ANNUAL REPORT
& ACCOUNTS 2023
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The 2023 Annual Report
You will see this year’s Annual Report has been
streamlined. By simplifying the document, we are
still able to deliver necessary investor information
while significantly reducing resource allocation
and cost including design, production and
printing. For more information about our Business
that is not in the report, please visit
www.xlmedia.com
We Invite You to Go Digital
Going digital allows us to help reduce our impact
on the environment. We hope you will join our
efforts to reduce our carbon footprint.
To register, simply visit: www.signalshares.com,
a secure platform provided by our Registrar, Link
Group. From the homepage, select XLMedia plc
as the company, click ‘register an account’ and
follow the on-screen instructions. You will need
your shareholder reference number to register.
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
CONTENTS
Strategic Review
Chair Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07
Chief Executive Officer Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09
Financial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Corporate Governance
Our Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Corporate Governance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Audit and Risk Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Remuneration Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Assessing and Managing Our Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Financial Statements
Consolidated Financial Statements and Notes . . . . . . . . . . . . . . . . . . . . . . 61
Glossary of Terms
Glossary of Financial Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Glossary of Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
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STRATEGIC
REVIEW
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STRATEGIC REVIEW
CHAIR STATEMENT
INTRODUCTION
2023 was a year in which we simplified the organisation and exited non-core
activities which allowed us to deepen our focus on North America Sports and
Europe Sports and Gaming.
North America provides a medium to long-term opportunity in which we believe
we are well placed to succeed. The combination of our Owned and Operated
websites together with national, regional and local Media Partners provides access
and scale across the US.
Following the end of the year, we announced the successful sale of our Europe
Sports and Gaming business which created significant shareholder value.
2023 PERFORMANCE SUMMARY
The year started with the successful opening
of the online betting market in Ohio in January
followed by a quieter launch in Massachusetts
in March, after the NFL season had ended.
2023 saw periods of change with some
operators exiting certain states and some
entering for the first time. Across the year,
our teams worked to deepen our existing
commercial relationships while also developing
new ones. In May 2023, we entered our first
major North America revenue share contract.
We also strengthened our relationships
with existing Media Partners and entered
new partnership agreements with a number
of highly regarded publishers, enabling us
to further expand our reach and revenue
opportunities.
The Group delivered full year revenues of
$50.3 million and Adjusted EBITDA of $12.1
million which included our Europe Sports
and Gaming operations as well as our North
America operations.
Our Chief Executive Officer’s Review and
Financial Review contain more detail about our
operational and financial performance.
REALISING VALUE
During the summer, we announced the sales
of our Personal Finance business, followed by
a sale of a number of non-core Europe Gaming
assets.
Subsequent to the year end, as part of our
process to explore ways to create shareholder
value, we were pleased to announce in March
2024 that we had entered an agreement with
Gambling.com Group Limited for the sale of
our Europe and Canada Sports and Gaming
assets. The sale, for a total consideration of up
to $42.5 million, consists of a fixed element of
$37.5 million and a potential earnout of up to
$5.0 million. This reflects the strong underlying
value of those assets which we judged had not
been adequately reflected in the Company’s
share price. The initial tranche of $20.0 million
consideration was received on completion of
the transaction at the start of April 2024, with
further payments of $10.0 million receivable
in October 2024 and up to $12.5 million
(including any earnout) in early April 2025.
We are delighted to have realised value for
shareholders and are looking at proposals
for the best method to return a substantial
element of the proceeds to shareholders, and
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XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
anticipate an initial return of capital in quarter
four 2024. As we made clear at the time of
the transaction, a portion of the proceeds
will also be used to satisfy the final deferred
consideration payment of our North America
acquisitions, provide working capital and settle
tax liabilities.
These changes leave us with a smaller Board
and I extend my thanks to my fellow Directors
for their dedication and guidance during the
course of 2023, particularly in light of their
agreement to a 15% reduction in the fees
payable to our Non-Executive Directors which
was implemented from 1 April 2023.
STRATEGY UPDATE
Following the sale of our Europe Sports and
Gaming operations, our focus is firmly on
maximising the success of our North America
operations. The quality of our content and
the strength of our relationships with our
high-quality partners remains key to this,
and together with our Owned and Operated
assets, will ensure that we remain well placed
to take advantage of future state launches.
OUR COLLEAGUES
Finally, I would like thank and pay tribute to
our staff. 2023 was a challenging year and our
reorganisation saw a considerable number of
colleagues leaving the business. Throughout
this time, our team remained dedicated and
committed to delivering the best content for
our partners and consumers. They have the
gratitude of my fellow Directors and me for
their commitment and hard work.
The North America market remains attractive
for the long term, with 20 states yet to legalise
online sports betting and 43 states yet to
legalise online gaming, plus one state regulated
but not launched.
We will continue to look for opportunities to
maximise shareholder value from our North
America assets.
ORGANISATIONAL CHANGE
In May 2023, we announced the retirement of
both Jonas Mårtensson and Richard Rosenberg
as Directors. Jonas stepped down at the
end of June, while Richard remained on the
Board until the end of September, in part to
assist in a smooth transition of his duties as
Chair of the Audit Committee. Both provided
enormous service to the Company during
their time in office, and on behalf of my Board
colleagues I would like to thank them again for
their contributions. In January 2024, Caroline
Ackroyd, our Chief Financial Officer, advised
us of her decision to step down and left at
the end of March 2024. Caroline delivered
considerable progress in a number of key areas
during her time with the Company and left
with the gratitude of her fellow Directors for
her hard work.
Marcus Rich,
Chair of the Board
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STRATEGIC REVIEW
CHIEF EXECUTIVE OFFICER REVIEW
CHIEF EXECUTIVE
OFFICER REVIEW
INTRODUCTION
2023 saw the Business make further strategic
progress, growing its premium Europe assets,
continuing to rationalise its cost base and
selling non-core assets.
In the US, there was a strong start to the year
with the legalisation of online sports betting
in Ohio in January. However, over the year
the US market dynamics continued to evolve
at a rapid pace, putting pressure on North
America revenues. In particular, the market saw
increased competition from large publishers,
average customer acquisition payment (CPA)
rates gradually falling and rates varying in
different states.
The Group ended the year with continuing
revenues of $50.3 million (FY 2022: $70.9
million) delivering a gross profit margin of 53%.
Adjusted EBITDA from continuing operations
was $12.1 million (FY 2022: $18.9 million).
Revenues from North America activities were
$27.6 million, while revenues from our Europe
Sports and Gaming assets were $22.8 million.
The Europe business was sold after the
balance sheet date on 1 April 2024 for a fixed
price of $37.5 million plus an earnout of up to
$5.0 million.
The Group paid $7.4 million of deferred and
earnout acquisition payments in FY 2023,
using approximately $6.0 million of gross
proceeds from asset sales to support the
payments. At the year end, the Group had cash
at bank of $4.8 million and no borrowings.
SALE OF EUROPE AND CANADA GAMING ASSETS
On 21 March 2024, the Group announced
the divestment of its Europe and Canada
assets for a fixed sum of $37.5 million and
a potential earnout of up to $5.0 million.
The transaction completed on 1 April 2024,
with the first instalment of $20.0 million
received on 2 April 2024. A further fixed
instalment of $10.0 million is due six months
after completion, with a final instalment
of $7.5 million and up to $5.0 million in
earnout, payable on the first anniversary.
The Group will provide transition support
for a period of six months to Gambling.com
Group Limited, the acquirer of these assets.
Following the sale of the Europe Sports and
Gaming business, the Group is now focused
on driving organic revenues in the North
America market, while continuing to expand its
footprint in preparation for new state launches.
Having delivered cost savings of some $8.0
million in FY 2023, and following the sale in
April 2024, management remains focused on
rightsizing the Group’s remaining cost base
commensurate with the requirements of our
North America business, with the objective of
completing this process by the end of 2024.
DELIVERING SHAREHOLDER VALUE
In December 2023, the Board confirmed it had
been in discussions with potential acquirors
regarding the possibility of a sale of the whole
Company. At that time, it became clear that
while there was demand for the Group’s
assets, given the prevailing share price, a
sale of the whole Company was unlikely to
create maximum value for shareholders. In
parallel, the Board began exploring alternative
opportunities to create shareholder value
through separate asset sales and had some
early discussions with potential purchasers.
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
As announced at the time of the sale of the
Group’s Europe and Canada assets, the Board
intends to use the Net Cash Proceeds to pay
the final deferred acquisition payment of $4.0
million due in 2024, provide working capital for
the North America business, settle outstanding
tax provisions while returning cash to
shareholders and anticipates making an initial
return of capital from proceeds to shareholders
in Q4 2024.
(MPB). The Group’s North America business
only operates in legalised states.
The Group currently operates in 21 states
with legalised online sports betting. There are
20 states yet to legalise online sports betting,
including California and Texas, the two most
populous states.
Update on US regulated online sports betting
as at 16 May 2024:
• 30 states are live, legal (North Carolina
launched post-period March 2024). The
Group does not participate in nine of these
states due to limited affiliate opportunity
e.g., single operator monopoly (Florida) or in-
person registration requirements.
• 20 states are not yet live, legal for online
sports betting including California, Texas,
Georgia. Four of these states are in active
ballot discussions (Minnesota, Missouri,
Hawaii and Oklahoma).
• One Canadian province, Ontario, is live and
permits legal online sports betting.
In Sports, our O&O websites aim to combine
analysis, opinion, information and unique
insights to engage with sports fans and
where appropriate, introduce them to opening
a new ‘book’ or to place a bet with an
operator. Similarly, our Media Partners create
high quality, engaging content that attracts
audiences and we support them with excellent
sports betting and gaming commercial
content. Across the portfolio, our content and
promotions find ranking in Google News, an
important source for new customer acquisition,
particularly around a state launch.
STRATEGY
Having previously focused the Group’s strategy
towards becoming sports-led with a strong
gaming presence, we have now refined this
to focus the Group’s activities in the North
America sports market, while seeking to build
the gaming side of the business. The market
offers the opportunity for organic growth
over the longer term as new operators enter
the existing markets and new states legalise
online sports betting and online gaming.
The core elements of the Group’s strategy
remain unchanged. We will seek to expand
our footprint, deepen audience relationships
and diversify revenue streams with the
goal of developing more predictable
income for the longer term. This will take
time as the market currently remains a
predominantly CPA-led market with a
relatively small number of operators.
In preparation for growth in online gaming,
the Business will continue building its
US Gaming vertical and in 2023 it soft-
launched a new website, Honey Monkey
Pineapple, which will take time to build
its rankings and attract audiences.
NORTH AMERICA SPORTS OPPORTUNITY
The Group is one of the leading affiliates in
the US online sports betting market. As new
US states legalise online sports betting, the
Group is well placed to grow new revenues
through its portfolio of Owned and Operated
(O&O) sites and its Media Partnership Business
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STRATEGIC REVIEW
CHIEF EXECUTIVE OFFICER REVIEW
NORTH AMERICA GAMING OPPORTUNITY
In Gaming, informative content, how to play
explanations, best apps lists, best offers and
help with operator enquiries are all ways of
providing value-added services to audiences,
rather than simply listing games and offers.
• 44 states are not yet live and legal including
eight out of the ten most populous states
(California, Texas, Florida, New York, Illinois,
Ohio, Georgia and North Carolina). Rhode
Island is now regulated with a launch date
subject to confirmation.
The Group operates in four legal online
gaming states. There are 44 states
yet to legalise online gaming.
Update on US regulated online
gaming as at 16 May 2024:
• Six states are live, legal: Connecticut,
Delaware, Michigan, New Jersey,
Pennsylvania, West Virginia. Nevada
only allows online poker. Delaware and
Connecticut are states in which XLMedia
does not participate due to limited affiliate
opportunity.
• No states are confirmed to launch or in
active ballot discussions at present.
Online casino engagement is typically
less seasonal than sports betting and
over time can offer a more predictable
revenue stream, albeit in the US, this
too is currently a CPA-led market.
The Group is significantly underweight in
gaming, with modest revenues largely earned
from gaming pages on sports sites. Critical
to growth is expanding the Group’s reach
through increased SEO rankings, working
with Media Partners and developing our O&O
sites, including Honey Monkey Pineapple.
2023 BUSINESS MIX
The following FY 2023 analysis presents the business as a whole in 2023 prior to the sale of
the Europe assets.
1. Gaming includes
EU and NA with a
majority of revenue
driven by EU
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O&O (Owned
and Operated
Portfolio), MPB
(Media Partnership
Business)
2. Other defined
as Fixed Deals,
Sponsorship Deals,
Display Advertising
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
with 146 staff. The sale of the Europe and
Canada assets saw 28 staff transferred to
Gambling.com Group Limited on 1 April 2024.
The current employee base for the Company at
3 April 2024 was 100 staff.
FINANCIAL PERFORMANCE
In Europe, we saw good growth from our
premium brands offsetting decline in the long
tail of revenue share, ending the year with
revenue of $22.8 million (FY 2022: $23.2
million). In the US, we delivered a strong
performance in January 2023 following the
legalisation of sports betting in Ohio; however,
this was not of the scale of New York’s launch
in January 2022, resulting in revenues for FY
2023 of $27.5 million, significantly lower than
the prior year (FY 2022: $47.7 million).
In the Europe Gaming market, success in
developing our data tracking, enhanced testing
and the launch of our ‘auto exposure’ tool for
online casino game listings contributed to a
significant growth in new real money players
(RMPs), particularly in Nettikasinot.com, with
the same tools being rolled out across other
gaming sites. Furthermore, WhichBingo
recorded a record month in H1 2023.The
Group’s Freebets brand grew revenue 107%
year-on-year, led by Freebets.com. The Group’s
Europe Gaming premium brands Nettikasinot.
com and WhichBingo both returned to growth,
up 38% and 23% year-on-year respectively.
Europe Sports, particularly Freebets.com,
benefited from a new, stable platform, and
enjoyed considerable success across the year,
with strong performance at Cheltenham, the
Grand National, Ascot and across the Premier
League season, as well as the Champions
League, despite some unfavourable sport
results.
In 2023, 55% of revenues came from North
America, with the balance from Europe. Of the
North America revenue, 26% came from spikes
following new states launching in the year.
Sports represented 98% of North America
revenues, and 93% of total North America
revenues came from CPA income.
The North America business was created
through a series of acquisitions in 2020
and 2021, and the development of a Media
Partnership Business.
Having delivered significant revenues since
acquisition, the annual impairment review
concluded that it was necessary to write down
the carrying value of US assets by some $57.3
million. This reflects the uncertainty over the
timing and level of future revenues, particularly
from state launches, and in particular the
requirement to discount future cashflows at
25%. This impairment charge is a non-cash
charge to the profit and loss account.
ORGANISATION AND OPERATIONS UPDATE
Sustainable cost savings of approximately
$8.0 million delivered in the period including a
reduction in technology, expenditure, content
creation costs and headcount.
In January 2024, Caroline Ackroyd resigned
from the Group to pursue other interests. Her
final day with the Company was 31 March
2024.
Karen Tyrrell, our Chief People and Operations
Officer who is a qualified accountant, was
appointed Interim Chief Operating Officer in
March 2024. In 2023, Karen was responsible
for leading Europe Sports and Gaming, as well
as our People Team. Karen is now responsible
for Finance, People and overseeing the
transition following the sale of the Europe and
Canada assets.
The Group has also seen changes in staff
numbers during the period. Having started
2023 with 193 staff, we continued our
restructuring programme and ended the year
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OUTLOOK
The Group saw a solid start to the year in
Europe and North America. North Carolina
launched online sports betting on 11 March
2024, after the NFL season had finished and
while we delivered a strong performance,
revenues in the quarter were below 2023
which saw the launch of online sports betting
in Ohio in January during the NFL season.
Following the sale of the Europe assets at the
start of April 2024, the Group is focused on
rightsizing the cost base, allowing it to enter
2025 with an infrastructure commensurate
with the requirements of North America
business.
Looking forward, XLMedia will retain its focus
on revenue diversification. With no further
state launches confirmed for 2024, the Group
will continue its focus on optimising existing
legalised sports betting states and monetising
its audiences. This will include Daily Fantasy
Sport advertising and sponsorship as well
as new customer acquisition. In the period to
date we have signed two new Media Partners,
Star Tribune, a highly respected publisher in
Minnesota, and NOLA.com in Louisiana.
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
Growing the Media Partner Business remains
a key element of the strategy. Having added
five new partners in H2 2023 through
Q1 2024, including securing partners in
preparation for new state launches, we will
seek to further expand our partner footprint.
No new minimum guarantee arrangements
have been entered into.
The Group is working closely with all its Media
Partners following the Google update, the
majority of which have been unaffected by the
changes to date, while continuing to focus on
its O&O websites which have seen some early
improvements in rankings. We continue to
monitor the situation very closely.
2024 will be a year of considerable change
as we transfer our Europe assets, consolidate
our position in North America and prepare for
2025 and beyond.
David King,
Chief Executive Officer
STRATEGIC REVIEW
CHIEF EXECUTIVE OFFICER REVIEW
Across the year, Google algorithm updates
were regularly rolled out, often with no impact,
on occasion benefiting our websites, and
similarly on occasion slowing progress, latterly
slowing down the success we delivered in
H1 from WhichBingo. The team continue
to enhance content across all our websites
with the objective of ensuring we are well
positioned when algorithm changes take place.
The US market saw considerable change
including the reduction of average customer
acquisition payment rates. The Barstool
Sportsbook brand exited the sport betting
market and was replaced in mid-November
by ESPN BET. Fanatics Sportsbook acquired
PointsBet, while some smaller operators
withdrew from selected states. bet365
continued its US rollout state by state and,
in May 2023, we were able to enter revenue
share arrangements with them having
previously worked on a CPA-only basis.
The US business enjoyed considerable success
in Ohio following the launch of online sports
betting, working with our partners, Advance
Local, and their premium site, Cleveland.com.
The launch of online sports betting in
Massachusetts in March 2023, after the NFL
season, proved disappointing. Legislation
enabling affiliate marketing companies to work
with operators was approved only days before
launch, providing no time for pre-registration
marketing.
The start of the new season saw a pick-up
in activity, and the launch of online sports
betting in Kentucky in late September 2023.
The absence of PENN Entertainment’s Barstool
Sportsbook in the market impacted revenues
in the period to mid-November, but these
then benefited from the launch of ESPN BET,
delivering a strong close to the year.
During the year we were pleased with the
progress made working with Daily Fantasy
Sport operators and have now developed this
as a new revenue stream.
The successful partnership with Schneps
Media for amNY was extended for a further
three years. New Media Partnerships were
signed with Atlanta Journal-Constitution,
based in Georgia, and WRAL, the latter in
preparation for the launch of online sports
betting in North Carolina in 2024.
In July 2023, we announced the disposal of
three of the Group’s Europe Gaming domains
and associated websites, Casino.se, Casino.gr
and Casino.pt, for a total upfront cash
consideration of $4.0 million. This followed the
disposal of the Group’s Personal Finance asset
portfolio for a total cash consideration of $2.05
million in May 2023.
OPERATING RISK
Following the sale of Europe and Canada
assets, the Group operates affiliate marketing
services in legalised online sport and
legalised online gaming states in North
America. Period-on-period performance is
impacted by the scale and timing of state
launches, as well as the level of investment
by operators in new and existing states.
From 5 May 2024, Google applied manual
actions to a number of media organisations’
websites judged to feature third-party content
that promotes coupons and offers, including
in some instances online casino and sports
betting offers, that are not consistent with
the Brand’s authority. These manual actions
may impact the visibility of this content in
Google Search. XLMedia’s O&O websites
have not been affected and a number of
pages have seen ranking improvements.
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STRATEGIC REVIEW
FINANCIAL REVIEW
FINANCIAL REVIEW
FINANCIAL HIGHLIGHTS
The Business has delivered revenue from
continuing operations of $50.3 million, with
adjusted EBITDA from continuing operations
of $12.1 million. Operating profit has declined
to a reported loss of $44.9 million driven
mainly by a net impairment charge of $44.6
million for the US Sports and EU Sports
verticals, reflecting uncertainty over the timing
and level of future revenues.
Cash balances (including short-term deposits)
reduced from $10.8 million in the prior year to
$4.8 million at the year end. Cash generated
from continuing operations of the Group,
together with receipts from assets disposed of,
were offset by capital expenditure, payments
in respect of acquisitions in prior periods, and
tax payments for the period 2016 to 2020.
CONTINUING OPERATIONS1
$’000
Revenue ($’m)
Gross profit ($’m)
Gross profit margin (%)
Operating (loss) / profit before impairment ($’m)
Net impairment charge ($’m)
Operating (loss) / profit ($’m)
Adjusted EBITDA ($’m) 2
Adjusted EBITDA margin (%)
Statutory (loss) / profit for the period ($’m)
2023
50.3
26.6
53%
(0.3)
(44.6)
(44.9)
12.1
24%
(45.5)
2022
70.9
36.0
51%
6.2
-
6.2
18.9
27%
3.4
Basic (loss) / earnings per share ($)
(0.173)
0.009
Change
2023 vs 2022
(29)%
(26)%
2% pts
-
-
-
(36)%
(3)% pts
-
-
1. Defined as total Group financial performance less discontinued operations. For 2023, the Group classified the Personal Finance and
Blueclaw verticals as discontinued.
2. Adjusted EBITDA is defined as the operating profit after adding back depreciation, amortisation, impairment, share-based
payments, exceptional minimum guarantee cost, restructuring costs and aborted deal-related costs.
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XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
CONTINUING OPERATIONS REVENUE
Revenue from continuing operations for 2023
was $50.3 million (FY 2022: $70.9 million),
a 29% decline compared to the previous
financial year. The decline in revenues was
driven primarily by the North America Sports
vertical, and particularly the smaller scale of
new state launches during 2023, compared
to those launched in 2022. H1 2022 saw
launches in New York, Louisiana and Ontario.
In H1 2023, Ohio launched in January and
performed well. The launch of Massachusetts
in March 2023 after the end of the NFL
season was disappointing. Both our Owned
and Operated sites and our Media Partners
declined primarily as a result of the relative
scale of new state launches and changing
CPA rates in some states. In Europe, we
continued to rebuild our sites, driving new
customer acquisition and creating new tail
revenues. Total Europe revenues declined
by 2% as a result of decline in historical tail
revenue shares.
The decline can be seen in customer volumes
with Real Money Players (RMPs) from
core websites (including Media Partners) of
c.160,000 in 2023 (FY 2022: c.180,000),
a decrease of 11% year-on-year, reflecting
the relative size of state launches and
demonstrating the impact of reducing average
CPA levels on total revenues.
