26 September 2024
Devolver Digital,
Inc.
("Devolver Digital", "Devolver" or the "Company", and the
Company together with all of its subsidiary undertakings "the
Group")
Unaudited results for the six
months ended 30 June 2024
Return to Adjusted EBITDA
profitability as expected, on track to meet FY 2024
guidance
Devolver Digital, the award-winning
digital publisher and developer of independent ("indie") video
games, announces its unaudited results for the six months ended 30
June 2024. All figures relate to this period unless otherwise
stated.
A
focused strategy driving return to growth
·
1H 2024 trading in line with
expectations.
·
Growth driven by strong back catalogue sales,
contribution from new releases and improvement in platform
deals.
o 3
new titles released in 1H 2024 (1H 2023: 4), with record-matching
average Metacritic score of 80 (76 average for 1H 2023).
o Back
catalogue revenues up 22%, accounting for 89% of game sales
revenues (1H 2023: 87%), reflecting the continued strong
performance of Cult of the
Lamb and other key titles, plus the new contribution from
System Era's Astroneer
title.
o Platform deals saw recovery from 2023's low level, being
weighted to 1H 2024.
·
System Era, acquired last year, is performing in
line with expectations and is integrating well, adding a full
six-month contribution to 1H 2024 revenues.
Financial performance - return to EBITDA
profit
·
Revenues in line with FY24
expectations:
o 1H
2024 revenues up 18% to $51.6m; Adjusted Gross Profit up 62% to
$15.3m.
·
Strong execution and operational discipline
leading to improved Adjusted EBITDA profit, as previously
guided:
o 1H
2024 Adjusted EBITDA profit of US$4.7m, pre non-cash impairment (1H
2023: US$2.5m loss).
·
Non-cash impairment of US$1.7m recorded in 1H 2024
(1H 2023: US$0.9m) relating to previous releases where sales have
been softer than expected.
·
Statutory net loss of US$4.5m1 (1H
2023: US$10.1m loss).
·
Cash of US$31.9m as of 30 June 2024 (year end
2023: US$42.7m), not including $9.8m net proceeds from the primary
issuance of shares in early July 2024.
Current trading and outlook
·
10 new titles expected for full year 2024, with 7
releases in 2H 2024: Anger
Foot, The Crush
House, Sumerian Six,
Demon's Mirror, The Plucky Squire, Neva and Stronghold Castles.
·
System Era integration on track with full year
contribution in FY 2024.
·
Strong Balance Sheet boosted by $9.8m primary
share placement in July 2024.
·
On track to meet previous guidance: revenues over
US$100m and Adjusted EBITDA after non-cash impairments in the
mid-single digit US$ millions. We continue to expect an improvement
in 2025.
·
Healthy pipeline of more than 30 new titles due for release in the next three
years.
Harry Miller, Executive Chairman of Devolver,
said:
"As expected, the first half of 2024 saw a return to Adjusted
EBITDA profitability, driven by strong back catalogue revenues
supplemented by new releases, an improvement in platform deals and
a solid first half contribution from new acquisition System Era. We
are pleased with the record high average Metacritic ratings in 1H
2024, which we believe can bolster the longevity of our
games.
We
are building momentum going into 2H 2024, with 6 new titles
including the highly anticipated release of
Neva in October, on the back of the recent success
of The Plucky Squire. We reiterate our guidance
for FY 2024, with improvements expected through 2025 and
2026."
Notes
1. Including non-cash
impact of US$2.4m of share-based payments.
About Devolver Digital
Devolver is an award-winning video
games publisher in the indie games space with a balanced portfolio
of third-party and own-IP. Devolver has an emphasis on premium
games and has published more than 120 titles, with more than 30
titles in the pipeline scheduled for release over the next three
years. Devolver has in-house studios developing first-party IP
titles and a complementary publishing brand. Devolver is registered
in Wilmington, Delaware, USA.
Enquiries
|
Devolver Digital, Inc.
Harry Miller, Chief Executive
Officer
Daniel Widdicombe, Chief Financial
Officer
|
ir@devolverdigital.com
|
|
Zeus
(Nominated Adviser and Joint Broker)
Nick Cowles, Kieran Russell
(Investment Banking)
Ben Robertson (Equity Capital
Markets)
|
+44 (0)20
3829 5000
|
|
Panmure Liberum (Joint Broker)
Max Jones, Matt Hogg (Investment
Banking)
|
+44 (0)20
3100 2000
|
|
FTI
Consulting (Communications Adviser)
Jamie Ricketts / Dwight Burden /
Valerija Cymbal / Usama Ali
|
devolver@fticonsulting.com
+44 (0)20
3727 1000
|
OPERATING REVIEW
1H
2024 - return to profit, with three new high Metacritic
titles
Devolver released 3 new
well-received titles in 1H 2024 - Dicefolk, Pepper Grinder and Children of the Sun - with an average
Metacritic rating of 80, matching the record high average for a
single six-month period. High Metacritic scores and positive user
ratings are important as they help to bolster the longevity of
releases.
