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Company Registration Number 09346537
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FACEPUNCH GROUP LIMITED
COMPANY INFORMATION
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Mr J S Purewal (resigned 8 July 2024)
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Mr A G McFarlane (appointed 11 October 2024)
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Facepunch Studios Limited
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Statutory Auditors, Chartered Accountants
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FACEPUNCH GROUP LIMITED
CONTENTS
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Independent Auditor's Report
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Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Consolidated Analysis of Net Debt
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Notes to the Financial Statements
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FACEPUNCH GROUP LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The directors present their strategic report for the year ended 30 September 2024.
Facepunch Group Limited is a holding company.
Facepunch Studios Limited is a wholly owned subsidiary of Facepunch Group Limited, both incorporated in the United Kingdom. Facepunch Studios Limited is a game development company and continues to develop games in the United Kingdom for sale worldwide. The company specialises in sandbox multiplayer titles.
Group results and performance
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The directors consider that the group's key financial performance indicators are turnover and profit before tax. The results for the group for the year, as set out on pages 11 to 17, show:
As restated
2024 2023
Turnover £77,246,081 £89,811,631
Profit on ordinary activities before tax £26,420,987 £32,888,200
Shareholders' funds £85,186,475 £64,915,086
The directors continually monitor the gaming market to assess the impact of any changes on the Group’s financial performance. The Group has performed in line with expectations, with turnover down on the prior year. Mostly this relates to a reduction in console revenue because Rust only remains available on the older version of the consoles for both Xbox and PlayStation right now. Market trends have also impacted our PC revenue for Rust generating slightly less income than in the prior year. Future revenues will be supported through continued focus on our core product Rust, continuing our long term roadmap for it, as well as future game development. The Group’s top selling game Rust is regularly in Steam’s top sales list.
Group profit results are as expected, there has been significant investment in our new headquarters during 2023. During 2024 we have continued to increase staff count and there has been a fluctuation in foreign exchange where USD has returned to more usual levels.
The global video games market generated $188 billion U.S dollars to September 2024, the market is slowly but consistently growing.
The largest segment continues to be Mobile Games with a market volume of 49% in 2024, followed by Console and PC. The gaming industry as a whole faced many challenges in 2023 following exponential growth as a result of the covid pandemic, unfortunately this led to industry cuts and layoffs in the last 12-18 months. Mobile market share has slowed whilst PC has picked up, although the trend is expected to revert in 2025. The global games market is forecast to reach $213.3 billion U.S dollars in 2027.
Principal risks and uncertainties
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The Group's activities are subject to risks and uncertainties, which may affect future financial performance. The worldwide gaming market is highly competitive, particularly in the online streaming sector where our business is focused. Many companies offer similar products, giving rise to ongoing development to differentiate us from our competitors and to keep our customers engaged.
The Group's operations may expose it to a variety of potential financial risks, these include liquidity, credit, currency and interest rate risks. The Group is fortunate to have sufficient cash to mitigate these risks. Fluctuations in interest rates aren't currently a risk to the business given the large level of cash reserves and because the Group has no external loans. The Group does not however rely on interest received on these cash balances.
Page 1
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FACEPUNCH GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The Group is fortunate to have sufficient cash to meet its needs and hence there is no perceived liquidity risk. The group utilises funds to maximise the interest received. They continually review the liquidity position and would implement an appropriate structure of financing should this be required in the future.
The Group seeks to balance the flows of revenues and costs across currencies to minimise exposure to currency risk.
The gaming market shows no signs of slowing down, the group is continuing to invest in its core products which continue to be highly successful.
The Group currently has four active games available and plans to keep releasing regular updates to ensure sales remain strong, in the last year key game milestones have also been leveraged to drive performance. The group will continue to develop and release new games. The Group is working closer with partners to explore opportunities for collaboration and cross promotion.
The Group's principal game, Rust, celebrated its eleventh year of release in 2024. There is a roadmap for continued development and support over the long term.
The Group is engaged in the development of video games. All costs associated with game development are recognised directly in the profit and loss account as incurred.
