Unaudited Final Results 2024

26 March 2025 

everplay group plc

("everplay", the "Group" or the "Company")

Unaudited Final Results for the year ended 31 December 2024

● A strong bounce back in profitability and margins, and robust cash generation, reflecting a good performance from key titles across the portfolio and swift implementation of strategic actions.

● Good progress against mid-term strategic priorities, a high-quality schedule of new game releases, key new hires, ongoing development of new revenue streams and robust cost controls all position the Group for a solid FY 2025.

● Maiden final dividend proposed.

everplay group plc, a leading global independent ("indie") games developer and publisher of premium video games, working simulation games and children's edutainment apps, is pleased to announce its unaudited final results for the year ended 31 December 2024 ("FY 2024").

Financial summary:

Operational summary:

● Double-digit growth in first-party IP revenues, which contributed 37% to Group revenues (FY 2023: 35%). 10 first-party IP projects are in the development pipeline, based both on established and new IP and to launch mostly in 2026 and 2027, supporting the Group's focus on accelerating growth and improving profitability.

● The back catalogue had another excellent year across all divisions, with revenues up 27%, demonstrating the outstanding lifecycle management skills and shared learnings across the Group, as well as the dependable nature of the portfolio strategy. Over 130 titles contributed to back catalogue revenues during the period, spread across a wide range of genres and release years.

● Community engagement was very strong across our key titles. In particular, Hell Let Loose enjoyed record revenues (five years after its original launch), with peak concurrent users (CCU) during the year over 90% higher yoy, increasing to over 140,000 following its release on the Epic platform at the year end.

● astragon delivered strong revenue growth of 22%. Strong contributors for the year included the popular Police Simulator and Construction Simulator franchises, the latter which saw the introduction of a Year 2 Season Pass. Revenue growth was supported by the release of two new games (FY 2023: three) - including Construction Simulator 4 - as well as the physical distribution of Farming Simulator 25 in Germany, five existing first and third-party IP games on additional platforms and 12 paid DLCs4 (FY 2023: 16).

● StoryToys delivered another excellent year of growth, with revenue up 25%. It launched three new licensed app titles (FY 2023: 3), including Sesame Street Mecha Builders, Thomas & Friends™: Let's Roll and LEGO® DUPLO® Peppa Pig in addition to 531 app updates (FY 2023: 327) across existing titles supporting subscriptions. Active subscribers continue to grow and now exceed 337,000, with 11 million active users and the number of total lifetime downloads now exceeding 240m (FY 2023: 200m). 

● Team17 revenues fell by 5% as some new titles failed to meet management expectations and some titles were moved into FY2025. There was, on the other hand, strong double-digit growth in the back catalogue. More than 80 titles contributed towards back catalogue revenues in period, encompassing over 1,200 Digital Revenue Lines (up from over 900 in FY 2023), with stand-out performers including first-party IPs Hell Let Loose and Golf With Your Friends and third-party IPs Overcooked!, Dredge, Blasphemous 2 and Trepang2. Team17 launched 10 new games (FY 2023: 11) in the period, with 11 existing games released on new platforms (FY 2023: 5). Refinements to our greenlight process enable swifter decision-making, leveraging expertise across the organisation, providing increased confidence in the performance of newly signed games.

People and culture:

● In January 2025, the Group rebranded to everplay group plc, reflecting the evolution of the business since its IPO in 2018. The change allows the Team17 division to regain its iconic brand identity, whilst maximising operational synergies and cross-selling opportunities across the wider Group.

● Rashid Varachia joined in October 2024 in the newly-created role of Group Chief Financial Officer and Chief Operating Officer. His team is focused on maximising agility and efficiencies across the divisions.

● Harley Homewood, a gaming industry veteran who previously worked with Debbie Bestwick at Team17, joined as Group Product Acquisition Director, with responsibility for innovating our publishing models, leading our IP acquisition strategy as well as strategic involvement in our greenlight process.

Dividend declaration

· With consistent revenue growth, robust margin levels and strong underlying cash generation, everplay has a strong balance sheet. This can adequately fund the Group's organic growth investment plans for first- and third-party IP development, as well as an active M&A strategy, which remain the Group's core capital allocation priorities.

· The Group is in a strong strategic position with an improving outlook and healthy balance sheet. Therefore the Board believes the Group can implement a progressive dividend policy, while maintaining flexibility to support inorganic opportunities. Therefore, the Board is proposing a final ordinary dividend for the financial year ended 31 December 2024 of 2.7 pence per share for everplay group plc (TIDM: EVPL; ISIN: GB00BYVX2X20). The proposed record date is 6 June 2025, with a payment date of 4 July 2025.

Outlook:

● The Group has made a good start to FY 2025, supported by the momentum from the festive season promotions. As a result, the Board remains confident that the Group can deliver an improved trading performance in FY 2025, marginally ahead of current market expectations, and remains well positioned for continued growth over the medium to long term.

● The group has an exciting pipeline of at least 10 new games and apps expected to a launch in FY 2025, including two first-party IP titles.

● Our portfolio approach allows the Group to launch a range of games we identify as having high commercial potential, while limiting the risk from underperformance of individual games to the Group. So far this year, we have already launched Sworn in Early Access on PC from Team17, with encouraging initial results. We have announced a number of additional new releases for 2025, including Date Everything and Epic NPC Man: Nice Day for Fishing at Team17, Seafarer: The Ship Sim and Firefighting Simulator: Ignite at astragon and LEGO® Bluey™ at StoryToys.

● We will continue to leverage our exceptional lifecycle management capabilities to drive another year of robust sales across our back catalogue. 

● We will make further progress against our strategic priorities to accelerate growth alongside improving profitability, with an elevated focus on first-party IP, our evergreen franchises and improved returns. Recent Group hires are driving innovations to our publishing model to maximise opportunities with developers and progress on our active M&A strategy.