The quiet release schedule mirrored
that of 1H 2023 (4 titles), but 1H 2024 overall revenue benefitted
from a significant contribution from platform deals for front and
back catalogue, as well as the addition of a full six-month
contribution from recent acquisition System Era. These two factors
drove an 18% YOY increase in total group revenue in the first half
of this year compared to 1H 2023.
Hit
releases support 22% growth in back catalogue
Fan favourite Cult of The Lamb provided strong
revenue momentum in 1H 2024, a trend continuing through this
summer. The contribution from Cult of The Lamb, in combination with
a full six-month contribution from recent acquisition System Era's
Astroneer game, drove a
22% increase in back catalogue revenues in 1H 2024 compared to the
previous year period. BAFTA-winning Inscryption also continued to perform
well in the first six months of 2024, alongside other evergreen
titles in Devolver's back catalogue.
The strong growth in back catalogue
revenues, coupled with a lighter release schedule in 1H 2024, meant
that back catalogue revenues accounted for 89% of game sales
revenues (1H 2023: 87%). Our back catalogue includes all titles
released in or prior to the last financial year (2023 or earlier).
As of 1 January 2024, the back catalogue consists of over 120
titles, including numerous indie cult classics, supporting highly
diversified revenues.
Summer Game Fest 2024
Devolver marked June 2024 with
celebrations in the summer showcase to commemorate the company's
15th year anniversary of its founding. Devolver's iconic
live broadcast formed part of the Summer Game Fest 2024 in June,
featuring reveals of future new releases and expansions to fan
favourites Cult of the
Lamb and The Talos
Principle 2. New titles included Possessors, a slick side-scrolling
action game from developer Heart Machine, the creators of
Solar Ash and Hyper Light Drifter, and a reveal for Tenjutsu, the pending release from
Dead Cells lead developer
Deepnight Games. The game puts players in the role of a renegade
yakuza fighting through the criminal underworld and mixes pixel art
visuals with some fast-paced action.
Recent releases Anger Foot and Crush House received attention, and we
also highlighted the Road to
Elysium expansion from The Talos Principle 2, introducing a
host of new challenges spread across three chapters - Orpheus Ascending, Isle of the Blessed, and Into the Abyss - each with their own
look and storyline. The broadcast also
highlighted Cult of the
Lamb's Unholy
Alliance expansion (rolled out on August
12th), which included some new quests, gear and other
items, and added a co-op gameplay mode, underscoring our commitment
to successful title expansion.
Disciplined Cost Control
Devolver successfully controlled
operating expenses in 1H 2024, with growth in revenues outstripping
total operating expenses, resulting in margin expansion in both
gross profit and Adjusted EBITDA.
FINANCIAL REVIEW
Unaudited first half 2024 results to June 30
2024
The unaudited financial results
included in this announcement cover the Group's combined activities
for the six months ended 30th June 2024 (prepared in
accordance with applicable International Financial Reporting
Standards, "IFRS").
Adjusted results
The following refers to Adjusted
results, as presented in the financial statements contained within
this release. Adjusted results exclude any
one-time exceptional items during the respective half-year
periods.
Adjusted EBITDA results are not
intended to replace statutory results and are prepared to provide a
more comparable indication of the Group's core business performance
by removing the impact of certain items including exceptional items
(material and non-recurring), and other, non-trading, items that
are reported separately. These results have been presented to
provide users with additional information and analysis of the
Group's performance, consistent with how the Board monitors
results. Further details of adjustments are given in Note 4 to the
condensed financial statements contained within this semi-annual
results release.
P&L results and margins
Devolver Digital's first half 2024
performance was in line with expectations,
with 3 new title releases compared to 4 titles released in 1H 2023.
Revenues of US$51.6 million rose 18% year-over-year. Gross profit
was US$15.3 million, an increase of 62% year-over-year. Adjusted
EBITDA after non-cash impairments delivered a profit of US$3.0
million versus a US$3.5 million loss in 1H 2023.
Gross profit margin increased to
29.6% in the first half of 2024, up from 21.4% in the year-earlier
period. Gross margin expansion was a result of first-party IP
contributions from late 2023 new releases, other new releases in
recoup in 1H 2024, and a full six-month contribution from
Astroneer, System Era's
popular expandable game. This compares to 1H 2023 when the royalty
pay-out mix was heavily weighted towards third party
titles.
Adjusted EBITDA margins before
non-cash impairments improved to a positive 9.1% from a negative
5.7% in the first half of 2023. The expansion in 1H 2024 gross
profit had a direct flow-through effect which benefitted Adjusted
EBITDA.
Statutory net loss for 1H 2024 was
US$4.5m, improved from the US$10.1m loss in 1H 2023.
Cash Balances
Cash holdings at end of June 2024
were US$31.9
million, a reduction of
US$10.8 million compared to end of 2023's level of US$42.7 million,
on the back of continued investment into game development. After
the period end, a primary share placement in July 2024 resulted in
net proceeds of US$9.8m. Devolver has no
borrowings across the Group.