Directors' statement of compliance with duty to promote the success of the Group
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The directors are aware of their responsibilities pursuant to section 172 of the Companies Act 2006.
In order to promote the success of the business for all stakeholders and for the long term the directors regularly review internal and external stakeholder relationships and the impact that the activities of the business have on these stakeholders.
Long-Term Success
We are committed to the long-term success of Facepunch Group Limited. All of our strategic decisions take into account the impact on the company's financial performance, sustainable growth of shareholder value and enhancing the community’s playing experience.
Employee and Contractor Interests
We value our workforce as our greatest asset and as a result, we regularly review our working practices and remuneration approach to ensure we not only attract great talent but that the working environment is conducive to well-balanced working relationships and good work-life balance, as the directors consider this to be the highest priority for sustaining the continued long term success of the business.
In this regard additional business staff have been onboarded in the last few years to manage and support the following for the Group;
a) the development and growth of the team,
b) the change of premises to improve hybrid working and employee wellbeing, and
c) foster the company’s business relationships with suppliers, customers and other stakeholders.
Customer and Supplier Relationships
Maintaining strong relationships with our customers and suppliers is essential. We work to provide high-quality products and services to our player base while fostering fair and transparent partnerships with our suppliers. Our decisions aim to strengthen these relationships and ensure mutual benefit.
Page 2
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FACEPUNCH GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Players, Community and Environment
We are committed to being a responsible corporate citizen. Our decisions take into account the impact on the local community and the environment. We seek to minimise our environmental footprint and contribute positively to the communities in which we operate, including various local and worldwide charitable initiatives. We have dedicated ourselves to delivering captivating gaming experiences that resonate with our diverse player community. Community feedback is encouraged and is actioned upon by way of monthly updates.
Reputation Management
Protecting and enhancing the reputation of Facepunch Group Limited is a priority. We consider the potential impact of our decisions on the company's reputation, ensuring that our actions align with our values and contribute positively to our public image.
Engagement with Stakeholders
We actively engage with our stakeholders to understand their concerns and expectations. This includes shareholders, employees, contractors, customers, suppliers, and the wider gaming community. This engagement informs our decision-making process and helps us balance competing interests.
As a result of these activities, the directors believe that they have demonstrated compliance with their legal duty under s.172 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Mr C P Gwilt
Director
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Page 3
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FACEPUNCH GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The directors present their report and the financial statements for the year ended 30 September 2024.
Directors' responsibilities statement
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The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the Group and of the profit or loss of the Company and Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company and Group's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £20,271,390 (As restated 2023 - £26,982,662).
During the year ended 30 September 2024 the directors paid a dividend of £Nil (2023 - £Nil).
The directors who served since 1 October 2023 to the date of signing the financial statements were:
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Mr J S Purewal (resigned 8 July 2024)
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Mr A G McFarlane (appointed 11 October 2024)
Page 4
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FACEPUNCH GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
During the year ended 30 September 2024, Facepunch Studios Limited gathered data regarding scope one, two and three carbon emissions (as defined by the GHG protocol) from its UK operations as defined by the requirement of the Streamlined Energy Carbon Reporting (SECR) legislation.
2024 2023
Energy (kWh)
Total Energy consumption used to calculate GHG emissions 480,103 282,946
Emissions (tCO2e)
Scope 1 (emissions from gas and fuel for fleet vehicles) - -
Scope 2 (emissions from electricity and gas) 98.39 57.86
Scope 3 (emissions from business travel in employees cars) - -
Total SECR emissions 98.39 57.86
Specific Carbon Consumption
SCC (TCO2e / £000 revenue) 0.001 0.001
There were no energy efficiency actions reported in 2024.
Matters covered in the Strategic Report
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The directors have chosen to set out in the Group's strategic report information required to be contained in the directors' report in respect of future developments, financial instruments and research and development.
Engagement with suppliers, customers and others
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Considering the potential consequences that a decision may have on employees, suppliers, customers, and other related parties is paramount. Acting with integrity and promoting high standards across the business is fundamental to how we operate as a business.