Steve Bell, Group Chief Executive Officer of everplay, commented:

"I am extremely pleased with the Group's performance during 2024, a clear return to the quality business for which we have been known. As we begin our first year under the new name of everplay, I am excited about the incredible slate of games we have lined up for 2025, and some important innovations in our business model. Allied with stringent cost controls, we are confident that these will deliver results our shareholders expect.

"I'd like to thank Ann, Julia, Tim and Emmet for their support in leading each part of our Group that yet again has delivered a great year in gaming, and our people and development partners for their creativity and dedication. Our new group roles will ensure we remain efficient and focused on being the best games company that gives back to creators and shareholders while supporting our people."

Footnotes:

1A full description of Alternative Performance Measures, the rationale for their use, and reconciliation between adjusted and reported statutory measures can be found within the Group Chief Financial Officer's Report.

Adjusted profit before tax excludes acquisition-related costs and adjustments, amortisation and impairment of acquired intangible assets recognised as a result of business combinations, share-based compensation and one-off Team17 restructuring costs from the statutory measure whilst adding back development cost amortisation eliminated through acquisition fair value adjustments. 

Adjusted profit after tax excludes the same items as adjusted profit before tax removing corporation tax net of any tax effects on these items. 

Adjusted EBITDA can be calculated from adjusted profit after tax by adding back all remaining finance income and costs, tax, depreciation, amortisation and impairment except for those on development costs and publishing rights.

2The calculation of adjusted earnings per share is based on the adjusted profit after tax divided by the weighted average number of shares (either basic or diluted). 

3Operating cash conversion is defined as cash generated from operating activities adjusted to add back payments made to satisfy pre-acquisition liabilities recognised under IFRS 3 "Business Combinations", divided by earnings before interest, tax, depreciation and amortisation ("EBITDA")

4Downloadable content

Analyst and institutional investor webcast

A meeting for analysts will be held on Wednesday, 26 March 2025 at 08.30 a.m. GMT. The event will also be webcast. To register for this event and join the live stream on the day, please contact Vigo on [email protected].

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A webcast for retail investors will be held on Friday 28 March at 1.00 p.m. GMT. The presentation will be hosted on the Investor Meet Company platform. Questions can be submitted pre-event via the Investor Meet Company dashboard up until 9.00 a.m. the day before the meeting or at any time during the live presentation.

Investors can sign up for free and add to meet everplay via: https://www.investormeetcompany.com/everplay-group-plc/register-investor

Enquiries:

About everplay group plc  

everplay group plc (formerly Team17 Group plc) is an award winning and leading global indie games label developer and publisher of premium video games and apps, comprising three distinct divisions: Team17, astragon and StoryToys. Team17 is a games developer, publisher and creative partner for indie developers around the world, known for iconic IP such as Hell Let Loose, Worms and Overcooked!. astragon is a leading games publisher, developer and distributor of sophisticated working simulation games, including Construction Simulator and Police Simulator, targeting a broad audience from young enthusiasts to technical experts and casual gamers. Story Toys a world-class developer and publisher of educational entertainment apps, bringing the world's most popular characters, worlds and stories to life for children under the age of eight, with apps including Disney Colouring World and LEGO® DUPLO® PEPPA PIG

Visit www.everplaygroupplc.com for more information or follow us on LinkedIn: everplay group plc.

Chair's Statement

This report marks my first full year as Chair of everplay group plc. Much has changed over the last 12 months, such as the realignment of focus on the Indie market, alongside tighter cost controls and increased effort on driving our first-party IP. With a strengthened Group leadership and company re-branding, I believe this year has been pivotal in getting the business back on the right track to ensure profitable growth over the next few years.

We have refocused our go-to-market strategy by concentrating on what everplay knows best - Indie games and edutainment apps. We continue to be a leading player in the Indie space, with our skilled lifecycle management and resilient back catalogue setting us apart from our competitors. A key example of this from this year was the launch of Worms Armageddon: Anniversary Edition. It has been 25 years since the original Worms game was released, yet this series continues to captivate players and has a dedicated and loyal player community.

In the year ended 31 December 2024, the Group generated revenues of £166.6 million (FY 2023: £159.1 million), gross profit of £69.4 million (FY 2023: £57.5 million) and adjusted EBITDA of £43.5 million (FY 2023: £29.9 million). The Group continues to provide a strong balance sheet, with £62.9 million of cash and cash equivalents at 31 December 2024 (31 December 2023: £42.8 million). This places us in a robust position for future growth, as we consider new opportunities which closely align with our Indie focus.

In January 2025, we launched our new Group brand: everplay group plc. Our new name reflects the evolution and growth of the Company since our IPO and creates greater clarity for our three distinct divisions, astragon, StoryToys and Team17, operating across complementary markets within the video games and apps industry. Our new brand will have greater external relevance and internal efficiency, as we further centralise key business functions, such as finance, HR, legal, IT and compliance across all three divisions.

We are continuing to bring experienced games industry experts into this new structure, with their knowledge and leadership skills resonating across the broader business. In October 2024, we welcomed Rashid Varachia to the Board as Chief Financial Officer and Chief Operating Officer. Rashid is ideally placed to oversee a widened operational remit, having amassed over 25 years' financial, gaming, M&A and capital markets experience. The strengthened senior management team is working alongside our dynamic Board, which has unrivalled gaming pedigree, making us better placed than ever before to make everplay the go-to hub for Indie games label developer and publisher of premium video games and apps.

We have now reenergised our greenlight process, which has historically been people and data led, but will now benefit from the counsel of our strengthened senior team. This means that we can move more swiftly when it comes to attracting brilliant games available for us to develop, expanding on our first-party IP, as well as third party development. We now focus on exclusively Indie investment in this process, which is paramount to our goal of becoming the go-to developer for Indie games.