Appointment of Joint Broker
We are pleased to have Panmure
Liberum join the Devolver family as Joint Broker to assist in
broadening our investor coverage and business scope.
CURRENT TRADING OUTLOOK
Our busy release schedule for 2H
2024 has already featured Anger
Foot, The Crush
House, Sumerian Six
and Demon's Mirror, as
well as major title The
Plucky Squire.
NEVA, from the developers
of the award-winning Gris,
will release in October, alongside the mobile title Stronghold Castles from our subsidiary
Firefly. The Plucky Squire
released with a Metacritic score of 81 and very positive user
reviews. NEVA, slated for
release in October, has had very positive pre-release trailers, and
has also built a healthy wishlist ahead of launch.
Trading for the full year 2024
continues to be in line with consensus expectations of revenues
exceeding US$100 million and Adjusted EBITDA to be in the
mid-single digit US$ millions, with improvements expected through
2025 and 2026.
Our momentum, robust balance sheet,
deep pipeline and strong contribution from extensive back catalogue
all support our confidence of further progress in 2025 and in the
future. The Board believes that we are well positioned for future
success, and we look forward to reporting on our progress into
2025.
Harry Miller
Chief Executive Officer
Condensed Consolidated Statement of Profit or
Loss
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
6 months
ended
|
|
6 months
ended
|
|
Year ended
|
|
|
|
30-Jun-24
|
|
30-Jun-23
|
|
31-Dec-23
|
|
|
Note
|
US$'000
|
|
US$'000
|
|
US$'000
|
|
Revenue
|
2
|
51,583
|
|
43,877
|
|
92,356
|
|
Cost of sales
|
|
(36,327)
|
|
(34,483)
|
|
(67,838)
|
|
Gross profit
|
|
15,256
|
|
9,394
|
|
24,518
|
|
Administrative expenses
|
|
(21,439)
|
|
(18,141)
|
|
(38,537)
|
|
Other income / (expenses)
|
|
1,134
|
|
(591)
|
|
1,011
|
|
Operating loss
|
|
(5,049)
|
|
(9,338)
|
|
(13,008)
|
|
Finance costs
|
|
(61)
|
|
(198)
|
|
(58)
|
|
Finance income
|
|
272
|
|
897
|
|
1,361
|
|
Loss
before taxation
|
|
(4,838)
|
|
(8,639)
|
|
(11,705)
|
|
Income tax benefit /
(expense)
|
|
366
|
|
(1,426)
|
|
(1,019)
|
|
Loss
for the period
|
|
(4,472)
|
|
(10,065)
|
|
(12,724)
|
|
Loss for the period is attributable
to:
|
|
|
|
|
|
|
|
Equity holders of the
parent
|
|
(4,414)
|
|
(10,042)
|
|
(12,742)
|
|
Non-controlling interests
|
|
(58)
|
|
(23)
|
|
18
|
|
Loss
for the period
|
|
(4,472)
|
|
(10,065)
|
|
(12,724)
|
|
Basic and diluted loss per share
($)
|
3
|
(0.010)
|
|
(0.023)
|
|
(0.029)
|
|
Non-IFRS measures
|
|
|
|
|
|
|
|
Adjusted EBITDA* before performance-
related impairments
|
4
|
4,713
|
|
(2,535)
|
|
1,677
|
|
Adjusted EBITDA*
|
4
|
2,967
|
|
(3,469)
|
|
(458)
|
*Adjusted EBITDA is a non-IFRS
measure and is defined as earnings before interest, tax,
depreciation, amortisation (but does not exclude amortisation of
capitalised software development costs), share-based payment
expenses, foreign exchange gains or losses and one-time
non-recurring items and non-trading items.
For the six months ended 30 June
2023, the Group distinguished between Normalised Adjusted EBITDA
and Adjusted EBITDA and presented both measures. This distinction
was removed post June 2023 for a simpler, clearer presentation in
line with industry peers, and therefore the Adjusted EBITDA
for the six months ended 30 June 2023 as previously reported is no
longer presented, and the Normalised Adjusted EBITDA previously
reported is presented as Adjusted EBITDA in the above
table.
