcase – an in-person event
for our team members to hear about
the games lined up for launch that they
would be working on, and an
opportunity to spend the afternoon
playing those games. The sun shone
again for this year’s Team17 Fest in the
summertime, which brought together
team members from all locations –
along with their families, friends and
dogs – to enjoy live music, go-karting,
and, this year, a Super Mario Smash
Bros contest.
Wellbeing continues to be important
and a core aspect of our approach to
creating a great place to work. We have
been active in our support of our teams
through periods of change, providing
expert facilitated sessions on helping us
all respond positively to changes
towards the end of the year. We have
also introduced new initiatives to build
on the support we provide for the
mental wellbeing of colleagues. As well
as mental health keynotes and Mental
Health First Aid training, we launched
our internal podcast ‘Mind Matters’
28 Team17 Group plc Annual Report and Accounts 2023
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Strategic Report
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
ESG REPORT: PEOPLE FIRST CONTINUED
ASTRAGON
Diversity is a real priority at astragon.
We understand that promoting an
inclusive environment is not just about
logos and T-shirts. We have run
workshops to help each of us
understand what the topic means for
us. It is important that it is not just a
focus for a week, but something that is
part of our everyday approach. It has
been positive to see diversity topics
now being discussed naturally in our
teams. As part of International
Women’s Day, we posted a series of
videos. This included our co-CEO’s
talking about the importance of
diversity and how they each bring
different perspectives to topics, which
makes for a richer understanding of an
issue, and those different thoughts are
not because of gender, but because of
diversity of thought. The videos also
tackled stereotypes about women and
computer games, with our own team
members debunking myths including
“women don’t really know anything
about games” and “women are under-
represented because they don’t care
about games”. With our female
representation at 44% compared to
54% male and 2% non-binary*, we can
disprove these stereotypes. The focus
also included dedicating June to Pride
Month featuring presentations about
diversity and providing a glimpse
into the industry for young girls on
Girls Day 2023.
have increased our remote working
over recent times, with quarterly Office
Weeks to bring all employees to the
office, enhancing direct interaction. In
addition, every employee works from
the office for a minimum of four days
per month. We celebrate with events
like summer and Christmas parties,
release parties, game milestones and
employee achievements and milestones.
In October, the team initiated a charity
run as part of the Health Month initiative.
There was a donation for every kilometre
tracked on foot or by bike to a charitable
organisation. This is in addition to the
river clean up highlighted in “Our Impact
on the Environment”.
We work hard at helping everyone
work productively together. To address
general topics, there’s a monthly
company-wide stand-up for all
employees, and on Fridays, updates
about our games are shared. We
strengthen collaboration given we
astragon has continued its growth in
2023, leading to a more focused and
strategic approach in our people
management practices. This has been
particularly evident in the area of
employee recruitment, where we have
seen notable advancements in precision
and efficiency. Since the beginning of
the year, 11 new employees, 2 interns, and
1 apprentice have joined the company.
TEAM MEMBERS AT ASTRAGON
ON INTERNATIONAL WOMEN’S
DAY 2023
© 2024 Disney
STORYTOYS
In 2023, StoryToys prioritised employee
engagement and organisational
development initiatives to foster a
positive workplace culture. The year
began with the launch of the first
engagement survey, leading to a better
understanding as to what matters to
our people and to the establishment of
internal interest groups, such as the
Green team and a social team. Over the
course of the year, StoryToys organised
a diverse range of over 20 virtual and
in-person events, reflecting the interests
of our multinational workforce of 16
different nationalities. Career pathways
were developed in core areas based on
survey feedback, and communication
efforts were enhanced through monthly
All Hands demos and the newly
established Internal Comms Newsletter
channel, “What’s the Story, StoryToys?”
which spotlighted both people and
products. We stayed committed to
enhancing financial well-being in 2023,
by offering individual financial
consultations to our employees.
StoryToys’ dedication to continuously
improving the employee experience,
led to our nomination as a finalist for a
2023 CIPD HR award in “Elevating the
Employee Experience.”
StoryToys also focused on establishing
some important baselines. We
implemented comprehensive policy
and procedure updates, de-risked the
staffing model with a focus on direct
employment, and embraced HR
digitalisation, with the optimisation of
our HRIS and launch of an Applicant
Tracking System.
Talent acquisition and retention efforts
in 2023 resulted in over 25 new joiners,
improvements in diversity, and a
decreasing trend in attrition. Key hires,
including the Head of Studio and other
key leadership/management hires,
contributed to organisational growth
and leadership development. We also
saw opportunities for Games Label
employees to work in the StoryToys
business. Finally, our employer brand
has been strengthened (as measured
through LinkedIn), showing 43% growth
in 2023.
As of 31 December 2023, StoryToys had
58 direct team members, with a gender
distribution of 55% male and 45% female.
This marked an increase of 9% female
representation from 2022. Specifically,
we reached 50:50 gender balance in
our QA team and improved gender
diversity in engineering. The organisation
operated from one office location in
Dublin, offering variable working setups,
including a “Work from Anywhere”
policy. StoryToys promoted diverse
working models through guidelines, a
remote working policy, and community
groups on Slack. We transitioned to
Office365 enhancing connectivity, with
tools like Teams, SharePoint, and
Zendesk facilitating collaboration and
transparency. StoryToys engaged our
disparate workforce through a mix of
online social events co-created with the
business, ensuring inclusivity for all
groups, locations, and time zones.
It is important we provide opportunities
for our teams to continue to learn and
develop. We are excited to have secured
funding from IDA Ireland to invest in
learning opportunities across 2023-
2026. We also initiated a masterclass
series in 2023 with keynote speakers
and industry experts. New ideas have
also come from exploring AI and Agile
to enable future ways of working and
to help us to stay ahead in technology
adoption.
THE STORYTOYS TEAM ENJOY
A FESTIVE CELEBRATION
AT THE END OF A
SUCCESSFUL YEAR
* Data for astragon, excluding the subsidiary Independent Arts Software (IAS). Data including IAS: 36% female, 62% male, 2% non-binary.
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Strategic Report
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
ESG REPORT: OUR IMPACT ON THE ENVIRONMENT
“ WE CONTINUE TO DEVELOP INITIATIVES WHICH ENHANCE
INVOLVEMENT OF OUR TEAMS WITH ENVIRONMENTAL
ISSUES AND SUPPORT A REDUCED CARBON FOOTPRINT.”
OUR FOCUS FOR 2023
PROGRESS IN 2023
People and Communities
With the increasing
importance of environmental
issues, expand our involvement
to all departments within our
divisions. Raise awareness of the
environmental footprint of each
departments’ activities across
the Group.
Collecting Data
Collect material environmental
data for all divisions.
Carbon Reduction
Establish sustainable
environmental practices and
carbon reduction plans to reduce
emissions, prior to removing carbon
to compensate for the remaining
emissions as we journey towards
net zero.
Range of Influence
As we learn more about
ESG, spread this learning to a
broader audience both within
and outside of the Group, including
engaging with our developers and
key suppliers on environmental issues.
Our energy reduction initiatives are
driven by data gathered for our
forthcoming energy audit with NQA.
Other Activities Supporting
Environmental Good Causes
In terms of alignment with Sustainable
Development Goals our focus has been
addressing Sustainable Development
Goal 13 (“SDG13”) Climate Change.
We recognise the importance of
addressing biodiversity loss as well as
emissions reductions. Hence the
development of ‘Team17 Forest’ where
we have sponsored the planting of 10
trees for each year the Group has been
trading with our partners Make it Wild.
As well as addressing climate change
and biodiversity loss, this will also be
used to educate our teams about
environmental issues and the
importance of biodiversity. By making
our investment in ‘Team17 Forest’, we
are raising the profile of the importance
of addressing biodiversity loss to our
various stakeholders.
This year, the Games Label participated
in the World Oceans Day event on Steam
with Dredge and Before We Leave. In
co-ordination with our development
partners, we donated a percentage of the
revenue generated during the five day
sale to Whale and Dolphin Conservation.
Expanding our Range of Influence
This aligns with SDG 17 ‘Partnerships for
the Goals’ and SDG 16 ‘Peace, Justice,
and Strong Institutions’. Developing
green content for our games is vital
if we are to spread messages to a much
broader audience. This is already
happening in astragon and StoryToys,
who both promote sustainable transport
and other green themes in their games.
People and Communities
Within the Games Label we held
monthly Green17 meetings and worked
with Surfers Against Sewage with team
members volunteering to clean three
beaches – Blackpool, Scarborough and
Skegness for a day. Within astragon, the
Environmental Responsibility Team met
periodically to discuss green initiatives,
including a dedicated “Green Month” to
address sustainability and ecological
issues. One notable event was the Rhine
Clean-up, in which astragon team
members volunteered to clean a local
section of the Rhine for a day. Within
StoryToys, the partnership with Clean
Coasts was used to educate their team
in environmental issues and some
volunteered to clean the Royal Canal for
a day.
Collecting Data
We collect Scope 1, 2 and 3 data for
Games Label, astragon and StoryToys.
As well as analysing this data to compare
internally between our divisions, we can
also compare emissions with external
benchmarks, and look to establish
carbon reduction strategies in each area.
Carbon Reduction
New energy efficient computers were
issued to all team members of the
Games Label during the year, and we
are reviewing office energy usage across
the Group.
StoryToys have updated their Travel and
Expenses Policy to encourage sustainable
travel practices, while astragon have
taken measures to ensure Waste from
Electrical and Electronic Equipment
(“WEE”) compliance and surveyed the
team to ascertain where most interest in
sustainability issues lies.
We have continued to invest in carbon
removal projects through our partner
Supercritical in order to cover our Group
Scope 1 emissions. Supercritical’s
experience and insights are proving very
helpful in our long-term planning route
to net zero.
PROGRESS IN 2023 continued
FUTURE PLANS
During 2023 we held bi-monthly
meetings with our developer partners
to share what we are doing on
environmental issues and to learn from
initiatives they are carrying out around
the world. This peer-to-peer sharing of
ideas has proved useful in sharing our
green initiatives and learning about
environmental differences between
studios around the world.
The statistics below 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. 2022 data has been restated
as we better understand our emissions,
in particular our gas usage at our offices
and categorisation of emissions from
commuting.
The Scope 3 categories include
purchased goods and services, business
travel, working from home and employee
commuting. Use of sold products is
excluded because we are unable to
calculate with any degree of accuracy
the energy used by players of our
games. End of life treatment of sold
products, such as disposal of physically
produced games, is implicitly included
via the purchased good and services
category.
We are developing a range of initiatives
below which will enhance involvement
of our teams with environmental issues,
gather more data to meet future
legislative requirements and enhance
our sustainability initiatives and carbon
reduction plans and range of influence.
Emissions Reduction Plans
99% of our emissions arise from the
following five areas:
• Energy
• Supply chain
• Working from home and commuting
• Travel
• End of life treatment of sold product
Our focus for 2024 will continue to be
on energy reductions as identified in our
ISO 50001 audit through better supply
chain management and travel planning.
Moving forwards, the greater use of
outsourcing across the Group will add a
more flexible nature to our Scope 3
emissions. We anticipate supply chain
emissions growing as a proportion of
our Scope 3 emissions in 2024 and
working from home and commuting
reducing as a proportion.
We will also strengthen our due
diligence procedures to ensure
environmental credentials are
considered in supplier selection.
Net Zero Planning
We will continue to work on net zero
modelling in 2024 as we better
understand our carbon reduction
opportunities on one side of the
equation and carbon removal
opportunities and costs on the other
side. We will involve a broader cross-
section of the business teams in this
process in the future.
IFRS S1 and S2 and Corporate
Sustainability Report Directive
With the broadening of the range of
reporting requirements on the horizon
(climate change, pollution, water and
marine resources, biodiversity and
ecosystems, resource use and circular
economy) we will put processes in place
to gather the additional data required
and governance procedures needed to
meet the requirements of these
standards. Whilst some of this legislation
will not be mandatory for some time, we
will commence planning to gather the
data early in anticipation of future
requirements.
Supply Chain Management
We will use our supply chain analysis to
build stronger relationships with our
major suppliers and monitor closely
what they are doing on carbon reduction,
other ‘green’ initiatives, and where they
are on their carbon removal journeys.
Internal Reporting of Emissions
During 2023, we developed Power BI
dashboards to summarise our emissions
internally. These will be embedded
within the reporting process for 2024,
thereby engaging senior department
heads in our journey towards net zero.
As new data points are identified the
data sets will also be expanded in the
future.
Scope 1, 2 and 3 Emissions
Scope 1
Scope 2
Scope 3
Total
Energy consumption used to calculate
above emissions (kWh)
UK proportion of energy usage reported
Average number of employees
Intensity ratios:
Emissions per FTE (CO2 e tonnes)
Emissions per FTE (kWh)
CO2e tonnes
2023
CO2e tonnes
2022
(restated)
23
124
927
1,074
679,618
80%
380
2.83
1,788
21
104
972
1,097
644,640
84%
351
3.13
1,837
32 Team17 Group plc Annual Report and Accounts 2023
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Strategic Report
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
PRINCIPAL RISKS & UNCERTAINTIES
The Group operates in a competitive and dynamic market
environment. The Group has grown substantially since the
IPO in 2018 through a combination of organic growth and
addition of strategic and complementary acquisitions. An
enlarged senior leadership team actively manages the
individual risks of the Group’s divisions which are subsequently
collated into a combined Group risk register that is 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 2022
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
with the barriers to the latter now lower than ever before.
Slower than expected market growth or a failure to remain
competitive would adversely affect the Group’s performance.
The diversification of the Group through organic and
acquisitive growth has broadened the portfolio and provides
a wider portfolio protection from a genre, geographic and
customer age perspective. Furthermore, in addition to the
in-house development of games and apps, the Group
continues to drive a rigorous game scouting process to
secure new IP games as well as securing incremental licensed
partners driving new apps. 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 2022
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 – no change
from 2022
The Group’s products rely on a relatively small but growing
number of commercial partners 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 partners 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 broader Group provides additional routes to market,
with games 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 development and
licensed brand partners, and in delivering consistent high-
quality IP content across its growing portfolio of games
and apps. 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 games within the Group’s revenue
– no change from 2022
Historically, the Group has been reliant on a subset of
successful games to generate a large share of its revenues as
well as the successful launch on new first-party and third-party
games. Should the Group fail to competently develop, launch
and manage the lifecycle of its portfolio of games, this may
adversely affect its financial results.
The Group has significantly expanded its portfolio with the
three divisions providing a broader portfolio of first-party
and third-party games. In addition, the acquisition of key IP,
such as Golf With Your Friends and Hell Let Loose has
strengthened the underlying portfolio.
The Group’s games scouting approach is also designed to
enable it to swiftly identify exciting new IP and act dynamically
to continue to grow the portfolio with the introduction of
new games for development and future release.
The Group continues to look to develop a broader and
stronger back catalogue of games as well as create
successful games that can become franchises with sequels
providing wider portfolio protection and longer evergreen
franchise revenues. This can be seen within each of the three
divisions with games from each of these now part of the top
ten games by revenue in the year. This broader more
balanced portfolio approach helps give the Group protection
against individual games that may underperform within a
financial period and the overall year on year growth in the
back catalogue that represents 71% of the annual revenues,
provides a strong underlying content base that is
subsequently supported by the launch of new games and
additional content each year across the Group.
Commercial launch pipeline – increased since 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, increased levels of investment, competition with
external game releases, reduced barriers to developers to
self-publish, 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. New games are also robustly evaluated through the
‘greenlight’ process and throughout the development
process to minimise delivery risk.
The ‘greenlight’ process within the Games Label has been
re-focused on the historic successful business model working
on Indie games where the typical investment levels are
significantly lower than those seen in AA or AAA game
development. In addition, the ongoing review of games in
development has been tightened up in line with other cost
control measures implemented in FY 2023.
Operational Risks
The ability to recruit, develop and retain key team
members – increased since 2022
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, although the Group has moved to a more
outsourced model to manage the changes in dynamic work
patterns and resource requirements. This does also have risks
associated with securing and managing suitable outsource
partners, however the Group’s combined purchasing power
linked with leading outsource management expertise helps
minimise these risks.
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 regular employee engagement surveys that are
now consistently applied across the Group, 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. 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.