The Indie market continues to grow, with more titles released in 2024 than any other year in history. In light of this competitive new release market, the strength of everplay's back catalogue continues to be vital to the Company's success. Over the last six years, the back catalogue has on average accounted for 76% of total revenues, reflecting our ability to develop evergreen, timeless games which captivate audiences year after year. In 2024, its resilience strengthened, contributing 86% of the Company's revenue. Our back catalogue revenue base significantly derisks our exposure to an already crowded marketplace, as our success is not solely dependent on our latest releases.

FY 2025 is shaping up to be another successful year for everplay. There are a number of titles scheduled for launch in 2025, including new first-party IP titles, while broader market growth will be supported by the launch of the Nintendo Switch 2 console hardware. We're cognisant of the challenges associated with growth in an increasingly crowded games market, and so will deploy our strengthened organisation and strong balance sheet to explore M&A opportunities to accelerate our growth.

everplay remains a differentiated and compelling investment proposition within the games industry. Alongside the development of high-quality, engaging games and apps, everplay has a track record of consistently leveraging the strength of its back catalogue to drive reliable revenue streams from our existing content portfolio.

It is this confidence, in both our people and our strategy, that underpins the strength of the Board's belief in the future prospects for the business.

Frank Sagnier

Chair

Group Chief Executive Officer's Review

Introduction

In my first full year as Chief Executive Officer of everplay group plc, I am delighted with how the business has responded as we realigned our focus to our Indie heritage, which best captures the passion and drive of our hugely talented people. The focus of the team over the past 12 months has been excellent as we've sought to bring our divisions closer together and align under shared aspirations and goals.

This progress is evidenced in our financial performance, delivering all-time high revenues of £166.6 million (FY 2023: £159.1 million) and gross profit of £69.4 million (FY 2023: £57.5 million) in FY24, supported by strong traction from our extensive back catalogue, alongside sales from new releases. The business also saw a sharp recovery in adjusted EBITDA to £43.5 million (FY 2023: £29.9 million), highlighting the inherent strength of our business model. Reported profit before tax was £25.3 million (FY 2023: loss of £1.1 million). Further detail and granularity on the financial performance can be found in the Chief Financial Officer's review.

The Group retains a healthy balance sheet, with £62.9 million of cash and cash equivalents at 31 December 2024 (31 December 2023: £42.8 million), which provides a strong base from which to further invest and grow our business.

In January 2025, we successfully completed the rebranding of our business to everplay group plc. Our new name better captures the breadth of our genre, platform and demographic-agnostic business. It also reflects the connection we have with our consumers: inspiring gamers to never stop playing. It supports our ambition to be the best place in the world to make and play games, creating pioneering and captivating experiences that enrich and inspire players around the world of all ages. It also allows astragon, StoryToys and Team17 to retain their distinctive and well-established brand identities whilst maximising operational synergies and cross-selling opportunities across the wider Group.

Strategic Priorities

As highlighted at the beginning of 2024, we set out our key strategic priorities, along with our "Action Plan for Growth Delivery", aimed specifically at accelerating revenue growth, improving profitability and tightening cost control, while increasing agility, maximising synergies across the business and ultimately improving shareholder returns. These strategic priorities are laying the foundations for the Group to deliver continued market-beating growth, and I'm pleased to report we are already demonstrating tangible progress against these:

Evergreen brands: we continue to focus on our first-party IP games, which drives our return on investment. Ten exciting first-party IP projects are currently in development, with the first launch anticipated in 2025. At the same time, we maximise our lifecycle management skills to sustain our resilient back catalogue, which remains the bedrock of our business, supported by evergreen franchises such as Overcooked!, Hell Let Loose and Worms, while innovative marketing strategies drive both player engagement and sales.

Relationship builders: to be the leading Indie publisher, we need to continue to nurture our world-class partnerships with developers, platforms and brand owners. We reviewed more games in FY 2024 than in any prior year through our reinvigorated and streamlined greenlight process, in which we evaluate and analyse game submissions from potential developers, ensuring we access the most exciting games from outstanding developers from around the world. Our recently-appointed Group Legal Director has already enhanced the rigour of the process. We have reinforced our strict investment limits for games signed, ensuring each title has the right investment profile and our teams are fully aligned to develop and promote the games accordingly. StoryToys' launch of LEGO™ DUPLO™ Peppa Pig in May 2024 was further evidence of another leading brand choosing to partner with everplay, entrusting the Group to maintain the brand reputation.

Innovation and M&A: we are exploring opportunities to capitalise on our knowledge base and drive growth into new markets, audiences and IP, both organically and through M&A. Our commercial and scouting teams are adopting more flexible and innovative publishing models to ensure we are attracting the highest quality developers and publishing the best Indie games in the world. We are cognisant of our skillset and experience with back catalogue management and are exploring the opportunity to leverage this in innovative adjacent business models.

Synergies and collaboration: we are continuing to foster greater collaboration between all our teams and divisions, maximising the potential of their unique skills and expertise, whilst simultaneously optimising efficiencies and synergies across the business. The Group team is creating a more connected culture throughout the business, facilitating a greater sharing of best practise, expertise and cost discipline, while freeing up resources from the divisions.

Talent and culture: to deliver growth and achieve our ambitions, we need to ensure we retain our world class talent, and that our culture supports aspiration, creativity and belonging. We believe that when our employees have pride in their work, trust in the business and camaraderie amongst their colleagues, they will be more engaged and productive. We have taken several major steps during 2024 to improve employee engagement through surveys, townhalls, training programmes and workshops and look forward to building on this in 2025.

Operational Review

The Indie gaming market remains highly dynamic, as favourable demographic trends support underlying growth in gamers, while the proliferation of development tools and distribution channels lowers barriers to entry. Although growth in the broader gaming market remained modest in 2024 at 0.6%[1], this highly competitive landscape saw 18,148[2] titles launched on Steam in 2024, a 30% increase on 13,933 titles launched in 2023.