Condensed Consolidated Statement of Comprehensive
Income
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
6 months
ended
|
|
6 months
ended
|
|
Year ended
|
|
|
|
30-Jun-24
|
|
30-Jun-23
|
|
31-Dec-23
|
|
|
|
US$'000
|
|
US$'000
|
|
US$'000
|
|
|
|
|
|
|
|
|
|
Loss
for the period
|
|
(4,472)
|
|
(10,065)
|
|
(12,724)
|
|
|
|
|
|
|
|
|
|
Other comprehensive income: Items that may be
reclassified
|
|
|
|
|
|
|
|
subsequently to profit or loss
|
|
|
|
|
|
|
|
Exchange differences on translation
of foreign operations
|
|
(329)
|
|
33
|
|
1,673
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the period
|
|
(4,801)
|
|
(10,032)
|
|
(11,051)
|
|
Total comprehensive loss is
attributable to:
|
|
|
|
|
|
|
|
Equity holders of the
parent
|
|
(4,743)
|
|
(10,009)
|
|
(11,069)
|
|
Non-controlling interests
|
|
(58)
|
|
(23)
|
|
18
|
|
Total comprehensive loss for the period
|
|
(4,801)
|
|
(10,032)
|
|
(11,051)
|
Condensed Consolidated Statement of Financial
Position
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
As at
|
|
As at
|
|
As at
|
|
|
|
30-Jun-24
|
|
30-Jun-23
|
|
31-Dec-23
|
|
|
Note
|
US$'000
|
|
US$'000
|
|
US$'000
|
|
ASSETS
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
|
|
|
|
|
- goodwill
|
5
|
31,902
|
|
19,416
|
|
31,963
|
|
- other intangible
assets
|
5
|
97,506
|
|
72,356
|
|
95,936
|
|
Property, plant and
equipment
|
|
190
|
|
91
|
|
266
|
|
Right of use asset
|
|
845
|
|
-
|
|
953
|
|
Employee loans
|
|
594
|
|
456
|
|
320
|
|
Deferred tax assets
|
|
10,968
|
|
10,598
|
|
8,100
|
|
Total non-current assets
|
|
142,005
|
|
102,917
|
|
137,538
|
|
Current assets
|
|
|
|
|
|
|
|
Trade and other
receivables
|
|
21,561
|
|
12,173
|
|
13,778
|
|
Cash and cash equivalents
|
|
31,926
|
|
64,761
|
|
42,651
|
|
Employee loans
|
|
227
|
|
406
|
|
487
|
|
Current tax asset
|
|
1,227
|
|
3,905
|
|
2,354
|
|
Total current assets
|
|
54,941
|
|
81,245
|
|
59,270
|
|
Total assets
|
|
196,946
|
|
184,162
|
|
196,808
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Share capital
|
|
45
|
|
45
|
|
45
|
|
Share premium
|
|
146,106
|
|
146,062
|
|
146,106
|
|
Retained earnings*
|
|
44,219
|
|
48,326
|
|
47,092
|
|
Translation reserve
|
|
(923)
|
|
(2,234)
|
|
(594)
|
|
Capital redemption
reserve
|
|
(34,505)
|
|
(34,857)
|
|
(34,531)
|
|
Equity attributable to owners of the parent
|
|
154,942
|
|
157,342
|
|
158,118
|
|
Non-controlling interest
|
|
(142)
|
|
(125)
|
|
(84)
|
|
Total equity
|
|
154,800
|
|
157,217
|
|
158,034
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
Trade and other payables*
|
|
10,332
|
|
1,640
|
|
10,361
|
|
Deferred tax liabilities
|
|
238
|
|
1,046
|
|
259
|
|
Lease liability
|
|
782
|
|
-
|
|
873
|
|
Deferred revenue
|
|
-
|
|
-
|
|
1,309
|
|
Total non-current liabilities
|
|
11,352
|
|
2,686
|
|
12,802
|
|
Current liabilities
|
|
|
|
|
|
|
|
Trade and other payables
|
|
26,977
|
|
17,699
|
|
24,457
|
|
Lease liability
|
|
173
|
|
-
|
|
155
|
|
Deferred revenue
|
|
1,985
|
|
2,402
|
|
634
|
|
Current tax liability
|
|
1,659
|
|
4,158
|
|
726
|
|
Total current liabilities
|
|
30,794
|
|
24,259
|
|
25,972
|
|
Total liabilities
|
|
42,146
|
|
26,945
|
|
38,774
|
|
Total equity and liabilities
|
|
196,946
|
|
184,162
|
|
196,808
|
*Due to the identification of an
additional tax liability for prior periods relating to state income
taxes, the reported financials for the period ended 30 June 2023
have been adjusted for a US$1.6 million increase in the non-current
Trade and other payables and a US$1.6 million decrease in opening
Retained earnings.