34 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 35
Strategic Report
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
PRINCIPAL RISKS & UNCERTAINTIES CONTINUED
BOARD ENGAGEMENT WITH STAKEHOLDERS
Currency / Socio-Economic Risks
Currency fluctuations – no change from 2022
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”) alongside
a lower level of exposure to Euro. As such, despite global
fluctuations in currency movements being less aggressive
than in prior years, there is a risk that the Group’s financial
performance could be adversely affected by unfavourable
movements in foreign exchange.
The Group receives a significant amount of USD and Euros,
makes developer milestone payments and royalties in USD
where possible, and the majority of operational expenditure
remains in GBP. The Group continues to assess ways to
mitigate this risk in FY 2024 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 – no change from 2022
The rate of inflation impacting the cost of living, continued to
rise over the early part of 2023 and although the inflationary
pressures are reducing in 2024 it is felt that they still present
a negative impact on consumer spend and also puts ongoing
pressure on staff costs. This is outside the control of the
Group and although inflation is expected to continue to fall in
FY24, actual levels of inflation remain uncertain.
To support our team members with cost of living pressures,
the Group has implemented policies and procedures that
support the team as we embrace hybrid and remote working
structure, 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 continue to monitor closely in 2024.
Effective management of costs – increased since 2022
During the latter part of the year, it was identified that tighter
cost controls were required within the areas of development
and commercial areas within the UK Games Label division
and additional measures were put in place.
Development milestone review frequency was increased to
improve the visibility and tracking of spend on individual
game development projects.
Authority levels of spend were reduced in all areas with more
rigour placed on tracking and controlling spend.
The implementation of the new finance system planned
within the Games Label for later in 2024 will also help to
tighten up the authority/approval process with more efficient
online controls on spend as well as provide better visibility
and reporting in this area.
Monthly divisional Board meetings in which the Group CEO
and CFO to discuss financial results, risks and opportunities
and going forward to specifically review the identified risk
areas around development and commercial spend.
IT cyber security/Data Privacy – no change from 2022
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 and data protection
including third-party monthly online security interactive
programs to continue training and awareness which are
being rolled out across all divisions across the Group.
GDPR reviews are underway across the Group to provide
further insight into specific data held and treated and
recommend any additional changes required. In addition, a
new Group Legal Director will be joining the business in the
first half of 2024 to help support the teams on all legal
matters and will also be taking on the role of Data Protection
Officer to focus on how the Group can continually assess the
security, management and protection of data held within
the divisions.
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 Group and highlighted areas in this report where
these are covered:
Stakeholder
Group
Our Team
Other References
in this Report
PEOPLE FIRST REPORT
ON PAGES
28-31
Importance & Engagement
People are at the core of everything at the Group and we have sought to
build a business that recognises and supports this. Since the acquisition of
astragon and The Label in 2022 and StoryToys in 2021, we have monitored
the integration of the team members into the broader Group structure, while
maintaining a strong focus on 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 2024. StoryToys, astragon and the Games Label have each
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 who 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.
Players / Customers Fundamentally, the success of our business depends on demand from players
across a wide age range playing our games.
GROUP STRATEGY AND
BUSINESS MODEL
ON PAGES
08-09
We have a dedicated community management team which maintains a direct
relationship with players through public gaming notice boards, building
long- term trust through engagement and delivering the improvements that
the community wants most 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.
We have continued to attend industry leading events, such as Gamescom,
where members of the teams from Games Label and astragon represent the
Group and have face-to-face interaction with our customers, suppliers,
development partners, and peers.
36 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 37
Corporate Governance
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
BOARD ENGAGEMENT WITH STAKEHOLDERS CONTINUED
Stakeholder
Group
Importance & Engagement
Platform Partners Our customer reach has expanded further in 2023, and now includes a
broader 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.
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
first-party IP, third-party products, and distribution games with the right
partners and platforms to maximise 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.
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 Group.
Throughout the year, the Group Chief Executive Officer and Group 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.
During 2023, we hired a Group Investor Relations Director to further support
our engagement with shareholders. We have developed a comprehensive IR
plan and calendar to provide further touchpoints between the Group and
existing shareholders, as well as to broaden our shareholder base.
The Group 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 full-year and half-year results.
Presentation material was also posted on the Group website to engage with a
wider shareholder base.
Our Annual General Meeting affords all shareholders the opportunity to hear
from the Group directly, to ask questions and participate in the Group’s key
decisions.
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.
Other References
in this Report
GROUP STRATEGY AND
BUSINESS MODEL
ON PAGES
08-09
Stakeholder
Group
Suppliers
GROUP STRATEGY AND
BUSINESS MODEL
ON PAGES
08-09
Third-Party
Partners
Importance & Engagement
Other References
in this Report
Whilst some 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
to manage development workload requirements throughout the year.
The value that these external sources have added to the Group and its systems
has been significant. This year, we have increased our focus on outsourcing
partners to maintain this high level of quality and strengthen our relationships.
At astragon, we work very closely to maintain long standing relationships
with dedicated third-party development partners on each of the first-party
IP simulation games.
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.
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
the Group and use this to set KPIs for future years and 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
08-09
ESG REPORT
ON PAGES
28-33
Local Community
Following the acquisitions made in 2022, we now operate across 8 locations in
5 countries. We endeavour to continue to play an active role in each local
community our team live and work in.
We support local communities through activities and donations. Within the
Games Label, our employee-led Teamster Engagement Committee, “TEC”,
continues to play an important role in amplifying feedback and suggestions
from colleagues to senior management. A member of TEC joins the Senior
Management meetings each month to raise key feedback, and they have also
hosted a number of live Q&A sessions with senior leaders throughout the year.
This has created greater alignment across all levels on the Group’s priorities.
Across the wider Group, we continue to donate to international charities.
Full details of the support to charities can be found in the ESG Report.
We are part of the global gaming community, with members of the senior team
at astragon holding positions on industry panels in Germany. The Games Label
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.
38 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 39
Corporate Governance
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
BOARD OF DIRECTORS
FRANK SAGNIER
CHAIR
STEVE BELL
GROUP CHIEF EXECUTIVE OFFICER
MARK CRAWFORD
GROUP CHIEF FINANCIAL OFFICER
DEBBIE BESTWICK MBE
NON-EXECUTIVE DIRECTOR
PENNY JUDD
NON-EXECUTIVE DIRECTOR
PETER WHITING
SENIOR NON-EXECUTIVE DIRECTOR
Frank is an experienced executive and
entrepreneur with a successful track
record in the video games industry. He
brings over 25 years of gaming sector
experience to the Board, having held
plc, private equity and senior roles with
Codemasters, Electronic Arts, Acclaim
Entertainment, Double Fusion, and
Funcom.
In 2014, Frank was appointed CEO of
Codemasters. During his tenure he led
the transformation and restructuring of
the business, building one of the most
iconic racing games development
studios and publishers of the F1 racing
brand, before leading the company’s
successful IPO in 2018. Codemasters
was later acquired by EA in 2021
(NASDAQ: EA), in a deal worth $1.2bn.
Frank is currently serving as non-
executive Chair for video game
developers nDreams and Steel City
Interactive.
Steve was appointed Group Chief
Executive Officer in September 2023.
Steve joined the Group from Iris
Worldwide Holdings Limited (“Iris”), a
global integrated marketing agency
specialising in brand and digital
marketing strategy. Steve amassed
extensive digital marketing expertise at
Iris, having held numerous senior
leadership roles since co-founding Iris
in 1999, including the role of Global
Group Chief Executive since 2021.
Steve managed over 1000 employees
in 14 offices around the world, and
oversaw Iris’ work with some of the
biggest, most creatively driven and
technologically advanced global
brands, and was instrumental in
developing and delivering Iris’
commercial and M&A strategies.
Prior to co-founding Iris, Steve worked
for the advertising and retail agency
Arc Worldwide, spending over five
years working across a number of
high-profile integrated accounts.
Mark joined the Board in April 2020
having been interim Chief Financial
Officer since November 2019. Mark
has over two decades at Executive
and Board level and is a qualified
Chartered Management Accountant.
He joined the Group from TravelUp, a
privately owned online travel business,
where he was Chief Financial Officer
from 2018.
Previously, Mark was Chief Financial
Officer of TP Group plc, an AIM-listed
specialist technology, energy and
defence business, and prior to that
held a number of positions with
large corporates, including Glaxo
Pharmaceuticals, PepsiCo Restaurants,
Gondola Restaurants plc and more
recently Kingfisher plc, supporting their
major pan-European supply chain and
logistics transformation programme.
Debbie is an industry leader with over
30 years’ experience in the games
industry and is one of the founding
members of Team17 Group plc. Initially
leading the Group’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
Group 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 was awarded the
highly prestigious Develop Star Award
in 2021.
Penny joined the Board in 2018 in
advance of the successful IPO on AIM
and is Chair of the Audit Committee.
Penny has over 30 years’ experience in
Compliance, Regulation, Corporate
Finance and Audit. Penny is currently
Chair of FRP Advisory Group PLC, and
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.
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.
Peter was appointed Non-Executive
Director in August 2023. Peter is a
highly experienced NED, having spent
over ten years in several non-executive
roles across a wide range of boards.
Beginning his career as an equity
research analyst at Panmure Gordon,
Peter later moved to UBS where he
specialised in UK Technology,
Engineering and Automotive sectors,
before going on to become Chief
Operating Officer of UBS European
Equity Research.
Since leaving UBS in 2011, Peter has
served on a variety of boards, and is
currently Chair of Kooth plc, Senior
Independent Director of FDM Group
plc, and an independent Non-Executive
Director for Aurrigo International plc.
Peter Chairs the Audit Committee
for Kooth plc and Remuneration
Committee for FDM Group plc. He
is also a NED and RemCo chair at
Celebrus Technologies plc and audit
chair at Aurrigo.
40 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 41
Corporate Governance
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
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 2023.
Disclosures
Emissions Data
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
A full business review for FY 2023 is detailed in the CEO, CFO
and divisional reporting sections on pages 04 to 27.
Trading for the period from 31 December 2023 to the date of
this document has been positive and is consistent with the
Board’s expectations for the year.
The Group has released 4 new games within the Games Label,
1 from astragon and 2 apps from StoryToys in the year to
date. In addition, there are new game releases planned during
the course of 2024 across the wider businesses, and through
its ‘greenlight’ process the Group continues to review and
sign new games 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 loss for the year, after taxation, amounted to £3.7 million
(FY 2022: £23.5 million profit). The Directors have not
recommended the payment of a dividend (FY 2022: £Nil).
Post Balance Sheet Events
There have been no material post balance sheet events since
the end of the 2023 financial year.
Directors
The Directors who served the Company during the year and
up to the date of signing the financial statements were:
Christopher Bell (resigned on 31 December 2023)
Debbie Bestwick MBE (transitioned to non-executive director
on 1 January 2024)
Mark Crawford
Martin Hellawell (resigned on 31 July 2023)
Penny Judd
Jennifer Lawrence (resigned on 22 June 2023)
Peter Whiting (appointed on 1 August 2023)
Frank Sagnier (appointed on 6 September 2023)
Steve Bell (appointed on 4 September 2023)
Full details of the Board members’ profiles can be found on
page 40 to 41.
Directors’ Indemnity and Insurance
The Group provides for Directors and Officers’ liability
insurance in respect of the Group and its Directors which was
maintained throughout the financial year ended 31 December
2023 and remains in place at the date of signing the annual
report and accounts.
42 Team17 Group plc Annual Report and Accounts 2023
Charitable Donations
Political Donations
Fostering Relationships
with key stakeholders
& s.172 statement
Details of the Group’s greenhouse
gas emissions, energy
consumption and energy
efficiency action can be found on
page 33 of this report
Over the course of the previous
financial year, the Group has made
donations to various charities
across the Group totalling £6,019.
The Group has not made any this
year.
Details of how the Group fosters
and manages relationships with
key stakeholders can be found in
the s172 statement on pages 37
to 39 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 2024 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.
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 34 to 36.
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 2023, 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
No. Ordinary
Shares held
% of issued
20.79
10.68
7.87
6.69
Ms Debbie Bestwick MBE (UK)
30,266,945
Liontrust Asset Mgt (London)
15,573,889
Octopus Investments (London)
11,471,778
Janus Henderson Investors
(London)
BlackRock Investment Mgt
(London)
9,753,466
7,637,659
5.24
Anicom Gestion (Brussels)
6,200,000
Aberdeen (Standard Life)
(Edinburgh)
6,062,500
4.25
4.16
Interactive Investor
(Manchester)
4,455,885
3.06
Source: Orient Capital Shareholder register 31 December 2023)
Corporate Responsibility in Employment
The Group now operates 8 locations across 5 countries
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 ESG Report on
pages 28 to 31. We have a diverse team and do not tolerate
discrimination of any kind.
Our team members play a fundamental role in shaping 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 28 to 33.
Research and Development
The vast majority of the Group’s capital investment is to
develop first-party and third-party co-developed games
that are released in future years. As such investment in
development is capitalised in the Development Costs in the
balance sheet where applicable under IAS38.
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 employee engagement are included in
the ESG Report on pages 28 to 31 and also in the Section 172
statement on pages 37 to 39. Feedback relating to the
engagement survey results are shared with the Directors and
reviewed at Board meetings, often inviting the CEOs 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 14 of this report.
Website
The Directors are responsible for ensuring the annual report
and accounts 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.
Signed for and on behalf of the Board by
Steve Bell
Group Chief Executive Officer
16 May 2024
Team17 Group plc Annual Report and Accounts 2023 43
Corporate Governance
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
CORPORATE GOVERNANCE REPORT
Dear Shareholder,
As the new Chair of the Board of Directors, I am pleased to
present this year’s Corporate Governance statement for
Team17 Group plc. Over the past year, the Company has
noted a significant increase in focus on effective governance
within public companies. In keeping with this, the Board has
placed a stronger emphasis on encouraging open and
transparent debates that allow for proactive decision-making.
As Chair, it is my responsibility to ensure that these vital
governance practices are integrated into both the overall
objectives and day-to-day activities of the Board. In
acknowledgement of the importance of this integration and
of the high standards of Governance, the Board has 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”).
Each member of the Board recognises the value that good
governance practices can bring to each aspect of the
business and believes that compliance with the QCA Code
enables us to serve the interests of all of our key
stakeholders through the creation and maintenance of
long-term value in the Company.
This report describes our approach to applying the
principles of the QCA code and encouraging good
governance throughout the business, through relevant
policies, initiatives and the operation of the Board and its
Committees.
Frank Sagnier
Group Non-Executive Chair
16 May 2024
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 executive team are directed to the day-to-day management and are
accountable to the rest of the Board. The Board and Committees, in turn, meet regularly to oversee the successful
operation of the Company. 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 expanded on further throughout this report.
These disclosures are updated at least annually in the manner recommended by the QCA Code.
Principle
Disclosure
Principle 1: Establish a strategy and
business model which promotes long-
term value for shareholders
The Company develops and publishes games across multiple platforms.
Through its three divisions (Games Label, astragon and StoryToys), 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 08 to 09,
and commentary of progress in the last year against this can be found in the
strategic reviews on pages 04 to 07 and pages 16 to 27.
Principle 2: Seek to understand and
meet shareholder needs and expectations
See the section 172 Statement on page 38.
Principle 3: Take into account wider
stakeholder and social responsibilities
and their implications for long-term
success
The Board is conscious of the impact that the Group’s activities may have on
both immediate stakeholders and the wider social environment.
A detailed report on how the Company has taken into account both immediate
and wider stakeholders can be found in the ESG reports on pages 28 to 33 and
in the s172 statement outlined on pages 37 to 39 respectively.
Principle 4: Embed effective risk
management, considering both
opportunities and threats, throughout
the organisation
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
divisional 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 34 to 36.
Principle
Disclosure
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, three
Non-Executive Directors and two Executive Directors.
Three of the Non-Executive Directors - Frank Sagnier, Penny Judd, and Peter
Whiting - 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 47 to 48.
The Non-Executive Directors were selected with the objective of increasing the
breadth of skills and experience of the Board and bringing independent
judgement 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.
Principle 6: Ensure that between them
the Directors have the necessary
up-to-date experience, skills and
capabilities
Biographies of each Director are outlined on pages 40 to 41.
The Directors believe that the Board has the appropriate balance of diverse
skills and experience in order to deliver on its core objectives.
The Nominations Committee has assisted the Company in ensuring that any
changes to the Board do not affect this balance.