Against the backdrop of an increasingly competitive marketplace, discoverability remains crucial in driving the success of games. With such an increased number of titles competing for players' attention across all platforms, the role of marketing in growing and developing communities that engage with and raise awareness of our games has never been more important.

Adopting innovative marketing strategies forms a key component of driving discoverability, alongside supporting the Group's expertise in life cycle management. Targeted marketing, optimisation for platform-specific algorithms and social media campaigns are three examples of the many components we have at our disposal. In 2024, we successfully partnered with a number of influencers on social media platforms to drive awareness of specific titles from our back catalogue, including a feast of TikTok content for Overcooked! and taking over a burger bar in LA to recreate Overcooked! in real life with influencers, resulting in 53m views across social media platforms, and driving a pleasing resulting peak in sales. Exploring partnerships and targeted marketing opportunities continues to form a key part of our marketing strategy going forward.

The strength of everplay's back catalogue and the team's expertise in life cycle management cannot be overstated and it continues to elevate our brands in what has become a crowded marketplace. Over 130 games contributed revenues to our back catalogue in FY24 and the team's ability to continue to drive player engagement, launch new content and develop sequel titles for the back catalogue is key to underpinning the resilience of our revenues and the long-term success of everplay.

Divisional Highlights

Revenues generated by Team17 in 2024 were underpinned by the strong performance of the back catalogue. Whilst 10 new titles were launched (FY 2023: 11 titles) - comprising a mix of first- and third-party IP - Team17 was equally focused on driving sales through the release of additional content across existing titles within the portfolio. Key launches in the period included the multi-award-winning Conscript, Classified: France 44 and Amber Isle, along with content updates including Dredge, The Iron Rig, Worms Armageddon: Anniversary Edition and Olympus Odyssey for Golf With Your Friends.

astragon continued the historic trend of delivering solid revenue growth over the period, with its high-quality working simulation titles. New titles in 2024 included Construction Simulator 4, based in a new Canadian setting, along with additional content released across Construction Simulator, Police Simulator and Lawn Mowing Simulator among others. astragon also launched Police Simulator - Prop Island in August in collaboration with Fortnite, which sees gamers in either the Props or Hunters teams, battling to reign victorious.

The launch of additional apps including Thomas & Friends™: Let's Roll and the highly successful LEGO™ DUPLO™ Peppa Pig, our first collaboration with this globally iconic children's brand, further expanded StoryToys' portfolio in the period. Furthermore, an additional 520 app updates were delivered in the period, demonstrating the continued development and evolution of the products and responsibility in updating content to reflect feedback from users. The foundation of StoryToys' success is the strength of its partner relationships and reputation for delivering high quality apps that do not diminish a brands' value.

As previously outlined, part of the Group's strategy is to drive revenues from first-party titles, where we naturally retain a higher portion of revenues. In FY 2024, 4 of the top 10 games sold in the period came from first-party IP titles, with the constituents of the top 10 including titles from Team17, astragon and StoryToys. For FY 2024, the top ten selling games represented approximately 60% of total revenues, demonstrating the breadth of the portfolio's performance.

The Team

I would like to acknowledge the dedication and passion of the entire team at everplay group plc. I remain inspired by the level of dedication they bring to the business and am continually motivated by the company culture.

We have continued to strengthen the team throughout FY 2024 and, in particular, introduced a number of roles at the Group level which will help to drive synergies and ensure we benefit from the expertise and skillset across the divisions.

Rashid Varachia joined us in October 2024 in the newly-created role of Chief Financial Officer and Chief Operating Officer. Rashid replaced Mark Crawford, who I would like to personally thank for his support and contribution to the business over the last five years. In Rashid, we have someone with a rich pedigree in the video games industry and we are already benefitting enormously from his experience and insights. In December 2024, Harley Homewood, a gaming industry veteran who previously worked with Debbie Bestwick at Team17, joined as Group Product Acquisition Director.

I believe the strength of the board continues to be a point of differentiation for everplay group plc. During my first year at the helm, I have been privileged to benefit from such a breadth of experience in the gaming and public markets.

Outlook

Our ambition is clear, to create pioneering and captivating experiences that enrich and inspire players around the world and to never stop playing, whilst also delivering market-beating growth and improved profitability for our shareholders.

For 2025, we have an exciting pipeline of at least 10 games and apps. We expect a greater proportion of our launches to be our first-party IP going forward and are employing more innovative marketing strategies to drive discoverability in a crowded market. We are also implementing more agile publishing models whilst looking for the best M&A opportunities that are both strategically and commercially additive to the Group.

We have an enormously experienced and talented team across the business. Centralising a number of functions will ensure that we are able to drive further synergies and leverage the business expertise across the portfolio.

I am hugely excited for the future of everplay group plc. The Group is well positioned to deliver growth in the short to medium term and the current financial year has started strongly with the positively-received Sworn already launched and several other titles announced. I look forward to updating all stakeholders on further progress throughout the year.

Steve Bell

Group Chief Executive Officer

Chief Financial Officer's Report

Performance Overview

FY 2024 was another highly competitive year for the gaming sector. Against this backdrop, the Group delivered a pleasing revenue performance, up 5% compared to the prior year, substantially ahead of the market which grew just 0.6%. 2024 was everplay's seventh consecutive year since its IPO of delivering market-beating revenue growth. This growth was generated organically through revenues from existing businesses, though a combination of new releases and a stellar performance from the Group's extensive back catalogue, further demonstrating the benefit of everplay's portfolio strategy and exceptional life cycle management skills. Tightened cost controls, improved title mix and lower impairments all contributed to a significant improvement in margins. This, along with the higher revenues, contributed to a sharp recovery in earnings, with profits before tax of £25.3 million (FY 2023: £1.1 million loss).