Condensed Consolidated Statement of Changes in
Equity
|
|
|
Share
capital
|
Share
premium
|
Translation
reserve
|
Retained
earnings
|
Capital redemption
reserve
|
Total Devolver
equity
|
Non-controlling
interest
|
Total
equity
|
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December 2023 (audited)
|
|
45
|
146,106
|
(594)
|
47,092
|
(34,531)
|
158,118
|
(84)
|
158,034
|
|
Loss for the period
|
|
-
|
-
|
-
|
(4,414)
|
-
|
(4,414)
|
(58)
|
(4,472)
|
|
Currency translation
differences
|
|
-
|
-
|
(329)
|
-
|
-
|
(329)
|
-
|
(329)
|
|
Other movements
|
|
-
|
-
|
-
|
(150)
|
26
|
(124)
|
-
|
(124)
|
|
Fair value adjustment
|
|
-
|
-
|
-
|
(647)
|
-
|
(647)
|
-
|
(647)
|
|
Transactions with owners in their capacity as
owners:
|
|
|
|
|
|
|
|
|
|
|
Other movements
|
|
-
|
-
|
-
|
(76)
|
-
|
(76)
|
-
|
(76)
|
|
Share-based payments
|
|
-
|
-
|
-
|
2,414
|
-
|
2,414
|
-
|
2,414
|
|
Total transactions with owners
|
|
-
|
-
|
-
|
2,338
|
-
|
2,338
|
-
|
2,338
|
|
Balance at 30 June 2024 (unaudited)
|
|
45
|
146,106
|
(923)
|
44,219
|
(34,505)
|
154,942
|
(142)
|
154,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
Share
premium
|
Translation
reserve
|
Retained
earnings
|
Capital redemption
reserve
|
Total Devolver
equity
|
Non-controlling
interest
|
Total
equity
|
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December 2022 (audited)
|
|
45
|
146,044
|
(2,267)
|
54,618
|
(27,707)
|
170,733
|
(102)
|
170,631
|
|
Loss for the period
|
|
-
|
-
|
-
|
(10,042)
|
-
|
(10,042)
|
(23)
|
(10,065)
|
|
Currency translation
differences
|
|
-
|
-
|
33
|
-
|
-
|
33
|
-
|
33
|
|
Transactions with owners in their capacity as
owners:
|
|
|
|
|
|
|
|
|
|
|
Issue of shares
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Exercise of share options
|
|
-
|
18
|
-
|
-
|
-
|
18
|
-
|
18
|
|
Treasury share repurchase
transactions
|
|
-
|
-
|
-
|
-
|
(7,150)
|
(7,150)
|
-
|
(7,150)
|
|
Share-based payments
|
|
-
|
-
|
-
|
3,905
|
-
|
3,905
|
-
|
3,905
|
|
Share-based payments recycling of
charge
|
|
-
|
-
|
-
|
(155)
|
-
|
(155)
|
-
|
(155)
|
|
Total transactions with owners
|
|
-
|
18
|
-
|
3,750
|
(7,150)
|
(3,382)
|
-
|
(3,382)
|
|
Balance at 30 June 2023 (unaudited)
|
|
45
|
146,062
|
(2,234)
|
48,326
|
(34,857)
|
157,342
|
(125)
|
157,217
|
|
|
|
Share
capital
|
Share
premium
|
Translation
reserve
|
Retained
earnings
|
Capital redemption
reserve
|
Total Devolver
equity
|
Non-controlling
interest
|
Total
equity
|
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December 2022 (audited)
|
|
45
|
146,044
|
(2,267)
|
54,618
|
(27,707)
|
170,733
|
(102)
|
170,631
|
|
Loss for the period
|
|
-
|
-
|
-
|
(12,742)
|
-
|
(12,742)
|
18
|
(12,724)
|
|
Currency translation
differences
|
|
-
|
-
|
1,673
|
-
|
-
|
1,673
|
-
|
1,673
|
|
Transactions with owners in their capacity as
owners:
|
|
|
|
|
|
|
|
|
|
|
Issue of shares
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Exercise of share options
|
|
-
|
62
|
-
|
(312)
|
-
|
(250)
|
-
|
(250)
|
|
Treasury share repurchase
transactions
|
|
-
|
-
|
-
|
-
|
(6,824)
|
(6,824)
|
-
|
(6,824)
|
|
Share-based payments
|
|
-
|
-
|
-
|
5,528
|
-
|
5,528
|
-
|
5,528
|
|
Total transactions with owners
|
|
-
|
62
|
-
|
5,216
|
(6,824)
|
(1,546)
|
-
|
(1,546)
|
|
Balance at 31 December 2023 (audited)
|
|
45
|
146,106
|
(594)
|
47,092
|
(34,531)
|
158,118
|
(84)
|
158,034
|
Condensed Consolidated Statement of Cash
Flows
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
6 months
ended
|
|
6 months
ended
|
|
Year ended
|
|
|
|
30-Jun-24
|
|
30-Jun-23
|
|
31-Dec-23
|
|
|
|
US$'000
|
|
US$'000
|
|
US$'000
|
|
|
|
|
|
|
|
|
|
Loss for the period before taxation
|
|
(4,838)
|
|
(8,639)
|
|
(11,705)
|
|
Adjustments for:
|
|
|
|
|
|
|
|
Depreciation of tangible fixed
assets
|
|
94
|
|
31
|
|
186
|
|
Depreciation of right of use
assets
|
|
108
|
|
-
|
|
-
|
|
Amortisation of intangible fixed
assets
|
|
13,335
|
|
6,982
|
|
15,552
|
|
Impairment of intangible fixed
assets
|
|
1,746
|
|
934
|
|
2,455
|
|