Principle 7: Evaluate Board performance
based on clear and relevant objectives,
seeking continuous improvement
The Board considers the evaluation of its own performance to be a key step for
improvement. Since the independent evaluation conducted in 2022, the
Directors have worked to ensure that all key learnings surrounding the Board’s
ability to deliver growth, maintain a dynamic framework and build trust have
been acted on.
The Board has since worked with the Nominations Committee to factor these
learnings into the process of hiring new Directors.
Given the recent appointments to the Board, the Directors believe that another
independent performance evaluation should be conducted once the new
Directors have fully settled into their roles. The results of which will be
benchmarked against previous evaluations to ensure consistent improvement.
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. The Directors take ultimate responsibility
for ensuring that these are promoted and maintained throughout the
organisation, that they guide the Company’s business objectives, and that they
are made available to everyone in the business.
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
central role that sound ethical values and behaviour plays within the Company
is enshrined in the Employee Handbook, which promotes this culture through
all aspects of the business, from initial recruitment and hiring to career
advancement. The Employee Handbook also sets out the Company’s
requirements and policies on such matters as whistleblowing, communication
and general conduct of employees. Details of the Group’s Whistleblowing
Policy, Grievance Policy, Anti-Corruption & Bribery Policy and Anti Modern
Slavery Policy can also be found on our website.
44 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 45
Corporate Governance
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
CORPORATE GOVERNANCE REPORT CONTINUED
Principle
Disclosure
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 governance structures are appropriate, devolving to several Committees as
set out in the Committee reports on pages 47 to 48.
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.
The Board
Board Composition
Full biographies of the Directors can be found on page 40
to 41. At the date of this report, the Board comprises two
Executive Directors and four Non-Executive Directors, three
of whom are independent, including the Non-Executive Chair.
• Frank Sagnier – Independent Non-Executive Chair who
joined the Board in September 2023
• Steve Bell – Chief Executive Officer who joined the Board
in September 2023
• Mark Crawford – Chief Financial Officer who joined the
Board in April 2020
• Debbie Bestwick MBE – Non-Executive Director who
joined the Board in May 2018
• Penny Judd – Independent Non-Executive Director who
joined the Board in May 2018
• Peter Whiting – Independent Non-Executive Director who
joined the Board in August 2023
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.
Each Director is committed and individually responsible for
keeping up to date their skillset in relation to the Company’s
operations and all regulatory obligations. The Company
Secretary, along with legal advisers and the nominated
adviser, provides appropriate training on regulatory updates
and refresher training on ongoing obligations. The Directors
are supported in their knowledge of operational matters
through access to the Company’s officers and key
employees.
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;
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 accounts;
• approving the dividend policy;
• approving any significant changes in accounting policies;
• approving the treasury policy;
• approving the Group’s risk appetite and principal risk
statements;
• reviewing the effectiveness of the Group’s risk and control
processes;
• approving major capital projects and material contracts or
arrangements;
• approving all circulars, prospectuses, and admission
documents;
• ensuring a satisfactory dialogue with shareholders;
• establishing Board Committees and approving their terms
Committees
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.
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.
Almond + Co acts as the Company Secretary and attends
all Board meetings as well as advising on corporate
governance matters. The Company Secretary produces full
minutes of each meeting, including a log of actions to be
taken. The Chair of the Board then follows up on each
action at the next meeting, or before if appropriate.
Board/Committee Attendance
The attendance of the Board and Committees is as follows:
The Board has in place Audit, Nomination, Remuneration
and ESG Committees, which each comply with their own
stated terms of reference. Detailed reports on the Audit and
Remuneration Committees can be found on pages 49 to 54.
ESG Committee
Penny Judd chairs the ESG Committee. Frank Sagnier,
Debbie Bestwick, Peter Whiting, Mark Crawford and James
Targett (Group Investor Relations Director) are the other
members of the Committee.
The ESG Committee met formally once in 2023 and
oversees and scrutinises the strategies, policies, and
performance of the Group and aims to drive the
improvement of each of these to meet the Company’s high
ESG standards.
Further details of the work done by the Company can be
found in the ESG reports on pages 28 to 33.
Nominations Committee
Frank Sagnier chairs the Nomination Committee. Steve Bell,
Debbie Bestwick, Penny Judd and Peter Whiting 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. During the
year the Committee held numerous meetings in connection
with the changes to the Board composition, most notably
to oversee the successful search for a new Chair and
Group CEO to replace the Chris Bell as outgoing Chair and
Debbie Bestwick who stepped down from her role as Chief
Executive Officer to take a role remaining on the Board as
Non-Executive Director at the end of the financial year.
Christopher Bell
Independent Non-Executive
Chair*
Steve Bell**
Group Chief Executive Officer*
Debbie Bestwick MBE Non-Executive Director*
Mark Crawford
Group Chief Financial Officer
Martin Hellawell**
Penny Judd
Jennifer Lawrence**
Frank Sagnier**
Peter Whiting**
Independent Non-Executive
Director
Independent Non-Executive
Director
Independent Non-Executive
Director
Independent Non-Executive
Chair*
Independent Non-Executive
Director
Board
Committees
Max possible
attendance
Meetings
attended
Nomination Audit & Risk Remuneration
ESG Independence
8
3
8
8
4
8
4
2
4
7
3
8
8
4
8
4
2
4
2
N/A
2
N/A
N/A
2
N/A
N/A
N/A
2
N/A
N/A
N/A
1
3
1
N/A
2
4
1
1
2
3
3
3
1
1
1
N/A
N/A
1
N/A
1
N/A
N/A
1
Y
N/A
N
N/A
Y
Y
Y
Y
Y
*
Between September 2023 and December 2023, Steve Bell and Frank Sagnier served as designates in their roles. On 31 December 2023, Debbie Bestwick MBE was made
a Non-Executive Director and Chris Bell stepped down from the Board.
** The following Directors have had access to a reduced number of meetings due to changes to the Board’s structure, the dates of their appointment/resignation have
been listed below for context:
• Steve Bell joined the Board in September 2023
• Frank Sagnier joined the Board in September 2023
• Peter Whiting joined the Board in August 2023
• Martin Hellawell left the Board in July 2023
• Jennifer Lawrence left the Board in June 2023
• reviewing performance against the Group’s strategic aims,
Director
Position
46 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 47
Corporate Governance
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
CORPORATE GOVERNANCE REPORT CONTINUED
AUDIT COMMITTEE REPORT
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 proposed by the
Company’s Directors. This year’s AGM is currently planned
to be held at 09:30 on 19 June 2024. The Notice of AGM,
setting out the resolutions proposed, is contained in a
separate document and is available on the Company’s
website at www.team17groupplc.com.
Approved by order of the Board.
Richard Almond
Company Secretary
16 May 2024
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’s senior management team is comprised of the
Group CEO, the Group CFO and the CEOs of each division
of the Group. The team meets 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. Further
details on the Company’s approach to risk management can
be found on pages 34 to 36.
Corporate Culture & Systems
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
maintained throughout the organisation and that they guide
the Group’s business strategy. The Group has clearly
defined policies that help define these values and can be
found at the Group’s website www.team17groupplc.com.
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 new Directors will stand
for election and Mark Crawford, Debbie Bestwick and
Penny Judd 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.
Introduction
As the Chair of the Audit Committee, I am pleased to present
the report for the year ended 31 December 2023. 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
changed across the year reflecting the changes to the Board
of Directors but now include Frank Sagnier, Peter Whiting and
Debbie Bestwick. The Committee has a wealth of knowledge
from both within the gaming sector alongside other wider
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 pages 40 to 41. The Committee met
twice during the year with all members in attendance and also
attended by the Group Chief Executive and Group Chief
Financial Officer by request of the Committee to facilitate
discussions of the financial statements and internal controls to
which the auditors PricewaterhouseCoopers LLP (PwC) were
invited. A third meeting was held with an approved sub-
committee with myself, Peter Whiting and the Group Chief
Financial Officer. Outside the formal audit review meetings,
various other discussions held throughout the year to review
accounting policies, updates on acquisition accounting,
impairment reviews, 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.
• Meeting with the CFO and key members of the finance team
and formally reviewing the effectiveness of the audit process
and the appointment or reappointment of the auditor.
• 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.
for the audit services for the Group and PwC were retained
with a new lead partner following their normal rotation policy.
There are no current contractual restrictions that affect the
Company’s choice of auditor.
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 including the decision based on
discussions and conclusions made by the Board to change
the accounting policy for sales arrangements via Apple and
Google stores, where it was determined that the Group are
the principal to the end user and therefore report revenue
on a gross basis.
• Capitalised development costs and their useful life to review
the policies for amortisation of capitalised development costs.
• Performance measures and KPIs that feed into the regular
monthly reporting at the divisional and Board level providing
better insight at Board level to track performance.
• Carrying value of goodwill and intangible assets with
detailed impairment reviews.
• Purchase price allocation and acquisition accounting.
• Going concern looking across the Group looking at
reasonable worst-case scenarios to stress test the Group’s
working capital levels and making recommendations to the
Board for approval.
Internal Controls and Risk Assessment
Alongside the audit activities the Committee oversees the risk
processes and reporting within the Group to ensure that the
risk register is compiled with inputs from each division across
the Group to understand the key areas of risk and seeking
assurance that the outputs from the risk register are acted
upon. A summary of the output is shown in the Principal Risk
and Uncertainties report on pages 34 to 36.
The Committee’s other responsibilities also include the
oversight of a delegated authority system for approving
Company spending. This was further re-examined in the
second half of the year to implement tighter cost controls
across the development and commercial teams within the
UK Games Label division as well as the wider Group to apply
additional rigour and improve communication and awareness.
Given the Group’s current size and scale there is currently no
internal audit function, however this remains under review as
the Group continues to grow.
Finance System Upgrade
Work has continued at a slower pace than anticipated to
complete the final user testing and the full system rollout within
the Games Label in the UK is now anticipated to go live in 2024.
The new system will help provide improved cost controls linked
to the revised delegation of authority processes. Consideration
is also being taken to roll-out the system implementation
across the Group.
Going Concern
The Audit Committee recognises the ongoing challenging
external market combined with recent internal strategic review
and improved costs controls within the UK and wider business
divisions which impact the Group’s 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.
The Audit Committee is satisfied that no non-audit work was
undertaken by the external auditors.
48 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 49
The Company is not bound to have any formal process for
auditor tendering although does have regard to the requirement
for larger listed companies to put their audit out to tender
every ten years. As outlined in the Audit Committee report
published in 2022, a formal market review was undertaken
Penny Judd
Chair of the Audit Committee
16 May 2024
Corporate Governance
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
REMUNERATION COMMITTEE REPORT
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 2023. This is
my first report following my appointment to the Board on
1 August 2023. 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 in the year to 31 December 2023; and 4. the
proposed implementation of the policy for the upcoming
year.
This report will be submitted to an advisory shareholder
vote at our 2024 AGM.
1. Director’s Remuneration Policy
The Committee is focused on setting a remuneration policy
that takes 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.
All such fees are paid in cash. The Chair fee is decided by the
Remuneration Committee – the Non-Executive Directors’
fees are decided by the Board.
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 Long Term Incentive
Plan share awards.
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.
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.
The majority of the outcome is based on the Group’s adjusted
EBITDA performance with the balance determined by one
or more individual strategic objectives. The maximum earning
opportunity is 120% and 100% of salary for the CEO and
CFO respectively, with 50% of the maximum awarded for
on-target performance, and a further 50% of the maximum
if the Company achieves its stretch performance targets
(and typically a straight-line outcome between these two
points). In 2024, we are introducing provisions to defer 30%
and 20% of the awarded bonus for the CEO and CFO
respectively into shares with a two-year holding period and
malus and clawback provisions for that period.
Long Term Incentive Plan (“LTIP”)
The Company makes annual awards to Executive participants
under the LTIP. Awards are released subject to continued
employment and the 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 financial statements and also for other defined
reasons. Alongside this, from 2024 a two-year holding
period following the vesting date will be introduced.
This report will be submitted to an advisory shareholder
vote at our 2024 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 2024 financial year is illustrated below
(all figures are shown before income taxes):
£2,500k
£2,000k
£1,500k
£1,000k
£1,905k
Fixed Pay
Annual Bonus
LTIP
LTIP with 50% share price growth
£1,047k
£1,128k
£660k
£348k
Minimum
On Target Maximum Minimum On Target Maximum
Chief Executive Officer
Chief Financial Officer
Pension & Benefits:
Executive Directors receive a pension contribution of up to 8%
of salary matching individual contributions, in line with other
UK employees. Other benefits are in line with the policy.
£500k
£486k
£0k
Minimum
Performance:
On Target
Performance:
Maximum
Performance:
(excluding and
including share
price growth)
Comprising the minimum
remuneration receivable (i.e. fixed pay
only made up of base salary, pension
allowances and an estimate of
benefits for the 2024 financial year).
Comprising fixed pay, with the annual
bonus and LTIP each achieving 50%
of the maximum opportunity.
Comprising fixed pay, an annual bonus
of 100% of the maximum opportunity
(120% and 100% of salary respectively
for the CEO and CFO) and 100%
vesting of LTIP awards (135% and
100% of salary for the CEO and CFO
respectively). The maximum
performance scenario also illustrates
the potential pay-out under the LTIP
assuming a 50% share price
appreciation over the three-year
performance period.
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 monitors the overall
approach to reward including 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
from which it is recruited; the candidate’s experience and
skills; and the remuneration levels of other Executives and
colleagues in the business.
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
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 current members of the Committee are as follows:
1. Peter Whiting (Chair – from 1 August 2023)
2. Frank Sagnier (from 6 September 2023)
3. Penny Judd
4. Debbie Bestwick (from 1 January 2024)
Other members who served during the year were:
• Jennifer Lawrence (until 22 June 2023)
• Chris Bell (until 31 December 2023)
• Martin Hellawell (until 31 July 2023)
The committee met four times over the year as outlined on
page 47. The primary role of the Committee is to review and
set the remuneration of the Executive Directors and Chair
and to review the divisional and Group senior management
remuneration.
Key responsibilities include:
1. Setting and monitoring the remuneration of the Executive
Directors and Chair;
2. Monitoring the remuneration of the divisional and group
Senior Management Team which includes salary, annual
performance-related bonus and any LTIP arrangements;
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.
3. Monitoring of the Group’s overall annual performance-
related bonus payments and annual salary review; and
4. Approval of all share award plans and subsequent issue
of share awards to team members.
Service Agreements and Payments for Loss of Office
Non-Executive Directors:
The Non-Executive Directors enter 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.
Key Activities During the Year
External Advisers:
The Remuneration Committee has received independent
advice from Korn Ferry.
50 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 51
Corporate Governance
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
REMUNERATION COMMITTEE REPORT CONTINUED
3. Annual Statement (Unaudited Information)
Directors’ Remuneration for the Year Ended 31 December 2023
The following table sets out the total remuneration for Executive and Non-Executive Directors for 2023, showing 2022
remuneration for comparison:
All figures shown in £’000
Executive Directors
Debbie Bestwick MBE 2023
Steve Bell
Mark Crawford
Non–Executive Directors
Christopher Bell
Penny Judd
2022
2023
2022
2023
2022
2023
2022
2023
2022
Jennifer Lawrence
2023
Martin Hellawell
Peter Whiting
Frank Sagnier
2022
2023
2022
2023
2022
2023
2022
Salary
and
fees
437
420
144
–
309
283
112
108
62
59
31
59
37
59
26
–
36
–
Benefits1
Pension
Annual
Bonus
LTIP2
Total
Remuneration
Total Fixed
Pay
69
25
3
–
11
10
–
–
–
–
–
–
–
–
–
–
–
–
22
21
10
–
25
16
–
–
–
–
–
–
–
–
–
–
–
–
–
392
–
–
–
–
–
–
–
–
211
85
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
528
858
157
–
345
605
112
108
62
59
31
59
37
59
26
–
36
–
528
466
157
–
345
309
112
108
62
59
31
59
37
59
26
–
36
–
Total
Variable
Pay
–
392
–
–
–
296
–
–
–
–
–
–
–
–
–
–
–
–
1. Benefits represents the taxable value of benefits paid. Taxable benefits provided to Executive Directors include: private health cover; car allowance and accrued holiday not
taken but paid in lieu in 2024 for the CEO.