The Group’s operations are reported on the
basis of two core operating verticals, Sports
and Gaming (Casino and Bingo), and two
geographies, North America and Europe.
REVENUE AND ESTIMATED ADJUSTED EBITDA BY VERTICAL 2023
North America
Europe
Total
Revenue ($m)
Estimated Adjusted EBITDA ($m)
27.5
22.8
50.3
5.5
6.6
12.1
The Group runs its operations on an integrated basis, sharing cost and resource where
possible. The Adjusted EBITDA estimates are after the allocation of all shared group costs,
including XLMedia plc costs. Europe includes sub-affiliate partner revenues and costs.
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STRATEGIC REVIEW
FINANCIAL REVIEW
REVENUE SPLIT BY GEOGRAPHY
$’000
North America (Sports)
North America (Gaming)
North America
Europe (Sports)
Europe (Gaming)
Europe
Total
2023 ($m)
2022 ($m)
Change
2023 vs 2022 (%)
REVENUE SPLIT BY CATEGORY
26.9
0.6
27.5
9.7
13.1
22.8
50.3
46.4
1.3
47.7
8.9
14.3
23.2
70.9
(42)%
(54)%
(42)%
9%
(8)%
(2)%
(29)%
Sports 3
Gaming
Total
Revenue from the North America region
decreased 42% to $27.5 million (FY 2022:
$47.7 million) due primarily to the relative scale
of new state launches, and accounted for 55%
of the Group’s continuing operations revenues
(FY 2022: 67%).
Revenue from the Europe region decreased by
2% to $22.8 million (FY 2022: $23.2 million).
Old tail revenues in online casino declined
year-on-year, offset by growth in new RMPs
revenues in both sports and gaming.
REVENUE SPLIT BY TYPE
CPA
Revenue share / hybrid and other 2
Total
2023 ($m)
2022 ($m)
Change
2023 vs 2022 (%)
26.2
24.1
50.3
48.3
22.6
70.9
(46)%
7%
(29)%
2 Other defined as Fixed Deals, Sponsorship Deals, Display Advertising
The US market has continued largely as a
cost-per-acquisition (CPA) led market whereas
the Europe market continues to operate with
a mixture of fixed, hybrid and revenue share
deals. As a result, CPA revenues accounted
for 52% of continuing revenues, declining
from 68% in the prior year. Revenue share has
increased to 48% of total revenue due to the
overall decline in US revenues as a percentage
of total revenues. As the US market continues
to develop, we have started to see some hybrid
and revenue share deals offered and expect to
see modest growth in revenue share deals in
the near to medium term in North America.
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XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
2023 ($m)
2022 ($m)
Change
2023 vs 2022 (%)
36.6
13.7
50.3
55.3
15.6
70.9
(34)%
(12)%
(29)%
3 Includes the North America Sports, Media Partnerships and Europe Sports verticals.
In 2023, 73% of revenues came from Sports in line with the Group’s focus on being sports-led
in the US, while also rebuilding its Europe gaming assets and launching a new gaming brand in
the US.
REVENUE SPLIT BY OPERATION
North America (Sports)
Europe (Sports)
Sports
North America (Gaming)
Europe (Gaming)
Gaming
2023 ($m)
2022 ($m)
Change
2023 vs 2022 (%)
26.9
9.7
36.6
0.6
13.1
13.7
46.4
8.9
55.3
1.3
14.3
15.6
(42)%
9%
(34)%
(54)%
(8)%
(12)%
Sports revenues decreased by 34% year-on-
year to $36.6 million (FY 2022: $55.3 million)
driven primarily by the relative scale of state
launches in North America, partially offset by a
strong performance from Freebets.com, which
returned to growth in the period.
Europe Sports revenues grew to $9.7 million
in 2023 (FY 2022: $8.9 million). In Europe,
Freebets, our primary brand, grew revenue by
107% year-on-year.
Gaming revenues declined by 12% to $13.7
million (FY 2022: $15.6 million) as tail revenues
declined in Europe gaming markets against the
prior year. Our marquee brands Nettikasinot
and WhichBingo grew by 38% and 23%
respectively in 2023, year-on-year. Europe
remains the main Gaming region for the Group,
with revenues of $13.1 million (FY 2022: $14.3
million), accounting for more than 90% of
Gaming revenue in both 2023 and 2022.
Our US Gaming revenues are driven by gaming
pages provided on our sports websites, in
particular Crossing Broad which had previously
enjoyed a large Barstool Sportsbook audience.
US Gaming revenues declined year-on-year to
$0.6 million (FY 2022: $1.3 million).
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STRATEGIC REVIEW
FINANCIAL REVIEW
REVENUE SPLIT BY PARTNERSHIP AND OWNED AND OPERATED (O&O)
North America Partnership
Europe Partnership
Total Partnership
North America O&O
Europe O&O
Total O&O
Total revenue
2023 ($m)
2022 ($m)
18.5
1.2
19.7
9.0
21.6
30.6
50.3
28.4
1.3
29.7
19.3
21.9
41.2
70.9
Change
2023 vs 2022 (%)
(35)%
8%
(34)%
(53)%
(1)%
(26)%
(29)%
Revenue from Partnerships decreased by 34%
to $19.7 million (FY 2022: $29.7 million), again
reflecting the relative scale in state launches.
in new RMPs revenues in both sports and
online casino, in particular Freebets.com and
Nettikasinot.
Partnership revenues represented 39% of
Group revenues (FY 2022: 42%).
Revenue from O&O decreased by 26% to
$30.6 million (FY 2022: $41.2 million). In
Europe, O&O Gaming sites were impacted
by ongoing reduction in tail revenue from
closed sites, but this was offset by growth
North America O&O sites were impacted by
the relative size of their footprint in new state
launches and changing CPA rates in some
states.
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
GROSS PROFIT 4 AND GROSS MARGIN
Gross profit from continuing operations ($’m)
Gross profit margin (%)
2023
26.6
53%
2022
36.0
51%
Change
2023 vs 2022 (%)
(26)%
2% pts
4 Gross profit is calculated as revenue less the costs associated with generating revenue. Cost of revenue includes direct costs,
marketing costs, Media Partnership revenue share costs, and staff costs, and excludes exceptional minimum guarantee costs. Note,
these costs are part of operating, and sales and marketing expenses as defined in the consolidated financial statements.
The Group’s gross profit from continuing
operations for 2023 was down 26% to $26.6
million, with a gross margin of 53% (FY 2022:
$36.0 million, 51% gross margin). Europe
Sports and Europe Gaming margin improved
to 55% and 78% respectively, offsetting the
decline in North America margin to 40%.
Revenue share payments to Media Partners,
which form part of the reported sales and
marketing expenses, were $10.9 million in
2023 (FY 2022: $16.3 million).
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STRATEGIC REVIEW
FINANCIAL REVIEW
EARNINGS
The Group recognised an operating loss from continuing operations of $44.9 million (FY 2022:
$6.2 million profit).
EBITDA from continuing operations included items which affect comparability. The Group
excludes these items in calculating Adjusted EBITDA metrics. These are detailed below:
RECONCILIATION OF OPERATING PROFIT FOR CONTINUING OPERATIONS TO ADJUSTED EBITDA
Operating (loss) / profit from continuing operations
Depreciation and amortisation
Net impairment charge
Share-based payments
Reorganisation costs
Minimum guarantees shortfall
Adjusted EBITDA from continuing operations ($’m)
Adjusted EBITDA margin from continuing operations
2023 ($m)
2022 ($m)
(44.9)
6.5
44.6
0.2
2.6
3.1
12.1
24%
6.2
7.3
-
0.9
4.5
-
18.9
27%
Change
2023 vs 2022 (%)
-
(11)%
100%
(78)%
(42)%
100%
(36)%
(3)% pts
ADJUSTMENTS TO EARNINGS
From the annual impairment review of non-
financial assets, the Group recognised a
net impairment charge of $44.6 million for
continuing operations in 2023. This consists
of an impairment charge of $58.5 million
for US Sports and EU Sports assets, offset
by an impairment reversal of $13.9 million
for Gaming assets. Note 11 of the Financial
Statements provides a further breakdown of
the impairment.
The impairment of EU Sports and the reversal
of previous impairments for Gaming were both
impacted by the sale of the Europe and Canada
assets in April 2024 as the sales price was
deemed to be an indicator of the recoverable
amount of those assets at the balance sheet
date.
The Group incurred $0.2 million of share-
based payment charges (FY 2022: $0.9
million), with the reduction year-on-year due to
senior management leavers from the schemes
in 2023.
In addition, the Group incurred $2.6 million of
reorganisation costs in 2023 (FY 2022: $4.5
million) relating to the continuation of the
Group’s restructuring plan and integration, and
deal-related costs.
In 2023, the Group classified $3.1 million
of costs from the minimum guarantees in
the contract with one Media Partner as an
adjusting item to EBITDA due to the size and
short-term nature of this agreement. The
agreement expires in summer 2024. Further
minimum guarantees have not been offered to
extend this contract.
Adjusting for these one-off items:
• Adjusted EBITDA from continuing
operations was $12.1 million (FY 2022:
$18.9 million), with a margin of 24%
(FY 2022: 27%).
• Group adjusted EBITDA including Personal
Finance and Blueclaw was $11.7 million
(FY 2022: $16.8 million).
The Group completed the sale of Personal
Finance assets and the restructuring of non-
core activities in H1 2023, removing marginal
and loss-making activity while allowing
resources to be focused on the continuing
business.
SALES AND MARKETING COSTS
Direct costs associated with our revenue
streams decreased to $18.6 million from
$22.8 million. This includes the revenue share
payments to our Media Partners in the US
amounting to $14.0 million (FY 2022: $16.3
million) including $3.1 million of minimum
guarantee top-ups. Excluding revenue shares
payments to Media Partners, sales and
marketing costs were $4.6 million (FY 2022:
$6.5 million), a reduction of 29%. These costs
relate largely to content and SEO expenses.
OPERATING COSTS
Operating costs of $25.6 million include
$2.6 million of reorganisation costs and $0.2
million of share-based payment charges (FY
2022: $34.6 million including $4.5 million of
reorganisation costs and $0.9 million of share-
based payment charges).
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
Operating costs include staff costs, technology
investment and other operating costs.
Staff Costs
Staff costs from continuing operations was
$16.7 million (FY 2022: $19.9 million). The
reduction year-on-year was partly due to
refining operations in the US and Canada,
as well as the closure of the UK Blueclaw
operation in 2023. This has also been
reflected in the reduction in total Group
employee numbers (including Personal
Finance) to 146 from 193.
As a result of the sale of the Europe and
Canada assets in April 2024, the total
Group employee numbers have fallen to 100
at 3 April 2024, including 28 employees
transferring to the Gambling.com Group
Limited upon completion of the transaction.
Technology Investment
The Group has continued to invest in its
technology in 2023, including replacing
legacy technology for data platforms and
implementing a new finance billing system.
Cost was reduced to $2.7 million of operating
costs (FY 2022: $5.2 million).
Other Operating Costs
Other operating costs were $6.2 million
(FY 2022: $9.5 million). These include all
other operating costs such as administrative
expenses, professional service costs and
one-off reorganisation costs of $2.6 million
(FY 2022: $4.5 million).
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STRATEGIC REVIEW
FINANCIAL REVIEW
EARNINGS PER SHARE (EPS)
2023
2022
Change
2023 vs 2022 (%)
SUMMARY BALANCE SHEET AND CASH FLOW METRICS
Basic and diluted EPS from continuing operations ($)
(0.173)
0.009
-
Free cash flow 5
Basic and diluted EPS ($)
(0.179)
(0.036)
(397)%
Cash from operations 6
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
2023 ($m)
2022 ($m)
Change
2023 vs 2022 (%)
4.0
4.6
5.7
7.4
7.6
15.8
6.8
18.4
(47)%
(71)%
(16)%
(60)%
Normalised capital expenditure 7
Acquisition-related payments
5 Defined as cash from operations excluding tax payments or refunds, less capital expenditure.
6 Includes working capital and trading from discontinued operations.
7 Defined as reported capex less acquisition-related capital expenditure.
CASH AND WORKING CAPITAL
Group cash balance (including short-term
deposits) at 31 December 2023 was $4.8
million (FY 2022: $10.8 million). After
adjustment for forex movements, overall cash
balances decreased due to acquisition-related
payments, historical tax payments and lower
trading performance, offsetting consideration
received from the sale of assets.
The Group recognised free cash inflows of
$4.0 million in 2023 after adjusting for one-
off cash items, compared to an inflow of
$7.6 million in 2022. The main driver of the
reduction in free cash outflows was the decline
in underlying trading.
Whilst the Group did not acquire any
businesses in 2023, it continued to invest in
its assets, mainly in its domains and enhanced
websites, spending $5.7 million on capital
expenditure (FY 2022: $6.8 million).
The Group received $6.05 million for the
disposal of three of the Europe Gaming
domains and associated websites, Casino.se,
Casino.gr and Casino.pt, and domains and
websites relating to the Personal Finance
business.
The Group’s acquisition programme
between Q4 2020 and Q4 2021 resulted
in it committing to future acquisition and
earn out payments as part of the acquisition
consideration, to be substantially funded from
the Group’s free cashflow.
During 2023, the Group paid out $7.4 million of
deferred acquisition and earnout payments (FY
2022: $18.4 million). Post period, the Group
has paid a further $3.5 million on earnout
payments with a final payment of $4.0 million
of deferred consideration expected in H2
2024. Included in the 2023 cash outflow was
a one-off settlement for all existing obligations
with the previous owners of Blueclaw Media
Ltd. This final settlement was paid in January
2023 and the Group has no further obligations
in this matter.
The cash flows above included the cash flow
from operations and working capital balances
for the Personal Finance and Blueclaw
businesses.
Basic and diluted EPS remained the same (FY 2022: same) due to the number of weighted
average number of shares. In 2023, the Group recognised a basic and diluted loss per share
from continuing operations of $0.173 (FY 2022: EPS of $0.009).
Including the discontinued operations of Personal Finance (before it was sold) and Blueclaw,
the Group recognised a loss per share of $0.179 (FY 2022: loss per share of $0.036).
FINANCE COSTS
Net financial costs amounted to $0.2 million
(FY 2022: $1.7 million). The prior year
comparative includes a $1.5 million foreign
exchange loss due to re-translation of
monetary balances held in GBP and EUR to
USD, the presentational currency of the Group,
which was not replicated in 2023. Excluding
this forex impact, net financial costs were
consistent year-on-year at $0.2 million relating
to bank charges and lease finance costs.
The Group does not hold any external debt
financing as at 31 December 2023.
TAX
The Group has a tax-presence in the regions
where the Group is incorporated, which
are Jersey (where the parent company is
incorporated), UK, US, Cyprus, Canada and
Israel. The Group structure consists of a UK
parent company with a shared service centre in
Cyprus, both of which support the intellectual
property based in Israel and Cyprus and the
growing operations in the US.
The Group recognised a total tax charge
of $0.6 million in 2023 for its continuing
operations (FY 2022: $1.6 million charge).
A deferred tax charge of $3.2 million was
recognised upon sale of the Personal Finance
business in discontinued operations to reverse
a previous deferred tax asset recognised in
2022.
The Group recognised an income tax provision
of $5.7 million (FY 2022: $4.5 million). The
increase in the income tax liability relates to an
increase in specific tax provisions to mitigate
tax risks across jurisdictions. In 2023, the
Group paid $3.5 million to tax authorities in
Israel in respect of the tax years 2016 to 2020
and a further $1.6 million in the jurisdictions it
operates (FY 2022: $0.9 million).
The Group understands the importance of the
tax contribution it makes, and we have a tax
strategy which supports this commitment. The
Group is committed to paying all of its taxes in
full and on time, in all the jurisdictions in which
the Group operates.
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CORPORATE
GOVERNANCE
25
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XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS CORPORATE GOVERNANCE
OUR BOARD
XLMEDIA’S BOARD IS A HIGHLY SKILLED TEAM
WITH BREADTH OF CAPABILITY AND EXPERIENCE
The Board is collectively responsible for promoting the success
of XLMedia by directing and supervising policy and strategy. It is
responsible to shareholders for the Company’s financial and
operational performance and risk management.
CHANGES TO THE BOARD DURING THE YEAR:
Jonas Mårtensson – stepped down from the Board on 30 June 2023
Richard Rosenberg – stepped down from the Board on 30 September 2023
CHANGES TO THE BOARD FOLLOWING THE YEAR END:
Caroline Ackroyd – stepped down from the Board on 31 March 2024
COMMITTEE MEMBERSHIP KEY
Audit and Risk Committee
Remuneration Committee
Committee Chair
Appointed: March 2022
Nationality: British
Key strengths and expertise:
· Extensive digital publishing
industry leadership experience
· Considerable knowledge of
capital markets and global
media industry
Other current appointments:
· Non-Executive Chairman at
Digitalbox plc
Marcus is an experienced Chair and Chief Executive,
with deep knowledge of the global media, publishing
and marketing sectors gained from over 30 years’
senior leadership experience. Most recently, he was
CEO at TI Media from March 2014 to May 2020,
prior to the sale to Future plc. Previously, he was at
Associated Newspapers for five years in the roles of
Commercial Director and Managing Director, Mail On
Sunday. Preceding this, Marcus worked at EMAP for
16 years, during which time he held the role of Group
Managing Director of EMAP Lifestyle Magazines and
EMAP Advertising, and he also ran the company’s
Australian and US businesses. Marcus was also
formerly a Group Account Director at McCann Erickson
and ran Optimus Communication.
Marcus Rich
Independent Non-Executive Chair
27
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XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
Appointed: July 2022
Nationality: British
Key strengths and expertise:
· Broad media and digital
publishing industry experience
· Strong leadership and financial
expertise
Other current appointments:
· None
David is an experienced Chief Executive Officer with
extensive leadership and financial expertise. He joined
the Group having held a number of senior executive
roles in companies across the media sector, most
recently as CEO at JPIMedia Group. Prior to this, he
served as CEO of Timeout Group and CFO of BBC
Worldwide (now BBC Studios). In his early career,
David spent time as a Management Consultant at PwC
working with a number of blue-chip clients. He is a
qualified Chartered Accountant.
Appointed: April 2012
Nationality: Israeli
Key strengths and expertise:
· Extensive knowledge of
XLMedia, having founded the
business
· Significant understanding
of performance marketing
Other current appointments:
· Founder, Team Odeon
Ory co-founded XLMedia and served as CEO from
2008 to 2019, prior to which he worked across all
areas of the business as it successfully scaled from
the affiliate network he first established in 2003.
He brings considerable entrepreneurial and digital
business leadership experience. Ory is also the founder
of Team Odeon, a performance marketing company
focused on higher education. He is an active investor
and advisor to companies operating in software as a
service, gaming and performance marketing.
Appointed: October 2021
Nationality: French
Key strengths and expertise:
· Significant experience in both
public and private markets
· Considerable knowledge of the
online gambling industry
Other current appointments:
· Non-Executive Director,
Kindred Group plc
Cédric has worked with Premier Investissement SAS
for over ten years, initially in the company’s listed
real estate development subsidiary Bassac, where he
worked for five years. In 2017, he co-founded Lagune
Holding, an investment advisor, and he worked
closely with Premier Investissement to develop its
asset management arm and help it to invest in listed
companies. Cédric is the appointed representative
of Premier Investissement, XLMedia’s largest
shareholder.
David King
Chief Executive Officer
Ory Weihs
Non-Executive Director
Cédric Boireau
Non-Executive Director
Appointed: June 2021
Nationality: British
Key strengths and expertise:
· Significant experience in
people strategy across
international organisations
· Considerable knowledge
of large-scale consumer
businesses
Other current appointments:
· None
Julie brings a wealth of experience across all facets of
Human Resources strategy and development on an
international scale, gained from over 30 years of senior
leadership. Most recently, Julie was Group People
Director at Ocado PLC, where she was responsible for
implementing their global people strategy and served
on the management committee. Previously, she held
senior leadership roles at Tesco PLC and Diageo plc.
Julie Markey
Independent Non-Executive
Director
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CORPORATE GOVERNANCE
DIRECTORS’ REPORT
NOMINATED ADVISOR &
CORPORATE BROKER:
Cavendish Capital
Markets Limited
One Bartholomew
Close
London
EC1A 7BL
AUDITORS TO THE
COMPANY:
Kost Forer Gabbay &
Kasierer (a member of
Ernst & Young Global)
144 Menachem Begin
Road, Building A
Tel-Aviv
6492102,
Israel
PUBLIC RELATIONS
ADVISOR:
Vigo Consulting
40 Piccadilly
London
W1J 0DR
The Directors present their report for the year
ended 31 December 2023.
RESULTS AND REVIEW OF THE BUSINESS
The Directors’ Report should be read in
conjunction with the full 2023 Annual Report
and financial statements.
SHARE CAPITAL
The authorised and issued share capital of the
Company are shown in note 18 of the
financial statements.
Pursuant to the resolution passed by
shareholders at the last Annual General
Meeting, and in accordance with the
Company’s Article of Association, the
Directors were authorised by shareholders to
allot and issue, wholly for cash, with
disapplication of pre-emption rights, up to
26,258,640 shares representing 10% of the
issued share capital of the Company as of the
date of the Annual General Meeting. These
authorities expire, to the extent not already
used, on the date of the Annual General
Meeting to be held on 28 June 2024.
Approval will be sought for new authorities at
the Annual General Meeting.
TREASURY SHARES
The Company does not hold any Ordinary
Shares in treasury.
REGISTERED OFFICE:
IFC 5
St Helier
Jersey
JE1 1ST
ADVISORS
REGISTRARS:
Link Market Services
(Jersey) Limited
12 Castle Street
St Helier
Jersey
JE2 3RT
JERSEY LAW COUNSEL:
Carey Olsen
47 Esplanade
St Helier
Jersey
JEI 0RD
UK LAW COUNSEL:
Eversheds Sutherland
Two New Bailey
6 Stanley Street
Salford
Manchester
M3 5GS
COMPANY SECRETARY:
Peter McCall
XLMedia plc
25 Wilton Road
London
SW1V 1LW
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XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
STRATEGIC ACTIVITIES
DIRECTORS’ INDEMNITY INSURANCE
The Group has provided to all of its Directors
limited indemnities in respect of costs of
defending claims against them and third-party
liabilities. The Group has made qualifying
third-party indemnity provisions for the benefit
of its Directors which were available during the
period and remain in force at the date of this
report.