The Group is aware of its responsibility to the local community and the environment, making charitable donations and contributing to the local community on a number of different initiatives.
Ultimately, we aim to increase the value of the business through building relationships with our external partners and creating opportunities for employees and stakeholders to achieve their potential.
Qualifying third party indemnity provisions
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Directors' and officers' liability insurance cover is held in respect of any potential legal action brought against the Group's directors, which was in place throughout the year.
Branches outside the United Kingdom
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The Group does not operate any branches outside the United Kingdom.
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FACEPUNCH GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
After reviewing the Group's forecasts and projections, which cover the 12-month period from the date of signing the financial statements, the directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. This assessment takes into account the Group’s significant cash reserves, which provide substantial liquidity and financial flexibility. Additionally, the Group and company continues to experience strong sales growth for its main game, Rust, which has seen record levels of player engagement post year end. Additional revenue is also expected from new projects set for release in the next 12 months. The forecasts and projections confirm that sales remain strong and cash reserves are significant, providing the Group and Company with sufficient funds to meet their liabilities as they fall due over the next 12 months. As a result, the Group and company continues to adopt the going concern basis in preparing its financial statements.
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the company and the Group's auditor is unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company and the Group's auditor is aware of that information.
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
The auditor, Grant Thornton UK LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Page 6
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FACEPUNCH GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FACEPUNCH GROUP LIMITED
We have audited the financial statements of Facepunch Group Limited (the 'parent company') and its subsidiary (the 'group') for the year ended 30 September 2024 which comprise the consolidated the consolidated statement of comprehensive income, the consolidated statement of financial position, the company statement of financial position, the consolidated statement of changes in equity, the company statement of changed in equity, the consolidated statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
∙the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 30 September 2024 and of the group's profit for the year then ended;
∙the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's and the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the Group’s and the parent company’s business model including effects arising from macro-economic uncertainties such as fluctuating exchange rates and global uncertainties, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the Group’s and the parent company’s financial resources or ability to continue operations over the going concern period.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Page 7
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FACEPUNCH GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FACEPUNCH GROUP LIMITED (CONTINUED)
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the financial statements other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the financial statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and Directors' Report has been prepared in accordance with applicable legal requirements.
Matter on which we are required to report under the Companies Act 2006
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In the light of the knowledge and understanding of the group and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' Report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Page 8
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FACEPUNCH GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FACEPUNCH GROUP LIMITED (CONTINUED)
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
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Our objectives are to obtain reasonable assurance about whether the group financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙The group is subject to many laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements. We identified the following laws and regulations as the most likely to have a material effect if non-compliance were to occur; financial reporting legislation, Companies Act legislation, and tax legislation;
∙We understood how the group is complying with those legal and regulatory frameworks by making enquiries of management. We corroborated our enquiries through our review of board minutes;
∙We assessed the susceptibility of the group’s financial statements to material misstatement, including how fraud might occur by meeting with management from different parts of the business to understand where it is considered there was a susceptibility of fraud. We also considered performance targets and their propensity to influence efforts made by management to manage earnings. We considered the programs and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programs and controls. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk;
∙Our audit procedures involved: journal entry testing, with a focus on large or unusual transactions based on our understanding of the business and enquiries of management. In addition, we completed audit procedures to conclude on the compliance of disclosures in the financial statements with applicable financial reporting requirements;
∙These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;
Page 9
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FACEPUNCH GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FACEPUNCH GROUP LIMITED (CONTINUED)
∙Assessment by the engagement partner of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s:
- knowledge of the industry in which the group operates and understanding of, and practical experience with, audit engagements of a similar nature and complexity through appropriate training and participation; and
- understanding of the legal and regulatory requirements specific to the group including:
•the provisions of the applicable legislation
• the regulators rules and related guidance, including guidance issued by relevant authorities that
interprets those rules
• the applicable statutory provisions
∙We communicated relevant laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
A further description of our responsibilities is available on the Financial Reporting Council's website at
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the group's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the group's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the group and the group's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Philip Sayers (Senior Statutory Auditor)
for and on behalf of
Grant Thornton UK LLP
Statutory Auditors, Chartered Accountants
Birmingham
23 May 2025
Page 10
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FACEPUNCH GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Interest receivable and similar income
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Profit for the financial year
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Profit for the year attributable to:
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Owners of the parent company
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There were no recognised gains and losses for 2024 or 2023 other than those included in the consolidated statement of comprehensive income.