Finance income
|
|
(326)
|
|
(897)
|
|
(1,361)
|
|
Finance costs
|
|
115
|
|
198
|
|
58
|
|
Share-based payment
charge
|
|
2,398
|
|
3,905
|
|
5,528
|
|
Other non-cash movements
|
|
(269)
|
|
(239)
|
|
9
|
|
Movements in working capital:
|
|
|
|
|
|
|
|
Receivables
|
|
(7,693)
|
|
1,616
|
|
3,692
|
|
Payables
|
|
(115)
|
|
792
|
|
(2,095)
|
|
Cash inflow from operations
|
|
4,555
|
|
4,683
|
|
12,319
|
|
Taxation paid
|
|
(83)
|
|
(361)
|
|
(778)
|
|
Taxation received
|
|
-
|
|
-
|
|
2,416
|
|
Net
cash inflow from operating activities
|
|
4,472
|
|
4,322
|
|
13,957
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Purchase of intangible
assets
|
|
(15,009)
|
|
(12,570)
|
|
(27,883)
|
|
Purchase of tangible
assets
|
|
(56)
|
|
-
|
|
(51)
|
|
Acquisitions of businesses, net of
cash acquired
|
|
-
|
|
(600)
|
|
(18,033)
|
|
Net
cash outflow from investing activities
|
|
(15,065)
|
|
(13,170)
|
|
(45,967)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Share capital issuance
|
|
-
|
|
18
|
|
62
|
|
Share repurchase
transactions
|
|
-
|
|
(7,150)
|
|
(6,824)
|
|
Interest received
|
|
317
|
|
893
|
|
1,338
|
|
Interest paid
|
|
(77)
|
|
-
|
|
(58)
|
|
Repayment of lease
liabilities
|
|
(72)
|
|
-
|
|
(22)
|
|
Net
cash inflow/(outflow) from financing activities
|
|
168
|
|
(6,239)
|
|
(5,504)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
Net
decrease in the period
|
|
(10,425)
|
|
(15,087)
|
|
(37,514)
|
|
At 1 January
|
|
42,651
|
|
79,493
|
|
79,493
|
|
Foreign exchange
movements
|
|
(300)
|
|
355
|
|
672
|
|
At
30 June / 31 December
|
|
31,926
|
|
64,761
|
|
42,651
|
Note 1: Basis of preparation
These condensed consolidated
financial statements have been prepared in accordance with the
recognition and measurement requirements of International
Accounting Standard 34 Interim
Financial Reporting. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for fair presentation have been included. The condensed
consolidated financial statements as at and for the six months
ended June 30, 2024 have been prepared on the same basis as the
audited annual financial statements.
Operating results for the six months
ended June 30, 2024 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2024. For
further information, refer to the consolidated financial statements
and footnotes thereto included in the Group's annual report for the
year ended December 31, 2023.
The Directors are confident that the
Group will remain cash positive and will have sufficient funds to
continue to meet its liabilities as they fall due for a period of
at least 12 months from the date of this first half 2024
announcement and have therefore prepared this unaudited semi-annual
announcement on a going concern basis.
Tax charged within 6 months ended 30
June 2024 has been calculated by applying the effective rate of tax
which is expected to apply to the Group for the year ending 31
December 2024 as required by IAS 34 Interim Financial
Reporting.
The financial presentation in this
release should be read in conjunction with the notes to the
consolidated financial statements as at and for the first half
ended 30 June 2024, as contained within this release.
These preliminary unaudited
financial statements were approved by the Board of Directors on 25
September 2024.
Note
2: Revenue
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
|
6 months
ended
|
|
6 months
ended
|
|
Year ended
|
|
|
|
|
30-Jun-24
|
|
30-Jun-23
|
|
31-Dec-23
|
|
|
|
|
US$'000
|
|
US$'000
|
|
US$'000
|
|
|
|
|
|
|
|
|
|
|
Revenue analysed by class of business:
|
|
|
|
|
|
|
|
|
Game publishing
|
|
51,583
|
|
43,877
|
|
92,356
|
|
|
Revenue analysed by timing of revenue:
|
|
|
|
|
|
|
|
|
Transferred at a point in
time
|
|
51,583
|
|
43,877
|
|
92,356
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group does not provide any
information on the geographical breakdown of revenues, as game
publishing revenue is earned via third-party distribution platforms
which hold the sales data of end consumers.