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. The value on vesting (10 September 2023) was £66,000.
Basis for Annual Bonus Payments
Targets for the year were based on the Company’s adjusted EBITDA performance. The maximum annual bonus opportunity
was 125% of salary for the CEO, and 100% of salary for the CFO, with 50% of the maximum awarded for on-target performance.
Financial performance during the year resulted in no bonus being awarded for the CEO and CFO.
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
Debbie Bestwick MBE
Debbie Bestwick MBE
Debbie Bestwick MBE
Mark Crawford
Mark Crawford
Mark Crawford
Mark Crawford
Date of
grant
8 July
20211
30 June
2022
18 July
2023
10 Sept
2020
8 July
20211
30 June
2022
18 July
2023
Awards
held on
1 January
2023
Awards
made
during year
Awards
lapsed /
forfeited
during year
Awards
held on 31
December
2023
Awards
vested
during year
End of
performance
period Exercise Period
150,943
159,000
–
–
–
150,943
–
159,000
–
–
–
31 Dec 2023
31 Dec 2024
31 Dec 2025
–
200,133
20,057
25,157
75,000
–
–
–
–
94,402
–
–
–
–
–
200,133
20,057
20,057
31 Dec 2022
25,157
75,000
94,402
–
–
–
31 Dec 2023
31 Dec 2024
31 Dec 2025
10 years
from grant
10 years
from grant
10 years
from grant
10 years
from grant
10 years
from grant
10 years
from grant
10 years
from grant
1. The performance conditions for the 2021 award have not been achieved and so the award will lapse on 8 July 2024.
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 annual bonus and 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.
Beneficially
owned at 31
December 2022
Beneficially
owned at 31
December 2023
Interest in LTIP
awards (subject
to performance
conditions)
Interest in LTIP
awards (not
subject to
performance
conditions)
Interest in other
awards (not
subject to
performance
conditions)
Shareholding at
31 December
2023 as % of
base salary
Executive Directors
Debbie Bestwick MBE
30,266,945
30,266,945
510,076
Steve Bell
Mark Crawford
Non–Executive Directors
Christopher Bell
Penny Judd
Jennifer Lawrence
Martin Hellawell
Peter Whiting
Frank Sagnier
–
16,623
54,050
34,565
90,909
24,242
1,864
10,000
30,335
77,717
–
–
–
–
20,900
108,000
–
–
–
194,559
20,057
None
None
None
None
None
None
–
–
–
–
–
–
–
–
392
–
–
–
–
–
–
>200%
23%
20%
n/a
n/a
n/a
n/a
n/a
n/a
52 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 53
Corporate Governance
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
REMUNERATION COMMITTEE REPORT CONTINUED
4. Implementation of Policy in 2024 (Unaudited)
There are changes to the Directors’ Remuneration Policy in 2024 with the introduction of a two-year partial deferral in the
Annual Bonus and a two-year holding period for the LTIP as set out in section 1 above.
On 1 January 2024, Debbie Bestwick transitioned from Group CEO to a Non-Executive Director role and was succeeded by
Steve Bell.
Steve Bell joined as Group CEO Designate in September 2023, and his base salary of £440,000 will not be reviewed until
October 2024. Mark Crawford’s salary of £312,000 remains unchanged.
Annual Bonus
As noted above the maximum earning opportunity is 120% and 100% of salary for the CEO and CFO respectively, with 50%
of the maximum awarded for on-target performance, and a further 50% of the maximum if the Company achieves its
stretch performance targets (and typically a straight-line outcome between these two points).
Performance measures will be based 80% on a sliding scale range of adjusted EBITDA targets and 20% on individual
objectives.
30% and 20% of the awarded bonus will be deferred for the CEO and CFO respectively into shares with a two-year holding
period.
LTIP
The award level for 2024 will be equivalent to 135% 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 two performance measures.
• 50% on a stretching range of adjusted EPS growth measured over the three years to 31 December 2026. 25% of the award
vests for a threshold level of performance with 100% of the award vesting at the top end of the performance range. This
performance range reflects the continued strategy of driving profit growth at levels ahead of the wider market.
• 50% on relative Total Shareholder Return compared to the constituents of the AIM100 index measured over the three
years to 31 December 2026. 25% of the award vests for performance at the median level of the index constituents, with
100% of the award vesting at upper quartile performance and a straight-line interpolation between these two points.
Non-Executive Director Remuneration
Following a review by the Board, the annual base fees payable to the Non-Executive Directors have been increased by 3%
effective 1 April 2024.
Non-Executive Director
Chair
Non-Executive Director base fee
Senior Independent Director
Committee Chair fee
Signed for and on behalf of the Board by
Peter Whiting
Chair of the Remuneration Committee
16 May 2024
Fee at 31
December
2023
Fee with
effect from
1 April 2024
% increase
113,360
116,760
51,064
52,595
11,336
11,336
11,676
11,676
3
3
3
3
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 2023 and of the group’s loss
and the group’s cash flows for the year then ended;
• the Group Financial Statements have been properly prepared in accordance with UK-adopted international accounting
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 Accounts (the “Annual Report”), which
comprise: the Consolidated and Company Statements of Financial Position as at 31 December 2023; the Consolidated
Statement of Profit or Loss, the Consolidated Statement of Comprehensive Income, the Consolidated and Company
Statements of Changes in Equity and the Consolidated Statement of Cash Flows for the year then ended; and the Notes
to the Financial Statements, comprising material accounting policy information and other explanatory information.
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, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
Our audit approach
Overview
Audit scope
• We identified Team 17 Digital Limited and astragon Entertainment GmbH as requiring a full scope audit based on their
financial significance to the group. We also performed a full scope audit of Team17 Group plc (the company).
• 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, RSM Ebner Stolz, based in
Dusseldorf, Germany. The group audit team issued formal instructions, had a number of virtual meetings and performed a
review of their working papers.
• Two non-significant components were also subject to audit procedures performed by the group engagement team.
StoryToys Limited required procedures over prepayments, trade receivables and accruals and deferred income, and The
Label Inc. required procedures over licence revenue, due to their contribution to the overall financial statement line items
in the consolidated financial statements.
• As a result of this scoping, we obtained coverage over 84% of group revenue, 78% of group loss before tax (adjusted for
impairment) and 82% of group net assets (being total assets less total liabilities).
Key audit matters
• Licence revenue recognition (group)
• Impairment of goodwill relating to the acquisition of The Label Inc. (group)
• Impairment of capitalised development costs (group)
• Impairment of investments (company)
54 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 55
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF TEAM17 GROUP PLC CONTINUED
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Materiality
• Overall group materiality: £1,500,000 (2022: £1,850,000) based on 5% of loss before tax adjusted for the impact of
impairments (2022: approximately 4% of adjusted profit before tax).
• Overall company materiality: £1,350,000 (2022: £1,650,000) based on 1% of total assets, capped at £1,350,000 being an
allocation of group materiality (2022: 1% of total assets, capped at £1,650,000 being an allocation of group materiality).
• Performance materiality: £1,125,000 (2022: £1,350,000) (group) and £1,012,500 (2022: £1,237,500) (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.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of
the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Impairment of goodwill relating to the acquisition of The Label Inc. and impairment of capitalised development costs are
new key audit matters this year. Calculation of the fair value of the consideration in the acquisition of astragon Entertainment
GmbH and The Label Inc. and calculation of the fair value of intangible assets acquired in astragon Entertainment GmbH
and The Label Inc., which were key audit matters last year, are no longer included because of the fact they related to
acquisitions which occurred in the prior year. Otherwise, the key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Licence revenue recognition (group)
The group’s accounting policy on licence revenue recognition is
shown in note 2 of the Notes to the Consolidated Financial
Statements and the significant accounting judgements in
respect of revenue are shown in note 3.
We obtained and reviewed licence contracts on a sample basis,
targeting the larger balances and sampling to high assurance
over the remaining contracts. For sampled items, we reviewed
the contractual obligations to ensure that revenue has been
recognised appropriately under IFRS 15.
We considered licence revenue recognition as a key audit
matter given the level of complexity and judgement involved in
recognising 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 under IFRS 15. Contracts are also assessed
to determine revenue recognition, including to identify whether
contracts provide the customer with a ‘right to use’ or ‘right to
access’ intellectual property, and whether they contain multiple
performance obligations.
These determinations can involve management exercising
significant judgement, which can have a material impact on
revenue. Revenues are recognised as the performance
obligations are satisfied.
We challenged management on estimates impacting the
cut-off assertion, considering the specific licence terms to
verify the timing of revenue recognition This included
determination of:
• whether contracts provide a licence ‘to use’, or a licence ‘to
access’ the IP; and
• the appropriateness of the allocation of consideration
between performance obligations, focusing particularly on
contracts where performance obligations span multiple
financial years.
Based on the procedures performed, we concluded that licence
revenue recognition is free from material misstatement.
Key audit matter
How our audit addressed the key audit matter
Impairment of goodwill relating to the acquisition of
The Label Inc. (group)
The group’s accounting policy on Goodwill is shown in note 2 of
the Notes to the Consolidated Financial Statements and the key
sources of estimation uncertainty related to impairment of
intangible assets are shown in note 3. The related disclosures
for goodwill are included in note 11.
The performance of The Label Inc. cash generating unit (CGU)
has been impacted by increased competition within the mobile
subscription market. This has led to a decline in performance-
based revenues for mobile games and also increased the
difficulty of securing new titles for launch on the mobile
subscription market.
As a result of the decline in performance, revised management
forecasts show the recoverable amount of The Label Inc. CGU is
less than the carrying value of the CGU, which has resulted in
an impairment of £20.9m against goodwill, as disclosed in note
11 of the Consolidated Financial Statements.
We consider the impairment assessment for the goodwill
relating to the acquisition of The Label Inc. to be a key audit
matter, specifically, in relation to the estimation of future
revenues used in the calculation of the recoverable amount.
We challenged the key assumptions around revenues in the
model, including revenue from milestone payments, revenue
from bonus payments and revenue from subscription service
fees. We obtained supporting evidence from management as well
as assessing management’s historical forecasting accuracy,
considering other available evidence in the public domain.
We obtained supporting evidence for the key assumptions
made, including considering historic forecasting accuracy for
bonus income and understanding management’s future plans
for the entity. We also assessed the reasonableness of future
milestone income compared with previously signed contracts.
We evaluated management’s assessment that the recoverable
amount based on the value in use exceeded the fair value less
cost to sell of the CGU, concluding that the value in use method
derived a higher recoverable amount.
We performed sensitivity analysis over the revenue
assumptions based on the supporting information available.
Based on the procedures performed, we concluded that the
post-impairment value of the goodwill balance relating to the
acquisition of The Label Inc. is free from material misstatement.
Impairment of capitalised development costs (group)
The group’s accounting policy on development costs is shown in
note 2 of the Notes to the Consolidated Financial Statements and
the key sources of estimation uncertainty related to impairment
of intangible assets are shown in note 3. The related disclosures
for capitalised development costs are included in note 11.
There has been an increase in the value of capitalised
development costs attributed to increased investment in larger
titles. Heavy competition in the market, variability in the
success of new titles launched and a refreshed focus on
Team17’s ‘indie’ gaming roots, have resulted in impairment
triggers across a number of games.
In order to estimate the recoverable amount, management are
required to make estimates over future revenues of the titles;
this is particularly judgemental where titles are not yet released
and do not relate to a legacy title, as this means that there is
less observable information to support the assessment. We
considered the estimates over future revenues for unreleased,
non-legacy titles as a key audit matter given the level of
estimation and uncertainty involved in these forecasts.
We obtained a detailed understanding of management’s
forecasting and due diligence process and understood the
relevant controls in place for this process.
We obtained management’s impairment analysis on all games
which we assessed to identify which games were at a higher
risk of impairment. For such titles, we obtained and reviewed
management’s impairment assessment supporting the
recoverable amount.
We reviewed and challenged management forecasts, as well as
performing a sensitivity analysis on the forecast revenue.
Where impairment was identified, we evaluated management’s
assessment that the recoverable amount based on the value in
use exceeded the fair value less cost to sell, concluding that the
value in use method derived a higher recoverable amount.
Based on the procedures performed, we concluded that the
post-impairment value of the development costs balance is free
from material misstatement.
Impairment of investments (company)
The company’s accounting policy on investments is shown in
note 2 of the Notes to the Company Financial Statements and
the key sources of estimation uncertainty related to the
recoverability of investments are shown in note 3. The
company’s investments balance is disclosed in note 6.
We challenged management over the significant assumptions,
being those related to revenue inflows, applied in the model.
This included obtaining supporting evidence where appropriate,
performing look-back procedures to assess management’s
historic forecasting accuracy, and performing sensitivity
analysis.
We verified the financial statement disclosures and considered
whether information on significant estimates was appropriately
included.
Based on the procedures performed, we concluded that the
valuation of the company’s investment balance is free from
material misstatement.
Investments are assessed for impairment if impairment
indicators exist. If such indicators exist, the recoverable
amounts of the investments are estimated in order to
determine the extent of the impairment loss, if any.
Given the magnitude of the investments balance, we have
considered the risk of impairment of these assets as a key audit
matter, specifically management’s determination of whether or
not there are triggers which would require a full impairment
assessment to be performed, and where applicable, the key
estimates included in management’s recoverability assessment.
As at the balance sheet date the decline in market capitalisation
of the group, in addition to the company’s investments value
exceeding the net assets of the group, are considered to be
indicators of impairment. As a result, management performed a
value in use calculation which shows the recoverable amount of
the investment exceeds the carrying value. We consider revenue
inflows to be the significant assumption within this assessment.
56 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 57
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
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 central group 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 Entertainment GmbH and
Independent Arts Software GmbH and a local finance function in Dublin, Ireland responsible for the accounting records for
StoryToys Limited. Both of the local finance functions report into the central group 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. This was determined by considering the
significance of each component’s contribution to profit before tax adjusted for the impact of impairments, as well as
considering the level of coverage obtained for each individual financial statement line item.
We identified three components being Team17 Group plc (the company), Team 17 Digital Limited and astragon
Entertainment GmbH, which were subject to a full scope audit. Of these, Team17 Group plc and Team 17 Digital Limited
were audited by the group audit team. astragon Entertainment GmbH was audited by a non-PwC component auditor.
The group audit team supervised the direction and execution of the audit procedures performed by the non-PwC
component auditor. Our involvement in their audit process gave us the evidence required 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, as
well as reviewing work papers and assessing matters reported.
In addition, audit procedures were performed across two non-significant components by the group audit team to gain
sufficient audit coverage over certain balances in the Consolidated Financial Statements. StoryToys Limited required
procedures over prepayments, trade receivables and accruals and deferred income, and The Label Inc. required procedures
over licence revenue. In addition work was performed by the group audit team over the consolidation, including
consolidation entries relating to elimination of intercompany balances and investments, equity, goodwill, acquisition
accounting and procedures over the financial statement disclosures.
In total, the audit work performed provided coverage over 84% of group revenue, 78% of group loss before tax (adjusted
for impairment) and 82% of group net assets. 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 and Company’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
£1,500,000 (2022: £1,850,000).
£1,350,000 (2022: £1,650,000).
Financial Statements - Group
Financial Statements - Company
How we determined it
5% of loss before tax adjusted for the
impact of impairments (2022:
approximately 4% of adjusted profit
before tax)
1% of total assets, capped at £1,350,000
being an allocation of group materiality
(2022: 1% of total assets, capped at
£1,650,000 being an allocation of group
materiality)
Rationale for benchmark applied
The company is a non-trading holding
company. The entity’s assets primarily
relate to the investments in the subsidiary
trading companies and thus reflect the
company’s purpose. Materiality has been
capped at an allocation of group
materiality.
The key objective of the group is to
deliver underlying profitable growth to
increase long-term shareholder value. As
such, we consider profit or loss before tax
to be the appropriate benchmark.
Profitability in the current year has been
impacted by impairments recognised. We
believe that loss before tax adjusted for
the impact of impairments in relation to
goodwill relating to the acquisition of The
Label Inc. and capitalised development
costs across the group, is an appropriate
benchmark to use in assessing materiality.
In 2022, adjusted profit before tax (as
presented as an alternative performance
measure) was applied due to the impact
of acquisitions in the year.