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There was no other comprehensive income for 2024 (2023:£NIL).
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The notes on pages 19 to 34 form part of these financial statements.
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Please refer to note 20 in regard to the restatement of 2023.
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Page 11
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FACEPUNCH GROUP LIMITED
REGISTERED NUMBER: 09346537
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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Equity attributable to owners of the parent company
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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Mr C P Gwilt
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Mr G J Newman
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The notes on pages 19 to 34 form part of these financial statements.
Please refer to note 20 in regard to the restatement of 2023.
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Page 12
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FACEPUNCH GROUP LIMITED
REGISTERED NUMBER: 09346537
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Capital redemption reserve
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Profit and loss account brought forward
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Other changes in the profit and loss account
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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Mr C P Gwilt
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Mr G J Newman
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The notes on pages 19 to 34 form part of these financial statements.
Page 13
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FACEPUNCH GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Capital redemption reserve
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At 1 October 2023 (as previously stated)
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At 1 October 2023 (as restated)
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Shares cancelled during the year
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The notes on pages 19 to 34 form part of these financial statements.
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Page 14
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FACEPUNCH GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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At 1 October 2022 (as previously stated)
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At 1 October 2022 (as restated)
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Profit for the year (as restated)
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The notes on pages 19 to 34 form part of these financial statements.
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Page 15
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FACEPUNCH GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Capital redemption reserve
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Shares cancelled during the year
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The notes on pages 19 to 34 form part of these financial statements.
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Page 16
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FACEPUNCH GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible assets
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Loss on disposal of tangible assets
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Video games expenditure credit included within other operating income
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Decrease/(increase) in debtors
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(Decrease)/increase in creditors
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Net cash from investing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Foreign exchange gains and losses
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 19 to 34 form part of these financial statements.
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Page 17
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FACEPUNCH GROUP LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Fair value and exchange movements
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The notes on pages 19 to 34 form part of these financial statements.
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Page 18
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FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
Facepunch Group Limited is a private company, limited by shares, registered in England and Wales. The
company's registered number is 09346537 and the registered office address is Facepunch Studios Limited, 8th Floor, 103 Colmore Row, Birmingham, B3 3AG.
The principal activity of the group is the development and retail of computer games.
2.Accounting policies
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Basis of preparation of financial statements
|
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The company profit for the year is £5,724 (2023 - £3,340).
The consolidated financial statements present the results of the company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Profit and Loss Account from the date on which control is obtained. They are deconsolidated from the date control ceases.
After reviewing the Group's forecasts and projections, which cover the 12-month period from the date of signing the financial statements, the directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. This assessment takes into account the Group’s significant cash reserves, which provide substantial liquidity and financial flexibility. Additionally, the Group and company continues to experience strong sales growth for its main game, Rust, which has seen record levels of player engagement post year end. Additional revenue is also expected from new projects set for release in the next 12 months. The forecasts and projections confirm that sales remain strong and cash reserves are significant, providing the Group and Company with sufficient funds to meet their liabilities as they fall due over the next 12 months. As a result, the Group and company continues to adopt the going concern basis in preparing its financial statements.
Page 19
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FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
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Foreign currency translation
|
Functional and presentation currency
The company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'administrative expenses'.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Group revenue represents income received from globally recognised digital platforms in respect of games downloaded. Revenue is recognised in the month the game is downloaded by the end customer.