CORPORATE GOVERNANCE
In September 2018, the Company adopted the
QCA Corporate Governance Code published by
the Quoted Companies Alliance. For more
information about Corporate Governance and
the implementation of the QCA Code please
refer to the Chair’s Statement on pages 7-8 of
this Annual Report, and the Corporate
Governance Report on pages 33-45 of this
Annual Report.
BOARD COMMITTEES
The Board has established an Audit and Risk
Committee, and a Remuneration Committee.
For more information about the Audit and Risk
Committee and for information about the
internal and external Auditors please refer to
the Audit and Risk Committee Report on
pages 46-48 of this Annual Report.
For more information about the Remuneration
Committee, Directors’ remuneration and bonus
and share option schemes please refer to the
Remuneration Committee Report on pages
49-53 of this Annual Report.
MAJOR SHAREHOLDERS
As of 31 December 2023, the following
interests of shareholders in excess of 3%, had
been notified to the Company by the
shareholders:
SHAREHOLDER’S
NAME
NUMBER OF
SHARES HELD
SHARES AS
% OF ISSUED
SHARE
CAPITAL
Premier
Investissement
SAS
TFG Asset
Management
UK LLP
73,478,567
27.98%
13,500,000
5.14%
Ory Weihs
8,137,444
3.08%
Note: on 27 March 2024 the Company announced that it had
been notified that Kapitalforengingen Wealth Invest held an
interest in 8,000,000 ordinary shares in the issued share capital
of the Company (3.05%).
GLOBAL SHARE INCENTIVE PLAN
On 12 May 2023, the Company granted share
awards over a total of 6,850,000 ordinary
shares, under the XLMedia 2020 Global Share
Incentive Plan.
BOARD CHANGES
The following resigned as Directors during
the year.
• Jonas Mårtennsson stepped down as a
Director on 30 June 2023.
• Richard Rosenberg stepped down as a
Director on 30 September 2023.
The following resigned as a Director after the
year end.
• Caroline Ackroyd, stepped down from the
Board on 31 March 2024
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CORPORATE GOVERNANCE
OUR FINANCIAL INSTRUMENTS
The Group’s financial instruments are
discussed in note 2 to the financial
statements.
OUR PROCEDURES
The Group’s Procedures including our Code of
Business Conduct, Anti-Bribery and
Corruption Policy, Disclosure Policy, Share
Dealing Code, Social Media Policy,
Whistleblowing Policy and Modern Slavery
Policy are determined by the Board and set
out for all employees to review. The
Company’s management is responsible for the
implementation of these procedures.
OUR SHARE DEALING CODE
The Company has adopted a Share Dealing
Code for Directors and applicable employees
of the Group for the purpose of ensuring
compliance by such persons with the
provisions of the AIM Rules relating to
dealings in the Company’s securities
(including, in particular, Rule 21 of the AIM
Rules) and in accordance with the Market
Abuse Regulations. The Directors reviewed
the Share Dealing Code during 2023 and
consider that it is appropriate for a company
whose shares are admitted to trading on AIM.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN
RESPECT OF THE FINANCIAL STATEMENTS
The Directors are responsible for preparing
the Annual Reports and the Group and
Company financial statements in accordance
with applicable law and regulations.
Jersey Companies Law requires the Directors
to prepare accounts for each financial period.
Under that law, and as required by the AIM
Rules for Companies, the Directors have
elected to prepare the Group and Company
financial statements in accordance with
International Financial Reporting Standards
(IFRS) as adopted by the European Union
(EU). In preparing these financial statements,
the Directors are required to:
• Present fairly the Group and Company
financial position, financial performance and
cash flows;
• Select suitable accounting policies in
accordance with IAS 8 – Accounting
Policies, Changes in Accounting Estimates
and Errors and apply them consistently;
• Present information, including accounting
policies, in a manner that provides relevant,
reliable, comparable and understandable
information;
• Make judgments that are reasonable;
• Provide additional disclosures when
compliance with the specific requirements
in IFRS, as adopted by the EU, is
insufficient to enable users to understand
the impact of particular transactions, other
events and conditions on the Group’s and
Company’s financial position and financial
performance; and
• State whether the Group and Company
financial statements have been prepared in
accordance with IFRS, as adopted by the
EU, subject to any material departures
disclosed and explained in the financial
statements.
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
GOING CONCERN
The Board is satisfied that the Group has
adequate financial resources to continue to
operate for the foreseeable future and is
financially sound. For this reason, the going
concern basis is considered appropriate for
the preparation of financial statements.
AUDITOR
A resolution to reappoint Kost Forer Gabbay &
Kasierer, a member of Ernst & Young Global
(EY), as Auditors of the Company will be put
to the Annual General Meeting. The Directors
will also be given the authority to fix the
Auditors’ remuneration. For more information
about the Auditors please refer to the Audit
and Risk Committee Report on pages 46-48
of this Annual Report.
During the year, the Auditors undertook
certain specific pieces of non-audit work. EY
were selected to undertake these tasks due to
their familiarity with the online industry and,
as regards tax, their alignment with work
carried out under the audit. In order to
maintain EY’s independence and objectivity,
EY undertook its standard independence
procedures in relation to those engagements.
By Order of the Board
Peter McCall
Company Secretary
DIRECTORS’ STATEMENT AS TO DISCLOSURE
OF INFORMATION TO AUDITORS
The Directors who were members of the
Board at the time of approving the Directors’
Report are listed on page 27-28. Having
made enquiries of fellow Directors and of the
Company’s Auditors each of these Directors
confirms that:
• To the best of each Director’s knowledge
and belief, there is no information relevant
to the preparation of their report of which
the Company’s Auditors are unaware; and
• Each Director has taken all the steps a
Director might reasonably be expected to
have taken to be aware of relevant audit
information and to establish that the
Company’s Auditors are aware of that
information.
EMPLOYEES
The Directors recognise the value of involving
employees in the business and ensuring that
matters of concern to them, including the
Group’s aims and objectives, are
communicated in an open and regular manner.
Management frequently briefs employees on
the Group’s performance and activities and
discusses matters of concern or interest.
Recruitment gives equal opportunity to all
employees regardless of age, gender, sex,
sexual orientation, colour, race, religion or
ethnic origin. Training programmes are
available for all levels of staff. These are
aimed at increasing skills and contribution.
ANNUAL GENERAL MEETING OF SHAREHOLDERS
The Company will be holding its Annual
General Meeting on 28 June 2024.
31
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complete.pdf
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CORPORATE GOVERNANCE
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
CORPORATE
GOVERNANCE REPORT
As an AIM-listed company working within
regulated markets, our Board recognises the
importance of applying sound and consistent
governance principles appropriate to the
nature, scale and business of the Company
and the need to apply best practices
wherever possible to help manage risk within
the business. Our Board is committed to
upholding high standards of corporate
governance throughout the Group. It
acknowledges its role in setting the culture,
values and ethics of the Group and in
ensuring good corporate governance
principles are maintained for the long-term
benefit of the Group.
In line with the requirement in the AIM Rules
requiring all AIM-quoted companies to adopt
and comply with a recognised corporate
governance code and detail how they comply
with that code, the Board has formally
adopted the QCA Corporate Governance
Code (the Code) and reports annually on the
Company’s compliance with the Code and
any exceptions.
The Code is constructed around ten key
governance principles that the QCA has
identified as focusing on the pursuit of
medium to long-term value for shareholders.
We have set out in the report below how we
apply the ten principles of the Code, using the
disclosures indicated by the Code.
The Board believes that the Group complies
with the principles of the Code to the extent
possible and has explained below where it
does not comply. The Board will continue to
monitor how the Code is interpreted in
practice to ensure we can continue to comply
with the principles of the Code as far as
possible.
33
AR2023-book.indb 33-34
AR2023-book.indb 33-34
complete.pdf
CATEGORY
PRINCIPLE
NUMBER
PRINCIPLE
APPLICATION
Deliver Growth
1
Deliver Growth
2
Establish a
strategy and
business model
which promotes
long-term value
for shareholders
Seek to
understand and
meet
shareholders’
needs and
expectations
Our strategy and business operations are
set out in the Chief Executive Officer
Review in pages 9-14 of the Annual
Report. For more information that covers
our business model, our strategy and how
we aim to drive long-term value for
shareholders, visit www.xlmedia.com.
The risk sections of the Annual Report are
on pages 54-57 and deal with the major
challenges the business faces and how
these challenges are addressed and
mitigated.
We are committed to communicating
openly with our shareholders to ensure that
our strategy, business model and
performance are understood; and to listen
to and seek to address any concerns.
Representatives of the Company and the
Board are present at the Annual General
Meeting of the Company to answer
questions from shareholders who attend
the meeting. The Company has also made
available a facility for shareholders to
address questions to the Company via
email.
Additionally, our Chair and the Chief
Executive Officer (CEO) meet and talk
regularly with shareholders and potential
investors directly and through analysts and
brokers in order to receive feedback on
market expectations or other matters.
We nominated our CEO, David King, and
our Company Secretary, Peter McCall, as
the responsible officers for shareholder
engagement and have in place a mailbox to
address investor feedback (ir@xlmedia.
com).
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CORPORATE GOVERNANCE
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
CATEGORY
PRINCIPLE
NUMBER
PRINCIPLE
APPLICATION
CATEGORY
PRINCIPLE
NUMBER
PRINCIPLE
APPLICATION
Deliver Growth
(cont.)
2
(cont.)
Seek to
understand and
meet
shareholders’
needs and
expectations
(cont.)
We also operate a free email alerts tool on
our website, which allows subscribers to
receive breaking news about the Company
and the Group via email. Registration to
the newsletter can be made here: https://
www.xlmedia.com/investors/regulatory-
news/
Additional information about the ways in
which the Group is communicating with its
shareholders is also available on our
website: https://www.xlmedia.com/
investors/overview/
Deliver Growth
(cont.)
3
(cont.)
Take into account
wider stakeholder
and social
responsibilities
and their
implications for
long-term success
(cont.)
Deliver Growth
3
Take into account
wider
stakeholder and
social
responsibilities
and their
implications for
long-term
success
We are mindful of our corporate social
responsibilities and the need to build and
maintain strong relationships across a
range of stakeholder groups. Our key
stakeholders are our shareholders,
customers and their end customers,
suppliers, employees and regulators.
We nominated our CEO, David King, and
our Company Secretary, Peter McCall, as
the responsible officers for stakeholder
engagement and set up a mailbox to
address stakeholders’ feedback (ir@
xlmedia.com). The specific needs of each
stakeholder group are considered when
the Company reviews and responds to that
feedback.
We are committed to ensuring a high level
of customer service. We frequently
correspond with, and seek feedback from,
key customers in order to improve our
services. All customer feedback and
requests are handled carefully and
promptly. Our executives also regularly
meet with key customers at professional
35
AR2023-book.indb 35-36
AR2023-book.indb 35-36
complete.pdf
conventions and other events to improve
customer relations and to better
understand customers’ needs.
We view highly trained and satisfied
employees as another essential part of
business growth. As such, we strive to
train and develop our employees to ensure
professionalism, excellence and personal
development, in turn facilitating
progression on their part. We recruit
employees who fit our open and dynamic
working environment and our employees
are encouraged to provide feedback on
ongoing matters through informal
discussions with managers and executives
at all levels and during their meetings with
their managers. Managers are encouraged
to act on the feedback received. We have
established a written Whistleblowing
Policy which has been issued to all our
workers. The Group has provided a
specific email address to be used for the
purposes of raising a whistleblowing issue
which can only be viewed by senior
members of the Group’s People and Legal
teams.
We believe that suppliers are key to
providing excellent services and are
therefore essential for supporting our
long-term success. Many of our suppliers
rank at the top of their services category.
Suppliers are asked by the relevant
functions in our Group to provide feedback
about their services and expertise. Any
feedback is discussed by us and further
action, if required, is considered.
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CORPORATE GOVERNANCE
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
CATEGORY
PRINCIPLE
NUMBER
PRINCIPLE
APPLICATION
Deliver Growth
4
Embed effective
risk
management,
considering both
opportunities and
threats,
throughout the
organisation
The Board has embedded an effective risk
management framework to identify,
evaluate, manage and mitigate risks, in
order to ensure the Company is well
positioned to execute its strategy and
achieve its business objectives. The
Company’s risk register is compiled with
input from our executives and other
employees.
The Audit and Risk Committee of the
Board is responsible for reviewing the risk
register and other risks facing the
Company and discussing all compliance
issues and regulatory developments based
on the risk register and other periodical
management updates designed to
highlight any new or developing risks.
In addition, we have an internal audit
function performed by Chaikin Cohen
Rubin & Co. which conducts audits
periodically pursuant to an internal audit
plan. The specific internal audit plan is
established each year based on the issues
identified by the Audit Committee and the
Board as most relevant to such year.
Each report published by the internal
Auditors is discussed by the Audit
Committee and action items identified in
such reports are handled by the Company.
Further details on the risk management
process, the key risks and challenges
facing the business and how they are
mitigated are set out in pages 54-57 of
this Annual Report.
37
AR2023-book.indb 37-38
AR2023-book.indb 37-38
complete.pdf
PRINCIPLE
NUMBER
5
CATEGORY
Maintain a
Dynamic
Management
Framework
PRINCIPLE
APPLICATION
Maintain the
board as a
well-functioning,
balanced team
led by the Chair
The Board is charged with the
responsibility of directing and governing
the Company’s affairs, including: the
formulation and approval of the Company’s
long-term objectives, mission and strategy;
the approval of budgets; the oversight of
the Company’s operations and delegation
of authority to management; the
establishment and monitoring of sound
internal controls and risk management
systems; and the evaluation of the
implementation of the Company’s policies
and business plan.
The Board operates formally through
meetings of both the Board and of its
committees, and informally through regular
contact between Directors. The Board
convenes at least once every quarter to
review and monitor the implementation of
the Company’s strategy, budgets and
progress, and more frequently if necessary.
While the Board may delegate
responsibilities, there are formal matters
specifically reserved for decision by the
Board. Such reserved matters include the
approval of significant capital expenditures,
material business contracts and major
corporate transactions. A formal schedule
of Matters Reserved for the Board has
been adopted by the Company.
The Board currently comprises five
directors, one of whom is an Executive
Director and four of whom are Non-
Executive Directors, including the Chair.
The Board views Julie Markey as an
Independent Non-Executive Director and
Marcus Rich as an Independent Non-
Executive Chair.
38
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CORPORATE GOVERNANCE
PRINCIPLE
NUMBER
5
(cont.)
CATEGORY
Maintain a
Dynamic
Management
Framework
(cont.)
PRINCIPLE
APPLICATION
Maintain the
Board as a
well-functioning,
balanced team
led by the Chair
(cont.)
Members of the Board must be re-elected
by the shareholders of the Company at the
Company’s Annual General Meeting at
least once every three years.
The Board consists of Directors presenting
an appropriate balance of skills and
experience to effectively operate and
control the business and, where deemed
necessary, the Board also consults with
external advisors or with Executive
Officers of the Company. The Board is an
independent unit acting for the benefit of
the Company and its composition ensures
that no individual (or small group of
individuals) can dominate its decision-
making. The Board has established an
Audit and Risk Committee, and a
Remuneration Committee, both with
formally delegated duties and
responsibilities. More information about the
composition and the duties and
responsibilities of each Board Committee is
available in the Company’s website on
https://www.xlmedia.com/corporate-
governance/
The Board does not consider that it is
currently necessary to establish a
Nominations Committee and the Board will
take decisions regarding the appointment
of new Directors and Executive employees
following a thorough assessment of a
potential candidate’s skill and suitability for
the role.
PRINCIPLE
NUMBER
5
(cont.)
CATEGORY
Maintain a
Dynamic
Management
Framework
(cont.)
6
Maintain a
Dynamic
Management
Framework
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
PRINCIPLE
APPLICATION
Maintain the
Board as a
well-functioning,
balanced team
led by the Chair
(cont.)
Ensure that
between them,
the Directors
have the
necessary
up-to-date
experience,
skills and
capabilities
Non-Executive Directors are expected to
devote as much time as is necessary for the
proper performance of their duties.
Executive Directors are full-time employees
and expected to devote as much time as is
necessary for the proper performance of
their duties.
During 2023, the Board held 11 meetings.
Attendance at those meetings is shown on
page 45.
The Board considers its current
composition to be appropriate and suitable
with the adequate and up-to-date
experience, skills and capabilities to make
informed decisions.
Each member of the Board brings a
different set of skills, expertise and
experience, making the Board a diverse unit
equipped with the necessary set of skills
required to create maximum value for the
Company.
The Board is fully committed to ensuring its
members have the right skills. Members of
the Board must be re-elected by the
shareholders of the Company if they have
not been re-elected at the previous two
Annual General Meetings in accordance
with the Company’s Articles of Association
(and more frequently in some
circumstances), thereby providing
shareholders with the opportunity to decide
on the election of the Company’s Board.
39
AR2023-book.indb 39-40
AR2023-book.indb 39-40
complete.pdf
40
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CORPORATE GOVERNANCE
PRINCIPLE
NUMBER
6
(cont.)
CATEGORY
Maintain a
Dynamic
Management
Framework
(cont.)
41
AR2023-book.indb 41-42
AR2023-book.indb 41-42
complete.pdf
PRINCIPLE
APPLICATION
CATEGORY
PRINCIPLE
NUMBER
PRINCIPLE
APPLICATION
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
Ensure that
between them,
the Directors
have the
necessary
up-to-date
experience,
skills and
capabilities
(cont.)
The Directors’ biographical details and
relevant experience can be found on pages
27-28 of this Annual Report and at the
following https://www.xlmedia.com/
board-management/
Throughout the year, members of the
Board receive updates on corporate
governance matters from either the
Company Secretary and/or the Company’s
Nominated Advisor.
During the year, the Directors receive
regular updates on our business from the
CEO and and other senior executives, and
regulatory updates from the Company
Secretary.
More information about the Group’s
management can be found here https://
www.xlmedia.com/board-management/
The Board also consults with external
advisors and with Executives of the
Company on various matters as deemed
necessary and appropriate by the Board.
7
8
Maintain a
Dynamic
Management
Framework
(cont.)
Maintain a
Dynamic
Management
Framework
(cont.)
Evaluate Board
performance
based on clear
and relevant
objectives,
seeking
continuous
improvement
Promote a
corporate culture
that is based on
ethical values
and behaviours
In order to ensure that the Board as a
whole and its members collectively function
in an efficient and productive manner, a
formal external Board evaluation was
carried out in the first quarter of 2023. A
report on the findings of the evaluation
exercise was submitted to the Chair who
considered its findings with the Board and
individual Directors. The Board will consider
when it is appropriate to conduct a further
evaluation exercise.
We are committed to acting ethically and
with integrity. We expect all employees,
officers, Directors and other persons
associated with us to conduct their day-to-
day business activities in a fair, honest and
ethical manner.
For that purpose, we have adopted a Code
of Business Conduct (Code) which applies
to all our workforce personnel. Pursuant to
the Code, employees, Directors and other
relevant stakeholders are required to
comply with all laws, rules and regulations
applicable to us. These include, without
limitation, laws covering anti-bribery,
copyright, trademarks and trade secrets,
data privacy, insider trading, illegal political
contributions, antitrust prohibitions, rules
regarding the offering or receiving of
gratuities, environmental hazards,
employment discrimination or harassment,
occupational health and safety, false or
misleading financial information or misuse
of corporate assets.
42
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CORPORATE GOVERNANCE
PRINCIPLE
NUMBER
8
(cont.)
CATEGORY
Maintain a
Dynamic
Management
Framework
(cont.)
PRINCIPLE
APPLICATION
Promote a
corporate culture
that is based on
ethical values and
behaviours (cont.)
9
Maintain a
Dynamic
Management
Framework
(cont.)
Maintain
governance
structures and
processes that are
fit for purpose and
support good
decision-making
by the Board
43
AR2023-book.indb 43-44
AR2023-book.indb 43-44
complete.pdf
The Code also includes provisions for
disclosing, identifying and resolving
conflicts of interest of employees and
Board members. The Code includes
provisions requiring all employees to report
any known or suspected violation and
ensures that all reports of violations of the
Code will be handled sensitively and with
discretion. We also recognise the benefits
of a diverse workforce and are committed
to providing a working environment that is
free from discrimination.
We have also adopted a Share Dealing
Code, regulating trading by persons
discharging managerial responsibility
(PMDRs) and persons closely associated
with them. We take all reasonable steps to
ensure compliance by PDMRs and any
relevant employees with the terms of the
Share Dealing Code.
The Company now operates with a small
Board, appropriate for its size. The Board
Committee membership is comprised
entirely of Directors who the Board
considers to be independent in order to
ensure (amongst other considerations) that
resolutions adopted are conflict-free.
Further details of the composition and
meetings of these Committees can be
found on pages 27-28 of the Annual
Report. Each of the Board Committees has
the ability to use external advisors as it
deems necessary in the furtherance of its
duties.
The Company’s CEO is responsible for the
leadership and day-to-day management of
the Group. This includes formulating and
recommending the Group’s strategy for
Board approval and then executing the
approved strategy.
PRINCIPLE
NUMBER
9
(cont.)
CATEGORY
Maintain a
Dynamic
Management
Framework
(cont.)
Build Trust
10
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
PRINCIPLE
APPLICATION
Maintain
governance
structures and
processes that are
fit for purpose and
support good
decision-making
by the Board
(cont.)
Communicate
how the group is
governed and is
performing by
maintaining a
dialogue with
shareholders and
other relevant
stakeholders
The Chair’s main responsibility is the
leadership and management of the Board’s
business and its governance and acting as
its facilitator. He meets regularly and
separately with the CEO and the other
Directors to discuss matters relevant to the
Board.
We will continue to review our governance
structures with the QCA Code in mind
(including the changes introduced by the
revised QCA Code published in November
2023) and are committed to the evolution
of our corporate governance in line with
best practices, to the extent the Directors
judge it appropriate considering the
Company’s size, stage of development and
resources.
We are committed to an open
communication and dialogue with our
stakeholders. Our main stakeholder groups
are our regulators, our shareholders, our
customers, our suppliers and our
employees.
We communicate with stakeholders
including through the Annual Report, the
Annual General Meeting of shareholders,
the full-year, half-year and other regulatory
market announcements, investor meetings
and through the Group’s website.
Our website is regularly updated, and users
can register to be alerted via email when
announcements are posted on the website.
Annual Reports and notices of Annual
General Meetings from recent years can be
found on our website.