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 £433,000 and £1,425,000. Certain
components were audited to a local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the
scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for
example in determining sample sizes. Our performance materiality was 75% (2022: 75%) of overall materiality, amounting to
£1,125,000 (2022: £1,350,000) for the Group Financial Statements and £1,012,500 (2022: £1,237,500) for the Company
Financial Statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount 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 £75,000 (Group audit) (2022: £92,000) and £75,000 (Company audit) (2022: £82,500) 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 2025 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 over the forecast period.
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.
58 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 59
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF TEAM17 GROUP PLC CONTINUED
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s
and the company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the 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 2023 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 the Companies Act 2006, and we considered the extent to which non-
compliance might have a material effect on the financial statements. 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 inappropriate
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 which
impact financial performance; 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
16 May 2024
60 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 61
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Revenue
Cost of sales
Gross profit
Other income
Administrative expenses
Operating profit
Finance income
Finance costs
Share of net (loss)/profit of associates accounted for using the equity method
(Loss)/ Profit before tax
Taxation
(Loss)/Profit for the year
Earnings per share
– Basic (pence)
– Diluted (pence)
Year ended
31 December
2023
£’000
159,125
(101,620)
57,505
176
(57,639)
42
344
(1,261)
(205)
(1,080)
(2,665)
Year ended
31 December
2022
(restated)
£’000
142,282
(72,666)
69,616
469
(37,819)
32,266
34
(3,982)
347
28,665
(5,187)
(3,745)
23,478
(2.6)
(2.6)
16.5
16.4
Note
5
6
8
8
13
9
10
10
Certain comparative balances included within the consolidated income statement have been restated as disclosed in note 2.
All amounts relate to continuing operations.
The notes on pages 67 to 111 are an integral part of these consolidated financial statements.
(Loss)/profit for the year
Other comprehensive (expense)/income:
Items that may be reclassified to profit or loss:
Exchange (loss)/gain on translation of foreign operations
Total comprehensive (expense)/income for the year
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
(3,745)
23,478
(3,209)
(6,954)
8,070
31,548
62 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 63
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
COMPANY REGISTRATION NUMBER: 11205116
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
As at
31 December
2023
£’000
As at
31 December
2022
£’000
Note
Equity attributable to shareholders of the Group
86,244
123,748
867
1,440
3,172
215,471
960
38,408
42,824
82,192
113,424
120,685
1,045
1,692
2,785
239,631
1,225
36,044
50,828
88,097
At 1 January 2022
Comprehensive income
Profit for the year
Other comprehensive expense 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
297,663
327,728
At 31 December 2022
Adjustment
Comprehensive income
Loss for the year
Other comprehensive expense for the year
Total comprehensive loss
Transactions with owners
Issue of shares
Share based compensation
Total transactions with owners
At 31 December 2023
Share
capital
£’000
Share
premium
account
£’000
Note
Retained
Earnings
£’000
Other
reserves
£’000
Total
Equity
£’000
1,315
44,084
76,863
5,374
127,636
–
–
–
6
15
10
110
–
141
1,456
–
–
–
–
2
–
2
24
19
19
19
24
–
–
–
23,478
–
23,478
–
–
–
–
444
444
–
8,070
8,070
4,649
–
–
–
–
4,649
23,478
8,070
31,548
4,655
11,794
10
76,373
444
93,276
100,785
18,093
252,460
–
(4,649)
–
(3,745)
–
(3,745)
–
(3,209)
(3,209)
(3,745)
(3,209)
(6,954)
–
474
474
–
–
–
799
474
1,273
–
11,779
–
76,263
–
88,042
132,126
4,649
–
–
–
797
–
797
1,458
137,572
97,514
10,235
246,779
Certain comparative balances included within the consolidated statement of changes in equity have been reclassified as
disclosed in note 2.
Assets
Non-current assets
Goodwill
Other intangible assets
Investments accounted for using the equity method
Property, plant and equipment
Right-of-use assets
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
Retained earnings
Other reserves
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
11
11
13
14
15
16
17
18
19
19
19
19
20
21
22
23
20
1,458
137,572
97,514
10,235
1,456
132,126
100,785
18,093
246,779
252,460
2,889
–
113
8,386
11,388
35,422
3,391
683
39,496
50,884
2,625
9,369
140
9,169
21,303
52,339
1,262
364
53,965
75,268
297,663
327,728
Certain comparative balances included within the consolidated statement of financial position have been reclassified as
disclosed in note 2.
The financial statements on pages 62 to 111 were approved by the board of directors and authorised for issue on 16 May 2024
and were signed on its behalf by:
Steve Bell
Group Chief Executive Officer
64 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 65
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash generated from operations
Payments for contingent consideration on business acquisitions
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 Independent Arts Software GmbH, net of cash acquired
Payments for contingent consideration on business acquisitions
Payments for IP
Payments for other intangibles
Payments for property, plant and equipment
Payments for capitalised development costs
Proceeds from sale of property, plant and equipment
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 (outflow)/inflow 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
Note
25
21
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
50,721
(4,189)
(5,148)
56,187
–
(6,761)
41,384
49,426
12
12
12
21
21
11
14
11
8
8
–
–
(1,792)
(6,886)
(7,500)
(900)
(477)
(32,184)
35
299
(65,024)
(12,134)
–
(5,236)
(18,750)
–
(723)
(26,110)
–
34
(49,405)
(127,943)
–
(89)
(546)
–
(635)
(8,656)
50,828
652
76,397
(131)
(417)
(2,136)
73,713
(4,804)
55,302
330
Cash and cash equivalents at end of year
18
42,824
50,828
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. Material accounting policy information
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 with the requirements of the Companies Act 2006 as applicable to
companies reporting under those standards.
The consolidated financial information has been prepared on a going concern basis, under the historical cost convention, as
modified by the revaluation of financial assets and financial liabilities measured at fair value through profit or loss, 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 merger reserve and currency translation reserve separately in the Consolidated Statement
of Financial Position and Consolidated Statement of Changes in Equity. Management believes it to be more relevant to
amalgamate these reserves into “other reserves” and further details of these reserves can be found in note 19. Prior year
comparatives as at 31 December 2022 have been restated to conform with current year presentation.
Revenue recognition and restatement
The Group is constantly reviewing contracts in line with the significant estimates and judgements as set out in note 3. As
part of this review, it has been determined that the Group acts as a principal in contracts generating digital sales through
the Apple and Google app stores. Revenue from these contracts should be recognised gross of platform fees with the
corresponding platform fees being included in cost of sales to better reflect the substance of the transaction whereas
historically revenue was recognised net of platform fees. This restatement has no impact on profits in either the current or
prior year. For consistency, the revenue balances for the year ending 31 December 2022 have been restated increasing
revenue by £4,838,000 with a corresponding increase in cost of sales.
New and amended standards adopted by the Group
The following accounting standards or IFRIC interpretations are effective for the year ended 31 December 2023:
• Amendments to IFRS 17 ‘Insurance contracts: Initial Application of IFRS 17’ and ‘IFRS 9 – Comparative Information’
• Amendments to IAS 1 ‘Presentation of Financial Statements’ and IFRS Practice Statement 2: ‘Disclosure of Accounting
Policies’
• Amendments to IAS 8 ‘Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates’
• Amendments to IAS 12 ‘Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction’
• Amendments to IAS 12 ‘Income taxes: International Tax Reform – Pillar Two Model Rules’ (effective immediately–
disclosures are required for annual periods beginning on or after 1 January 2023)
None of these are expected to have a material impact on the Group’s financial statements or the accounting policies are
already consistent with the new requirements.
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.
66 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 67
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
2. Material accounting policy information continued
Basis of consolidation continued
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.
For any investments 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 479C of the Companies Act 2006 to the Companies listed below
for the year ending 31 December 2023. These companies are exempt from the requirements of this Act relating to the audit
of financial statements under section 479A of the Companies Act 2006:
• Yippee Entertainment Limited (registration number: 07522716)
• Team 17 Holdings Limited (registration number: 10293313)
• Team 17 Software Limited (registration number: 07416614)
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 annually 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;
The following types of intangibles have been recognised:
• Brands
• Acquired games and 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 the Group’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 (as discussed below)
• Acquired games and apps – 7 to 10 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 launch 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. There are 3 different categories of development costs which have a different amortisation profile to
reflect the future economic benefits of the games. These are as follows:
Indie Games are video games launched across PC and other major consoles with the main benefit driven by the initial
purchase of the game by the consumer and a relatively short economic life due to the volume of new game releases
available to consumers. These games have an amortisation period of 2 years split as follows:
• Month 1 – 30% of original cost
• Months 2 to 12 – 40% of original cost over period (Cumulative 70% at end of Month 12)
• Months 13 to 24 – 30% of original cost over period (Cumulative 100% at end of Month 24)
Edutainment apps are developed for younger audiences based on very successful IP’s. Due to the subscription-based
nature of the IP’s the benefits are received over a longer period as the consumers utilise the apps over several years. The
amortisation method is as follows recognising that content later on in the base app’s lifecycle will have a shorter life:
• Base App/Platform – 3 to 5 Years straight line
• Edutainment content – 1 to 3 Years straight line
Simulation games are video games such as bus simulator that emulate performing everyday jobs. These titles tend to have
sequels and the amortisation profile of the assets are spread over 3 years in line with the expected release of a sequel. The
policy is:
• Year 1 – 50% straight line
• Year 2 – 25% straight line
• Year 3 – 25% straight line
68 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 69
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
2. Material accounting policy information continued
Amortisation continued
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.
Amortisation on acquired games and apps
The useful economic life for these assets are 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 as it is not considered to directly
drive revenues. Amortisation is calculated over the estimated useful life of the games and apps which ranges from 7 to 10
years straight-line.
Amortisation on acquired customer and developer relationships
Customer relationships are acquired as part of business combinations and represent the relationships that the acquired
business has built up over time. The useful economic life of the 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 acquired
customer and developer relationships as these are not considered to directly drive revenues. Amortisation is calculated
over the estimated useful life of the asset which is estimated to be 10 years straight-line.
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 first and third-party intellectual property to both
end consumers and digital and physical distributors.
Digital Revenue
The majority of the Group’s revenue is in the form of royalties received from third party digital distributors who have a
license to sell the Group’s own and third-party 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. For sales through the Apple and Google app stores, the Group considers these platforms to be acting
as an agent and therefore recognises revenue gross with platform fees being included separately in cost of sales. For all
other customers the Group considers the distribution platforms to be the end consumer and therefore revenue is
recognised net of platform fees.
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 game 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 game 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.
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.
Principal / Agent considerations
We offer certain software products via third-party digital providers. For sales of our software products via third-party
digital storefronts, we determine whether or not we are acting as the principal in the sale to the end user, which we consider
in determining if revenue should be reported based on the gross transaction price to the end user or based on the
transaction price net of fees retained by the third-party digital storefront. An entity is the principal if it controls a good or
service before it is transferred to the customer. Key indicators that we use in evaluating these sales transactions include, but
are not limited to, the following:
• the underlying contract terms and conditions between the various parties to the transaction;
• which party is primarily responsible for fulfilling the promise to provide the specified good or service; and
• which party has discretion in establishing the price for the specified good or service.
For sales arrangements via Apple and Google app stores, we have determined that we are the principal to the end user and
thus report revenue on a gross basis and mobile platform fees charges from these digital storefronts are expensed as
incurred and reported within cost of sales.
70 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 71
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
2. Material accounting policy information continued
Royalties
Revenue from the distribution of third-party games generate 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 games 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.
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.
The carrying amount of deferred tax assets is reviewed at each period end date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates and laws that are expected to apply in the period when the liability is settled or
the asset is realised. Deferred tax is charged or credited in the Consolidated Statement of 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 have no exercise price. Volatility therefore has no impact on the
share options and the fair value has been estimated as the share price at the issue date.
• 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
– 3 years straight-line
– 6 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 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.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below:
Financial assets carried at amortised cost
This category applies to trade and other receivables due from customers in the normal course of business 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.
72 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 73
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
2. Material accounting policy information continued
Financial assets continued
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.
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 2023
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.
74 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 75
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
2. Material accounting policy information continued
4. Segmental analysis
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 2023:
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
• Classification of Liabilities as Current or Non-current – Amendments to IAS 1 (effective 1 January 2024)
• Edutainment – Developing educational entertainment apps for children
• Non-current Liabilities with Covenants – Amendments to IAS 1 (effective 1 January 2024)
• Lease Liability in a Sale and Leaseback – Amendments to IFRS 16 (effective 1 January 2024)
• Supplier finance arrangements – Amendments to IAS 7 and IFRS 7 (effective 1 January 2024)
• Amendments to IAS 21 to clarify the accounting when there is a lack of exchangeability (effective 1 January 2025)
• Sale or contribution of assets between an investor and its associate or joint venture – Amendments to IFRS 10 and IAS 28
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.
3. Key sources of estimation, uncertainty and significant accounting judgements
The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
In the process of applying the Group’s accounting policies, management has made the following key judgements and
estimates, which have the most significant effect on the amounts recognised in the consolidated financial statements:
Development Costs Capitalisation (Judgement)
The Group invests heavily in research and development. The identification of development costs that meet the criteria for
capitalisation is dependent on management’s judgement and knowledge of the work done together with any agreements
made with the rights holders of a specific game. Judgements are based on the information available at each period end.
Economic success of any development is assessed 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 2023 are
£35,072,000 (FY 2022: £26,830,000).
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 the Company is acting as an
agent or a principal in each contract when providing goods or services to a customer. Each contract has been reviewed
against the indicators set out in the “Principal / Agent consideration” section included in the accounting policies. Where the
Group acts as an agent, revenue is recognised net of selling costs and when the Group is a principal it recognises revenue
gross of selling costs. The Group is considered the agent for all digital sales, except those through the Apple and Google
app stores where the Group is considered the principal.
In licence revenue contracts there is judgement required in determining the value and allocation of consideration across the
elements of the contract.
Impairment of intangible assets (Estimate)
Every year impairment tests are undertaken for all assets with an indefinite life and any assets with a finite life where indicators
of impairment have been identified. As part of the impairment assessment, a value in use calculation is used in determining
the level of impairment. These value in use calculations are estimated based on cashflow forecasts. These cashflow models
are most sensitive to a change in the estimated of cash inflows and details of these and other sensitivities can be found in
note 11.
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 are included within notes 11 and 12. This was not considered to be a significant estimate in the year ending 31 December
2023 due to the decrease in the value of business acquisitions during the year.
The chief operating decision maker (“CODM”) of the Group is considered to be the Group CEO and CFO, 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
2023
£’000
Year ended
31 December
2022
(restated)
£’000
101,690
108,792
4,989
106,535
105,588
27,508
215,471
239,631
The 2022 comparatives have been restated to align group consolidation entries to the respective geographies of the assets.
5. Revenue
All revenue was generated by the sale of goods. 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:
First-Party IP
Third-Party IP
Year ended
31 December
2023
£’000
Year ended
31 December
2022
(restated)
£’000
55,854
103,271
56,484
85,798
159,125
142,282
The Group is constantly reviewing contracts in line with the significant estimates and judgements as set out in note 3. As
part of this review, it has been determined that the Group acts as a principal in contracts generating digital sales through
the Apple and Google app stores. Revenue from these contracts should be recognised gross of platform fees with the
corresponding platform fees being included in cost of sales to better reflect the substance of the transaction whereas
historically revenue was recognised net of platform fees. This restatement has no impact on profits in either the current or
prior year. For consistency, the revenue balances for the year ending 31 December 2022 have been restated increasing
revenue by £4,838,000 with a corresponding increase in cost of sales.
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 2023 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.
76 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 77
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
5. Revenue continued
7. Staff numbers and costs
The following customers each contributed over 10% of the total revenue in 2023:
The monthly average number of persons employed by the Group (including directors) during the year, was as follows:
Steam
Microsoft
Sony
Nintendo
Apple
6. Operating profit
The following items are charged/(credited) in arriving at operating profit:
Cost of sales
Amortisation of development costs (note 11)
Impairment of development costs (note 11)
Redundancy costs (note 7)
Administrative expenses
Amortisation of intangible assets (note 11)
Impairment of goodwill (note 11)
Depreciation of property, plant and equipment (note 14)
Depreciation of right-of-use assets (note 15)
Redundancy costs (note 7)
Acquisition fees
Fair value adjustment on contingent consideration (note 21)
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 for the audit of Company’s subsidiaries
During the year £Nil (FY 2022: £Nil) was paid to the company’s auditors for non-audit fees.