Revenue is recognised on a gross basis where the Group is considered to be the principal in the transaction, and on a net basis where the Group is considered to be acting as an agent. The determination of whether the Group is acting as principal or agent is based on an evaluation of the terms of each arrangement, considering whether the Group controls the goods or services before they are transferred to the customer.
Income received in advance is deferred in full alongside the associated costs, both are released and recognised once a game is downloaded or physically distributed.
Company revenue relates to investment income.
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Operating leases: the Group as lessee
|
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Page 20
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FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
Research and development costs in relation to games being developed are recognised as an expense as incurred in profit and loss.
Interest income is recognised in profit or loss using the effective interest method.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
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Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Page 21
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FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The Group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the methods listed below.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Page 22
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FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
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Provisions for liabilities
|
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
Financial instruments are recognised in the company's Statement of Financial Position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
The company only enters into basic financial instrument transactions that result in the recognition of basic financial assets and liabilities.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments
Page 23
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FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
2.Accounting policies (continued)
|
|
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Financial instruments (continued)
|
discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.
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Impairment of non-financial assets
|
At each reporting date non-financial assets not carried at fair value, like tangible fixed assets, are reviewed to determine whether there is an indication that an asset may be impaired. If there is an indication of possible impairment, the recoverable amount of any asset or group of related assets, which is the higher of value in use and the fair value less cost to sell, is estimated and compared with its carrying amount. If the recoverable amount is lower, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised immediately in profit or loss.
If an impairment loss is subsequently reversed, the carrying amount of the asset or group of related assets is increased to the revised estimate of its recoverable amount, but not to exceed the amount that would have been determined had no impairment loss been recognised for the asset or group of related assets in prior periods. A reversal of an impairment loss is recognised immediately in profit or loss.
Page 24
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|
FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
|
|
Judgements in applying accounting policies and key sources of estimation uncertainty
|
In determining and applying accounting policies, judgement is often required in respect of items where choice of specific policy, accounting estimate or assumption to be followed could materially affect the reported results or net asset position of the company; it may later be determined that a different choice would have been more appropriate. Management considers that certain accounting estimates and assumptions relating to revenue, taxation and accruals are its critical accounting estimates.
Management also exercises judgement in determining whether the Group acts as a principal or an agent in relation to its different income streams. This assessment considers whether the Group controls the underlying goods or services before they are transferred to the customer, whether it is primarily responsible for fulfilling the performance obligation, and whether it has discretion in setting prices. These factors are evaluated on a contract-by-contract basis. Where the Group is assessed to be the principal, revenue is recognised on a gross basis. Where the Group is assessed to be acting as an agent, revenue is recognised on a net basis, representing only the income to which the Group is contractually entitled.
The whole of the turnover is attributable to the same business activity.
Analysis of turnover by country of destination:
|
|
Video games expenditure credit (VGEC)
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The operating profit is stated after charging:
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Other operating lease rentals
|
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(Profit)/loss on disposal of tangible assets
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Research and development expenditure
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Page 25
|
|
FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
|
|
Fees payable to the company's auditor and its associates for the audit of the consolidated and parent company's financial statements
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Fees payable to the company's auditor and its associates in respect of:
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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Key management personnel comprises the directors. Their aggregate remuneration was £531,750 (2023 - £615,000). The highest paid director received £252,250 (2023 - £255,000).
Pension costs in the period in respect of directors totalled £Nil (2023 - £Nil).
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|
|
The average monthly number of employees, including the directors, during the year was as follows:
|
|
|
Other interest receivable
|
|
|
Page 26
|
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FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
|
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|
|
Current tax on profits for the year
|
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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|
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Taxation on profit on ordinary activities
|
|
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|
|
Factors affecting tax charge for the year
|
|
|
The tax assessed for the year is lower than (2023 - lower than) the standard rate of corporation tax in the UK of 25% (2023 - 22%). The differences are explained below:
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|
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Profit on ordinary activities before tax
|
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|
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 22%)
|
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|
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
|
|
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|
|
Capital allowances for year in excess of depreciation
|
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|
|
Adjustments to tax charge in respect of prior periods
|
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Other differences leading to a (decrease)/increase in the tax charge
|
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|
|
Total tax charge for the year
|
|
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|
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Factors that may affect future tax charges
|
There were no factors that may affect future tax charges.