We publish on the Company’s website in a
clear and transparent manner the outcomes
of the General Meetings of shareholders,
including a breakdown of votes cast.
44
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CORPORATE GOVERNANCE
ATTENDANCE TABLE
Director
Position
Max Possible
Attendance
Meetings
attended
Max Possible
Attendance
Meetings
attended
Max Possible
Attendance
Meetings
attended
BOARD MEETING
AUDIT AND RISK COMMITTEE REMUNERATION COMMITTEE
David King
CEO
Caroline Ackroyd CFO
Marcus Rich
Chair
Julie Markey
Ory Weihs
Richard
Rosenberg1
Cédric Boireau
Independent Non-
Executive Director
Non-Executive
Director
Independent Non-
Executive Director
Non-Executive
Director
Jonas
Mårtensson2
Independent Non-
Executive Director
11
11
11
11
11
9
11
5
11
11
11
11
11
6
11
5
-
-
3
3
-
2
-
1
This table records attendance at Committee meetings by Committee members only.
1. Stepped down on 30 September 2023
2. Stepped down on 30 June 2023
-
-
3
3
-
2
-
1
-
-
4
4
-
3
-
2
-
-
4
4
-
3
-
2
45
AR2023-book.indb 45-46
AR2023-book.indb 45-46
complete.pdf
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
AUDIT AND RISK
COMMITTEE REPORT
Marcus Rich
Chair of the Audit and Risk Committee
COMPOSITION OF THE AUDIT
AND RISK COMMITTEE
The Audit and Risk Committee (referred to
as the “Committee” in this section of the
Report) is a committee of the Board. The
Committee Chair reports formally to the
Board on all matters within the Committee’s
duties and responsibilities and on how the
Committee discharges its responsibilities.
The Committee members are Marcus Rich
(who chairs the Committee on an interim
basis) and Julie Markey. Independent Directors
Richard Rosenberg (who previously chaired
the Committee) and Jonas Mårtennson
both stepped down as Directors and as
members of the Committee in 2023.
The members of the Committee are
considered to be Independent Directors. For
further information about the qualifications of
the Committee members please refer to
pages 27-28 of this Annual Report and the
Company’s website https://www.xlmedia.
com/board-management/
The Committee’s terms of reference (which
were reviewed in early 2024) provide that it
should meet at least twice a year at
appropriate times in the reporting and audit
cycle and otherwise as required. The
Committee met three times during the year.
The Committee also meets regularly with the
Company’s internal and external Auditors.
PURPOSE AND RESPONSIBILITIES
OF THE AUDIT AND RISK COMMITTEE
The purpose of the Committee is to assist the
Board to carry out the following functions:
• Oversight of the integrity of the Group’s
formal reports, statements and
announcements relating to the Group’s
financial performance;
• Reviewing compliance with internal
guidelines, policies and procedures and other
prescribed internal standards of behaviour.
To achieve such purposes, the Committee has
been assigned with the following
responsibilities:
• Reviewing the half-year and full-year
financial statements with management and
with the external Auditors as necessary prior
to their approval by the Board;
• Reviewing financial results announcements
of the Group and any other formal
announcements relating to the Group’s
financial performance and recommending
them to the Board for approval;
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CORPORATE GOVERNANCE
• Reviewing recommendations from the
executive management and the external
Auditors on the key financial and accounting
principles to be adopted by the Group in the
preparation of the financial statements;
• Reviewing the Group’s systems for internal
financial control;
• Approving the appointment and termination
of appointment of the Group’s internal
Auditors, reviewing and approving the
Group’s internal audit plan and ensuring the
internal Auditors have the necessary
resources and access to information to
enable them to fulfil their mandate;
• Considering and making recommendations
to the Board to put to shareholders for
approval at the AGM, the appointment,
re-appointment and removal of the
Company’s external Auditors and overseeing
the relationship with the external Auditors;
• Reviewing and approving the external audit
plan and regularly monitoring the progress
of implementation of the plan;
• Determining and monitoring the
effectiveness and independence of the
internal and external Auditors; and
• Monitoring the level of resources related to
the management of audit functions across
the Group.
MAIN ACTIVITIES IN 2023
The Committee:
• Reviewed and approved the financial
statements for FY2022 and reviewed the
external Auditors’ plans for the Annual
Report of FY2023;
• Reviewed and approved the financial
statements of the Company for H1 2023;
• Reappointed Ernst & Young as the external
Auditors;
• Reviewed and discussed reports from the
internal Auditors, Chaikin Cohen Rubin &
Co.; and
• Reviewed and approved the financial
statements, RNS and internal audit final
reports for FY2022 and the internal audit
plan for FY2023.
INTERNAL AUDITORS
The internal Auditors of the Company are
Chaikin Cohen Rubin & Co., appointed by the
Company in May 2021. The internal Auditors
provide their audit based on an audit plan.
Each year specific topics are identified by the
Committee for audit during such year. Each
report of the internal Auditors is discussed by
the Committee and if necessary by the Board
and its results are learned from and
implemented as required.
EXTERNAL AUDITORS
The external Auditors of the Company are Kost
Forer Gabbay & Kasierer (Ernst & Young Israel)
(EY). The appointment of EY as Auditors by the
Committee was based on their performance
during past years and their offer for auditing
the financial statements for 2023. The
Committee review of the external Auditors
confirmed the appropriateness of their
reappointment and included assessment of
their independence, qualification, expertise and
resources, and effectiveness of their audit
process.
Both the Board and the external Auditors have
safeguards in place to avoid the possibility that
the Auditors’ objectivity and independence
could be compromised.
The services provided by the external Auditors
include their audit-related services and tax
consulting. In recognition of public concern
over the effect of consulting services on
Auditors’ independence, the external Auditors
are not invited to provide general consulting
work which can affect their independence as
external Auditors.
47
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XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
The total remuneration of the external Auditors
for 2023 and for 2022 was as listed in the
table below:
EXTERNAL AUDITORS’ REMUNERATION
$’000
2023
$’000
2022
Audit services
249
200
Acquisition and
assurance services
179
--
Tax compliance
419
208
The Committee and the Auditors found that
the external audit plan for 2023, the work of
the external Auditors for 2023 and the
remuneration of the external Auditors for 2023
did not undermine the independence
of the external Auditors.
WHISTLEBLOWING
The Group has a Whistleblowing Policy
permitting each employee of the Group to raise
concerns in confidence about possible
improperness in various aspects and matters.
Issues raised will be handled appropriately by
the management of the Group.
FINANCIAL REPORTING
The Group’s trading performance is monitored
on an ongoing basis. An annual budget is
prepared, and specific objectives and targets
are set. The budget is reviewed and approved
by the Board. The key trading aspects of the
business are monitored on an ongoing basis and
internal management and financial accounts are
prepared monthly. The results are compared to
budget and prior year performance.
The Committee has taken and will continue to
take further steps to ensure the Group’s control
environment is working effectively and
efficiently.
MODERN SLAVERY
The Board has approved a policy in respect of
preventing modern slavery and all forms of
forced labour which applies to all parts of our
business and which encourages all of our
people to report concerns in respect of this.
The Company’s modern slavery statement is
available on the Company’s website at
https://www.xlmedia.com/wp-content/
uploads/2024/03/Modern-Slavery-Statement-
2024-.pdf
Marcus Rich
Chair of the Audit and Risk Committee
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CORPORATE GOVERNANCE
REMUNERATION
COMMITTEE REPORT
Julie Markey
Chair of the Remuneration Committee
Dear Shareholder,
I am pleased to present the Directors’
Remuneration Committee Report for the year
ended 31 December 2023.
The Remuneration Committee membership
comprises Marcus Rich and myself (as Chair).
Both of us are independent Non-Executive
Directors. Richard Rosenberg and Jonas
Mårtensson also served as members of the
Remuneration Committee during the year until
the date they stepped down from the Board.
RESPONSIBILITIES
The Remuneration Committee is responsible
for determining and recommending to the
Board the framework for remuneration of the
Board Chair, Executive Directors and other
Senior Executives and, within the terms of the
agreed framework, determining the total
individual remuneration packages of such
persons including, where appropriate,
bonuses, incentive payments and share
options or other share awards.
During 2023, the Remuneration Committee
met four times, and the attendance of the
Committee members at these meetings is
detailed in the table on page 45. The
Remuneration Committee also undertook a
comprehensive review of its annual calendar of
activities and of its terms of reference (which
can be found at https://www.xlmedia.com/
wp-content/uploads/2024/03/Remuneration-
Committee-Terms-of-Reference-07122023.
pdf).
In exercising their role, the Remuneration
Committee has regard to the recommendations
put forward in the QCA Code and, where
appropriate, the QCA Remuneration
Committee Guide and associated guidance.
During the year FIT Remuneration Consultants
LLP (FIT) provided the Remuneration
Committee with external remuneration advice,
including on all aspects of remuneration policy
for the Executive Directors. The Remuneration
Committee is satisfied that the advice received
was objective and independent. FIT is a
member of the Remuneration Consultants
Group and the voluntary code of conduct of
that body is designed to ensure that objective
and independent advice is given to
Remuneration Committees.
OUR PERFORMANCE AND LINK TO REMUNERATION
Elsewhere in this report you will find details of
the developments in corporate strategy during
2023 and the challenges addressed by the
Company in a rapidly changing marketplace.
As a result of the significant change to the
environment that the business was operating
in and the challenges faced, the Committee
decided to implement an employee retention
scheme for our Executive Team to ensure that
we retained our key talent.
You can read more about the remuneration of
our Executive Directors in the section
immediately below.
49
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EXECUTIVE DIRECTOR REMUNERATION
Executive Directors have service agreements
with the Group. David King’s contract may be
terminated by either party serving six months’
written notice. At its discretion, the Group may
make a payment in lieu of such notice or place
the Executive Director on garden leave. The
service contracts also contain provisions for
early termination in the event of various
scenarios and contain typical restrictive
covenants.
On 9 January 2024 Caroline Ackroyd notified
the Board of her intention to resign as a
Director. Caroline remained with the business
until 31 March 2024 to assist with an orderly
handover. Caroline received her normal salary
and benefits to the 31 March 2024 and no
payment in lieu of notice or for loss of office
was paid.
The following is a summary of the key
remuneration components of executive
packages:
Base salary:
The salary of an Executive Director will be
reviewed annually by the Remuneration
Committee without any obligation to
increase such salary. David King joined in
July 2022 on a base salary of USD
$392,000. His salary was increased with
effect from 1 April 2023 to USD $425,000.
Caroline Ackroyd joined in March 2022 on a
base salary of USD $271,000. Her salary
was increased with effect from 1 April 2023
to USD $313,000.
Pension and benefits:
Ancillary benefits include the reimbursement
of all reasonable and authorised out of
pocket expenses, provision of private
healthcare cover and life cover. The Group
also contributes to pension plans or as an
additional cash supplement in respect of the
Executive Directors at a rate of 10% of
salary.
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
Annual bonus:
The Executive Directors are eligible to
receive an annual bonus of up to 100% of
salary, subject to achievement of corporate
and personal objectives (“Annual Bonus
Targets”) set by the Remuneration
Committee each year and subject to the
discretion of the Remuneration Committee.
In July 2023 the Remuneration Committee
amended the bonus plan to incorporate a
retention element to reflect the importance
to the Company of retaining the services of
a small number of key staff (including the
Executive Directors) deemed essential for
the fulfillment of certain objectives during a
period of significant change. As a result the
Company varied the annual bonus plan for
Executive Directors for 2023, reducing the
maximum bonus potential for achievement
of Annual Bonus Targets to a sum equivalent
to 50% of salary (from 100% of salary) and
introducing an element of guaranteed bonus
equivalent to 50% of salary (“guaranteed
element”) conditional upon the individual
remaining in employment and continuing to
positively contribute throughout the period
from the date of the agreement by the
Committee of the guaranteed element of
bonus in July 2023 and ending on 1 April
2024. The scheme did not increase the
overall potential maximum available and
secured the services of those staff for a
period, during which key assets of the
Company were being sold.
Targets for corporate objectives for 2023
(which represented 70% of the potential
Annual Bonus Targets opportunity) were not
achieved and performance against the
personal objectives resulted in the
Remuneration Committee determining that a
bonus payment equivalent to 5.5% of salary
would be made to David King under the
2023 annual bonus plan. In addition, Mr.
King was potentially eligible for a payment
equivalent to 27.5% of annual salary in
respect of that part of the guaranteed
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CORPORATE GOVERNANCE
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
element of bonus relating to 2023. An
amount of $120,000 was expensed in the
period. Mr King qualified for the payment on
1 April 2024, and it was subsequently paid
together with payment in respect of the
2023 annual bonus plan in April 2024.
Following her resignation Caroline Ackroyd
was not entitled to any element of bonus in
respect of 2023 and no bonus was paid to
her (and she will not be entitled to a bonus
under the 2024 plan).
The bonus scheme rules permit for the
Remuneration Committee to determine that
any bonus be paid 50% in cash shortly after
determination of performance for the year
and 50% in deferred shares vesting over
three years subject to continued
employment. Given the limited nature of
bonuses payable in respect of 2023, and the
administration involved in the deferral of
bonuses into share awards, the
Remuneration Committee has determined
that 100% of bonuses payable in respect of
2023 shall be paid in cash.
Any bonus for 2024 will be based on
achievements against the priorities and
strategic aims of the company for the year.
A discretionary share plan, the LTIP:
Executive Directors may receive
Performance Stock Units (PSU) Awards up
to 200% of salary subject to a minimum
three-year performance period, with vesting
subject to stretching performance targets
set by the Remuneration Committee,
followed by a holding period (resulting in a
total of a five-year period between grant
and potential exercise).
PSU awards were granted during the year to
David King and Caroline Ackroyd under the
shareholder approved XLMedia 2020 Global
Share Incentive Plan (the 2020 LTIP).
The awards were over shares with the
following values:
• David King: 58.75% of salary; and
• Caroline Ackroyd: 58.75% of salary.
These PSU Awards are subject to a three-
year performance period, with vesting
subject to two conditions: (a) performance
measured by reference to total shareholder
return over the performance period as
compared to the constituents of the FTSE
AIM 100 index, and (b) performance
measured by reference to targets for the
Company’s adjusted share price at the end
of the three-year period. The awards are
additionally subject to a two-year holding
period following the date of vesting. The
award to Caroline Ackroyd lapsed upon her
departure from the Company at the end of
March 202
4.
COMPANY’S TSR
RANKING1.
Lower than median
Median
Upper quartile or
better
PERCENTAGE OF AN
AWARD CAPABLE OF
VESTING.
0%
25%
100%
1 Calculated on a straight-line basis between 25% and 100%
The Remuneration Committee will decide
on the appropriate use of any equity
incentives during the course of the year.
NON-EXECUTIVE DIRECTORS
The Board agreed to implement a reduction of
15% in the level of fees paid to Non-Executive
Directors (including the Chair) with effect from
1 April 2023.
The fees payable for services as Non-
Executive Chair and Non-Executive Directors
following this reduction are shown below:
• Marcus Rich: $106,000
• Julie Markey: $64,000
• Ory Weihs: $51,000
• Cédric Boireau1: $37,000
1. Does not receive a director’s fee but is paid a GBP
£30,000 per annum consultancy services fee.
Marcus Rich was appointed Non-Executive
Chair of the Group by letter of appointment
dated 30 March 2022 and assumed the role on
31 March 2022. The three-year appointment is
subject to re-election at the Annual General
Meeting in accordance with the Company’s
Articles of Association and thereafter is
terminable on six months’ notice by either the
Group or Mr. Rich.
The other Non-Executive Directors are
appointed subject to re-election every three
years at the Annual General Meeting and are
terminable on three months’ notice by either
party – other than Julie Markey’s engagement
which is terminable on six months’ notice.
As it is listed on AIM, the Group is not required
to provide all the information required of a
company listed on the Official List in this
Report. However, in the interests of
transparency certain additional information has
been included as a voluntary disclosure.
The Report is unaudited, unless otherwise
stated.
Directors’ Emoluments1
$’000
Fees/Basic Salary
Bonus
LTIP
Pension
2023
Total
2022
Total
Executive Directors
David King2
Caroline Ackroyd3
Stuart Simms4
Non-Executive Directors
Marcus Rich5
Christopher Bell6
Julie Markey
Richard Rosenberg7
Jonas Mårtensson8
Ory Weihs
Cédric Boireau
419
304
-
111
-
66
47
29
54
38
24
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
42
30
-
-
-
-
-
-
-
-
485
334
-
111
-
66
47
29
54
38
240
284
608
90
28
74
69
62
60
9
Notes
1. Due to the global nature of the Group, some of the emoluments for the Directors and Non-Executive Directors listed above
are paid in currencies other than in USD and as such are exposed to foreign currency movements.
2. David King joined the Board on 1 July 2022.
3. Caroline Ackroyd joined the Board on 21 March 2022 and stepped down from the Board on 31 March 2024.
4. Stuart Simms stepped down from the Board on 30 June 2022. The figures for fees/basic salary listed above include sums
paid to Mr Simms in accordance with his contractual entitlements.
5. Marcus Rich joined the Board on 31 March 2022.
6. Christopher Bell stepped down from the Board on 19 January 2022.
7. Richard Rosenberg stepped down from the Board on 30 September 2023.
8. Jonas Mårtensson stepped down from the Board on 30 June 2023.
51
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CORPORATE GOVERNANCE
Interests in Shares
The details of all the outstanding share awards held
by the Executive Directors are shown below:
Director
Type of
Award
Date of
Grant
Number of
Shares
Performance
Conditions
Expiry
Date
Outstanding
options at the
end of 2022
Granted
in 2023
Cancelled
in 2023
Exercised
option in
2023
Outstanding
options at
the end of
2023
David King
PSU 19 August 2022
833,333
TSR1
August 2025
833,333
-
David King
PSU
12 May 2023
1,700,000
TSR
Adjusted share
price2
May 2026
-
1,700,000
Caroline
Ackroyd3
Caroline
Ackroyd3
PSU
26 May 2022
762,712
TSR1
May 2025
762,712
-
PSU
12 May 2023
1,250,000
TSR
Adjusted share
price2
May 2026
-
1,250,000
-
-
-
-
-
-
-
-
833,333
1,700,000
762,712
1,250,000
1. Three-year performance period from the date of grant with vesting dependent on Total Shareholder Return over the performance
period as compared to the constituents of the FTSE AIM 100 Index as at the date of grant. 25% of the award vests for achieving a
TSR equal to the median ranking with 100% vesting for achieving a TSR equal to an upper quartile ranking.
2. Three-year performance period, with vesting subject to the achievement of two conditions: (a) performance measured by reference
to total shareholder return over the performance period as compared to the constituents of the FTSE AIM 100 index, and (b)
performance measured by reference to targets for the Company’s adjusted share price at the end of the three-year period. The
awards to David King and Caroline Ackroyd are additionally subject to a two-year holding period following the date of vesting.
3. Caroline Ackroyd’s resignation was announced on 9 January 2024 and her employment with the Company ceased on 31 March
2024. As a result, the share awards made to her detailed above lapsed.
The table below shows the beneficial interests in the Company’s shares
of Directors serving at the end of period, and their connected persons.
Name
Marcus Rich
David King
Number of Ordinary Shares
as at 31 December 2023
Number of Ordinary Shares
as at 31 December 2022
88,458
100,000
88,458
100,000
-
Caroline Ackroyd
-
Julie Markey
Ory Weihs
63,064
63,064
8,137,444
8,137,444
Cédric Boireau¹
-
-
1. Mr Boireau is the appointed representative of Premier Investissement, XLMedia’s largest
shareholder, with a holding at 31 December of 2023 of 73,478.567 ordinary shares
(27.98% of issued share capital).
53
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XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
ASSESSING AND
MANAGING OUR RISKS
As with any business, we face risks and uncertainties.
Effective risk management is essential to support the
achievement of our strategic and operational objectives. In
this section we outline a number of the key risks faced by
the Group and steps taken to manage them.
GAMBLING LAWS AND REGULATIONS SUCH AS ONLINE
MARKETING REGULATIONS ARE CONSTANTLY EVOLVING
AND BECOMING MORE STRINGENT
The Group does not itself operate a gambling
business, but as a number of the Group’s
principal clients are online gambling operators,
the gambling regulatory environment has a
significant effect on the business of the Group
(either directly or indirectly through its effect
on the Group’s clients’ businesses), and in
particular, the Group’s marketing activities for
certain gambling operators.
In the United States, the provision of online
marketing services to gambling operators is
regulated and the Group seeks to obtain and
hold the necessary licences and/or approvals
and to ensure that its activities comply with
the terms of such licences and/or approvals.
A failure by the Group to maintain its licences
in the relevant states in the US in which it
operates could result in the Group becoming
the subject of regulatory action and losing
business with operators in the US which could
have a material adverse impact on the Group’s
reputation, business, its strategy to develop its
presence in US sports gaming and its financial
position.
Furthermore, the Directors cannot predict
when (or if) an established regulatory or
legislative regime in any jurisdiction will
change, what changes (if any) will be made
and what effect (if any) such changes will have
on the Group’s online marketing activities.
Investors should be aware that any such
changes could have a material adverse effect
on the Group’s business, financial position and
future prospects.
Any future legal proceedings against the Group
relating to the provision of online marketing
services for gambling operators could involve
substantial litigation, expense, penalties, fines,
injunctions or other prohibitions being invoked
against it or its Directors and Officers or others
and divert the attention of key Executives. The
outcome of any litigation cannot be predicted.
THE ACTIVITIES OF THE GROUP MAY BE ADVERSELY
AFFECTED BY CHANGES TO TAXATION REGIMES
APPLICABLE TO GAMBLING WINNINGS
Although in many jurisdictions gambling
winnings are currently not subject to income
tax or are taxed at low rates, this is not
universally the case and future regulatory
regimes may introduce such taxation and make
participation less attractive to players in those
jurisdictions, in turn having an effect of the
profitability of the Group.
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CORPORATE GOVERNANCE
FAILURE OF SYSTEMS AND CONTROLS COULD EXPOSE
THE GROUP TO REGULATORY RISK
The technological solutions that gambling
operators have in place to block the access to
services by customers located in certain
jurisdictions may fail. Operators often block
access to their products to players located in
certain jurisdictions (and, specifically, for those
operating in the United States, to states other
than those in which the gambling operator is
licensed). There is no guarantee that the
technical restrictions which the operators
implement will be effective, which could place
such operators in breach of the relevant laws
and regulations and/or in breach of specific
licences they hold, which would also have a
detrimental effect on the financial position of
such operators and, potentially, the Group.
