- More titles released than any previous year helping to deliver revenue growth of 34%
- Record £26.2m profit before tax - up 36% year on year
- Continued improvement in shareholder value with basic EPS growth of 32%
| ||12 Months ended|| || |
| ||31 December 2020||31 December 2019||Growth|
|Gross Profit Margin||47%||48%|| |
|Profit Before Tax||£26.2m||£19.2m||36%|
|Operating Cash Conversion2||109%||103%|| |
|Cash and cash equivalents||£61.5m||£41.9m||47%|
|Basic Earnings per Share ("EPS")||17.0 pence||12.9 pence||32%|
|Diluted EPS||16.8 pence||12.9 pence||30%|
|Basic Adjusted EPS ("AEPS")3||18.2 pence||13.6 pence||34%|
|Diluted AEPS3||18.1 pence||13.6 pence||33%|
Operational and strategic highlights
- Strengthening portfolio with 12 titles launched in the year providing new revenue lines which included a record 10 new games released, supported by an increasing depth of back catalogue titles:
- Approaching 400 digital revenue lines delivered across the whole portfolio• 2 titles launched on next-generation consoles, Worms Rumble and Overcooked! All You Can Eat
- Cross-play tech integration in Next Generation titles (forms the wrapper for releases in future years for online games using the Unreal and Unity engines)
- Solid underlying Back Catalogue performance making up 78% of revenues.
- First party IP reached 21% of revenues, supported by 2 first party titles launched in Q4.
- Seamless transition to remote working in early March 2020 ahead of the Covid-19 ("Covid") outbreak with the safety of our Teamsters paramount.
- Continued investment in senior management and core infrastructure:
- CFO appointed and key hires made in Development Studio, HR and IT
- Martin Hellawell appointed Senior Independent Non-Executive Director (with immediate effect)
- Finance system upgrade initiated
- With the acquisition and integration of Yippee Entertainment Limited ("Yippee") establishing a second UK development studio based in Media City, Manchester, the team has now doubled in size.
- Overall headcount growth of 25% to 250 Teamsters at year end (2019: 200)
- On January 2021, completed the acquisition of all rights and assets for Golf With Your Friends, an existing third party title to become a fully owned IP for a total consideration of £12m.
- Team17 has a solid and diverse pipeline of launches for 2021 and beyond and is well positioned to continue to deliver on our growth plans
- The year has started well and the expansion of both major new consoles and distribution platforms underpins management's optimism about the future of gaming given its unique mixture of technology and entertainment
- The board continues to be mindful of any potential headwinds associated with a prolonged pandemic, including uncertain macro-economic and consumer environments alongside manufacturing and supply chain challenges
- However, the Company remains confident that its ever-growing and diverse portfolio and high-quality development and commercial teams will continue to underpin performance
- Team17 continues to review a healthy pipeline of potential M&A opportunities that could bring long term value to the Group
Debbie Bestwick MBE, Chief Executive Officer of Team17, commented:
"I am delighted that our Teamsters and the wider Team17 family have pulled together, in what has been a challenging 12 months for many. It is because of their hard work and creativity, alongside that of our brilliant label partners, that we can report yet another record year of profitability.
Team17 has been able to offer gamers a means of escapism and a way to interact with their friends and family more than ever before, even when they were unable to meet face to face. The ability to enjoy interactive entertainment between multiple households is something that is almost unique to gaming and we are pleased that our inclusive and family-oriented games have proven so popular.
2020 was a significant year for the gaming industry as a whole, as we saw the launch of both Sony and Microsoft's next-gen consoles. It is fantastic to see our titles being launched on both these platforms and that another generation of gamers will get to explore Team17's gaming universes. Incredibly, our Worms franchise is now twenty-five years old and in December we launched the franchise's newest title, Worms Rumble, on PlayStation 5. While we have all been delighted to see how well the game has taken to this new platform, I know many gamers, myself included, will fondly remember Worms' first iteration, developed for the Commodore Amiga and released in 1995.
2021 will be a very exciting and busy year for Team17, with more games signed to our label than any time in our history and new IP launches to look forward to including Rogue Heroes, King of Seas, Narita Boy, Epic Chef, Super Magbot, Greak: Memories of Azur, HoneyI Joined a Cult and Hokko Life with three new games still to be announced. Alongside these, Hell Let Loose is due to exit Early Access and launch on PlayStation 5 and Xbox X/S, Overcooked! All You Can Eat will launch on Nintendo Switch, PlayStation 4, Xbox One & PC and Worms Rumble will launch on Xbox X/S, Xbox One and Nintendo Switch. I look forward to updating our shareholders on our progress as the year goes on."
1 Adjusted EBITDA is defined as operating profit adjusted to add back depreciation of property, plant and equipment, amortisation of brands and impairment of intangible assets (excluding capitalised development costs) and share based payment costs.
2 Operating cash conversion is defined as cash generated from operating activities as per the statement of cash flows, divided by EBITDA.
3 Adjusted earnings per share is calculated by dividing the adjusted profit after tax by the weighted average number of ordinary shares. This is adjusted for the effect of share options when calculating the diluted adjusted earnings per share (Note 5).