Revenue

Group revenues increased 5% on a like-for-like basis to £166.6 million (FY 2023: £159.1 million). Team17 (formerly Team17 Games Label) contributed £98.6 million, down 5% on the prior year (FY 2023: £103.6 million), astragon delivered £43.8 million (FY 2023: £36.0 million) showing excellent growth of 22%, whilst StoryToys had another outstanding year, with revenues up 25% to £24.3 million (FY 2023: £19.5 million).

Overall first-party IP revenues increased 10% to £61.5 million (FY 2023: £55.9 million) reflecting a strong performance from games such as Hell Let Loose, Construction Simulator, Police Simulator and Golf With Your Friends - all of which remain in the Group's top 10 selling titles. This brings first-party IP revenues up to 37% of revenues (FY 2023: 35%), in line with the Group's core strategy to increase the weighting of first-party IP revenues. Third-party game revenues grew modestly to £105.1 million (FY 2023: £103.3 million), led by Overcooked! and 2023's award-winning Dredge.

The Group's back catalogue enjoyed another year of sustained strong performance, thanks to some excellent new downloadable content ("DLC") and innovative marketing activity from the teams. Revenues grew 27% to £143.8 million (FY 2023: £113.6 million). This growth is testament both to the quality of the Group's portfolio, and the team's skills in lifecycle management. Stand out performers included Overcooked! 2, Hell Let Loose, Police Simulator and Dredge. The competitive environment and strong prior year base did result in a more muted revenue performance for new releases at £22.9million (FY 2023: £45.5 million), affecting Team17 in particular. However, reviews for many of games which were released were pleasing, including 90% positive user reviews on Steam for Conscript and 89% for Amber Isle.

Gross Profit

Gross profit in the year rose 21% to £69.4 million (FY 2023: £57.5 million). The gross margin increased sharply by 550bps to 41.6% (FY 2023: 36.1%), due to a number of factors including substantially lower title impairment charges, development cost amortisation charges, expensed development costs and royalty payments.

As usual, a full review was undertaken of the value of intangible assets held on the balance sheet which included both released games with a residual net book value as well as games in development yet to be released. Title impairment charges for the year were £4.7 million (FY 2023: £11.1 million), across select titles following the lower-than-expected performance of new releases in H1 2024 and the current view of the new release market.

Royalty payments were lower year on year, accounting for 29.9% of sales (FY 2023: 30.4%), due to the stronger performance of first-party titles relative to third-party titles (the latter of which generate higher levels of royalty payments). However, astragon's first-party IP simulation games represented a higher proportion of the Group's first-party revenues this year (50% compared to 47% in FY 2023) and unlike Team17's first-party IP games, these attract a royalty paid to astragon's dedicated development partners, which moderated the reduction in overall royalty payments in the period.

After several years of increases resulting from acquisitions and some larger third-party game development investments at Team17, capitalised development costs in the year decreased to £25.0 million (FY 2023: £32.2 million) of which £12.1 million (FY 2023: £22.5 million) related to Team17, £9.9 million (FY 2023: £7.1 million) to astragon and £3.0 million (FY 2023: £2.6 million) to StoryToys. This reflects lower planned development costs for Team17 third-party titles, partly offset by higher spending on first-party IP in both Team17 and astragon - for which there are 10 projects currently under development. As a result of the capitalisation, impairment and development cost amortisation charges, capitalised development costs on the balance sheet at the end of the period stood at £40.6 million (FY 2023: £35.1 million).

Development cost amortisation charges were £13.5 million for the year (FY 2023: £12.7 million), an increase on the prior due to the higher number of new releases in the period. Expensed development costs also fell during the year, partly due to the greater use of outsourcing within the Team17 studios.

Administrative Expenses

Total costs in the period decreased to £45.6 million (FY 2023: £57.6 million). The decrease was primarily due to the lower non-cash impairment of goodwill charge relating to The Label Inc. of £4.6 million (FY 2023: £20.9 million). Acquisition-related adjustments, costs and amortisation were £13.9 million (FY 2023: £10.0 million).

Staff costs within administrative expenses increased 27% in the year predominantly reflecting higher bonus payments across the Group as well as the final management incentive payments relating to the acquisition of StoryToys and astragon. Marketing costs decreased during the year, following the implementation of tighter controls in H2 2023 to better align to the Indie model. Depreciation and amortisation fell to £13.1 million (FY 2023: £15.0 million). Other costs including premises, professional fees and travel & entertainment were lower as a percentage of sales than the prior year. Total headcount for the Group at 31 December 2024 was 344 (31 December 2023: 348).

Alternative Performance Measures ("APMs")

The Directors believe that the reported APMs provide meaningful performance information to aid the understanding of the underlying business trading performance and profitability. Although these are not GAAP measures as defined by IFRS, they have been applied to provide an accurate comparison as well as provide readers of the financial statements a clear understanding of the underlying profitability of the business and more consistent comparisons over time. A breakdown of the adjusting factors is provided in the table below:

Adjusted EBITDA reflects the EBITDA of the Group in a steady state, without the impact of acquisition-related costs which vary year on year based on acquisition activity. In addition, we include the impact of amortisation and impairment of development costs and publishing rights, as this reflects the primary costs incurred by the Group in generating revenue. In the previous year, restructuring costs were also excluded as one-off in nature and not reflective of the underlying performance of the Group.

Adjusted profit before tax reflects the profitability of the Group, adjusted for the previously outlined acquisition-related costs. In the prior year, this was also adjusted for the goodwill impairment which is not a recurring cost to the Group.

Share-based compensation charges of £1.0 million (FY 2023: £0.4 million) relate to options that were granted to the Executive Directors, the senior leadership team and other members of the team under a variety of schemes which other than in the case of the Executive Directors and Non-Executive Directors will be satisfied by shares held in the Employee Benefit Trust ("EBT").