THE GROUP MUST CONTINUE TO INNOVATE IN ORDER TO
COMPETE
The Group must offer and develop new
features and perform regular system updates
that will continue to attract a broad range of
users in order to continue generating traffic to
customers’ websites. If the Group is unable to
adapt its technology or its offering to
consumers to ensure that it continues to
generate significant volumes of traffic to
customers, its revenue and profitability could
be significantly reduced which would
negatively impact upon the Group’s financial
performance.
The Group uses business intelligence tools in
order to track the flow of traffic to customers
and analyses its quality and conversion into
revenue using these tools to improve return on
investment. Any inability of the Group to
access these tools, for whatever reason, could
have a material impact on the Group’s ability to
analyse its business which could have an
adverse effect on the financial position of the
Group.
THE GROUP IS RELIANT ON ITS TOP SIX CUSTOMERS FOR
A SIGNIFICANT PROPORTION OF ITS REVENUES
The Group’s top six customers generated 46%
of Group revenues. To the extent that the
businesses of these customers deteriorate, or
are adversely affected, whether by any of the
issues described in this section or otherwise, or
change the way in which they work with
affiliates or XLMedia in particular, the Group’s
revenue streams from these sources may also
be adversely impacted.
MANY OF THE GROUP’S CUSTOMER AGREEMENTS HAVE
A SHORT DURATION AND/OR CAN BE TERMINATED ON
SHORT NOTICE
Many of the contracts that the Group has
entered into have a short duration and/or can
be terminated on short notice or at will. To the
extent that customers terminate such
contracts, this could have an immediate and
material adverse effect on the financial position
of the Group.
THE GROUP IS RELIANT ON OPERATOR CUSTOMER DATA
IN RELATION TO ESTABLISHING ITS REVENUES
The Group relies on information provided by its
operator customers in relation to commissions
earned by the Group as a result of players’
activity. Inadequate information to properly
validate commission payments due to the
Group resulting from the lack of advanced data
systems, with a heavy reliance on third party
(customers’) systems, may result in loss of
revenue to the Group.
THE GROUP’S US INCOME IS PREDOMINANTLY BASED ON
COST PER ACQUISITION
The Group’s US income is typically earned from
introducing betting customers to betting
operators and is paid a one-off fee (CPA) for
the introduction. A change in the level of
investment in customer acquisition by betting
operators, or a change in the basis on which
the Group earns its income, for example to a
smaller initial payment and an ongoing revenue
share, may result in a reduction in revenues for
the group during the transition period. The
timing and scale of such change is uncertain.
55
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THE GROUP’S US INCOME INCLUDES SIGNIFICANT
REVENUES FROM NEW STATE LAUNCHES
The Group’s US income benefits from new
revenue streams following a new state
legalising online sports betting or online casino
gambling. The timing and scale of state
launches is uncertain. There can be no
certainty that the number and scale of state
launches in a given period will be comparable
period on period, giving rises to potential
spikes and dips in period on period revenues
and profits.
THE GROUP IS RELIANT ON ITS CUSTOMERS
MAINTAINING AND ENHANCING THEIR BRANDS
The Group’s future success is dependent upon
its customers’ performance, maintenance,
marketing and further building of their brands.
Marketing and enhancing these brands will
require significant expenses. As certain
markets mature or become more competitive,
the investment in marketing and customer
acquisition of these brands may not be
maintained.
MINIMUM GUARANTEE PAYMENT RISK
The Group has one contract with a Media
Partner in which the Group is committed to
make minimum guarantee payments regardless
of the partnership’s performance. In the event
that the commercial arrangement does not
perform as anticipated, the Group could be
adversely affected by the requirement to fulfil
minimum guarantee payments.
In 2023, the Group has incurred $3.1 million in
minimum guarantees on this partner contract,
in excess of the profit share generated from
trading in the period. This contract ends in
August 2024.
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
SEARCH ENGINE ALGORITHM UPDATES AND MANUAL
ACTIONS RESULTING IN DE-RANKING OF WEBSITES MAY
HAVE AN ADVERSE MATERIAL IMPACT ON THE GROUP
The Group relies on search engines, mainly
Google, which use specific algorithms that
decide a website’s ranking to determine the
discoverability of the website and its content.
At any time, Google reserves the right to
update its ranking algorithms and Terms of
Service. In extreme instances, Google will notify
a website of a manual action where it deems
specific webpages to be in violation of it terms
and will de-rank content until it deems the issue
has been resolved. Any material update to
those algorithms or any manual actions taken
by search engine entities may damage the
ranking of the Group’s websites in search
results and its presence in search-related
products like Google News and Google
Discover. This would materially disrupt traffic to
one or more of the Group’s websites and
decrease the amount of revenue generated.
Any delay in the Group making a full recovery,
or if the Group was unable to fully recover
following such an update/manual action, it
could have a material adverse effect on the
financial position of the Group.
On 5 May 2024, Google commenced the
process of applying manual actions which
impacted the rankings of a number of media
organisations’ websites (including a small
number of the Group’s Media Partners). These
manual adjustments have been applied where a
website is judged to feature third-party content
that promotes coupons and offers, including in
some instances online casino and sports
betting offers that are not consistent with the
media organisation’s brand authority. These
manual adjustments may impact the visibility of
content produced by these websites in Google
Search and thereby reduce revenues. XLMedia’s
Owned and Operated websites have not been
affected.
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XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
CORPORATE GOVERNANCE
THE GROUP IS RELIANT ON MAINTAINING ITS
COMPUTER AND COMMUNICATION SYSTEMS AND
COULD BE ADVERSELY AFFECTED BY A FAILURE OF
ITS INFORMATION SECURITY POLICY OR DISASTER
RECOVERY STRATEGY
The successful operation of the Group’s
business depends upon it and its operators
maintaining the integrity and operation of its
and their respective computer and
communication systems. However, these
systems are vulnerable to damage or
interruption from events which are beyond the
Group’s control such as fire and flood, power
loss or telecommunications or data network
failure and interruptions to internet system
integrity generally, as the result of attacks by
computer hackers, viruses or other types of
security breaches. The Group has in place
disaster recovery systems and security
measures for events of failure, disruption of, or
damage to, the Group’s network or IT systems
or events of security breaches, hacking or other
malicious acts and/or cybercrime to the
websites owned by the group. Such systems
may not, however, be sufficient to ensure that
the Group is able to carry on its business in the
ordinary course if they fail or are disrupted,
such that the Group may not be able to
anticipate, prevent or mitigate any material
adverse effect of any failure on its operations
or financial performance.
THE GROUP IS RELIANT ON THIRD PARTY SUPPLIERS
The Group relies on hosting providers,
marketing support services, communications
carriers and other third parties for the day-to-
day operation of its business. Any failure by
one or more of these third parties may
jeopardise the business and operations of the
Group and may have a material adverse impact
on its financial performance.
THE GROUP RELIES ON ITS UNDERLYING CUSTOMERS
HAVING EFFECTIVE INTERNAL CONTROLS
The online gambling industry may be
vulnerable to attack by customers through
fraud on the operators’ websites. The Group is
reliant on operators having effective internal
controls to prevent fraud as it derives the
majority of its revenue from fixed payments
with operators (with a further element from
revenue sharing arrangements) that would be
adversely impacted by such activities.
Furthermore, such attempts, if not detected
and stopped, could result in a loss of
confidence in the customer base of such
operator websites and could lead to customers
leaving such operator’s website in favour of a
competitor, which may not be an operator with
whom the Group works. The Group cannot
ensure that operators’ financial processes and
reporting systems provide reliable financial
reports and effectively prevent fraud.
SALE OF EUROPE AND CANADA ASSETS
Following the sale of the Group’s Europe and
Canada assets it received an initial payment of
$20.0 million. A further $10.0 million is due on
the date following six months from completion
with a further $7.5 million due on the first
anniversary. Non-payment of these amounts
would impact the Group’s cashflow and ability
to return cash to shareholders, and could have
a material adverse impact on the position of
the Group.
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FINANCIAL
STATEMENTS
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INDEPENDENT
AUDITORS’ REPORT
FINANCIAL STATEMENTS
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
TO THE SHAREHOLDERS OF XLMEDIA PLC
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL
STATEMENTS
Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a
basis for our opinion.
Revenue recognition
Description of key audit matter
Description of auditor’s response
OPINION
We have audited the consolidated financial
statements of XLMedia PLC and its subsidiaries
(the Group), which comprise the consolidated
statements of financial position as of 31 December
2023 and 2022, and the consolidated statements
of profit or loss and other comprehensive income,
consolidated statements of changes in equity and
consolidated statements of cash flows for each of
the years then ended, and notes to the consolidated
financial statements, including material accounting
policy information.
In our opinion, the accompanying consolidated
financial statements present fairly, in all material
respects, the consolidated financial position of
the Group as of 31 December 2023 and 2022
and its consolidated financial performance and its
consolidated cash flows for each of the years then
ended in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the
European Union.
BASIS FOR OPINION
We conducted our audit in accordance with
International Standards on Auditing (ISAs). Our
responsibilities under those standards are further
described in the Auditor’s responsibilities for the
audit of the consolidated financial statements
section of our report. We are independent of the
Group in accordance with the International Ethics
Standards Board for Accountants’ International
Code of Ethics for Professional Accountants
(including International Independence Standards)
(IESBA Code), and we have fulfilled our other
ethical responsibilities in accordance with the IESBA
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KEY AUDIT MATTERS
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the consolidated financial statements of
the current period. These matters were addressed in
the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion
on these matters. For each matter below, our
description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described
in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of
our report, including in relation to these matters.
Accordingly, our audit included the performance of
procedures designed to respond to our assessment
of the risks of material misstatement of the
consolidated financial statements. The results of
our audit procedures, including the procedures
performed to address the matters below, provide
the basis for our audit opinion on the accompanying
consolidated financial statements.
Domains and
Websites and other
intangible assets –
impairment test
Revenues which amounted to
approximately USD 51 million in
2023 (including USD 0.6 million from
discontinued operations) are significant
to the consolidated financial statements
based on their quantitative materiality.
As such, there is inherent risk that
revenuesmay be improperlyrecognised,
inflated or misstated.
Recognition of revenues in the accounts
of the Group is a highly automated
process. The Group is heavily reliant on
the reliability and continuity of its in-house
IT platform to support automated data
processing in its recognition and recording
of revenues.
As of 31 December 2023, the total
net carrying amount of domains and
websites with indefinite useful life and
other intangible assets is approximately
USD 63 million. In accordance with IFRS
as adopted by the European Union, the
Group is required to annually test these
assets for impairment. As a result of the
impairment test, the Company recorded a
net impairment loss of USD 43 million.
Taxation
The Group’s operations are subject
to income tax in various jurisdictions.
Taxation is significant to our audit because
the assessment process is complex and
judgmental, and the amounts involved
are material to the consolidated financial
statements as a whole.
In order to gain the required level of
assurance, we performed substantive
audit procedures relating to the recognition
and recording of revenues, including tests
of reconciliations from underlying data to
the financial accounts. IT audit specialists
were deployed to assist in understanding
the design and operation of the relevant
IT systems and in performing various data
analyses in order to test completeness,
accuracy and timing of the recognition of
revenues.
We also evaluated theadequacy of
the disclosures provided in relation to
revenues in Notes 2,4 and 8 to the
consolidated financial statements.
Our audit procedures included, among
others, the involvement of valuation
experts, examinations and evaluations of
the assumptions and methodologies used
by the Group. In particular, we tested the
Group’s determination of the recoverability
and the forecasted cash flows of these
assets by reviewing management’s
forecasts of revenues and profitability. We
assessed the reliability of these forecasts
through, among others, a review of actual
performance against previous forecasts.
We evaluated and tested the discount
rates and attribution of expenses, and
we considered the reasonableness of
management’s other assumptions. We
also verified the adequacy of the disclosure
of the assumptions and other data in
Note 11 to the consolidated financial
statements.
We included in our engagement team
tax specialists to analyse and evaluate
the assumptions used to determine tax
provisions. We evaluated and tested
the underlying support and data for
the calculation of income taxes in the
various jurisdictions. We also assessed
the adequacy of the Group’s disclosures
in Notes 7 and 17 to the consolidated
financial statements.
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main headingmain heading 2 FINANCIAL STATEMENTS
INDEPENDENT
AUDITORS’ REPORT
CONTINUED
OTHER INFORMATION INCLUDED IN THE GROUP’S 2023
ANNUAL REPORT
Other information consists of the information
included in the Annual Report, other than the
consolidated financial statements and our auditor’s
report thereon. Management is responsible for the
other information.
Our opinion on the financial statements does not
cover the other information and we will not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated
financial statements, our responsibility is to read the
other information identified above when it becomes
available and, in doing so, consider whether the
other information is materially inconsistent with the
consolidated financial statements or our knowledge
obtained in the audit or otherwise appears to be
materially misstated.
RESPONSIBILITIES OF MANAGEMENT AND THE BOARD
OF DIRECTORS FOR THE CONSOLIDATED FINANCIAL
STATEMENTS
Management is responsible for the preparation
and fair presentation of the consolidated financial
statements in accordance with IFRS as adopted by
the European Union, and for such internal control as
management determines is necessary to enable the
preparation of consolidated financial statements that
are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements,
management is responsible for assessing the
Group’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 management either intends to
liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
The Board of Directors is responsible for overseeing
the Group’s financial reporting process.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance
about whether the consolidated financial statements
as a whole are free from material misstatement,
whether due to fraud or error, and to issue
an auditor’s 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 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
consolidated financial statements.
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FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
As part of an audit in accordance with ISAs, we
exercise professional judgment and maintain
professional skepticism throughout the audit. We
also:
➤ Identify and assess the risks of material
misstatement of the consolidated financial
statements, whether due to fraud or error,
design and perform audit procedures responsive
to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher
than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal
control.
➤ Obtain an understanding of internal control
relevant to the audit in order to design
audit procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on the effectiveness of
the Group’s internal control.
➤ Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by management.
➤ Conclude on the appropriateness of
management’s use of the going concern basis
of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists
related to events or conditions that may cast
significant doubt on the Group’s ability to
continue as a going concern. If we conclude that
a material uncertainty exists, we are required
to draw attention in our auditor’s report to
the related disclosures in the consolidated
financial statements or, if such disclosures
are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence
obtained up to the date of our auditors’ report.
However, future events or conditions may
cause the Group to cease to continue as a going
concern.
➤ Evaluate the overall presentation, structure and
content of the consolidated financial statements,
including the disclosures, and whether the
consolidated financial statements represent the
underlying transactions and events in a manner
that achieves fair presentation.
➤ Obtain sufficient appropriate audit evidence
regarding the financial information of the entities
or business activities within the Group to
express an opinion on the consolidated financial
statements. We are responsible for the direction,
supervision and performance of the Group
audit. We remain solely responsible for our audit
opinion.
We communicate with the Board of Directors
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Board of Directors with a
statement that we have complied with relevant
ethical requirements regarding independence, and
to communicate with them all relationships and
other matters that may reasonably be thought to
bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the Board of
Directors, we determine those matters that were of
most significance in the audit of the consolidated
financial statements of the current period and
are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or
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main headingmain headingmain heading 2main heading 2 FINANCIAL STATEMENTS
INDEPENDENT
AUDITORS’ REPORT
CONTINUED
FINANCIAL STATEMENTS
CONSOLIDATED
FINANCIAL STATEMENTS
regulation precludes public disclosure about the
matter or when, in extremely rare circumstances,
we determine that a matter should not be
communicated in our report because the adverse
consequences of doing so would reasonably be
expected to outweigh the public interest benefits of
such communication.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
The consolidated financial statements have been
prepared in accordance with the requirements of the
Companies (Jersey) Law 1991.
The partner in charge of the audit resulting in this
independent auditor’s report is Mr. Eli Barda.
Tel-Aviv, Israel
16 May 2024
KOST FORER GABBAY & KASIERER
A Member of Ernst & Young Global
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Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 December 2023
Continuing operations
Revenue 2
Expenses:
Operating
Sales and marketing
Depreciation and amortisation
Net impairment charge
Operating (loss)/profit
Finance expenses
Finance income
Loss on disposal of assets
Other income
(Loss)/profit before taxes on income
Tax charge
(Loss)/profit for the year from continuing operations
Discontinued operations
Notes
4
5
11, 12
11c
6
6
9
7
Loss for the year from discontinued operations (net of tax)
8
Net loss for the year attributable to the owners of the Company
Other comprehensive expenses that may be reclassified to profit
or loss in subsequent periods:
2023
$000
20221
$000
50,329
70,935
(25,555)
(18,602)
(6,477)
(44,624)
(44,929)
(233)
20
(212)
463
(44,891)
(627)
(45,518)
(1,527)
(47,045)
(34,629)
(22,824)
(7,313)
–
6,169
(1,751)
5
–
566
4,989
(1,604)
3,385
(12,824)
(9,439)
Exchange differences on translation of foreign operations
429
(372)
Other comprehensive expenses that will not be reclassified to
profit or loss in subsequent periods:
Impairment of equity investment
Total other comprehensive income/(expenses)
Total comprehensive loss for the year attributable to the owners
of the Company
(Loss)/earnings per share attributable to the owners of the
Company (in $):
Basic and diluted (loss)/earnings per share from continuing operations
Basic and diluted loss per share
(242)
187
–
(372)
(46,858)
(9,811)
10
10
(0.173)
(0.179)
0.009
(0.036)
1 Comparative data for the year ended 31 December 2022 has been adjusted to reflect the reclassification of the Blueclaw business
to discontinued operations in line with IFRS 5 ’Non-current Assets Held for Sale and Discontinued Operations’.
2 Total Group revenue including discontinued operations is $50,960,000 (2022: $73,738,000). See Note 4 for further details.
The accompanying notes are an integral part of the consolidated financial statements.
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main headingmain heading 2main headingmain heading 2main headingmain heading 2
FINANCIAL STATEMENTS
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
Notes
2023
$000
2022
$000
11
12
20a
13
13
14a
14b
18
18
16
17
63,345
1,761
–
78
65,184
103
6,605
1,315
4,692
12,715
77,899
–
122,071
860
(69,353)
53,578
937
1,411
–
2,348
108,581
2,277
242
75
111,175
342
5,699
3,454
10,411
19,906
131,081
–
122,071
500
(22,308)
100,263
1,177
36
3,884
5,097
Consolidated statement of financial position
as at 31 December 2023
Non-current assets
Intangible assets and goodwill
Property and equipment
Other financial assets
Long-term deposits
Current assets
Short-term deposits
Trade receivables
Other receivables
Cash and cash equivalents
Total assets
Equity and liabilities
Equity
Share capital 1
Share premium
Capital reserve
Accumulated deficit
Total equity
Non-current liabilities
Lease liabilities
Deferred taxes
Deferred consideration
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Current liabilities
Trade payables
Deferred consideration
Consideration payable on intangible assets
Other liabilities and accounts payables
Current tax provision
Current maturities of lease liabilities
Total liabilities
Total equity and liabilities
1 Less than $1,000.
Notes
11
15
16
2023
$000
4,613
3,954
3,500
3,974
5,696
236
21,973
24,321
77,899
2022
$000
3,655
3,969
3,000
10,241
4,505
351
25,721
30,818
131,081
The accompanying notes are an integral part of the consolidated financial statements. The financial
statements were approved by the Board of Directors on 16 May 2024 and were signed on its behalf by:
David King
Chief Executive Officer
Marcus Rich
Chairman
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main headingmain headingmain heading 2main heading 2main headingmain headingmain heading 2main heading 2
FINANCIAL STATEMENTS
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
Consolidated statement of changes in equity
for the year ended 31 December 2023
Consolidated statement of cash flows
for the year ended 31 December 2023
(242)
(47,045)
(46,858)
Proceeds from sale of discontinued operation
Capital
reserve
from share-
based
transactions
$000
Capital
reserve
from the
translation
of a foreign
operation
$000
Share
capital1
$000
Share
premium
$000
Other
Capital
reserves2
$000
Accumulated
deficit
$000
Total
equity
$000
As at 1 January
2023
Loss for the year
Other
comprehensive
income
Total comprehensive
loss
Cost of share-based
payments3
As at 31 December
2023
As at 1 January
2022
Loss for the year
Other
comprehensive loss
Total comprehensive
loss
Cost of share-based
payments3
As at 31 December
2022
1 Less than $1,000.
–
–
–
–
–
–
–
–
–
–
–
–
122,071
–
–
–
173
3,514
–
(388)
(2,626)
(22,308)
100,263
–
–
(47,045)
(47,045)
–
–
–
429
429
–
(242)
–
187
–
–
173
122,071
3,687
41
(2,868)
(69,353)
53,578
122,071
2,656
–
–
–
–
(16)
–
(372)
(372)
–
–
–
858
–
(2,626)
(12,869)
109,216
–
–
–
–
(9,439)
(9,439)
(372)
(9,439)
(9,811)
–
858
122,071
3,514
(388)
(2,626)
(22,308)
100,263
2 Other Capital reserves relate to transactions with non-controlling interests and financial assets at fair value through other
comprehensive income.
3 See Note 19 for further details.
The accompanying notes are an integral part of the consolidated financial statements.
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Cash flows from operating activities
Cash generated from operations
Interest paid
Interest received
Income tax paid
Income tax received
Net cash inflow from operating activities
Cash flows from investing activities
Proceeds on disposal of property and equipment Proceeds
from sale of intangible assets
Purchase of property and equipment
Purchase of and additions to systems, software and licences
Acquisition of and additions to to domains, websites and
other intangible assets
Short-term and long-term deposits (net)
Net cash outflow from investing activities
Cash flows from financing activities
Payment of principal portion of lease liabilities
Payment of deferred consideration
Payment of contingent consideration on intangible assets
Payment of consideration on intangible assets
Net cash outflow from financing activities
Net decrease in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
Notes
21
11
9
11
20
2023
$000
9,905
(203)
2
(5,134)
–
4,570
4,000
2,050
(14)
(3,500)
(5,678)
236
(2,906)
(354)
(4,004)
(371)
(3,000)
(7,729)
(6,065)
346
10,411
4,692
2022
$000
14,647
(310)
5
(876)
2,287
15,753
83
–
(62)
(3,000)
(6,701)
1,824
(7,856)
(401)
(15,371)
–
(3,000)
(18,772)
(10,875)
(1,151)
22,437
10,411
The accompanying notes are an integral part of the consolidated financial statements.