Year ended
31 December
2023
£’000
Year ended
31 December
2022
(restated)
£’000
45,066
17,679
28,952
17,344
19,980
129,021
38,310
13,993
21,104
16,039
15,667
105,113
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
12,674
11,121
1,010
13,759
20,879
692
563
199
44
(5,086)
180
53
232
9,277
–
–
10,316
–
625
461
–
863
884
187
80
283
Development
Commercial & Support
Non-Executive Directors
Executive Directors
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Other pension costs
Share based compensation
Redundancy costs
Year ended
31 December
2023
No.
Year ended
31 December
2022
No.
205
169
4
2
380
196
149
4
2
351
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
18,003
2,158
1,092
474
1,209
17,846
1,594
827
533
–
22,936
20,800
Redundancy costs relate to the restructuring review undertaken within the Games Label in FY 2023 which reviewed resource
requirements within the studio and commercial teams linked to the strategic review to refocus on the historic indie games
business model and increased utilisation of an outsourced studio resource and resulted in reductions in headcount within
the Games Label.
Directors’ Remuneration
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
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
1,276
139
57
(323)
1,149
1,654
(392)
44
(24)
1,282
During the year no (FY 2022: 1) directors exercised nil cost share options valued at £Nil (FY 2022: £3,744,999). Retirement
benefits are accruing to 3 directors (FY 2022: 2) under money purchase schemes. Share based compensation has been a
negative in both the current and previous year due to a reduction in the assessment of performance criteria being met.
78 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 79
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
7. Staff numbers and costs continued
Directors’ Remuneration continued
The various elements of remuneration received by each Director were as follows:
9. Taxation
2023 Directors’ remuneration
Debbie Bestwick MBE
Steve Bell
Mark Crawford
Christopher Bell
Penny Judd
Jennifer Lawrence
Martin Hellawell
Peter Whiting
Frank Sagnier
2022 Directors’ remuneration
Debbie Bestwick MBE
Mark Crawford
Christopher Bell
Penny Judd
Jennifer Lawrence
Martin Hellawell
Company
contributions
to money
purchase
scheme
£’000
Aggregate
emoluments
£’000
506
147
320
112
62
31
37
26
36
1,277
22
10
25
-
-
-
-
-
-
57
Company
contributions
to money
purchase
scheme
£’000
Aggregate
emoluments
£’000
837
504
108
59
59
59
1,626
21
16
–
–
–
–
37
Total
£’000
528
157
345
112
62
31
37
26
36
1,334
Total
£’000
858
520
108
59
59
59
1,663
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:
(Loss)/Profit before tax
Taxation using the UK Corporation Tax rate of 23.5% (FY 2022: 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
2023
£’000
Year ended
31 December
2022
£’000
6,756
(1,067)
–
(589)
564
(2,999)
2,665
7,284
(455)
(75)
(453)
(127)
(987)
5,187
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
(1,080)
(254)
28,665
5,446
3,964
–
(1,067)
(25)
(192)
239
2,665
164
(75)
(455)
(580)
(372)
1,059
5,187
Aggregate emoluments includes both cash and non-cash benefits. Details of share options for the directors can be found in
note 24.
Deferred taxes at the balance sheet date have been measured using the enacted local tax rates of between 12.5% and 30%
(FY 2022: 12.5% and 30%).
8. Finance income and costs
Finance income
Bank interest receivable
Finance costs
Interest payable on lease liabilities
Other interest payable
Interest on contingent consideration
Non-trading foreign exchange movement
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
344
344
187
32
1,126
(84)
1,261
34
34
124
25
2,320
1,513
3,982
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. During the year a hybrid rate of 23.5%
has been used representing 3 months at the previous tax rate of 19% and 9 months at the new rate of 25%.
10. Earnings per share
The calculation of the basic earnings per share is based on the loss/profit 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.
(Loss)/Profit attributable to shareholders £’000
Weighted average number of shares
Weighted average diluted number of shares
Basic earnings per share (pence)
Diluted earnings per share (pence)
Year ended
31 December
2023
Year ended
31 December
2022
(3,745)
143,809,466
144,005,551
(2.6)
(2.6)
23,478
142,644,403
143,247,940
16.5
16.4
80 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 81
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
11. Intangible Assets
Cost
At 1 January 2022
Additions
Amounts arising on acquisitions
Translation on foreign operations
Disposals
At 31 December 2022
Additions
Adjustments
Amounts arising on acquisitions
Translation on foreign operations
Disposals
Development
costs
£’000
29,597
26,032
–
303
(440)
55,492
32,184
–
–
(195)
(3,401)
Brands
£’000
34,738
43,773
2,034
138
–
80,683
–
–
–
(66)
–
Acquired
games
and apps
£’000
Customer
and developer
relationships
£’000
Goodwill
£’000
Other
intangibles
£’000
Total
£’000
6,228
–
21,716
1,410
–
29,354
–
8,269
–
(405)
–
–
–
4,720
560
–
5,280
–
–
–
(261)
–
41,449
–
65,964
6,011
–
113,424
–
(5,561)
2,103
(2,843)
–
107
11
–
6
–
124
900
–
–
(4)
–
112,119
69,816
94,434
8,428
(440)
284,357
33,084
2,708
2,103
(3,774)
(3,401)
At 31 December 2023
84,080
80,617
37,218
5,019
107,123
1,020
315,077
Amortisation
At 1 January 2022
Charge for the year
Translation on foreign operations
Disposals
At 31 December 2022
Charge for the year
Impairment
Translation on foreign operations
Disposals
19,749
9,277
76
(440)
28,662
12,674
11,121
(48)
(3,401)
10,749
6,115
9
–
16,873
6,118
–
(6)
–
311
3,669
164
–
4,144
6,365
–
(100)
–
–
516
12
–
528
512
–
(37)
–
–
–
–
–
–
–
20,879
–
–
2
16
23
–
41
764
–
(4)
–
30,811
19,593
284
(440)
50,248
26,433
32,000
(195)
(3,401)
At 31 December 2023
49,008
22,985
10,409
1,003
20,879
801
105,085
Net carrying amount
At 31 December 2023
At 31 December 2022
35,072
57,632
26,809
26,830
63,810
25,210
4,016
4,752
86,244
113,424
219
209,992
83
234,109
Adjustments
During the year the valuation of brands related to the acquisition of Astragon Entertainment GmBH was reassessed and an
adjustment was identified in the valuation model after the permitted IFRS 3 measurement period for determining fair value.
This reassessment increased the valuation of the acquired apps asset by £8,269,000, whilst decreasing the value of Goodwill
by £5,561,000 and increasing the related deferred tax liability by £2,708,000. These reclassification adjustments have been
made in the current year accordingly. These reclassification adjustments have been made in the current year accordingly.
Development costs
The Group capitalises the costs of developing new games for release to the market. The balance consists of internal salary
costs, advances payable to external developers under development agreements and other external payments. Amortisation
is calculated over the assets’ useful life of between 2 to 5 years. The assets are tested for impairment annually or more
frequently if there are indicators of impairment.
Indicators of impairment
The recoverable amount of development cost assets at 31 December 2023 are determined from the value in use. In arriving
at a value in use, management has used a 2 to 3 year cashflow forecast in line with the expected useful life of the assets.
These cashflows are not discounted due to the short-term nature of the assets. Through this process, impairment of
£11,121,000 was recognised on development cost assets. This impairment is due to the titles not meeting their full market
potential in a congested marketplace.
Key assumptions used for value-in use calculations
Management considers the projected future cash inflows to be the key assumption in calculating the value in use of each
asset. Budgeting is done on a game by game basis, with game revenues varying based on management’s best estimates.
Impact of possible changes in key assumptions
In assessing the carrying value of development costs, management performed sensitivity analysis on each of the key
assumptions. In assessing the sensitivity of projected future cash inflows the effects of a decrease in revenue of 10% over
the remaining useful life were modelled for all development cost assets with an indicator of impairment and this would
cause an additional impairment of £604,000.
Brands
These reflect the value of brands acquired either through direct purchases of IP recognised under IAS 38 “Intangible
Assets” or brands recognised under IFRS 3 “Business Combinations”. Amortisation on brands are calculated on a straight-
line basis over the assets estimated useful life of between 10 and 15 years.
Hell Let Loose (acquired in 2022)
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 was 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%. Contingent consideration was valued
at £13.2m.
The purchase was not 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 was 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
Acquired games and 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 games and apps
7 to 10 years straight line
Indicators of impairment
The financial performance of games and apps were assessed against the forecasts produced at the point of acquisition for
indicators of impairment. Where an impairment trigger was identified due to under performance, a 10 year cash flow forecast
was produced to measure the value in use. No impairment was identified through this process.
Key assumptions used for value-in use calculations
Management consider the pre-tax discount rate to be a key assumption in the calculation of value in use and the rate used
in the model is 17.5%. We reviewed sensitivities to this and any increase of the discount rate to over 18.4% would reduce the
headroom in the value in use model over the carrying value to £Nil.
Projected future cash inflows (revenue) from unreleased titles are also considered to be a key assumption. Budgeting is
done on a game by game basis, with game revenues varying based on management’s best estimates. A reduction of 3% to
future unreleased sequel revenue in the model would reduce the headroom over the carrying value to £Nil.
Customer and developer relationships
This is the fair value of relationships held with customers and developers acquired through business combinations. Group
capitalises the costs of developing new games for release to the market. Amortisation is calculated over the assets estimated
useful life of 10 years. The assets are tested for impairment annually or more frequently if there are indicators of impairment.
Customer and developer relationships
10 years straight line
Goodwill
The Group tests for impairment annually, or more frequently if there are indicators that goodwill might be impaired. There
are 4 CGUs in the Group which are as follows:
• Team 17 Digital (Indie games)
• StoryToys (Edutainment)
• astragon (Simulation)
• Team17 USA (Mobile licence)
82 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 83
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
11. Intangible Assets continued
Goodwill continued
The carrying value of Goodwill allocated to those CGU’s is split as follows:
At 1 January 2022
Acquisitions
Foreign exchange
At 31 December 2022
Adjustment
Acquisitions
Foreign exchange
Impairment
At 31 December 2023
Team 17
Digital
£’000
StoryToys
(Edutainment)
£’000
astragon
(Simulation)
£’000
22,379
–
–
22,379
–
–
–
–
22,379
19,070
–
1,054
20,124
–
–
(450)
–
19,674
–
45,410
2,519
47,929
(5,561)
2,103
(1,254)
–
43,217
Team17
(USA)
£’000
–
20,554
2,438
22,992
–
–
(1,139)
(20,879)
Total
£’000
41,449
65,964
6,011
113,424
(5,561)
2,103
(2,843)
(20,879)
974
86,244
Impairment of Team17 (USA) Goodwill
The impairment review of Team17 (USA) identified impairment of £20,879,000. Team17 (USA) is focussed on developing
games for the mobile subscription market. During the last two years the mobile subscription market has seen increased
competition reducing the ongoing performance income received for launched games as well as reduced third-party new
games being secured for development. The below table shows the increase in impairment from changes to the key
estimates disclosed above:
Reduction in New Release Revenue
Reduction in Back Catalogue Revenue
Increase in Discount Rate
Decrease of Terminal Growth Rate
Other intangibles
These are made up of capitalised software and are amortised under the following policies:
Change
in key
estimate
Resulting
increase in
impairment
£’000
10%
5%
1%
1%
568
109
259
135
The recoverable amount of each of the CGUs at 31 December 2023 is determined from the value in use which is higher than
the fair value less costs of disposal. In arriving at a value in use management has used a discounted 5-year bottom up
forecast before applying a long-term growth assumption. The discount rates and terminal growth used in the impairment
assessment of each CGU is as follows:
Capitalised software
2 years straight line
12. Business combinations
CGU
Team 17 Digital
StoryToys (Edutainment)
astragon (Simulation)
Team17 (USA)
2023
2022
Pre-Tax
Discount
Rate Used
Terminal
Growth
Rate Used
Pre-Tax
Discount
Rate Used
Terminal
Growth
Rate Used
12.9%
21.2%
17.5%
29.5%
2.0%
2.0%
2.0%
2.5%
12.5%
19.9%
15.9%
27.8%
2.0%
2.0%
2.0%
3.0%
Key assumptions used for value-in use calculations
When reviewing for impairment of goodwill in CGU’s, management prepare cash flow forecasts to estimate the value in use.
Management consider the following to be the key assumptions in the cash flow:
• Pre-Tax discount rate
• Terminal growth rate
During the year the pre-tax discount rate has been adjusted to take into account the Group’s size risk premium which is
based on the market cap for the Group.
Acquisition of Independent Arts Software GmbH
On 27 April 2023 astragon Entertainment GmbH acquired 100% of the share capital of Independent Arts Software GmbH
for a maximum payment of £3.1 million (€3.5m) subject to the seller and Company meeting certain requirements. The initial
payment for the acquisition was £1.8 million (€2.0m) in cash. A further payment of up to £1.3 million (€1.5 million) is payable
in cash based on the seller meeting certain requirements following completion of the acquisition. There was no minimum
due on the contingent payment. The results of the business have been included in the Consolidated Statement of Profit or
Loss from the date of acquisition. In the period from 1 January 2023 to the date of acquisition, the results of the business
were wholly immaterial and therefore not disclosed.
Independent Arts Software GmbH is a talented video game developer based in Germany. The acquisition increases
astragon’s development capabilities in the simulation space. The total consideration was made up of £1,792,000 of initial
consideration and £964,000 of contingent consideration. Details of the movement in contingent consideration can be
found in note 21.
Contingent consideration consists of the payments to the sellers included at fair value and payable based on them and the
Company meeting certain requirements.
Contingent consideration requirements – Management have assessed the likelihood of these requirements being met. At
acquisition, management assessed the fair value of the contingent consideration using a risk weighted model. This will be
reassessed at each reporting date and the movement in the fair value of the consideration amount recognised in the
Consolidated Statement of Profit or Loss.
Projected future cash inflows (revenue) are also considered to be a key assumption. Budgeting is done on a game by game
basis, with game revenues varying based on management’s best estimates.
The assets and liabilities recognised as a result of the acquisition are as follows:
Impact of possible changes in key assumptions
In assessing the carrying value of Goodwill management performed sensitivity analysis on each of the key assumptions. The
result of the sensitivity tests on each CGU are detailed below. In assessing the sensitivity of projected future cash inflows
the sensitivity test was split between new release revenue and back catalogue revenue. New release revenue is deemed to
be inherently riskier in nature and as such a higher level of sensitivity was applied to new release cash inflows than to back
catalogue cash inflows.
Impact of possible changes in key assumptions
The recoverable amount of each CGU would equal its carrying amount if the key assumptions were to change as follows:
CGU
2023
2022
Reduction
in New
Release
Revenue
Reduction
in Back
Catalogue
Revenue
Increase
in Discount
Rate
Decrease
of Terminal
Growth
Rate
Reduction
in New
Release
Revenue
Reduction
in Back
Catalogue
Revenue
Increase
in Discount
Rate
Decrease
of Terminal
Growth
Rate
Team 17 Digital
StoryToys (Edutainment)
astragon (Simulation)
Team17 USA
>100%*
24%
9%
36%
23%
32%
14.4%
4.6%
1.9%
143%
10.4%
3.3%
See impairment section on page 85
>100%*
33%
>100%*
5%
>100%*
15%
44%
10%
12.1%
6.7%
4.2%
0.5%
42.7%
14%
6.8%
0.9%
*In the case of a 100% reduction in new release revenue the recoverable amount of the CGU would still exceed its carrying value.
Property, plant and equipment
Right of use asset
Trade and other receivables
Trade and other payables
Lease liabilities
Net identifiable assets acquired
Add: Goodwill
Total Consideration
Book value
£’000
Fair value
adjustment
£’000
Fair value
acquired
£’000
29
–
783
(207)
–
605
–
135
–
40
(127)
48
29
135
783
(167)
(127)
653
2,103
2,756
The goodwill is attributable to Independent Arts Software’s talented development team. It has been allocated to the
Simulation segment of the business led by astragon Entertainment GmbH which is the development and publishing of
simulation games for the digital and physical market. None of the goodwill is expected to be deductible for tax purposes.