Acquisition-related adjustments created a net cost in the period of £2.4 million (FY 2023: £2.7 million credit), relating to one-off costs directly associated with the acquisitions made over the last three years. There were £2.3 million of associated management incentive payments in FY 2024 (FY 2023: nil), with other acquisition costs and fair value adjustments totalling £0.1 million (FY 2023: £1.4 million). Finance costs relating to contingent consideration was £0.1 million (FY 2023: £1.0 million) reflecting the lower balances outstanding.

Adjusted EBITDA

Adjusted EBITDA rose to £43.5 million, a sharp recovery from the £29.9 million in FY 2023, reflecting the strong revenue growth, underlying margin improvements and materially lower title impairment costs. Adjusted EBITDA excludes acquisition related adjustments and fees, amortisation on and impairment of acquired intangible assets as a result of business combinations, share-based compensation (as well as one-off Team17 restructuring costs and tax in FY 2023).

Profit Before Tax

Profit Before Tax for the year was £25.3 million, compared to a £1.1 million loss in the prior year (which was negatively affected by the £32.0m of non-cash impairment charges). 

In addition, net finance income increased to £1.2m (FY 2023: £0.9 million cost), reflecting higher interest rates and cash on balance.

Adjusted profit before tax, adjusting for the items outlined in the APMs table above, was £43.4 million (FY 2023: £28.7 million).

The tax charge for the year was £5.1 million (FY 2023: £2.7 million). The effective tax rate for the year was 20%.

Earnings Per Share ("EPS")

Basic EPS rose to 14.0 pence (FY 2023: (2.6) pence), reflecting higher pre-tax profits, as well as the non-cash impairment charges affecting the FY 2023 base. Basic adjusted EPS, reflecting the APM adjustments noted above and calculated using the adjusted profit after tax increased 38% to 24.1 pence (FY 2023: 17.5 pence).

Statement of Financial Position

The Group remains highly cash generative with an operating cash conversion of 97% (FY 2023: 87%), and a net inflow of cash from operations of £51.2 million (FY 2023: £41.4 million). As a result of final cash earn-out payments in the period (£5.0 million) and investment in capitalised development costs (£25.0 million), there was an overall net increase in cash and cash equivalents to £62.9 million (FY 2023: £42.8 million) which includes £2.7 million (FY 2023: £2.9 million) held in the Employee Benefit Trust.

The EBT remains an important fund established at IPO to support employee share awards and incentivise team members across the Group. All UK and EU employees across the Group continue to be awarded share options on joining, noting that the use of the EBT avoids the issue of new shares to satisfy these and other employee options.

Goodwill and intangible assets now total £197.0 million (FY 2023: £210.0 million). As at 31 December 2024, the net book value of goodwill was £82.3 million (FY 2023: £86.2 million). The value of the Group's brands now stands at £51.4 million (FY 2023: £57.6 million) which takes into account the annual brand amortisation charge. The current net book value of capitalised development costs at year end stands at £40.6 million (FY 2023: £35.1 million).

Movements in working capital totalled £1.7m in the period (FY 2023: £3.5m). This amounted to a £9.1m increase in trade and other receivables (FY 2023: £0.4m), offset by a corresponding increase in trade and other payables balance of £7.6m (FY 2023: £3.3m decrease). This increase in trading balances is due to high volumes of trade in Q4 related to physical distribution within astragon, while an increase in license sales also impacted year end working capital.

Share Issues

As at 31 December 2024, the Group's issued share capital comprised 145,848,677 ordinary shares of £0.01 each (FY 2023: 145,803,620).

A total of 317,970 (FY 2023: 294,535) share options were issued during the year to the Executive Directors with a three-year vesting period with performance criteria, 391,465 (FY 2023: 532,858) share options were issued to other employees across the Group also with a similar three-year vesting period and performance criteria, while 61,648 share options were issued to Non-Executive Directors as part of a new Share Option Plan.

The Group has extended the use of its Long-Term Incentive Plan with performance criteria across its senior divisional leadership team together with the deferred bonus share plan for senior management. everplay continues to administer an All-Employee Share Incentive Plan ("SIP") which is a UK employee SIP with matching shares open to all UK employees and which continues to be well supported.

Rashid Varachia 

Group Chief Financial Officer and Chief Operating Officer

Unaudited Consolidated Statement of Profit or Loss

For the Year Ended 31 December 2024

Unaudited Consolidated Statement of Comprehensive Income

Unaudited Consolidated Statement of Financial Position

As at 31 December 2024

Unaudited Consolidated Statement of Changes in Equity

For the Year Ended 31 December 2024

Equity attributable to shareholders of the Group

Unaudited Consolidated Statement of Cash Flows

For the Year Ended 31 December 2024

Notes to the Unaudited Consolidated Financial Statements

1. General information

The principal activity of everplay group plc (formally Team17 Group plc) (the "Company") is that of a holding company and the principal activity of the Company and its subsidiaries (together, the "Group") is the development and publishing of independent ("indie") premium video games and development of educational entertainment apps for children and a leading working simulation games developer and publisher.

2. Basis of preparation

The preliminary results for the year ended 31 December 2024 are unaudited. The financial information set out in this announcement does not constitute the Group's financial statements for the year ended 31 December 2024 as defined by Section 434 of the Companies Act. This financial information has been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. It has been prepared on the historical cost basis, except for those items which are measured at fair value.

This financial information should be read in conjunction with the financial statements of Team17 Group plc for the year ended 31 December 2023 (the "prior year financial statement"), which are available from the Registrar of Companies. The prior year financial statements which were prepared in accordance with UK adopted international accounting standards (UK IFRS) and the applicable legal requirements of the Companies Act 2006. The auditors, PricewaterhouseCoopers LLP, reported on those accounts and their report was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 (2) or (3) of the Companies Act 2006.

The Group's financial statements for the year ended 31 December 2024 will be finalised on the basis of the financial information presented by the Directors in these preliminary results and will be delivered to the Registrar of Companies following the Annual General Meeting of everplay group plc.