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main headingmain headingmain heading 2main heading 2main headingmain headingmain heading 2main heading 2
FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
1. GENERAL
a. Corporate information
XLMedia PLC (“the Group”) is a global performance
publisher listed on the London Stock Exchange
Alternative Investment Market (“AIM”). The Group
was incorporated in Jersey and its registered office
is 12 Castle Street, St. Helier Jersey, JE2 3RT
(registration number 114467).
b. Definitions
a.
Basis of presentation of the consolidated
financial statements
i. Compliance with IFRS
The consolidated financial statements have been
prepared in accordance with International Financial
Reporting Standards (“IFRS”) adopted by the
European Union, and issued by the International
Accounting Standards Board (“IASB”), in accordance
with the requirements of the Companies (Jersey)
Law 1991.
In these financial statements, the following terms
will be used:
ii. Historical cost convention
Euro
British Pound Sterling
The financial statements have been prepared on a
historical cost basis, except for the following:
International Financial Reporting
Standards as adopted by the
European Union
New Israeli Shekel
As defined by IAS 24 ‘Related Party
Disclosures’
–
–
certain financial assets and liabilities (including
derivative instruments) – measured at fair value
or revalued amount; and
assets held for sale – measured at the lower of
carrying amount and fair value less costs to sell.
EUR
GBP
IFRS
NIS
Related parties
Subsidiaries
U.S.
U.K.
USD/$
–
–
–
–
–
–
–
–
–
Entities controlled (as defined in
IFRS 10 ‘Consolidated Financial
Statements’) by the Group and
whose financial statements are
consolidated into the Group. For
a list of the main subsidiaries, see
Note 23
United States
United Kingdom
U.S. dollar, all values are rounded
to the nearest thousand ($000),
except when otherwise indicated
2. ACCOUNTING POLICY INFORMATION
The following accounting policies have been
applied consistently in dealing with items which
are considered significant in relation to the Group’s
financial statements, unless otherwise stated.
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iii. New accounting standards, amendments
and interpretations adopted by the Group
There are no new major standards or amendments
applicable for the Group.
The Group has assessed IAS 1 ‘Presentation of
Financial Statements’ and concluded it does not
have a significant impact on the Group’s financial
statements.
b. Basis of consolidation
The consolidated financial statements comprise
the financial statements of companies that are
controlled by the parent company (subsidiaries).
Control is achieved when the Group is exposed,
or has rights, to variable returns from its
involvement with the investee and has the ability
to affect those returns through its power over the
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
value of the acquiree’s net identifiable assets. Direct
acquisition costs are expensed as incurred.
Contingent consideration is recognised at fair value
on the acquisition date and classified as a financial
asset or liability in accordance with IFRS 9 ‘Financial
Instruments’. Subsequent changes in the fair value
of the contingent consideration are recognised in
the statement of profit or loss. If the contingent
consideration is classified as an equity instrument,
it is measured at fair value on the acquisition date
without subsequent remeasurement.
Goodwill is initially measured at cost, which
represents the excess of the acquisition
consideration and the amount of non-controlling
interests over the net identifiable assets acquired
and liabilities assumed. If the resulting amount is
negative, the acquirer recognises the resulting gain
on the acquisition date. After initial recognition,
goodwill is measured at cost less any accumulated
impairment losses.
d.
Functional currency, presentation currency and
foreign currency
Functional currency and presentation currency
Items included in the financial statements of each
of the Group’s entities are measured using the
currency of the primary economic environment in
which the entity operates (’the functional currency’).
The consolidated financial statements are presented
in USD, which is the Group’s functional and
presentation currency.
investee. Potential voting rights are considered
when assessing whether an entity has control.
The consolidation of the financial statements
commences on the date on which control is
obtained and ends when such control ceases.
The financial statements of the Group and of the
subsidiaries are prepared as of the same dates and
periods. The consolidated financial statements of
the Group are prepared using consistent accounting
policies by all companies in the Group. Significant
intragroup balances and transactions and gains
or losses resulting from intragroup transactions
are eliminated in full in the consolidated financial
statements.
c. Business combinations and goodwill
Business combinations are accounted for by
applying the acquisition method. The consideration
transferred for the acquisition of a subsidiary
comprises the:
–
–
fair values of the assets transferred
liabilities incurred to the former owners of the
acquired business
– equity interests issued by the Group
–
–
fair value of any asset or liability resulting from a
contingent consideration arrangement, and
fair value of any pre-existing equity interest in
the subsidiary.
The cost of the acquisition is measured at the
fair value of the consideration transferred on
the date of acquisition with the addition of non-
controlling interests in the acquiree. In each
business combination, the Group chooses whether
to measure the non-controlling interests in the
acquiree based on their fair value on the date of
acquisition or at their proportionate share in the fair
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NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
Transactions and balances
ii.
Foreign currency transactions are translated into the
functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such
transactions, and from the translation of monetary
assets and liabilities denominated in foreign
currencies at year end exchange rates, are generally
recognised in statement of profit or loss. They are
deferred in equity if they relate to qualifying cash
flow hedges and qualifying net investment hedges
or are attributable to part of the net investment in
a foreign operation. Foreign exchange gains and
losses that relate to borrowings are presented in
the statement of profit or loss, within finance costs.
All other foreign exchange gains and losses are
presented in the statement of profit or loss on a net
basis within other gains/(losses).
Non-monetary items that are measured at fair
value in a foreign currency are translated using the
exchange rates at the date when the fair value was
determined. Translation differences on assets and
liabilities carried at fair value are reported as part of
the fair value gain or loss.
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
iii. 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 the statement of 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.
Group companies
e. Cash equivalents
The results and financial position of foreign
operations (none of which has the currency of a
hyperinflationary economy) that have a functional
currency different from the presentation currency
are translated into the presentation currency as
follows:
i.
assets and liabilities for each statement of
financial position presented are translated at
the closing rate at the date of that statement of
financial position,
Cash is cash on hand and demand deposits. Cash
equivalents are highly liquid investments, including
unrestricted short-term bank deposits with an
original maturity of three months or less that are
readily convertible to known amounts of cash and
which are subject to insignificant risk of changes in
value.
Investments normally only qualify as cash equivalent
if they have a short maturity of three months or less
from the date of acquisition.
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f. Short-term and long-term deposits
Short-term bank deposits are deposits with an
original maturity of more than three months from the
investment date and do not meet the definition of
cash equivalents. Long-term deposits are deposits
with a maturity of more than twelve months from
the reporting date. The deposits are presented
according to their terms of deposit.
g. Revenue recognition
The Group generates revenues mainly from referred
players who are driven by either the Group’s
premium branded websites or partners. The main
revenue streams are: cost per acquisition (“CPA”),
revenue-share fees or a combination of both, which
is referred to as a hybrid.
CPA fees are fixed-rate fees owed for each player
who registers and usually deposits a minimum
balance on the operator’s site, and they are
recognised when earned upon acceptance of the
referral by the operator.
Revenue-share fees represent a set percentage
of net revenues generated over the lifetime of
the referred player. The Group has no material
obligations for discounts, incentives or refunds
of commissions subsequent to completion of
performance obligations.
h. Taxation
Current or deferred taxes are recognised in the
statement of profit or loss, except to the extent that
they relate to items that are recognised in other
comprehensive income or equity.
Current taxes
The current tax liability is measured using the
tax rates and tax laws that have been enacted or
substantively enacted by the reporting date, as well
as adjustments required in connection with the tax
liability in respect of previous years.
Deferred taxes
Deferred taxes are computed in respect of
temporary differences between the carrying
amounts in the financial statements and the
amounts attributed for tax purposes. Deferred taxes
are measured at the tax rate that is expected to
apply when the asset is realised or the liability is
settled based on tax laws that have been enacted or
substantively enacted by the reporting date.
Deferred tax assets are reviewed at each reporting
date and reduced to the extent that it is not
probable that they will be utilised. Deductible
temporary differences for which deferred tax assets
had not been recognised are reviewed at each
reporting date, and a respective deferred tax asset
is recognised to the extent that their utilisation is
probable. Taxes that would apply in the event of
the disposal of investments in investees have not
been taken into account in computing deferred
taxes, as long as the disposal of the investments in
investees is not probable in the foreseeable future.
Also, deferred taxes that would apply in the event
of distribution of earnings by investees as dividends
have not been taken into account in computing
deferred taxes, since the distribution of dividends
does not involve an additional tax liability or since
it is the Group’s policy not to initiate distribution of
dividends from a subsidiary that would trigger an
additional tax liability.
Deferred taxes are offset if there is a legally
enforceable right to offset a current tax asset
against current tax liability, and the deferred taxes
relate to the same taxpayer and the same taxation
authority.
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NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
i. Leases
The Group accounts for a contract as a lease when
the contract terms convey the right to control the
use of an identified asset for a period of time in
exchange for consideration.
Recognition of assets and liabilities
For leases in which the Group is the lessee, the
Group recognises on the commencement date of
the lease a right-of-use asset and a lease liability,
excluding leases whose term is up to 12 months
and leases for which the underlying asset is of
low value. For these excluded leases, the Group
has elected to recognise the lease payments as
an expense in the statement of profit or loss on a
straight-line basis over the lease term.
In measuring the lease liability, the Group has
elected to apply the practical expedient and does
not separate the lease components from the
non-lease components (such as management
and maintenance services, etc.) included in a
single contract. On the commencement date, the
lease liability includes all unpaid lease payments
discounted at the interest rate implicit in the lease,
if that rate can be readily determined, or otherwise
using the Group’s incremental borrowing rate. After
the commencement date, the Group measures
the lease liability using the effective interest rate
method. The right-of-use asset is recognised
in an amount equal to the lease liability plus
lease payments already made on or before the
commencement date and initial direct costs incurred.
The right-of-use asset is measured applying the
cost model and depreciated over the shorter of
its useful life or the lease term (see j below). The
Group tests for impairment of the right- of-use
asset whenever there are indications of impairment
pursuant to the provisions of IAS 36 ‘Impairment of
Assets’.
Variable lease payments that depend on an
index
The Group uses the index rate prevailing on the
commencement date to calculate the future lease
payments. For leases in which the Group is the
lessee, the aggregate changes in future lease
payments resulting from a change in the index are
discounted (without a change in the discount rate
applicable to the lease liability) and recorded as an
adjustment of the lease liability and the right-of-use
asset, only when there is a change in the cash flows
resulting from the change in the index (that is, when
the adjustment to the lease payments takes effect).
Lease extension and termination options
A non-cancellable lease term includes both the
periods covered by an option to extend the lease
when it is reasonably certain that the extension
option will be exercised and the periods covered
by a lease termination option when it is reasonably
certain that the termination option will not be
exercised.
In the event of a significant change in the expected
exercise of the lease extension option or in the
expected non-exercise of the lease termination
option, the Group remeasures the lease liability
based on the revised lease term using a revised
discount rate as of the date of the change in
expectations. The total change is recognised in the
carrying amount of the right-of-use asset until it
is reduced to zero, and any further reductions are
recognised in the statement of profit or loss.
Lease modifications
If a lease modification does not reduce the scope of
the lease and does not result in a separate lease, the
Group remeasures the lease liability based on the
modified lease terms using a revised discount rate
as of the modification date and records the change
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
k.
Intangible assets
Separately acquired intangible assets are measured
on initial recognition at cost, including directly
attributable costs. Intangible assets acquired in a
business combination are measured at fair value
at the acquisition date. Expenditures relating to
internally generated intangible assets, excluding
capitalised development costs, are recognised in the
statement of profit or loss when incurred.
Intangible assets with a finite useful life are
amortised over their useful life and reviewed for
impairment whenever there is an indication that the
asset may be impaired. The amortisation period and
the amortisation method for an intangible asset are
reviewed at least at each year-end.
The Group’s assets include computer systems
comprising hardware and software. Software
forming an integral part of the hardware to the
extent that the hardware cannot function without
the programs installed on it is classified as property
and equipment. In contrast, software that adds
functionality to the hardware is classified as an
intangible asset.
Amortisation is calculated on a straight-line basis
over the useful life of the assets at annual rates as
follows:
Systems and software (purchased and in-
house development cost)
Non-competition and Agencies
Relationships
%
33
33 – 50
in the lease liability as an adjustment to the right-of-
use asset.
If a lease modification reduces the scope of the
lease, the Group recognises a gain or loss arising
from the partial or full reduction of the carrying
amount of the right-of-use asset and the lease
liability. The Group subsequently remeasures the
carrying amount of the lease liability according to
the revised lease terms at the revised discount rate
as of the modification date and records the change
in the lease liability as an adjustment to the right-of-
use asset.
j. Property and equipment
Property and equipment are measured at
cost, including directly attributable costs less
accumulated depreciation. Depreciation is calculated
on a straight-line basis over the useful life of the
assets at annual rates as follows:
Office furniture and equipment
Computers and peripheral equipment
%
10
33
Right of use leased assets and leasehold
improvement (over the lease term)
10 – 50
Right of use leased assets, and leasehold
improvements are depreciated on a straight-line
basis over the shorter lease term (including any
extension option held by the Group and intended
to be exercised) and the asset’s expected life. The
useful life, depreciation method and residual value
of an asset are reviewed at least each year-end and
any changes are accounted for prospectively as a
change in accounting estimate.
Depreciation of an asset ceases at the earlier of the
date that the asset is classified as held for sale and
the date that the asset is derecognised. An asset
is derecognised on disposal or when no further
economic benefits are expected from its use.
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FINANCIAL STATEMENTS
Intangible assets (domains and websites) with
indefinite useful lives are not systematically
amortised and are tested for impairment annually or
whenever there is an indication that the intangible
asset may be impaired. The useful life of these
assets is reviewed annually to determine whether
their indefinite life assessment continues to be
supportable. If the events and circumstances do not
continue to support the assessment, the change
in the useful life assessment from indefinite to
finite is accounted for prospectively as a change in
accounting estimate and on that date, the asset is
tested for impairment. Commencing from that date,
the asset is amortised systematically over its useful
life.
Research expenditures are recognised in profit or
loss when incurred. An intangible asset arising from
a development project or from the development
phase of an internal project is recognised if the
Group can demonstrate: the technical feasibility
of completing the intangible asset so that it will
be available for use or sale; the Group’s intention
to complete the intangible asset and use or sell
it; the Group’s ability to use or sell the intangible
asset; how the intangible asset will generate future
economic benefits; the availability of adequate
technical, financial and other resources to complete
the intangible asset; and the Group’s ability to
measure reliably the expenditure attributable to
the intangible asset during its development. The
asset is measured at cost less any accumulated
amortisation and any accumulated impairment
losses. Amortisation of the asset begins when
development is completed and the asset is available
for use. The asset is amortised over its useful life.
Testing of impairment is performed annually over
the period of the development project.
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
l.
Impairment of non-financial assets
The Group evaluates the need to record an
impairment of the carrying amount of non-
financial assets whenever events or changes in
circumstances indicate that the carrying amount is
not recoverable. If the carrying amount of the cash-
generating unit of the non-financial assets exceeds
their recoverable amount, the assets are reduced to
their recoverable amount. The recoverable amount is
the higher of fair value less costs of sale and value in
use. In measuring value in use, the expected future
cash flows are discounted using a pre-tax discount
rate that reflects the risks specific to the asset.
The recoverable amount of an asset that does not
generate independent cash flows is determined for
the cash-generating unit to which the asset belongs.
Impairment losses are recognised in the statement
of profit or loss.
An impairment loss of an asset, other than goodwill,
is reversed only if there have been changes in
the estimates used to determine the asset’s
recoverable amount since the last impairment loss
was recognised. Reversal of an impairment loss,
as above, shall not be increased above the lower
of 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 and its recoverable amount. The reversal
of impairment loss of an asset presented at cost is
recognised in the statement of profit or loss.
Goodwill is tested for impairment by assessing the
recoverable amount of the cash-generating unit
(or Group of cash-generating units) to which the
goodwill has been allocated. An impairment loss is
recognised if the recoverable amount of the cash-
generating unit (or Group of cash-generating units)
to which goodwill has been allocated is less than
the carrying amount of the cash-generating unit (or
Group of cash-generating units). Any impairment
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FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
loss is allocated first to goodwill. Impairment losses
recognis ed for goodwill cannot be reversed in
subsequent periods.
The Group reviews goodwill and intangible assets
with indefinite useful life that are not systematically
amortised (domains and websites) for impairment
annually on 31 December, or more frequently if
events or changes in circumstances indicate that
there is a need for such review.
m. Financial instruments
i. Financial assets
Financial assets are measured upon initial
recognition at fair value plus transaction costs
directly attributable to the acquisition of the financial
assets, except for financial assets measured at
fair value through profit or loss in respect of which
transaction costs are recorded in the statement of
profit or loss.
The Group classifies and measures debt instruments
in the financial statements based on the following
criteria:
–
–
the Group’s business model for managing
financial assets; and
the contractual cash flow terms of the financial
asset.
Debt instruments measured at amortised cost
The Group’s business model is to hold the financial
assets in order to collect their contractual cash
flows, and the contractual terms of the financial
asset give rise on specified dates to cash flows
that are solely payments of principal and interest
on the principal amount outstanding. After initial
recognition, the instruments in this category are
measured according to their terms at amortised cost
using the effective interest rate method, less any
provision for impairment.
Financial assets held for trading
Financial assets held for trading (derivatives) are
measured through the statement of profit or loss
unless they are designated as effective hedging
instruments.
ii. Impairment of financial assets
The Group reviews at the end of each reporting
period the provision for loss of financial debt
instruments which are measured at amortised
cost. The Group has short-term trade receivables
in respect of which the Group applies a simplified
approach and measures the loss allowance in an
amount equal to the lifetime expected credit losses.
An impairment loss on debt instruments measured
at amortised cost is recognised in the statement of
profit or loss with a corresponding loss allowance
that is offset from the carrying amount of the
financial asset.
iii. Derecognition of financial assets
A financial asset is derecognised when the
contractual rights to the cash flows from the
financial asset expire.
iv. Financial liabilities
Financial liabilities are initially recognised at fair
value less transaction costs that are directly
attributable to the issue of the financial liability. After
initial recognition, the Group measures all financial
liabilities at amortised cost using the effective
interest rate method, except for:
–
financial liabilities at fair value through profit or
loss such as derivatives; and
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–
contingent consideration recognised by the
buyer in a business combination within the
scope of IFRS 3.
At initial recognition, the Group measures financial
liabilities that are not measured at amortised cost
at fair value. Transaction costs are recognised in the
statement of profit or loss. After initial recognition,
changes in fair value are recognised in the
statement of profit or loss.
v. Derecognition of financial liabilities
A financial liability is derecognised only when
it is extinguished, that is when the obligation is
discharged or cancelled or expires.
n. Fair value measurement
Fair value is the price to sell an asset or pay to
transfer a liability in an orderly transaction between
market participants at the measurement date. Fair
value measurement is based on the assumption
that the transaction will take place in the asset’s or
the liability’s principal market, or in the absence of a
principal market, in the most advantageous market.
The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest. The Group uses valuation
techniques that are appropriate in the circumstances
and for which sufficient data are available to
measure fair value, maximising the use of relevant
observable inputs and minimising the use of
unobservable inputs. All assets and liabilities
measured at fair value or for which fair value is
disclosed are categorised into levels within the fair
value hierarchy based on the lowest level input that
is significant to the entire fair value measurement:
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
Level 1
Level 2
–
–
Level 3
–
quoted prices (unadjusted) in active
markets for identical assets or liabilities.
inputs other than quoted prices included
within Level 1 that are observable either
directly or indirectly.
inputs that are not based on observable
market data (valuation techniques that use
inputs that are not based on observable
market data).
o. Provisions
A provision in accordance with IAS 37 ‘Provisions,
Contingent Liabilities and Contingent Asset’ is
recognised when the Group has a present obligation
(legal or constructive) as a result of a past event,
and 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. When
the Group expects part or all of the expense to
be reimbursed, for example, under an insurance
contract, the reimbursement is recognised as a
separate asset but only when the reimbursement is
virtually certain. The expense is recognised in the
statement of profit or loss net of the reimbursed
amount.
p. Employee benefit liabilities
Short-term employee benefits include salaries,
paid sick leave, recreation and social security
contributions, and are recognised as expenses as
the services are rendered. Liability in respect of a
cash bonus or a profit – sharing plan is recognised
when the Group has a legal or constructive
obligation to make such payment as a result of past
service rendered by an employee, and a reliable
estimate of the amount can be made.
Post-employment benefits are financed by
contributions to insurance companies or pension
funds and are classified as defined contribution
plans. The Israeli subsidiaries of the Group have
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
market condition is satisfied, provided that all other
vesting conditions (service and/or performance) are
satisfied.
r. Earnings per share
Earnings per share are calculated by dividing the net
income attributable to equity holders of the Group
by the weighted average number of ordinary shares
outstanding during the period. The Group’s share
of earnings of investees is included based on the
earnings per share of the investees multiplied by the
number of shares held by the Group. If the number
of ordinary shares outstanding increases as a result
of a capitalisation, bonus issue, or share split, the
calculation of earnings per share for all periods
presented are adjusted retrospectively.
Potential ordinary shares are included in the
computation of diluted earnings per share when
their conversion decreases earnings per share from
continuing operations. Potential ordinary shares
that are converted during the period are included in
diluted earnings per share only until the conversion
date and from that date in basic earnings per share.
S. Discontinued operations
A discontinued operation is a component of the
Group that either has been disposed of or is
classified as held-for-sale. The operating results
relating to the discontinued operation (including
comparative data) are presented separately in the
statement of profit or loss, net of the tax effect.
defined contribution plans pursuant to Section 14 to
the Severance Pay Law under which the subsidiary
pays fixed contributions and will have no legal or
constructive obligation to pay further contributions
if the fund does not hold sufficient amounts to pay
all employee benefits relating to employee service in
the current and prior periods.
Contributions to the defined contribution plan
in respect of severance or retirement pay are
recognised as an expense when contributed
concurrently with the performance of the
employee’s services.
q. Share-based payment transactions
The Group’s employees and officers are entitled
to remuneration in the form of equity-settled
share-based payment transactions. The cost of
equity-settled transactions is measured at the
fair value of the equity instruments granted at the
grant date. The fair value is determined using an
acceptable option pricing model (also see Note 19).