Note
3: Earnings Per Share
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
6 months
ended
|
|
6 months
ended
|
|
Year ended
|
|
|
|
30-Jun-24
|
|
30-Jun-23
|
|
31-Dec-23
|
|
|
|
US$'000
|
|
US$'000
|
|
US$'000
|
|
|
|
|
|
|
|
|
|
Loss attributable to owners of the
company
|
|
(4,414)
|
|
(10,042)
|
|
(12,742)
|
|
Weighted average number of
shares
|
|
444,832,441
|
|
444,818,506
|
|
444,825,531
|
|
Dilutive effect of share
options
|
|
-
|
|
-
|
|
-
|
|
Weighted average number of diluted
shares
|
|
444,832,441
|
|
444,818,506
|
|
444,825,531
|
|
Basic and diluted loss per share ($)
|
|
(0.010)
|
|
(0.023)
|
|
(0.029)
|
|
|
|
|
|
|
|
|
Note
4: Adjusted Results
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
6 months
ended
|
|
6 months
ended
|
|
Year ended
|
|
|
|
30-Jun-24
|
|
30-Jun-23
|
|
31-Dec-23
|
|
|
|
US$'000
|
|
US$'000
|
|
US$'000
|
|
Revenue
|
|
|
|
|
|
|
|
Reported Revenue
|
|
51,583
|
|
43,877
|
|
92,356
|
|
Reported Revenue growth
|
|
18.0%
|
|
(17.2%)
|
|
(31.4%)
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
Reported Gross Profit
|
|
15,256
|
|
9,394
|
|
24,518
|
|
Reported Gross Profit
margin
|
|
29.6%
|
|
21.4%
|
|
26.5%
|
|
Performance-related
impairments
|
|
1,746
|
|
934
|
|
2,455
|
|
Adjusted Gross Profit
|
|
17,002
|
|
10,328
|
|
26,973
|
|
Adjusted Gross Profit margin, pre
performance-related impairment
|
|
33.0%
|
|
23.5%
|
|
29.2%
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
2,967
|
|
(3,469)
|
|
(458)
|
|
Adjusted EBITDA margin
|
|
5.8%
|
|
(7.9%)
|
|
(0.5%)
|
|
Performance-related
impairments
|
|
1,746
|
|
934
|
|
2,135
|
|
Adjusted EBITDA pre performance-related
impairment
|
|
4,713
|
|
(2,535)
|
|
1,677
|
|
Adjusted EBITDA margin, pre
performance-related impairment
|
|
9.1%
|
|
(5.8%)
|
|
1.8%
|
|
|
|
|
|
|
|
|
*Adjusted EBITDA is a non-IFRS
measure and is defined as earnings before interest, tax,
depreciation, amortisation (but not excluding amortisation of
capitalised software development costs), share-based payment
expenses, foreign exchange gains or losses and one-time
non-recurring items and non-trading items.
For the six months ended 30 June
2023, the Group distinguished between Normalised Adjusted EBITDA
and Adjusted EBITDA and presented both measures. This distinction
was removed post June 2023 for a simpler, clearer presentation in
line with industry peers, and therefore the Adjusted EBITDA
for the six months ended 30 June 2023 as previously reported is no
longer presented, and the Normalised Adjusted EBITDA previously
reported is presented as Adjusted EBITDA in the above
table.
A reconciliation from the operating
loss to adjusted EBITDA is set out in the table below:
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
6 months
ended
|
|
6 months
ended
|
|
Year ended
|
|
|
|
30-Jun-24
|
|
30-Jun-23
|
|
31-Dec-23
|
|
|
|
US$'000
|
|
US$'000
|
|
US$'000
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
(5,049)
|
|
(9,338)
|
|
(13,008)
|
|
Share-based payment
expenses
|
|
2,414
|
|
3,905
|
|
5,528
|
|
Amortisation of intellectual
property
|
|
4,840
|
|
1,832
|
|
3,918
|
|
Depreciation of property, plant and
equipment
|
|
94
|
|
31
|
|
150
|
|
Depreciation of right-of-use
asset
|
|
108
|
|
-
|
|
36
|
|
Foreign exchange losses
(gains)/losses
|
|
(150)
|
|
(239)
|
|
9
|
|
Impairment of capitalised software
developments costs
|
|
-
|
|
-
|
|
320
|
|
Non-recurring, one time
expenses
|
|
710
|
|
340
|
|
2,589
|
|
Adjusted EBITDA
|
|
2,967
|
|
(3,469)
|
|
(458)
|
|
Performance-related
impairments
|
|
1,746
|
|
934
|
|
2,135
|
|
Adjusted EBITDA pre performance-related
impairments
|
|
4,713
|
|
(2,535)
|
|
1,677
|
Note
5: Intangible Assets
|
|
Software development
cost
|
Purchased intellectual
property
|
Subtotal other
intangibles
|
Goodwill
|
Total
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Cost
|
|
|
|
|
|
|
As
at 31 December 2023 (audited)
|
121,920
|
79,959
|
201,879
|
79,630
|
281,509
|
|
Additions
|
16,652
|
-
|
16,652
|
-
|
16,652
|
|
Fair value adjustment
|
-
|
-
|
-
|
(61)
|
(61)
|
|
As
at 30 June 2024 (unaudited)
|
138,572
|
79,959
|
218,531
|
79,569
|
298,100
|
|
|
|
|
|
|
|
|
Amortisation and
impairment
|
|
|
|
|
|
|
As
at 31 December 2023 (audited)
|
67,990
|
37,953