84 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 85
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
12. Business combinations continued
Acquisition of astragon Entertainment GmbH (acquired in 2022)
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) were payable in
cash if astragon met certain targets during FY 2021 and FY 2022 following completion of the acquisition. There was no
minimum due on the contingent consideration.
astragon is a publisher and distributor of sophisticated ‘working’ simulation games based in Germany. The acquisition
allowed the Group to enter a new and complementary simulation game category with its strong back catalogue of
evergreen owned franchises and a solid pipeline of products in development. This further expands the Group’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 at acquisition consisted
of the earn-out for the sellers included at fair value and payable based on the acquired business reaching certain results
during FY 2021 and FY 2022.
The total consideration was made up of £63,030,000 of initial consideration, £1,800,000 of deferred consideration and
£6,067,000 of contingent consideration. Details of the movement in contingent consideration can be found in note 21.
The fair value of the purchase consideration at acquisition takes into account the following assumptions and estimates:
• Earn-out targets – Management have assessed the likelihood of targets being met. For FY 2021 this is based on the
trading results for the year. For FY 2022 earn-out targets, at acquisition management have reviewed a risk weighted
forecast for the year.
• Interest costs of £0.3m (FY 2022: £0.6m) from the unwinding of the discounting has 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 games and 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 liabilities
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.
Acquisition of The Label Inc (acquired in 2022)
On 6 January 2022 Team 17 Digital Limited acquired 100% of the share capital of The Label Inc through Team17 (USA) Inc
(a 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) was 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 Label is a USA based indie publisher specialising in mobile subscription games content and will further expand the
Group’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) consisted of £17.8m ($24.1m) consideration and £0.1m ($0.2m) deemed to be
remuneration from the acceleration of outstanding share options. The total consideration was made up of £17,796,000 of
initial consideration and £6,531,000 of contingent consideration. Details of the movement in contingent consideration can
be found in note 21.
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 2022 £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 FY 2022, FY 2023 and FY 2024
earn-out targets, at acquisition management have reviewed a risk weighted forecast for the year. This has been 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 £0.3m (2021: £0.7m) 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 2023 of £44,000 (FY 2022: £863,000) are included in administrative
expenses in the Consolidated Statement of Profit or Loss.
Results from acquisitions
Financial performance of Independent Arts Software GmbH has not been disclosed as it was wholly immaterial to the
results for the year ended 31 December 2023. The business was acquired in order to provide development support to the
astragon (Simulation) CGU and received no significant revenues from outside of Group companies.
86 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 87
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
13. Investments
Details of which the Group acquired 100% of the share capital of the following companies during the year ended
31 December 2023 are disclosed below:
The Group has the following investments in associates all of which were acquired on 13 January 2022 in the prior year 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
Weltenbauer Software
Entwicklung GmbH
Rincon Design GmbH
GQA Games Quality GmbH1
GQA Games Quality Ukraine1
Registered
address
Frankfurter Str 5, 65189
Wiesbaden
Gilbachstrasse 29a,
50672 Cologne
Dr.-Hans-Lebach-Str. 2,
15537 Erkner
Sichovikh Striltsiv Street,
21, office 501
04053, Kiev city
Principal
place of
business
Germany
Germany
Germany
Ukraine
Proportion of
voting rights
and shares held
Activity
25.2% ordinary
shares
Development of
simulation video games
20% ordinary
shares
50% ordinary
shares
50% ordinary
shares
Digital design work
Quality assurance
services for video games
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.
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
Translation on foreign operations
Share of loss from associates
At 31 December 2023
Year ended
31 December
2023
£’000
–
630
68
347
1,045
27
(205)
867
Name of company
Registered
address
Principal
place of
business
Proportion of
voting rights
and shares held
Activity
Independent Arts Software GmbH Münsterstraße 5, 59065,
Germany
Hamm, Germany
100% acquired
on 27 April 2023
Development of
simulation video games
StoryToys Canada Limited
Brookfield Place,
181 Bay Street, Suite 1800,
Toronto, Canada
Canada
100% from
incorporation
on 15 June 2023
Provider of development
and commercial support
for edutainment apps
The following subsidiaries were 100% owned throughout the current and preceding year. A striking off process
commenced for these companies during the year on 21 December 2023:
Team 17 Holdings Limited
Team 17 Software Limited
3 Red Hall Avenue,
Wakefield, WF1 2UL
3 Red Hall Avenue,
Wakefield, WF1 2UL
UK
UK
100%
100%
In the process of being
struck off the register
In the process of being
struck off the register
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:
Principal
place of
business
Proportion of
voting rights
and shares held
Activity
Name of company
Team 17 Digital Limited
Mouldy Toof Studios Limited
Yippee Entertainment Limited
Touch Press Inc.
StoryToys Limited
Team17 (USA) Inc
(incorporated 15 December 2021)
The Label Inc
(acquired 6 January 2022)
Registered
address
3 Red Hall Avenue,
Wakefield, WF1 2UL
3 Red Hall Avenue,
Wakefield, WF1 2UL
3 Red Hall Avenue,
Wakefield, WF1 2UL
1013 Centre Road, Suite
403-B, Wilmington,
Delaware, 19805, USA
Exchequer Chambers,
23 Exchequer Street,
Dublin 2, Ireland
1013 Centre Road,
Suite 403S, Wilmington,
Delaware 19805, USA
PO Box 309,
Ugland House,
South Church Street,
George Town,
Grand Cayman KY1-1104,
Cayman Islands
UK
UK
UK
100%
100%
100%
USA
100%
Ireland
100%
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
Dormant
Dormant
Intermediate holding
company
Development of
edutainment apps
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
88 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 89
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
14. Property, plant and equipment
15. Right-of-use assets
Cost
At 1 January 2022
On acquisition
Additions
Currency translation
At 31 December 2022
On acquisition
Additions
Disposals
Currency translation
At 31 December 2023
Accumulated depreciation
At 1 January 2022
Charge for the year
Currency translation
At 31 December 2022
Charge for the year
Currency translation
Disposals
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
Leasehold
improvements
£’000
Plant and
equipment
£’000
Fixtures
and fittings
£’000
926
–
2
–
928
–
3
–
–
931
177
95
–
272
73
–
–
345
586
656
1,139
93
715
9
1,956
29
468
(610)
(13)
1,830
576
471
3
1,050
577
(25)
(541)
1,061
769
906
242
17
35
3
297
–
6
(20)
–
283
108
59
–
167
42
9
(20)
198
85
130
Total
£’000
2,307
110
752
12
3,181
29
477
(630)
(13)
3,044
861
625
3
1,489
692
(16)
(561)
1,604
1,440
1,692
Cost
At 1 January 2022
On acquisition
Currency translation
At 31 December 2022
On acquisition
Additions
Disposals
Currency translation
At 31 December 2023
Accumulated depreciation
At 1 January 2022
Charge for the year
Currency translation
At 31 December 2022
Charge for the year
Disposals
Currency translation
At 31 December 2023
Net carrying amount
At 31 December 2023
At 31 December 2022
16. Inventories
Finished goods
Buildings
£’000
Plant and
machinery
£’000
2,692
964
113
3,769
135
446
(103)
(101)
4,146
503
461
20
984
476
(103)
(57)
1,300
2,846
2,785
Total
£’000
2,692
964
113
3,769
135
859
(103)
(101)
4,559
503
461
20
984
563
(103)
(57)
1,387
–
–
–
–
–
413
–
–
413
–
–
–
–
87
–
–
87
326
–
3,172
2,785
31 December
2023
£’000
31 December
2022
£’000
960
960
1,225
1,225
The balance represents the value of physically produced video games controlled by the company. During the year
£7,135,000 (FY 2022: £8,339,000) was recognised through cost of sales. Inventories are stated after provision for
impairment of £128,000 (FY 2022: £87,000).
17. Trade and other receivables
Amounts falling due within one year:
Trade receivables
Accrued income
Corporation tax receivable
Other taxes receivable
Other receivables
Prepayments
Costs of fulfilling contracts
31 December
2023
£’000
31 December
2022
£’000
11,915
16,612
1,660
2,185
1,697
4,141
198
16,089
13,329
–
1,606
819
3,108
1,093
38,408
36,044
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 2022 and 31 December 2023.
90 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 91
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
18. Cash and cash equivalents
Cash at bank and in hand
Restricted cash
31 December
2023
£’000
31 December
2022
£’000
39,923
2,901
42,824
47,875
2,953
50,828
Included within the restricted cash balance above is £2,901,000 (FY 2022: £2,953,000) held 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.
19. Equity attributable to owners of the parent
Share capital
Represents the nominal value of the shares that have been issued.
Authorised, allotted, called up and fully paid
145,803,620 (FY 2022: 145,593,271) ordinary shares of 1p each
31 December
2023
£’000
31 December
2022
£’000
1,458
1,458
1,456
1,456
The ordinary shares have voting, dividend and capital distribution rights. They are not redeemable.
On 13 April 2023 the Company issued 210,349 to the sellers of the Label Inc for a total value of £799,000. Of this balance
£487,000 related to contingent consideration on the acquisition of the business and the remaining £312,000 was deemed
remuneration under IFRS 3 “Business Combinations”.
Shares held by subsidiaries
At 31 December 2023, and included in these consolidated financial statements, the Team17 Employment Benefit Trust holds
1,850,658 (FY 2022: 1,867,522) shares in Team17 Group plc with a nominal value of £18,507 (FY 2022: £18,675).
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. During the year premiums of £797,000
(FY 2022: £Nil) have been recognised as part of share issues to the sellers of The Label inc. An adjustment was made
during the year to reclass £4,649,000 from the merger reserve to Share premium to reflect the substance of the
transaction from the issue of shares to satisfy acquisition consideration of The Label Inc.
Retained earnings
Includes all current and previous retained profits and losses.
Other reserves
Merger reserve
Capital contribution reserve
Merger relief reserve
Currency translation reserve
Other
31 December
2023
£’000
31 December
2022
£’000
(153,822)
3,616
154,245
4,761
1,435
(149,173)
3,616
154,245
7,970
1,435
10,235
18,093
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. A reclassification was made during the year transferring £4,649,000 from the merger reserve to Share
premium to better reflect the substance of the transaction.
Capital contribution reserve
Includes the value of shares gifted to the Team17 Employment Benefit Trust on 23 May 2018 as part of the IPO.
Merger relief reserve
The premiums on the shares issued as part of historic share for share exchanges have been included in the merger relief
reserve.
Currency translation reserve
Currency movements arising on the revaluation of foreign subsidiaries into the presentation currency of the consolidated
financial statements, GBP, are included in other comprehensive income and held in the currency translation reserve.
Other
This includes the gain on the sale of shares in the Company from sales of shares held in treasury.
20. Lease liabilities
Amounts falling due within one year
Amounts falling due in over one year
The following reconciles the lease liability movements:
At 1 January
Acquisitions
Additions
Interest
Payments
Movements in foreign exchange
At 31 December
31 December
2023
£’000
31 December
2022
£’000
683
2,889
3,572
364
2,625
2,989
31 December
2023
£’000
31 December
2022
£’000
2,989
127
938
187
(635)
(34)
3,572
2,343
964
–
124
(541)
99
2,989
92 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 93
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
21. Contingent consideration
Amounts falling due in under one year
Amounts falling due in over one year
31 December
2023
£’000
31 December
2022
£’000
4,944
–
4,944
17,965
9,369
27,334
Included within trade and other payables is £4,944,000 (FY 2022: £17,965,000) of contingent consideration as disclosed in
note 23. Contingent consideration is broken down as follows:
At 1 January 2022
On acquisition
Fair value adjustment
Interest
Foreign exchange
Payment
At 31 December 2022
On acquisition
Fair value adjustment
Interest
Foreign exchange
Payment – Cash (classified as investing activities in the statement of cash flows)
Payment – Cash (classified as operating activities in the statement of cash flows)
Payment – Shares
Business
acquisitions
£’000
IP Purchase
£’000
5,287
14,379
884
1,240
1,234
(9,998)
13,026
964
(2,614)
518
(332)
(6,886)
(4,189)
(487)
–
13,228
–
1,080
–
–
14,308
–
(2,472)
608
–
(7,500)
–
–
Total
£’000
5,287
27,607
884
2,320
1,234
(9,998)
27,334
964
(5,086)
1,126
(332)
(14,386)
(4,189)
(487)
At 31 December 2023
–
4,944
4,944
Contingent consideration on business acquisitions includes the following:
At 1 January 2022
On acquisition
Fair value adjustment
Interest
Foreign exchange
Payment
At 31 December 2022
On acquisition
Fair value adjustment
Interest
Foreign exchange
Payment – Cash
Payment– Shares
At 31 December 2023
StoryToys
Limited
£’000
astragon
Entertainment
GmbH
£’000
The Label Inc
£’000
Independent
Arts Software
GmbH
£’000
5,287
–
–
–
193
(5,480)
–
–
–
–
–
–
–
–
–
7,848
4,466
560
250
(4,518)
8,606
–
–
257
(184)
(8,679)
–
–
–
6,531
(3,582)
680
791
–
4,420
–
(2,601)
261
(131)
(1,462)
(487)
–
–
–
–
–
–
–
–
964
(13)
–
(17)
(934)
–
–
Total
£’000
5,287
14,379
884
1,240
1,234
(9,998)
13,026
964
(2,614)
518
(332)
(11,075)
(487)
–
The maximum value of outstanding contingent consideration at the year end was £16.7 million (FY 2022: £48.8 million). A
fair value adjustment was made during the year reflecting the position of expected earnout payments at the year end and
included within administrative expenses in the statement of profit or loss. The value of the earnout was determined based
on the performance criteria included in the underlying contract.
22. Deferred taxation
Recognised deferred tax asset:
At 1 January 2022
Foreign exchange
Deferred tax recognised in profit or loss
At 31 December 2022
Foreign exchange
Deferred tax recognised in profit or loss
At 31 December 2023
Recognised deferred tax liabilities:
At 1 January 2022
On acquisition
Foreign exchange
Deferred tax recognised in profit or loss
At 31 December 2022
Adjustment
Foreign exchange
Deferred tax recognised in profit or loss
At 31 December 2023
Other
short-term
timing
differences
£’000
Tax losses
£’000
561
228
(492)
297
150
(447)
-
1,543
–
(45)
1,498
–
2,530
4,028
Accelerated
depreciation
for tax
purposes
£’000
Arising on
intangible
assets
£’000
Other
short term
timing
differences
£’000
389
–
–
10
399
–
–
292
691
4,704
6,749
554
(1,687)
10,320
2,708
50
(1,364)
11,714
–
–
9
236
245
–
–
(236)
Total
£’000
2,104
228
(537)
1,795
150
2,083
4,028
Total
£’000
5,093
6,749
563
(1,441)
10,964
2,708
50
(1,308)
9
12,414
The overall deferred tax position is a liability of £8,386,000 (FY 2022: liability of £9,169,000).
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% (FY 2022: 12.5% to 32.5%).
During the year the valuation of brands related to the acquisition of astragon Entertainment GmbH was reassessed. This
adjustment increased the valuation of the acquired games and apps asset by £8,269,000 as discussed in note 11. The
impact on deferred tax liabilities is an increase of £2,708,000.
23. 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
2023
£’000
31 December
2022
£’000
6,530
1,387
4,944
787
21,774
35,422
8,016
1,325
17,965
745
24,288
52,339
Contingent consideration of £Nil (FY 2022: £9,369,000) due in over one year is included in non-current liabilities. The
carrying amount of trade and other payables is considered to be the same as the fair value due to the short-term nature.
94 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 95
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
24. Share based compensation
The following share schemes have been awarded but not yet vested at 31 December 2023:
Included within the consolidated financial statements is the following:
Share scheme name
Executive LTIPs – 2021
Executive LTIPs – 2022
Executive LTIPs – 2023
Award date
8 July 2021
29 June 2022
18 July 2023
Free shares (Multiple awards)
See note
Vesting date
7 July 2024
28 June 2025
17 July 2026
See note
Share Incentive Plan
Monthly award
3 years from award date
Nil cost options (Multiple awards)
Other LTIPs
See note
See note
See note
See note
Senior management LTIPs
29 June 2022
28 June 2025
Exercise price
per share option
£Nil
£Nil
£Nil
£Nil
£Nil
£Nil
£Nil
£Nil
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)
31 December
2023
£’000
31 December
2022
£’000
474
(57)
417
444
(537)
(93)
113
3,671
170
3,197
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:
All share options have both an award and exercise price of £Nil and there are no dividends expected to be paid during the
option vesting period.