In estimating fair value, the vesting conditions
(consisting of service conditions and performance
conditions other than market conditions) are not
taken into account. The cost of equity-settled
transactions is recognised in the statement of profit
or loss together with a corresponding increase in
equity during the period which the performance
is to be satisfied ending on the date on which the
relevant employees or officers become entitled to
the award (“the vesting period”). The cumulative
expense recognised for equity-settled transactions
at the end of each reporting period until the vesting
date reflects the extent to which the vesting period
has expired and the Group’s best estimate of the
number of equity instruments that will ultimately
vest. No expense is recognised for awards that do
not ultimately vest, except for awards where vesting
is conditional upon a market condition, which are
treated as vesting irrespective of whether the
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main headingmain headingmain heading 2main heading 2main headingmain headingmain heading 2main heading 2 FINANCIAL STATEMENTS
3.
ACCOUNTING JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS
Estimations and assumptions
The preparation of the financial statements requires
management to make estimates and assumptions
that have an effect on the application of the
accounting policies and on the reported amounts of
assets, liabilities, revenues and expenses.
Changes in accounting estimates are reported
in the period of the change in estimate. The key
assumptions made in the financial statements
concerning uncertainties at the end of the reporting
period and the critical estimates computed by the
Group that may result in a significant adjustment to
the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Impairment of domains and websites
The Group reviews domains and websites for
impairment at least once a year. This requires
management to make an estimate of the projected
future cash flows from the continuing use of the
cash-generating units to which the assets are
allocated and also to choose a suitable discount rate
for those cash flows (see Note 11).
Current taxes
The Group is subject to income tax in various
jurisdictions, and judgment is required in
determining the provision for income taxes.
During the ordinary course of business, there are
transactions and calculations for which the ultimate
tax determination may be uncertain. The Group
recognises tax liabilities based on assumptions
supported by, among others, transfer price studies.
The Group believes that its accruals for tax liabilities
are adequate for all open audit years based on
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NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
its assessment of many factors, including past
experience and interpretations of tax law (see
Note 7).
4. REVENUE AND OPERATING SEGMENTS FOR THE YEARS
ENDED 31 DECEMBER
An operating segment is a part of the Group
that conducts business activities from which it
can generate revenue and incur costs, and for
which discrete financial information is available.
Identification of segments is based on internal
reporting to the chief operating decision maker
(“CODM”). The CODM, who is responsible for
allocating resources and assessing performance of
the operating segments, has been identified as the
Chief Executive Officer (“CEO”). The Group does not
divide its operations into different segments, and
the CODM operates and manages the Group’s entire
operations as one segment, which is consistent
with the Group’s internal organisation and reporting
system.
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
4. REVENUE AND OPERATING SEGMENTS FOR THE YEARS ENDED 31 DECEMBER (CONTINUED)
Geographic information for the years ended 31 December
North America
Europe
Rest of the World
Total revenues from identified customer locations
Revenues from unidentified customer locations
Revenues by vertical
Sports U.S.
Media Partnerships
Casino
Sports Europe
Revenue from continuing operations
Blueclaw1
Personal Finance
Revenue from discontinued operation (see Note 8)
2023
$000
25,925
18,335
540
44,800
6,160
50,960
2023
$000
8,992
18,566
13,106
9,665
50,329
–
631
631
50,960
2022
$000
49,226
20,725
652
70,603
3,135
73,738
2022
$000
18,065
28,398
15,602
8,870
70,935
870
1,933
2,803
73,738
1 The Group classified Blueclaw as a discontinued operation in the year ended 31 December 2023 as part of a strategic decision.
See Note 8 for further details.
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FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
5. OPERATING EXPENSES FROM CONTINUING OPERATIONS FOR THE YEARS ENDED 31 DECEMBER
7. TAX FROM CONTINUING OPERATIONS FOR THE YEARS ENDED 31 DECEMBER
Staff costs2
Share-based payments
Technology expenses
Professional services
Administrative expenses
Transformation costs3
Consulting services
Hiring and settlements
Acquisition costs
2023
$000
16,536
173
2,661
2,142
1,402
1,301
1,340
–
25,555
20221
$000
19,065
858
5,158
2,799
2,170
1,685
2,792
102
34,629
1 Comparative data for the year ended 31 December 2022 has been adjusted to reflect the reclassification of the Blueclaw business
to discontinued operations in line with IFRS 5 ’Non-current Assets Held for Sale and Discontinued Operations’.
2 Included within staff costs are expenses in respect of defined contribution plans of $1,184,000 (2022: $1,615,000).
3 Transformation costs total $2,641,000 (2022: $4,579,000).
6. FINANCE EXPENSES AND INCOME FROM CONTINUING OPERATIONS FOR THE YEARS ENDED 31 DECEMBER
Finance cost
Foreign exchange loss
Lease finance cost
Other charges 1
Finance expenses
Finance income on cash at bank
Foreign exchange gain
Finance income
Net finance costs
1 Other charges relate to interest accrued on acquisition related costs.
2023
$000
79
–
29
125
233
(2)
(18)
(20)
213
2022
$000
138
1,297
29
287
1,751
(5)
–
(5)
1,746
83
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Taxation included in the statement of profit or loss for the years ended 31 December:
Current taxes
Deferred taxes (Note 17)
Tax charge
Tax reconciliation
2023
$000
2,434
(1,807)
627
2022
$000
(242)
1,846
1,604
The reconciliation between the tax expense, assuming that all the income and expenses were taxed at the
statutory tax rate for the U.K., and the taxes on income recorded in the statement of profit or loss for the
years ended 31 December are as follows:
(Loss)/profit before taxes on income from continuing operations
Taxes on income at 23.5% (2022: 19%)
Adjustment due to the difference between the Group’s statutory tax
rate and tax rates applicable to the subsidiaries
Non-deductible expenses for tax purposes
Taxes in respect of previous years – current tax
Unrecognised temporary differences and others
Tax charge
2023
$000
(44,891)
(10,549)
(270)
10,635
(3,207)
4,018
627
20221
$000
4,989
948
660
15
(5,116)
5,097
1,604
1 Comparative data for the year ended 31 December 2022 has been adjusted to reflect the reclassification of the Blueclaw business
to discontinued operations in line with IFRS 5 ’Non-current Assets Held for Sale and Discontinued Operations’.
The Group has a tax presence in different jurisdictions, including Jersey (where the parent company is
incorporated), U.K., U.S., Cyprus, Canada and Israel.
Tax law applicable to the Group’s Israeli subsidiaries is the Israeli tax law – Income Tax Ordinance (New
Version) 1961. The Israeli corporate income tax rate was 23% in 2023 (2022: 23%). Amendment 73 to the
law for the Encouragement of Capital Investments, 1959 also prescribes special tax tracks for technological
enterprises, which became effective in 2017, as follows:
–
Technological preferred enterprise – an enterprise for which total consolidated revenues of its parent
company and all subsidiaries are less than NIS 10 billion. A preferred technological enterprise, as defined
in the law, is located in Israel and is subject to tax at a rate of 12% on profits deriving from intellectual
property.
–
Any dividends distributed to “foreign companies”, as defined in the law, deriving from income from the
technological enterprises will be subject to a withholding tax at a rate of 4%.
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main headingmain headingmain heading 2main heading 2main headingmain headingmain heading 2main heading 2
FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
7. TAX FROM CONTINUING OPERATIONS FOR THE YEARS ENDED 31 DECEMBER (CONTINUED)
8. DISCONTINUED OPERATIONS (CONTINUED)
The applicable U.S. federal statutory income tax rate for the Group’s U.S. subsidiaries for 2023 was 21%
(2022: 21%). In addition, state and city taxes are applicable in certain states and cities.
Cash flows
Losses carried forward for tax purposes
As at 31 December 2023, the Group has carry-forward tax losses in its subsidiaries of $4,000,000 covering
its Israel and UK jurisdictions, of which $416,000 has been recognised as part of the deferred tax asset on
other short-term temporary differences (see Note 17). The remaining element has not been recognised on
the statement of financial position as there is insufficient evidence as to the generation of suitable profits
against which these assets can be offset.
8. DISCONTINUED OPERATIONS
For the year ended 31 December 2023, the Group classified the Personal Finance and Blueclaw businesses
as discontinued operations based on strategic decisions. Revenue and expenses, and gains and losses
relating to the discontinuation of these activities are shown as a single line item on the face of the statement
of profit or loss as “Loss for the year from discontinued operations (net of tax)”, with the comparative figures
being restated as required by IFRS 5 ’Non-current Assets Held for Sale and Discontinued Operations’.
Profit or loss
The financial results of discontinued operations were as follows:
Revenue
Expenses:
Operating
Sales and marketing
Impairment reversal/ (charge) (Note 11)
Profit/(loss) before taxes on income
Tax (charge)/credit (Note 17)
Loss from discontinued operations
2023
$000
631
(875)
(151)
2,050
1,655
(3,182)
(1,527)
2022
$000
2,803
(3,755)
(1,219)
(13,835)
(16,006)
3,182
(12,824)
Taxation from discontinued operations of $3,182,000 relates to the deferred tax impact of the $13,835,000
impairment charge incurred in the year ended 31 December 2022, and its subsequent unwind on disposal
of the Personal Finance business in the year ended 31 December 2023 (see Note 9).
Loss for the year
Impairment (reversal)/charge
Tax charge/(credit)
Cash outflow from discontinued operations
2023
$000
(1,527)
(2,050)
3,182
(395)
2022
$000
(12,824)
13,835
(3,182)
(2,171)
Cash flows from discontinued operations also include working capital balances to support the Personal
Finance and Blueclaw businesses. These are immaterial for disclosure in both the year ended 31 December
2023 and in the comparative year.
9. LOSS ON DISPOSAL OF ASSETS
On 30 May 2023 and 6 June 2023, the Group disposed of the assets of the Personal Finance business for
total proceeds of $2,050,000. The disposal is detailed below:
Consideration received
Costs of disposal
Carrying value of net assets sold
Loss on disposal after tax
2023
$000
2,050
(212)
(2,050)
(212)
The disposal of the Personal Finance business incurred no tax payable.
The cash generated from the disposal of the Personal Finance business has been utilised in the day-to-day
operations of the wider business of the Group.
10. (LOSS)/EARNINGS PER SHARE
Basic (loss)/earnings per share (“EPS”) is calculated by dividing the loss attributable to ordinary shareholders
by the weighted average number of ordinary shares in issue during the year excluding shares held in trust.
For diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion
of potentially dilutive ordinary shares. Note that share options for the Group have not been reflected for the
year ended 31 December 2023 as their effect would be anti-dilutive.
The following tables reflects the income and share data used in the basic and diluted EPS calculations.
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main headingmain headingmain heading 2main heading 2main headingmain headingmain heading 2main heading 2
1 Defined as (Loss)/profit for the year from continuing operations as per the statement of profit or loss.
At 31 December 2022
31,870
FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
10. (LOSS)/EARNINGS PER SHARE (CONTINUED)
Continuing operations
2023
Weighted
average
number of
ordinary
shares
Thousands
Earnings1
$000
2022
Weighted
average
number of
ordinary shares
Thousands
EPS
$
Loss
per share
$
Earnings1
$000
Basic and diluted
(loss)/earnings
per share
(45,518)
262,586
(0.173)
2,353
262,586
0.009
Discontinued operations
2023
Weighted
average
number of
ordinary
shares
Thousands
Earnings1
$000
2022
Weighted
average
number of
ordinary shares
Thousands
Loss
Per Share
$
Loss
per share
$
Earnings1
$000
Basic and diluted loss
per share
(1,527)
262,586
(0.006)
(11,792)
262,586
(0.045)
1 Defined as Loss for the year from discontinued operations (net of tax) as per the statement of profit or loss.
Total Group
2023
Weighted
average
number of
ordinary
shares
Thousands
Earnings1
$000
2022
Weighted
average
number of
ordinary shares
Thousands
Loss
Per Share
$
Loss
per share
$
Earnings1
$000
Basic and diluted loss
per share
(47,045)
262,586
(0.179)
(9,439)
262,586
(0.036)
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
11. INTANGIBLE ASSETS AND GOODWILL
Goodwill
$000
Domains
and websites
$000
Agencies
Relationships
$000
Systems,
software and
licences
$000
Work in
Progress1
$000
Cost or valuation
At 1 January 2022
Additions
Additions – internally
developed
Other adjustments
Reclassifications2
32,115
–
–
(245)
–
Additions
Additions – internally
developed
Disposals
Revaluations
Reclassifications2
–
–
–
105
–
162,287
3,000
–
(367)
–
164,920
3,500
–
(35,048)
–
(32)
At 31 December 2023
31,975
133,340
Accumulated
amortisation and
impairment:
At 1 January 2022
Amortisation
Impairment charge
Exchange differences
Reclassifications2
30,052
55,106
–
–
–
–
–
13,835
–
–
At 31 December 2022
30,052
68,941
Amortisation
Impairment charge
Disposals
Revaluations
Reclassifications2
–
1,923
–
–
–
–
40,651
(30,163)
–
–
716
–
–
(48)
–
668
–
–
–
25
–
693
201
241
–
90
–
532
171
–
–
(10)
–
693
136
–
48,054
3,926
2,775
–
(637)
54,118
–
3,954
(7,169)
–
(5,083)
45,820
37,529
6,578
–
–
(637)
43,470
5,776
–
(6,085)
–
(5,115)
38,046
10,648
7,774
Total
$000
243,172
6,926
2,775
(660)
(637)
251,576
3,500
–
–
–
–
–
–
–
1,660
5,614
–
–
–
(42,217)
130
(5,115)
1,660
213,488
–
–
–
–
–
–
–
–
–
–
–
–
–
122,888
6,819
13,835
90
(637)
142,995
5,947
42,574
(36,248)
(10)
(5,115)
150,143
108,581
1,660
63,345
1 Defined as Net loss attributable to the owners of the Company as per the statement of profit or loss.
At 31 December 2023
31,975
79,429
Net book value
At 31 December 2022
1,818
At 31 December 2023
–
95,979
53,911
1 Work in Progress relates to internally developed software.
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2 These items relate to reclassifications between asset class, cost and accumulated depreciation on historical balances. There is no
net book value impact from these reclassifications.
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FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
11. INTANGIBLE ASSETS AND GOODWILL (CONTINUED)
a. Goodwill and Agency Relationships
In September 2021, the Group acquired Blueclaw Media Ltd, recognising a goodwill balance of $2,063,000
and agencies relationships of $484,000. As Blueclaw Media Ltd is a foreign operation, the goodwill balance
is retranslated at the end of each reporting period. As at 31 December 2023, the goodwill balance of
$1,923,000 was fully impaired as a result of the impairment review of non-financial assets. See Note 11c
for further details.
Agency relationships are amortised in line with the Group’s accounting policy.
b. Domains and websites
In the year ended 31 December 2021, the Group acquired domains and websites, including Sports Betting
Dime and Saturday Football inc. and accounted for these as an asset acquisition. The Group recognises a
liability for the intangible assets acquired for contingent consideration only when there is sufficient certainty
that the liability will be settled.
In the year ended 31 December 2023, due to targets being met for the acquisition of CB Sports and
Warwick Gaming (CBWG) , additions of $3,000,000 were recognised and paid, and a further $3,500,000
was recognised as an addition, and paid in March 2024.
In the year ended 31 December 2023, the Group disposed of three of the Europe Gaming domains
and associated websites, Casino.se, Casino.gr and Casino.pt, and domains and websites relating to
the Personal Finance business (see Note 9 for further details) . Before the sales completed, the Group
reversed the impairment charge relating to these domains and websites up to the sales proceeds as the
recoverable amount of the assets was deemed to be the consideration agreed with the third party buyers
for those specific assets. The Group then disposed of those domains and websites for a combined total of
$6,050,000, with $2,050,000 relating to the Personal Finance assets being recognised within discontinued
operations in the line “Loss for the period from discontinued operations (net of tax) ” in the year ended
31 December 2023.
c. Net impairment of non-financial assets
The Group tests goodwill and intangible assets with indefinite useful life for impairment annually or
when whenever events or changes in circumstances indicate that the carrying amount is not recoverable.
Intangible assets are grouped into cash generating units (“CGU’s”) to determine their recoverable amount,
which is the higher of fair value less cost of sale and value in use. If the carrying amount of the CGUs
exceeds their recoverable amount, the assets are reduced to their recoverable amount.
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
11. INTANGIBLE ASSETS AND GOODWILL (CONTINUED)
In measuring value in use, the expected future cash flows of each CGU are discounted using a pre-tax
discount rate that reflects the risks specific to the asset. The key assumptions used in calculating the value
in use are:
–
The calculations use cash flow projections based on financial budgets approved by management
covering a three-year period. Revenues and the profit rate assumptions are based on management
expectations and forecasts for the coming years. These forecasts included an evaluation of factors which
could adversely affect revenues and profitability.
–
Cash flows beyond the three-year period are extrapolated using the estimated terminal growth rate of
3%. This growth rate is based on the long-term average growth rate as customary in similar industries.
– The discount rate reflects management’s assumptions regarding the Group’s specific risk premium.
– The pre-tax discount rate that was applied for the cash flow projection was 25% (2022: 20%) .
Fair value less cost of sale is considered if external, market-based evidence exists indicating the valuation of
the CGUs.
For the impairment review for the year ended 31 December 2023, the value in use was deemed to be the
recoverable amount for Sports U.S. For the Casino and Sports Europe CGUs, due to the existence of a fair
valuation soon after 31 December 2023, the fair value less cost of sale was applied as the recoverable
amount for these CGUs. This fair value reflects the consideration paid by a third party for those CGUs (see
Note 24) .
In total, the Group has recognised a net impairment charge of $42,574,000 in the year ended 31 December
2023. This figure is made up of a net impairment charge of $44,624,000 related to continuing operations,
offset by an impairment reversal of $2,050,000 for discontinued operations.
For continuing operations, the net impairment charge of $44,624,000 consists of an impairment charge
of $58,534,000 (2022: $Nil) for the Sports U.S. and Sports Europe CGUs . This is driven by a decline in
trading for Sports U.S. during the year ended 31 December 2023, and a high cost base for the assets in the
Sports Europe CGU, offset by an impairment reversal of $13,910,000 for Casino. The impairment reversal in
Casino reflected the increase in the recoverable amount to the consideration received for assets. The Group
received $4,000,000 disposal of three of the Europe Gaming domains and associated websites, Casino.se,
Casino.grand Casino.pt, with the remainder of the reversal reflecting the consideration paid by a third party
for the remainder of the Casino CGU in April 2024 (see Note 24) .
This net impairment charge has been allocated first to the goodwill balance and then to domains and
websites in line with IAS 36 ‘Impairment of Assets’.
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main headingmain headingmain heading 2main heading 2main headingmain headingmain heading 2main heading 2 FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
11. INTANGIBLE ASSETS AND GOODWILL (CONTINUED)
12.
PROPERTY AND EQUIPMENT
The table below summarises the net impairment charge assigned to the different intangible asset classes
for the year ended 31 December 2023:
Sports U.S.
Sports Europe
Impairment charge
Casino1
Impairment reversals
Net impairment charge for continuing operations
Personal Finance
Impairment reversal for discontinued operations (see Note 8)
Goodwill
$000
Domains and
websites
$000
1,923
–
1,923
–
–
1,923
–
–
1,923
55,335
1,276
56,611
(13,910)
(13,910)
42,701
(2,050)
(2,050)
40,651
Total
$000
57,258
1,276
58,534
(13,910)
(13,910)
44,624
(2,050)
(2,050)
42,574
1 Within this impairment reversal, the Group recognised $4,000,000 of reversal relating to the disposal of three of the Europe
Gaming domains and associated websites, Casino.se, Casino.gr and Casino.pt in the year ended 31 December 2023.
Cost
At 1 January 2022
Additions
Reclassifications
Disposals
At 31 December 2022
Additions
Termination of leases
At 31 December 2023
Accumulated depreciation
At 1 January 2022
Depreciation during the year
Reclassifications
Disposals
At 31 December 2022
Depreciation during the year
Termination of leases
At 31 December 2023
Net book value
At 31 December 2022
At 31 December 2023
Computers,
furniture, office
equipment and
others
$000
Leasehold
improvements
$000
Right of use
leased assets –
Offices
(see note 16)
$000
685
62
403
(299)
851
14
–
865
250
41
429
(188)
532
94
–
626
319
239
341
–
30
–
371
–
–
371
15
34
4
–
53
40
–
93
318
278
4,795
419
(2,840)
–
2,374
–
(326)
2,048
3,155
419
(2,840)
–
734
396
(326)
804
1,640
1,244
Total
$000
5,821
481
(2,407)
(299)
3,596
14
(326)
3,284
3,420
494
(2,407)
(188)
1,319
530
(326)
1,523
2,277
1,761
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FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
13. LONG-TERM AND SHORT-TERM DEPOSITS AS AT 31 DECEMBER
15. OTHER LIABILITIES AND ACCOUNTS PAYABLES AS AT 31 DECEMBER
Long-term deposits
Held in EUR
Short-term deposits
Held in USD
Held in NIS
Held in EUR
2023
$000
2022
$000
78
78
100
–
3
103
75
75
100
239
3
342
Employees and payroll accruals
Accrued expenses
Deferred revenues
Government authorities
Other liabilities
2023
$000
1,644
1,511
730
89
–
3,974
2022
$000
2,496
2,889
191
4,283
382
10,241
Government authorities mainly relates to agreed settlements of historic tax liabilities in specific jurisdictions.
The long-term deposits have a fixed lien in relation to a bank guarantee for the Cyprus office lease.
Short-term deposits carried no interest rate in the year ended 31 December 2023 (2022: 0.99%) .
14. TRADE AND OTHER RECEIVABLES AS AT 31 DECEMBER
a. Trade receivables
Receivables from third party customers
Allowance for expected credit losses
16. LEASE LIABILITIES AS AT 31 DECEMBER
Lease liabilities
Less – current maturities
Non-current lease liabilities
2023
$000
1,173
(236)
937
2023
$000
6,869
(264)
6,605
2022
$000
6,015
(316)
5,699
The Group recorded fixed liens on bank deposits in connection with these agreements (see Note 13) .
In the year ended 31 December 2023, the Group terminated one of its lease contracts, recognising a
$4,000 loss in the statement of profit and loss and incurring $61,000 in dilapidations costs.
17. DEFERRED TAXES AS AT 31 DECEMBER
As at 31 December 2023, the Group has no material amounts that are past due and not impaired (2022:
$Nil) .
Changes in the allowance for expected credit losses are included in administrative expenses reported in
Note 5. In the statement of profit or loss, the allowance decreased by $182,000 (2022: $29,000 decrease) .
Deferred tax assets
Deferred tax liabilities
See Note 20b(ii) on the credit risk of trade receivables.