|
105,943
|
47,667
|
153,610
|
|
Amortisation charge for the
period
|
8,496
|
4,840
|
13,336
|
-
|
13,336
|
|
Impairment charge for the
period
|
1,746
|
-
|
1,746
|
-
|
1,746
|
|
As
at 30 June 2024 (unaudited)
|
78,232
|
42,793
|
121,025
|
47,667
|
168,692
|
|
|
|
|
|
|
|
|
Carrying
amount
|
|
|
|
|
|
|
As at 31 December 2023
(audited)
|
53,930
|
42,006
|
95,936
|
31,963
|
127,899
|
|
As at 30 June 2024
(unaudited)
|
60,340
|
37,166
|
97,506
|
31,902
|
129,408
|
|
|
Software development
cost
|
Intellectual
property
|
Subtotal other
intangibles
|
Goodwill
|
Total
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Cost
|
|
|
|
|
|
|
As
at 31 December 2022 (audited)
|
94,037
|
59,817
|
153,854
|
66,820
|
220,674
|
|
Additions - business
combinations
|
-
|
815
|
815
|
263
|
1,078
|
|
Additions
|
13,570
|
-
|
13,570
|
-
|
13,570
|
|
As
at 30 June 2023 (unaudited)
|
107,607
|
60,632
|
168,239
|
67,083
|
235,322
|
|
|
|
|
|
|
|
|
Amortisation and
impairment
|
|
|
|
|
|
|
As
at 31 December 2022 (audited)
|
53,901
|
34,035
|
87,936
|
47,667
|
135,603
|
|
Amortisation charge for the
period
|
5,150
|
1,863
|
7,013
|
-
|
7,013
|
|
Impairment charge for the
period
|
934
|
-
|
934
|
-
|
934
|
|
As
at 30 June 2023 (unaudited)
|
59,985
|
35,898
|
95,883
|
47,667
|
143,550
|
|
|
|
|
|
|
|
|
Carrying
amount
|
|
|
|
|
|
|
As at 31 December 2022
(audited)
|
40,136
|
25,782
|
65,918
|
19,153
|
85,071
|
|
As at 30 June 2023
(unaudited)
|
47,622
|
24,734
|
72,356
|
19,416
|
91,772
|
|
|
Software development
cost
|
Intellectual
property
|
Subtotal other
intangibles
|
Goodwill
|
Total
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Cost
|
|
|
|
|
|
|
As
at 31 December 2022 (audited)
|
94,037
|
59,817
|
153,854
|
66,820
|
220,674
|
|
Additions - business
combinations
|
-
|
20,142
|
20,142
|
12,810
|
32,952
|
|
Additions
|
27,883
|
-
|
27,883
|
-
|
27,883
|
|
As
at 31 December 2023 (audited)
|
121,920
|
79,959
|
201,879
|
79,630
|
281,509
|
|
|
|
|
|
|
|
|
Amortisation and
impairment
|
|
|
|
|
|
|
As
at 31 December 2022 (audited)
|
53,901
|
34,035
|
87,936
|
47,667
|
135,603
|
|
Amortisation charge for the
period
|
11,634
|
3,918
|
15,552
|
-
|
15,552
|
|
Impairment charge for the
period
|
2,455
|
-
|
2,455
|
-
|
2,455
|
|
As
at 31 December 2023 (audited)
|
67,990
|
37,953
|
105,943
|
47,667
|
153,610
|
|
|
|
|
|
|
|
|
Carrying
amount
|
|
|
|
|
|
|
As at 31 December 2022
(audited)
|
40,136
|
25,782
|
65,918
|
19,153
|
85,071
|
|
As at 31 December 2023
(audited)
|
53,930
|
42,006
|
95,936
|
31,963
|
127,899
|
Note
6: Impairment to Software Development Costs
The Group assessed software
development costs for indicators of impairment, considering both
qualitative and quantitative factors. For the titles exhibiting
indicators of impairment, the Group recorded an impairment loss of
$1.7 million in Cost of Sales against the carrying value of
software development costs at 30 June 2024.
The impairment is related to titles
published in 2023 by Devolver Digital Inc. and Good Shepherd
Entertainment. As a result of lower than expected sales and future
projections, these titles were impaired to their recoverable
amounts, being value in use.
In assessing value in use for games
identified with indicators of impairment, the Group has prepared a
cash flow forecast reflecting management's estimations of future
performance of these titles. Key assumptions on which this forecast
was based includes title revenue generation and revenue decay
curves.
The cash flows were discounted to
their present value utilising a pre-tax discount rate of 21.9%,
calculated based on the particular circumstances of the Group and
its CGUs, derived from its Weighted Average Cost of
Capital.
Note 7: Events After the Reporting Date
On 1 July 2024, Devolver announced a
successful placing of 23,917,151 new common shares at a price of 33
pence per share, which represents a 10% premium to the closing
price on 1 July 2024.
The gross proceeds from the placing
amounted to approximately £7.9 million (circa US$10 million). The
new shares represent approximately 5.4% of Devolver's issued and
outstanding share capital.
Following admission, Devolver's
issued and outstanding share capital totalled 468,749,592 common
shares.