• Assessment of meeting results based performance targets (where applicable)
• Assessment of the likelihood for remaining employed throughout the vesting period
Granted
Forfeited
Exercised
Outstanding at
31 December
2023
Exercisable at
31 December
2023
Director’s share options
The directors of the Company have interest in the following share options:
The combination of these make up the estimate of options vesting percentage as shown in the following tables.
Share scheme name
Executive LTIPs – 2020
Executive LTIPs – 2021
Executive LTIPs – 2022
Executive LTIPs – 2023
Free shares
Share Incentive Plan
Nil cost options
Other LTIPs
Senior management LTIPs
Outstanding at
1 January
2023
20,057
176,100
313,500
–
–
–
–
–
(79,500)
-
599,303
(104,861)
110,368
27,688
110,166
12,535
49,718
–
(10,966)
(39,346)
14,731
(5,566)
213,359
(10,492)
(7,694)
(17,105)
–
–
–
(14,375)
–
–
–
–
–
–
20,057
176,100
234,000
494,442
60,056
29,159
295,928
12,535
35,343
20,057
–
–
–
32,404
7,238
27,136
–
16,571
820,132
827,393
(225,760)
(64,145)
1,357,620
103,406
Of these share options 433,021 (FY 2022: 300,798) will be settled from shares already held by the Team17 Employment
Benefit Trust.
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.
Share scheme name
Mark Crawford
Executive LTIPs – 2020
Executive LTIPs – 2021
Executive LTIPs – 2022
Executive LTIPs – 2023
Share Incentive Plan
Debbie Bestwick MBE
Executive LTIPs – 2021
Executive LTIPs – 2022
Executive LTIPs – 2023
Outstanding at
1 January
2023
Granted
Forfeit
Exercised
Outstanding at
31 December
2023
Exercisable at
31 December
2023
20,057
25,157
75,000
–
–
–
–
211
94,402
181
120,425
94,583
150,943
159,000
–
–
–
200,133
309,943
200,133
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20,057
25,157
75,000
94,402
392
20,057
–
–
–
13
215,008
20,070
150,943
159,000
200,133
510,076
–
–
–
–
During the year, Debbie Bestwick MBE exercised no (FY 2022: 972,727) nil cost share options. The value of the share options
exercised in 2022 was £3.85 per share for a total value of £3,745,000. No (FY 2022: no) other directors exercised share
options during the year.
96 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 97
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
24. Share based compensation continued
Executive LTIPs
Due to the share options having no exercise price the volatility does not impact the calculation and the fair value is the
share price at the issue date. 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.
2020
2021
2022
2023
2023
Award date
Vesting date
10 September 2020 8 July 2021
29 June 2022
18 July 2023
18 July 2023
9 September 2023 7 July 2024
28 June 2025
17 July 2026
17 July 2026
Underlying share price (£) 6.86
Vesting period
3 years
Estimate of options vesting 100%
Risk free rate
0.83%
7.95
3 years
0%
0.83%
3.95
3 years
11%
0.83%
3.225
3 years
100%
4%
1,703
3.225
3 years
100%
4%
230
Fair value at vesting
date (£’000)
Performance targets
138
1,400
1,238
Group’s cumulative
AEPS targets
Group’s EPS
Compound
annual growth
targets
Group’s adjusted
EPS compound
annual growth
targets
Group’s adjusted
EPS compound
annual growth
targets
Team 17 Digital’s
adjusted EBITDA
compound annual
growth targets
Performance period
FY 2020
to FY 2022
FY 2021
to FY 2023
FY 2022
to FY 2024
FY 2023
to FY 2025
FY 2023
to FY 2025
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
29 April 2022
3 April 2022
28 April 2025
2.825
52%
186
4.35
69%
157
32,404
27,652
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.
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
(£)
8 April 2019
8 April 2022
2.665
18 December 2019
18 December 2022
3.425
Estimate
of options
vesting
80%
100%
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
31 October 2022
30 October 2022
27 January 2023
26 January 2026
26 April 2023
25 April 2024
28 April 2023
27 April 2026
18 July 2023
17 July 2026
31 July 2023
30 July 2026
31 October 2023
30 October 2026
5.52
5.20
7.05
4.60
4.40
4.125
4.80
3.45
3.62
3.225
3.16
2.65
80%
80%
80%
80%
69%
69%
69%
90%
69%
69%
69%
69%
Fair value
at vesting
date
(£’000)
Maximum
number of
share options
outstanding
76
60
22
77
277
55
15
16
22
486
18
27
9
49
2,835
17,392
3,208
3,701
24,425
6,423
4,176
6,363
5,486
156,673
6,838
12,133
2,804
26,767
Senior management LTIPs
The senior management LTIP scheme has 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
35,343
Other LTIPs
During the year, options were issued under the LTIP scheme. Unlike the executive 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
During the year both schemes were modified to remove the requirement to remain employed. The vesting period of the
options remains the same.
98 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 99
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
25. Cash generated from operations
27. Financial instruments
Cash flow from operating activities
(Loss)/Profit before tax
Adjustments for:
Amortisation of intangible assets
Impairment of intangible assets
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Loss on disposal of fixed assets
Fair value movement in contingent consideration
Share based compensation
Share of loss of associates
Finance income
Financial expenses
Operating cash flow before changes in working capital
Increase in trade and other receivables
(Decrease)/increase in provisions
(Decrease)/increase in trade and other payables
Decrease/(increase) in inventory
Cash generated from operations
26. Commitments and contingencies
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
(1,080)
28,665
26,433
32,000
692
563
34
(5,086)
(474)
205
(344)
1,261
54,204
(394)
(27)
(3,301)
239
19,593
–
625
461
–
884
443
(347)
(34)
3,983
54,273
(1,892)
31
4,510
(735)
50,721
56,187
The Group had no contracted capital commitments or contingencies at 31 December 2023 (31 December 2022: £Nil).
At 31 December 2023
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
23
20
20
20
At 31 December 2022
Note
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
23
21
20
20
20
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
32,172
42,824
–
–
–
–
32,172
42,824
32,172
42,824
–
–
–
–
(20,993)
(683)
(2,159)
(730)
74,996
(24,565)
(4,944)
–
–
–
(4,944)
(25,937)
(683)
(2,159)
(730)
(25,937)
(683)
(2,159)
(730)
45,487
45,487
Financial
assets at
amortised
cost
£’000
30,236
50,828
Financial
liabilities at
amortised
cost
£’000
Financial
liabilities at
fair value
through
profit and loss
£’000
–
–
–
–
Carrying
value
£’000
30,236
50,828
Fair value
£’000
30,236
50,828
–
–
–
–
–
(22,255)
(17,965)
(40,220)
(40,220)
–
(364)
(1,726)
(899)
(9,369)
–
–
–
(9,369)
(364)
(1,726)
(899)
(9,369)
(364)
(1,726)
(899)
81,064
(25,244)
(27,334)
28,486
28,486
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 23.
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). There are no reasonable
changes that could lead to a change in the valuation.
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 lease liabilities, cash and cash equivalents and equity attributable to the equity
holders of the parent, comprising issued capital, reserves and retained earnings.
100 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 101
Group Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2023
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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 2023. However, certain customers comprise in excess of 10% of the
revenue earned by the Group (see note 5). 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
The majority of bank balances are held on short term / no notice terms to minimise liquidity risk. Included within trade and
other payables within one year is £4,944,000 (FY 2022: £17,965,000) of contingent consideration due within one year.
Contingent consideration in non-current liabilities is £Nil (FY 2022: £9,369,000) due in two to five years and £Nil (FY 2022:
£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 £881,000 (FY 2022: £364,000) of lease liabilities due within one year, £2,583,000 (FY
2022: £1,726,000) within two to five years and £822,000 (FY 2022: £899,000) due in over five years.
28. Pensions
The Group operates a defined contribution scheme for its Directors and employees. The assets of the scheme are held
separately from those of the Group in an independently administered fund.
The outstanding pension contributions at 31 December 2023 were £87,000 (31 December 2022: £201,000).
29. Related parties
Ultimate controlling party
At 31 December 2023 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 2023 and there are no loan notes
outstanding with related parties at the 31 December 2023.
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.
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
Merger relief reserve
Profit and loss account
Total equity
As at
31 December
2023
£’000
As at
31 December
2022
£’000
Note
6
7
8
9
9
9
9
251,585
276
250,803
94
251,861
250,897
36,821
5,797
42,618
47,047
9,944
56,991
(3,663)
(20,533)
38,955
36,458
290,816
287,355
1,458
137,572
154,245
(2,459)
1,456
136,775
154,245
(5,121)
290,816
287,355
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 in these separate financial statements. The profit (FY 2022: loss) for the year dealt with in
the financial statements of the Company was £2,188,000 (FY 2022: £7,125,000).
The financial statements on pages 62 to 111 were approved by the board of directors and authorised for issue on 16 May 2024
and were signed on its behalf by:
S Bell
Group Chief Executive Officer
102 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 103
Company Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Equity attributable to shareholders of the company
1. General information
At 1 January 2022
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
Comprehensive income
Profit and total comprehensive income
for the financial year
Transactions with owners
Issue of shares
Share based compensation
Total transactions with owners
At 31 December 2023
Called up
share
capital
£’000
Share
premium
account
£’000
Merger
relief
reserve
£’000
Profit
and loss
account
£’000
Note
Total
Equity
£’000
1,315
44,084
154,245
1,560
201,204
–
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
–
2
–
2
–
797
–
797
–
–
–
–
2,188
2,188
–
474
474
799
474
1,273
9
9
9
9
9
10
Team17 Group Plc (the “Company’’) is a public limited company, limited by shares and incorporated and domiciled in
England (United Kingdom). 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. Material accounting policy information
Basis of preparation
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 10”)
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: Disclosure”
•The requirements of paragraphs 91-99 of IFRS 13 “Fair Value Measurement”
• The requirement in paragraph 38 of IAS 1 “Presentation of Financial Statement” 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”
1,458
137,572
154,245
(2,459)
290,816
• 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
• Paragraph 17 of IAS 24 “Related Party Disclosures” relating to remuneration of key management personnel
• 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.
104 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 105
Company Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2. Material accounting policy 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.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for
objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the
Statement of Comprehensive Income.
For financial assets measured at cost less impairment, the impairment loss is measured at the difference between an assets
carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company
would receive for the asset if it were to be sold at the reporting date.
Trade and other payables
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured
initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest
method.
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.
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.
Merger relief reserve
Merger relief reserve includes any premiums received on the issue of share capital in a share for share exchange.
Retained earnings
Includes all current and previous retained profits and losses.
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.
3. Key sources of estimation, uncertainty and significant accounting judgements
The preparation of the Company’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
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. This was not considered to be a significant estimate in the year ending 31 December
2023 due to the decrease in the value of business acquisitions during the year.
Recoverability of investment (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 of the key estimates are discussed in note 6 to the company financial statements.
106 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 107
Company Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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 financial statements.
5. Staff numbers and costs
The monthly average number of persons employed by the Company during the year was as follows:
Key assumptions used for value-in use calculations
Management consider the following to be the key assumptions in calculating the value in use of each CGU:
• Pre-Tax discount rate
• Terminal growth rate
Projected future cash inflows (revenue) are also considered to be a key assumption. Budgeting is done on a game by game
basis, with game revenues varying based on management’s best estimates.
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
Year ended
31 December
2023
No.
Year ended
31 December
2022
No.
5
2
4
11
3
2
4
9
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
1,717
145
101
(320)
1,643
1,941
(345)
56
59
1,711
The details on directors remuneration can be found in note 7 to the consolidated financial statements.
6. Investments
Cost
At 1 January 2022
Additions
At 31 December 2022
Additions
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
£’000
179,510
71,293
250,803
782
251,585
251,585
250,803
Included in the additions balance is £782,000 (FY 2022: £396,000) representing the value of share options issued to
employees of Team17 Group plc’s subsidiaries. In 2022, the acquisition of astragon Entertainment GmbH resulted in an
addition to investments of £70,897,000.
During the year Team 17 Holdings Limited declared a dividend to the Company, which was settled through the distribution
of 100% of the shares in Team 17 Digital Limited, this has been treated as a return of capital. The transaction has a £Nil
impact on the total value of investments, as the additional investment in Team 17 Digital Limited offsets the return of capital
from Team 17 Holdings Limited.
CGU
Team 17 Digital
StoryToys (Edutainment)
astragon (Simulation)
2023
2022
Pre-Tax
Discount
Rate Used
Terminal
Growth Rate
Used
Pre-Tax
Discount Rate
Used
Terminal
Growth Rate
Used
12.9%
21.2%
17.5%
2.0%
2.0%
2.0%
12.5%
19.9%
15.9%
2.0%
2.0%
2.0%
Impact of possible changes in key assumptions
In assessing the carrying value of Goodwill management performed sensitivity analysis on each of the key assumptions.
There were no reasonable changes to key assumptions that led to an impairment in any of the CGU’s investment values.
Details of the subsidiaries in which the Company directly 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:
Name of company
Registered
address
Principal
place of
business
Proportion of
voting rights
and shares held
Activity
astragon Entertainment GmbH
(acquired 13 January 2022)
Am Wehrhahn 33, 40211,
Duesseldorf, Germany
Germany
100%
Touch Press Inc.
Team 17 Digital Limited
1013 Centre Road,
Suite 403-B, Wilmington,
Delaware, 19805, USA
3 Red Hall Avenue,
Wakefield, WF1 2UL
USA
100%
UK
100%
Development and
publishing of video games
Development and
publishing of simulation
video games
Intermediate holding
company
Team 17 Digital Limited became a direct subsidiary of the Company on 21 December 2023 as part of a corporate
reorganisation.
The following direct subsidiaries commenced a striking off process during the period. Both companies were dormant prior
to striking off on 21 December 2023.
Team 17 Holdings Limited
Team 17 Software Limited
3 Red Hall Avenue,
Wakefield, WF1 2UL
3 Red Hall Avenue,
Wakefield, WF1 2UL
UK
UK
100%
100%
In the process of being
struck off the register
In the process of being
struck off the register
The list of indirect subsidiaries and associates held by the Company is included in note 13 to the consolidated financial
statements.
108 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 109
Company Financial Statements
Strategic Report
Corporate Governance
Group Financial Statements
Company Financial Statements
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
7. Trade and other receivables
9. Capital and reserves
Amounts falling due within one year:
Amounts owed by group undertakings
Other receivables
Prepayments
Amounts owed by group undertakings are interest free and repayable on demand.
8. Trade and other payables
Amounts falling due within one year:
Trade payables
Amounts owed to group undertakings
Other payables
Taxation and social security
Accruals and deferred income
31 December
2023
£’000
31 December
2022
£’000
36,112
168
541
36,821
45,983
271
793
47,047
31 December
2023
£’000
31 December
2022
£’000
191
2,383
188
89
812
3,663
208
9,713
8,865
85
1,662
20,533
Amounts owed to group undertakings are interest free and repayable on demand. Other payables in the previous year
included £8,606,000 of contingent consideration for the acquisition of astragon Entertainment GmbH as discussed in note
21 to the consolidated financial statements.
Authorised, allotted, called up and fully paid
145,803,620 (FY 2022: 145,593,271) ordinary shares of 1p each
31 December
2023
£’000
31 December
2022
£’000
1,458
1,458
1,456
1,456
The ordinary shares have voting, dividend and capital distribution rights. They are not redeemable.
On 13 April 2023 the Company issued 210,349 shares to Team 17 Digital Limited for the purposes of settling acquisition-
related liabilities for a total value of £799,000.
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.
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.
10. Share based compensation
Please see note 24 in the consolidated Team17 Group Plc consolidated financial statements for further information on the
share based compensation charge in the year.
11. Pensions
The Company operates a defined contribution scheme for its Directors and employees. The assets of the scheme are held
separately from those of the Company in an independently administered fund.
The outstanding pension contributions at 31 December 2023 were £13,000 (FY 2022: £9,000).
110 Team17 Group plc Annual Report and Accounts 2023
Team17 Group plc Annual Report and Accounts 2023 111
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
Brokers
Berenberg
60 Threadneedle Street
London, EC2R 8HP
Peel Hunt
100 Liverpool St
London, EC2M 2AT
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
112 Team17 Group plc Annual Report and Accounts 2023
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