2023
$000
(628)
2,039
1,411
b. Other receivables
Government authorities
Prepaid expenses
Other receivables
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2023
$000
755
560
–
1,315
2022
$000
676
2,319
459
3,454
2022
$000
1,528
(351)
1,177
2022
$000
(2,073)
2,109
36
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FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
17. DEFERRED TAXES AS AT 31 DECEMBER (CONTINUED)
18. EQUITY AS AT 31 DECEMBER
IAS 12 ‘Income taxes’ permits the offsetting of balances within the same tax jurisdiction. All of the deferred
tax assets are available for offset against deferred tax liabilities. The movements in deferred tax liabilities are
shown below:
Authorised shares
2023
Thousands
2022
Thousands
Domains and
websites
$000
Other
intangible
assets
$000
Property and
equipment
$000
Current period
As at 1 January 2023
(Credited) / charged to loss
from continuing operations
Charged to loss from
discontinued operations
As at 31 December 2023
Prior period
(1,226)
1,734
(1,956)
151
3,182
–
–
1,885
As at 1 January 2022
2,072
(270)
(Credited) / charged to profit
from continuing operations
(Credited) to loss from
discontinued operations
As at 31 December 2022
(116)
(3,182)
(1,226)
2,004
–
1,734
375
(221)
–
154
(3)
378
–
375
Other
short-term
temporary
differences
$000
Total
$000
(847)
36
219
(1,807)
–
(628)
(427)
(420)
–
(847)
3,182
1,411
1,372
1,846
(3,182)
36
Other short-term temporary differences include deferred tax on tax losses carried forward, on lease
liabilities and on employee benefits.
The deferred taxes are computed at the tax rates of 12.5% to 25% based on the tax rates that are expected
to apply upon realisation (2022: 19% to 23%) .
Ordinary shares with a nominal value of $0.000001 each
100,000,000
100,000,000
2023
Thousands
2022
Thousands
Ordinary shares issued and outstanding including share premium
At 1 January 2022, 31 December 2022 and at 31 December 2023
262,586
122,071
Share capital in the table above is less than $1,000. Share premium is net of treasury shares.
As at 31 December 2023, 3,356,979 ordinary shares were held in trust for the Group’s share-based
payment plans (2022: 3,356,979) .
19. SHARE-BASED PAYMENTS
In 2013, 2017 and 2020, the Group adopted Share Option Plans (“the plans”) . According to the plans,
the Group’s Board of Directors are entitled to grant certain employees, officers and other service providers
(together herein “employees”) of the Group remuneration in the form of equity-settled share-based payment
transactions.
The Group have three different share schemes – Employee Share Options, Restricted Stock Units (“RSUs”) ,
and Performance Stock Units (“PSUs”) . The expense recognised in the statement of profit or loss for
services received for those share schemes were:
Total expense arising from share-based payment transactions
Employee Share Options
2023
$000
173
2022
$000
858
Pursuant to the plans, the Group’s employees may be granted options to purchase the Group’s ordinary
shares. These options may be exercised, subject to the continuance of engagement of such employees with
the Group, within a period of eight years from the grant date, at an exercise price to be determined by the
Group’s Board of Directors at the grant date.
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FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
19. SHARE-BASED PAYMENTS (CONTINUED)
19. SHARE-BASED PAYMENTS (CONTINUED)
The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and
movements in, employee share options during the year (excluding RSUs and PSUs) :
Outstanding at 1 January
Forfeited during the year
Outstanding at 31 December
Exercisable at 31 December
2023
Number in
thousands
148
(106)
42
42
2023
WAEP
$0.74
$0.67
$0.69
$0.69
2022
Number in
thousands
2,359
(2,211)
148
148
2022
WAEP
$0.90
$0.67
$0.74
$0.74
The weighted average remaining contractual life for the options outstanding as at 31 December 2023 was
0.2 years (2022: 1.3 years) . The range of exercise prices for options outstanding (not including the RSUs
and PSUs) as at 31 December 2023 was $0.69 (2022: $0.66 to $0.98) .
Restricted Stock Units
In May 2021, the Group granted Restricted Stock Units (“May 2021 RSU”) to key management personnel
and used the following inputs to the models:
Weighted average fair values at the measurement date ($)
Shares granted
Expected volatility (%)
Risk-free interest rate (GBP curve)
Expected life of share options (years)
Weighted average share price (GBP)
2021
May RSU
0.69
910,000
54.9
1.58
3
0.485
The fair value of an RSU is measured by use of the Monte Carlo model. The total fair value of the awards
above are recognised on a straight line basis in the statement of profit or loss over the vesting period,
amended for leavers from the Group.
The only performance condition which needs to be achieved such that RSUs are capable of vesting is service.
Performance Stock Units
The Group granted Performance Stock Units (“PSUs”) in 2022. On 11 May 2023, the Group granted a
further 6,850,000 of Performance Stock Units under the XLMedia 2020 Global Share Incentive Plan to the
Executive Committee members, including the Executive Directors of the Group.
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The PSU award is a contingent right to acquire shares for no consideration. It is subject to a three-year
performance period, with vesting subject to the achievement of performance measured by reference to total
shareholder return over the performance period as compared to the comparator group, followed by a two-
year holding period.
The following tables list the inputs for the schemes which are still live as at 31 December 2023:
2023
May
PSU
2022
October
PSU
2022
August
PSU
2022
May
PSU
2021
October
PSU
2021
March
PSU
Weighted average
fair values at the
measurement date ($)
0.09
0.22
0.28
0.28
0.16
0.61
Shares granted
6,850,000
530,120
833,333
2,467,264
1,615,275
470,977
Expected volatility (%)
72.14
81.51
80.27
78.91
71.20
73.94
Risk-free interest rate
(GBP curve)
Expected life of share
options (years)
Weighted average share
price (GBP)
3.56
4.24
3.10
2.72
0.60
0.29
3
3
3
3
3
3
0.1175
0.195
0.38
0.295
0.423
0.54
The fair value of an PSU is measured by use of the Monte Carlo model.
The total fair value of the awards above are recognised on a straight line basis in the statement of profit or
loss over the vesting period, amended for leavers from the Group.
The performance conditions to be achieved such that PSUs are capable of vesting are as follows:
XLMedia’s ranking relatively to the Comparator group
% of PSUs capable of vesting
Upper quartile or better
100%
Between upper quartile and median
On a straight-line basis, between 100% and 25%
Median 25%
Lower than Median
25%
0%
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FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
19. SHARE-BASED PAYMENTS (CONTINUED)
Movement during the year of RSUs and PSUs are as follows:
Outstanding at 1 January
Granted during the year
Forfeited during the year
Vested during the year
Outstanding at 31 December
These RSUs and PSUs do not have an exercise price.
20. FINANCIAL INSTRUMENTS
a. Classification of financial assets and liabilities
Financial assets
Financial assets at fair value through other comprehensive income
Equity instruments
Financial assets measured at amortised cost:
Cash and cash equivalents
Short-term and long-term deposits
Trade receivables
Other receivables
Total financial assets
Total non-current
Total current
Financial liabilities
Financial liabilities measured at amortised cost:
Trade payables
Deferred consideration
Consideration payable on intangible assets
Other liabilities and account payables
Lease liabilities
Total financial liabilities
Total non-current
Total current
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2023
Number in
thousands
2022
Number in
thousands
4,061
6,850
(1,986)
(187)
8,738
3,335
3,871
(3,145)
–
4,061
2023
$000
2022
$000
20. FINANCIAL INSTRUMENTS (CONTINUED)
On 28 February 2022, the Group converted a loan receivable from Xineoh Technologies Inc. to shares giving
the Group a 2.6% stake in ordinary shares with no special rights. The Group elected to designate the equity
investment as at fair value through Other Comprehensive Income.
As at 31 December 2023, the Group reviewed the financial performance of Xineoh Technologies Inc. and
have concluded that the carrying value of $242,000 was fully impaired. This impairment charge has been
recognised in Other Comprehensive Income as “Impairment of equity investment”.
b. Financial risks factors
The Group’s activities expose it to various financial risks.
i. Market risk – Foreign exchange risk
A portion of the Group’s revenues is received in EUR and in GBP. The Group has subsidiaries in Israel, the
UK and in Cyprus where expenses are paid in NIS, in GBP and in EUR. Therefore, the Group is exposed to
fluctuations in the foreign exchange rates in EUR, GBP and NIS against the USD.
The Group did not enter into any forward or options contracts to reduce the foreign exchange risk of
forecasted cash flows in the year ended 31 December 2023. A foreign exchange rate gain of $18,000 was
recognised in the year ended 31 December 2023 (2022: loss of $1,297,000) .
–
242
ii. Credit risk
The Group usually extends 30-60 days term to its customers. The Group regularly monitors the credit
extended to its customers and their general financial condition but does not require collateral as security for
these receivables. The Group maintains cash and cash equivalents, short-term and long-term investments
in various financial institutions. These financial institutions are located in the EU, Israel and U.S.
4,692
181
6,605
1,315
12,793
78
12,715
4,613
3,954
3,500
3,974
1,173
17,214
937
16,277
10,411
417
5,699
99
16,868
317
16,551
3,655
7,853
3,000
5,954
1,528
21,990
5,061
16,929
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FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
20. FINANCIAL INSTRUMENTS (CONTINUED)
iii. Liquidity risk
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual
undiscounted payments:
Less than
one year
$000
1 to 2
years
$000
2 to 3
years
$000
3 to 4
years
$000
> 4
years
$000
4,613
3,974
3,500
3,954
236
16,277
Less than
one year
$000
3,655
5,954
3,000
4,000
407
17,016
–
–
–
–
135
135
1 to 2
years
$000
–
–
–
4,000
289
4,289
–
–
–
–
155
155
2 to 3
years
$000
–
–
–
–
157
157
–
–
–
–
158
158
3 to 4
years
$000
–
–
–
–
–
–
–
–
489
489
> 4
years
$000
–
–
–
–
156
156
607
607
Total
$000
4,613
3,974
3,500
3,954
1,173
17,214
Total
$000
3,655
5,954
3,000
8,000
1,616
22,225
Trade payables
Other liabilities and account
payables
Consideration payable on
intangible assets
Deferred consideration
Lease liabilities
At 31 December 2023
Trade payables
Other liabilities and account
payables
Consideration payable on
intangible assets
Deferred consideration
Lease liabilities
At 31 December 2022
c. Fair value
The carrying amounts of the Group’s financial assets and liabilities approximate their fair value. The fair
value of financial derivatives are categorized within level 2 of the fair value hierarchy. The fair value of the
contingent consideration is categorized within level 3 of the fair value hierarchy.
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
20. FINANCIAL INSTRUMENTS (CONTINUED)
d. Sensitivity tests relating to changes in market factors
Sensitivity test to changes in EUR to USD exchange rate:
Gain (loss) from the change:
Increase of 10% in the exchange rate
Decrease of 10% in the exchange rate
Sensitivity test to changes in NIS to USD exchange rate:
Gain (loss) from the change (net of the effect of derivates) :
Increase of 10% in the exchange rate
Decrease of 10% in the exchange rate
Sensitivity test to changes in GBP to USD exchange rate:
Gain (loss) from the change:
Increase of 10% in the exchange rate
Decrease of 10% in the exchange rate
2023
$000
2022
$000
(183)
175
183
30
(30)
119
(119)
(175)
(5)
5
76
(76)
The sensitivity tests reflect the effects of possible changes in exchange rates on the position of the Group
for the above currencies as of the end of the year. As described in b.i. above, these contracts are intended to
reduce the Group’s exposure to fluctuations in exchange rates on future revenues and expenses. Therefore,
although it is expected the above effects will be offset by contra effects upon the recording of the revenues
and expenses, the timing of these effects may not coincide in the same reporting period.
Sensitivity tests and principal assumptions
The selected changes in the relevant risk variables were determined based on management’s estimate as to
reasonable possible changes in these risk variables. The Group has performed sensitivity tests of principal
market risk factors that are liable to affect its reported operating results or financial position. The sensitivity
tests present the effects (before tax) on profit or loss and equity in respect of each financial instrument for
the relevant risk variable chosen for that instrument as of each reporting date.
The test of risk factors was determined based on the materiality of the exposure of the operating results or
the financial condition of each risk with reference to the functional currency and assuming that all the other
variables are constant. The Group does not have significant exposure to interest rate risk.
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FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
20. FINANCIAL INSTRUMENTS (CONTINUED)
e. Changes in liabilities arising from financial activities
Consideration
payable on
intangible assets
$000
3,000
3,000
–
(3,000)
–
–
3,000
3,500
–
(3,000)
–
–
3,500
Contingent
consideration
$000
Deferred
consideration
$000
808
26,138
Lease
Liabilities
$000
1,553
–
–
–
–
(808)
–
–
–
–
–
–
–
–
–
(18,371)
234
(148)
7,853
–
–
(4,004)
105
–
3,954
–
449
(401)
28
(101)
1,528
–
29
(421)
49
(12)
1,173
Total
$000
31,499
3,000
449
(21,772)
262
(1,057)
12,381
3,500
29
(7,425)
154
(12)
8,627
At 1 January 2022
Additions
Finance lease obligation
Cash flows
Changes in interest expense
Other changes
At 31 December 2022
Additions
Finance lease obligation
Cash flows
Changes in interest expense
Other changes
At 31 December 2023
During the year ended 31 December 2023, the Group paid $4,004,000 (2022: $18,371,000) in deferred
consideration relating to the 2021 acquisitions of Sports Betting Dime, and a further $3,000,000 for the
2021 acquisition of CBWG.
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
21. CASH GENERATED FROM OPERATIONS
Loss for the year
Adjustments to reconcile loss for the year to net cash flows:
Depreciation and amortisation
Net impairment charge for continuing operations
Impairment (reversal) /charge for discontinued operations
Net finance expense
Loss on disposal of property and equipment
Loss on disposal of intangible assets
Other income
Cost of share-based payments
Tax charge from continuing operations
Tax charge/(credit) from discontinued operations
Exchange differences on balances of cash and cash equivalents
Working capital changes:
(Increase) /decrease in trade receivables
Decrease in other receivables
Increase in trade payables
Increase/(decrease) in other liabilities and accounts payable
Cash generated from operations
2023
$000
(47,045)
6,477
44,624
(2,050)
231
–
212
(463)
173
627
3,182
(3)
(906)
2,139
958
1,749
9,905
2022
$000
(9,439)
7,313
–
13,835
450
157
–
–
858
1,604
(3,182)
1,297
3,002
2,665
1,322
(5,235)
14,647
22. BALANCES AND TRANSACTIONS WITH RELATED PARTIES INCLUDING DIRECTORS
The Group’s related party transactions in the year include the compensation of the senior managers, the
Directors’ emoluments and retirement benefit entitlements, share awards and share options as disclosed in
the Directors’ remuneration report, which forms part of these financial statements.
Balances
Current liabilities – management fees and other short-term payables
Compensation of key management personnel of the Group
Short-term employee benefits
2023
$000
9
2,657
2,657
2022
$000
20
2,426
2,426
No other related party services were provided or received by the Group in the year ended 31 December
2023 (2022: None) .
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FINANCIAL STATEMENTS
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
CONTINUED
FINANCIAL STATEMENTS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
23. LIST OF MAIN SUBSIDIARIES
24. SUBSEQUENT EVENTS (CONTINUED)
A full list of related undertakings including the country of incorporation, the principal activity and the
effective percentage of equity owned as at 31 December 2023 is disclosed below:
Name of entity
Country of incorporation
Principal activity
Registered address
XLMedia Finance Ltd
Cyprus
Bank guarantees for Cyprus 232 Agias Fylaxeos,
XLMedia Publishing Ltd
Jersey
Websites / domains
Webpals Holdings Ltd
Israel
Holding entity
Limassol, 3082, Cyprus
12 Castle Street, St.
Helier, Jersey, JE2 3RT
HaMada 7, 6th floor,
Herzliya, 4673341, Israel
As the sale formally completed on 1 April 2024 which was after the statement of financial position
reporting date of 31 December 2023, the full financial impact will be reported in the consolidated financial
statements for the year ended 31 December 2024.
However, the consideration received as part of the sale was deemed to be the best indication of the fair
value of the domains and websites in the Casino and Sports Europe CGUs as at 31 December 2023. In line
with IAS 36 ‘Impairment of Assets’, previous impairment charges have been reversed to reflect the net book
value up to the value of the consideration received. The impairment review is detailed further in Note 11
and as of 31 December 2023, the assets had a statement of financial position valuation of approximately
$35,643,000.
Webpals Systems S.C Ltd
Marmar Media Ltd
Webpals Inc.
Israel
Israel
U.S
XLMedia US Inc.
XLMedia Canada
Marketing Ltd
U.S
Canada
Services to Casino business As above
Dormant
As above
Services to US Sports
business
US Sports
SBD business
U.S c/o Vcorps Services
LLC 1013 Centre Road
Suite 403-b Newcastle,
Wilimington, DE 19805c
As above
c/o Farris LLP 700 West
Georgia Street, 25th Floor,
Vancouver, BC V7Y 1B3
167 – 169 Great Portland
Street, London, W1W 5PF
Blueclaw Media Ltd
U.K.
Services company
All interest in the subsidiaries confer 100% voting rights and 100% rights to profits.
24. SUBSEQUENT EVENTS
Director changes
In January 2024, the Group announced that Caroline Ackroyd, Chief Financial Officer, would step down
from the Board of Directors of the Company on 31 March 2024. In March 2024, Karen Tyrell, Chief
People and Operations Officer, was promoted to Interim Chief Operating Officer and will cover all finance
responsibilities for the Group.
Disposal of EU Sports and Casino businesses
On 1 April 2024, the Group disposed of its Europe and Canada sports betting and gaming assets to
Gambling.com Group Limited for a total consideration of up to $42,500,000.
The purchase consideration includes a fixed sum of $37,500,000, plus a potential earnout of up to
$5,000,000 based on achieving contingent targets in April 2025. For the fixed element, $20,000,000 cash
consideration was received on completion on 2 April 2024, $10,000,000 deferred consideration is due in
October 2024 and a further $7,500,000 due in April 2025.
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main headingmain headingmain heading 2main heading 2main headingmain headingmain heading 2main heading 2 GLOSSARY OF TERMS
GLOSSARY OF
FINANCIAL TERMS
Although the Group is not subject to the Guidelines on Alternative
Performance Measures issued by the European Securities and Markets
Authority, we have provided additional information on the metrics used
by the Group. The Directors use the metrics listed below as they are
critical to understanding the financial performance and financial health
of the Group. As they are not defined by IFRS, they may not be directly
comparable with other companies who use similar measures.
PROFIT MEASURES
METRIC
Continuing
operations
revenue
CLOSEST EQUIVALENT
IFRS MEASURE
Revenue
Adjusted
EBITDA
Operating Profit 1
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
DEFINITION
Group revenue less discontinued
operations revenue.
For 2023, the Group classified the
Personal Finance and Blueclaw verticals
as discontinued.
Earnings before Interest, Taxes,
Depreciation and Amortisation, and
excluding any impairment, share-
based payments, exceptional minimum
guarantee costs, restructuring costs and
aborted deal related costs.
Adjusted EBITDA
from continuing
operations
Adjusted Basic
and diluted
earnings per share
from core
Operating Profit 1
As above but excluding other non-core
operations.
Basic and diluted
earnings per share
Based on profit for the year from
continuing operations excluding profit/
(loss) from other non-core operations.
1. Operating profit is not defined under IFRS. However, it is a generally accepted profit measure.
CASH FLOW MEASURES
METRIC
CLOSEST EQUIVALENT
IFRS MEASURE
DEFINITION
Free cash flow
No direct equivalent
Cash from operations less capital
expenditure excluding acquisition costs.
Normalised capital
expenditure
No direct equivalent
Reported capital expenditure excluding
acquisition-related capital expenditure.
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GLOSSARY OF TERMS
GLOSSARY OF
OTHER TERMS
XLMEDIA PLC 2023 ANNUAL REPORT & ACCOUNTS
TERM
DEFINITION
Cost per
acquisition (CPA)
A one-off, upfront payment for a referred user that either creates a new
profile or makes a deposit with an operator.
Revenue share
A revenue share model is based on the percentage of the net revenue
a user generates for the operator. It is typically ongoing revenue for the
lifetime of the player, but this duration can vary between operators.
Hybrid deal
Fixed deal
A blended revenue model consisting of an upfront CPA payment
combined with a long-term revenue share model.
A fixed deal allows an operator brand to secure a position on a site or
page for a tenancy period.
Other revenue
Display advertising sold on a CPM (cost per mille impressions) basis and
sponsorships sold for either a flat fee or CPM.
Real money player
(RMP)
A user that creates an online account and makes a deposit with an
operator.
State spikes
Following the launch of a newly legal online sports betting state in North
America, the business typically identifies a significant spike in revenues.
For the purposes of time allocation, this is considered to be the first ten
days post a state launch.
Media Partnership
Business (MPB)
The MPB is a collective of leading sports media and news publishers
that benefit from our quality storytelling, industry expertise and operator
relationships. Media Partners provide sports audiences, XLMedia provides
sports betting commercial content to those partners and together we
share in the revenue it generates.
TERM
Owned and
Operated (O&O)
Portfolio
DEFINITION
O&O brands are fully owned assets that provide news, insights and
entertainment from expert reporters and talent.
Google E-E-A-T
From Google’s Search Quality Evaluator Guidelines:
“Experience, Expertise, Authoritativeness and Trust (E-E-A-T) are all
important considerations in page quality (PQ) rating. The most important
member at the centre of the E-E-A-T family is Trust.
Depending on the purpose of the page, topic, and type of website, a high
level of E-E-A-T may be required for the page to achieve its purpose well
and be considered high quality. Pages with high E-E-A-T are trustworthy
or very trustworthy.
A website or content creator who is the uniquely authoritative, go-to
source for a topic has very high E-E-A-T. A content creator with a wealth
of experience may be considered to have very high E-E-A-T for topics
where experience is the primary factor in trust.”
Search engine
optimisation (SEO)
This is an operational activity for the business that capitalises on the
demand from consumers searching for information online. The process
optimises the online visibility of a website to improve search rankings and
deliver organic traffic from editorial and commercial content appearing in
search engine results.
Search ranking
To provide the most useful information to users, search engines apply
algorithms that take a variety of factors into account to sort, identify and
serve websites and webpages to address users’ query. The weight of
the factors varies depending on the nature of the query. The result is a
ranking or list of results designed to be the most valuable to the user.
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