Accounting policies

The Group's principal accounting policies used in preparing this information are as stated on pages 67 to 76 of the prior year financial statements. There have been no changes to accounting policies implemented since the date of the prior year financial statements except as disclosed below:

New and amended standards adopted by the Group

The following accounting standards or IFRIC interpretations are effective for the year ended 31 December 2024:

• Classification of Liabilities as Current or Non-current - Amendments to IAS 1 (effective 1 January 2024)

• Non-current Liabilities with Covenants - Amendments to IAS 1 (effective 1 January 2024)

• Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 (effective 1 January 2024)

• Supplier finance arrangements - Amendments to IAS 7 and IFRS 7 (effective 1 January 2024)

None of these are expected to have a material impact on the Group's financial statements or the accounting policies are already consistent with the new requirements.

Publishing rights

Publishing rights represent payments to secure the rights to publish a game title for a fixed term. A publishing right intangible asset will be recognised only on titles that meet the following criteria:

● the asset meets the definition of an intangible asset under IAS 38 'Intangible Assets';

● the asset is separable or arises from contractual or legal rights;

● sufficient information exists to measure reliably the fair value of the asset.

● the title is already released in the market with a demonstrable revenue stream.

● additional development work is not expected on the title.

The cost of such intangible assets is the purchase price of the publishing rights. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.

Amortisation The useful lives of intangible assets are assessed as either finite or indefinite and at the year end date no intangible assets are accorded an indefinite life other than goodwill.

Intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.

Amortisation is calculated over the estimated useful lives of the assets as follows:

● Brands - 10 to 15 years straight line

● Development costs - over the period of expected benefit (as discussed below)

● Acquired apps - 7 to 10 years straight line

● Customer and developer relationships - 10 years straight line

● Publishing rights - over the period of expected benefit (as discussed below)

● Other intangibles - 2 years straight line

Amortisation on publishing rights

The useful economic life of publishing rights is assessed at the point of acquisition based on the contractual length of the acquisition and forecasted benefits. This is then reassessed each year for any changes to this life. Amortisation commences at the point of acquisition and is recognised in the Consolidated Statement of Profit or Loss in cost of sales. Amortisation is calculated over the estimated useful life of the publishing rights and amortisation is calculated using the sum of digits method.

3. Segmental analysis

The Group has three different operating segments within the business which are as follows:

● Games Label - Developing and publishing video games for the digital and physical market

● Simulation - Developing and publishing simulation games for the digital and physical market

● Edutainment - Developing educational entertainment apps for children

The chief operating decision maker ("CODM") of the Group is considered to be the Group CEO and CFO, the group executive directors. The CODM reviews the Group's internal reporting in order to assess performance and allocate resources. The CODM determines the operating segments based on these reports and on the internal reporting structure.

The CODM considered the aggregation criteria set out within IFRS 8 "Operating Segments" where two or more operating segments can be combined for reporting purposes so long as aggregation provides financial statement users with information to evaluate the business and the environment in which it operates.

After assessing this criteria, the CODM deems it appropriate for all three operating segments to be aggregated and reported as a single segment. Each segment develops and publishes games and apps using own and third-party IP through similar distribution methods with similar margins in the same regulatory environments. Therefore all figures reported in the annual report are reported as a single aggregated reporting segment.

Non-current assets are located in the following locations:

4. Revenue

All revenue was generated by the sale of goods. Whilst the CODM considers there to be only one reportable segment, the Company's portfolio of games is split between internal IP (those based on IP owned by the Group) and third-party IP incurring royalties. Therefore, to aid the readers understanding of our results, the split of revenue from these two categories is shown below:

The Group does not provide any information on the geographical location of sales as the majority of revenue is through third-party distribution platforms which are responsible for the sales data of consumers.

All committed revenue contracts in progress at the 31 December 2024 are expected to be completed and recognised in revenue within one year or less. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed. All brought forward accrued income and deferred income has been recognised or released during the year. The timing of revenue recognition is shown below:

The following customers each contributed over 10% of the total revenue in 2024 and 2023:

5. Operating Profit

6. Taxation

Deferred taxes at the balance sheet date have been measured using the enacted local tax rates of between 12.5% and 32.5% (2023: 12.5% and 32.5%).

7. Earnings per share

The calculation of the basic earnings per share is based on the Profit/(loss) attributable to the shareholders of everplay group plc divided by the weighted average number of shares in issue. The weighted average number of shares takes into account treasury shares held by the Team17 Employee Benefit Trust. The diluted earnings per share uses the same calculation, however, the number of shares in issue are adjusted to include shares considered to be dilutive under the treasury stock method. An option is considered to be dilutive when the total proceeds per option is less than the average share price for the year.

8. Intangible Assets

Adjustments

During the previous year the valuation of brands related to the acquisition of astragon Entertainment GmBH was reassessed and an adjustment was identified in the valuation model after the permitted IFRS 3 measurement period for determining fair value. This reassessment increased the valuation of the acquired apps asset by £8,269,000, whilst decreasing the value of Goodwill by £5,561,000 and increasing the related deferred tax liability by £2,708,000. These reclassification adjustments have been made in the current year accordingly.

Development costs

The Group capitalises the costs of developing new games for release to the market. The balance consists of internal salary costs, advances payable to external developers under development agreements and other external payments. Amortisation is calculated over the assets' useful life of between 2 to 5 years. The assets are tested for impairment biannually or more frequently if there are indicators of impairment.

Indicators of impairment

The recoverable amount of development cost assets at 31 December 2024 are determined from the value in use. In arriving at a value in use, management has used a 2 to 3 year cashflow forecast in line with the expected useful life of the assets. These cashflows are not discounted due to the short-term nature of the assets. Through this process, impairment of £4,742,000 (2023: £11,121,000) was recognised on development cost assets. This impairment is due to the titles not meeting their full market potential in a congested marketplace. Impairment is stated net of £1,120,000 (2023: £Nil) reversal of impairments.

Key assumptions used for value-in use calculations

Management considers the projected future cash inflows to be the key assumption in calculating the value in use of each asset. Budgeting is done on a game by game basis, with game revenues varying based on management's best estimates.

Impact of possible changes in key assumptions

In assessing the carrying value of development costs, management performed sensitivity analysis on each of the key assumptions. In assessing the sensitivity of projected future cash inflows the effects of a decrease in revenue of 10% over the remaining useful life were modelled for all development cost assets with an indicator of impairment and this would cause an additional impairment of £263,000 (2023: £604,000).

Brands

These reflect the value of brands acquired either through direct purchases of IP recognised under IAS 38 "Intangible Assets" or brands recognised under IFRS 3 "Business Combinations". Amortisation on brands are calculated on a straight line basis over the assets estimated useful life of between 10 and 15 years.

Brands 10 to 15 years straight line

Acquired games and apps

These represent the fair value of games and apps arising at acquisition. The assets are tested for impairment annually or more frequently if there are indicators of impairment. Amortisation is calculated over the estimated useful life using the following policy:

Acquired games and apps 7 to 10 years straight-line

Indicators of impairment

The financial performance of games and apps were assessed against the forecasts produced at the point of acquisition for indicators of impairment. Where an impairment trigger was identified due to under performance, a 10 year cash flow forecast was produced to measure the value in use. No impairment was identified through this process.

Key assumptions used for value-in use calculations

Management considers the pre-tax discount rate to be a key assumption in the calculation of value in use and the rate used in the model is 15.7%. We reviewed sensitivities to this and any increase of the discount rate to over 36.1% would reduce the headroom in the value in use model over the carrying value to £Nil.

Projected future cash inflows (revenue) from unreleased titles are also considered to be a key assumption. Budgeting is done on a game by game basis, with game revenues varying based on management's best estimates. A reduction of 42% to future unreleased sequel revenue in the model would reduce the headroom over the carrying value to £Nil.

Customer and developer relationships

This is the fair value of relationships held with customers and developers acquired through business combinations. Group capitalises the costs of developing new games for release to the market. Amortisation is calculated over the assets estimated useful life of 10 years. The assets are tested for impairment annually or more frequently if there are indicators of impairment.

Customer and developer relationships 10 years straight-line

Goodwill

The Group tests for impairment annually, or more frequently if there are indicators that goodwill might be impaired. There are 4 CGUs in the Group which are as follows:

● Team 17 Digital (Indie games)

● StoryToys (Edutainment)

● astragon (Simulation)

● Team17 USA (Mobile licence)

The carrying value of Goodwill allocated to those CGU's is split as follows:

The recoverable amount of each of the CGUs at 31 December 2024 is determined from the value in use which is higher than the fair value less costs of disposal. In arriving at a value in use management has used a discounted 5-year bottom up forecast before applying a long-term growth assumption. The discount rates and terminal growth used in the impairment assessment of each CGU is as follows:

Key assumptions used for value-in use calculations

When reviewing for impairment of goodwill in CGU's, management prepares cash flow forecasts to estimate the value in use. Management considers the following to be the key assumptions in the cash flow:

● Pre-Tax discount rate

● Terminal growth rate

During the year the pre-tax discount rate has been adjusted to take into account the Group's size risk premium which is based on the market cap for the Group. Projected future cash inflows (revenue) are also considered to be a key assumption. Budgeting is done on a game by game basis, with game revenues varying based on management's best estimates.

Impact of possible changes in key assumptions

In assessing the carrying value of Goodwill management performed sensitivity analysis on each of the key assumptions. The result of the sensitivity tests on each CGU are detailed below. In assessing the sensitivity of projected future cash inflows the sensitivity test was split between new release revenue and back catalogue revenue. New release revenue is deemed to be inherently riskier in nature and as such a higher level of sensitivity was applied to new release cash inflows than to back catalogue cash inflows.

The recoverable amount of each CGU would equal its carrying amount if the key assumptions were to change as follows:

*In the case of a 100% reduction in new release revenue the recoverable amount of the CGU would still exceed its carrying value.

+ The recoverable amount of the CGU is supported by the 5-year plan period. As such no change in terminal growth rate assumption will cause impairment.

Impairment of Team17 (USA)

The impairment review of Team17 (USA) identified impairment of £991,000 to Goodwill (2023: £20,879,000) and a further impairment of £3,572,000 to Customer and Developer Relationship intangible assets (2023: £nil). Team17 (USA) is focussed on developing games for the mobile subscription market. Due to an increasingly competitive landscape and key employees leaving the CGU and the current pipeline the remaining carrying value of Goodwill and Intangible assets associated with the purchase were impaired to nil value. As no further impairment of these assets is possible no associated sensitivity analysis has been performed.

Other intangibles

These are made up of capitalised software and are amortised under the following policies:

Capitalised software 2 years straight-line

9. Cash and cash equivalents

Included within the restricted cash balance above is £2,699,000 (FY 2023: £2,901,000) held by the Team17 Employment Benefit Trust. This cash is not readily available for use by the Group to meet its everyday operating costs but can be spent for the benefit of the employees and as such is considered restricted cash.

10. Contingent consideration

Included within trade and other payables is £nil (FY 2023: £4,944,000) of contingent consideration. Contingent consideration is broken down as follows:

The maximum value of outstanding contingent consideration at the year end was £nil (FY 2023: £16,700,000). The value of the earnout was determined based on the performance criteria included in the underlying contract.

11. Cash generated from operations

12. Dividends not recognised at the end of the reporting period

Since the year end the directors have recommended the payment of a final dividend of 2.7 pence per fully paid ordinary share (2024: Nil). The aggregate amount of the proposed dividend is expected to be paid on 4 July 2025. The dividend not recognised as a liability at year end, is £3,893,000 (2023: Nil).