Page 27
|
|
FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
|
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Charge for the year on owned assets
|
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Investments in subsidiary companies
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Page 28
|
|
FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
|
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|
The following was a subsidiary undertaking of the company:
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Facepunch Studios Limited
|
8th Floor, 103 Colmore Row, Birmingham, B3 3AG
|
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|
|
The aggregate of the share capital and reserves as at 30 September 2024 and the profit or loss for the year ended on that date for the subsidiary undertaking were as follows:
|
|
|
|
Aggregate of share capital and reserves
|
|
|
|
Facepunch Studios Limited
|
|
|
Page 29
|
|
FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
|
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Amounts owed by group undertakings
|
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Prepayments and accrued income
|
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An impairment loss of £Nil (2023: £Nil) was recognised against trade debtors.
Amounts owed by group undertakings are interest free and due on demand.
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|
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Cash and cash equivalents
|
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Creditors: Amounts falling due within one year
|
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Other taxation and social security
|
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Accruals and deferred income
|
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Creditors: Amounts falling due after more than one year
|
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Accruals and deferred income
|
|
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|
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Page 30
|
|
FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
|
|
The deferred taxation balance is made up as follows:
|
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Accelerated capital allowances
|
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Change in accounting policy
|
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Allotted, called up and fully paid
|
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|
|
777,840 (2023 - 777,840) Ordinary shares of £0.0001 each
|
|
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|
|
300,000 (2023 - 300,000) Preferred A shares of £0.0001 each
|
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33,360 (2023 - 33,360) Preferred B shares of £0.0001 each
|
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20,000 (2023 - 30,000) Deferred shares of £0.0001 each
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On 15 July 2024, the company purchased 10,000 of its own Deferred shares of £0.0001 each, for a total consideration of £1. These shares were subsequently cancelled.
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FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
18.Share capital (continued)
Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights and are not redeemable. Deferred shares have no voting rights and no rights to participate in any distribution or receive any dividends. In the event of a winding-up the amount payable in respect of the deferred shares is capped at £1 in total for the aggregate of all the deferred shares. The deferred shares do not confer any rights of redemption. The preferred A shares have attached to them full voting, dividend and capital distribution. In the event of a winding up the amount payable in respect of the preferred A shares is first in paying to each of the preferred shareholdings, in priority to any other class of shares, an amount per share held equal to the higher of:
i) the preference amount; and
ii) such amount per share that would have been payable to each of the preferred shareholders had conversion of the preferred shares into ordinary shares taken place immediately prior to the date of such distribution of assets (taking into account the conversion of all preferred shares simultaneously), provided that if there are insufficient surplus assets to pay the amounts per share equal to the preference amount, the remaining surplus assets shall be distributed to preferred shareholders pro-rata to their respective holdings of preferred shares. The preferred A shares do not confer any rights to redemption.
The preferred B shares have the following rights attached to them:
- the right to receive dividends;
- the right to capital distribution including on winding up. On a return of capital, each of the preferred B Shares is entitled to the higher of $1,799.86 per share and such amount as would be payable if such share was reclassified as an Ordinary share;
- the right to convert preferred B Shares into Ordinary Shares pursuant to Article 9 of the Articles of Association; and
- the right to pre-emption on an allotment of new shares.
The preferred B shares are not entitled to vote at general meetings or on written resolutions.
Save as set out above, the preferred B shares shall rank pari passu to the Ordinary Shares.
Share premium account
This reserve relates to accumulated non-distributable profits and losses in respect of amounts paid for company shares over and above their issue price.
Capital redemption reserve
This reserve comprises of shares redeemed by the company.
Page 32
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FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
The comparatives have been restated to reclassify £2,597,688 of development costs, previously included within work-in-progress on the balance sheet, to cost of sales and administrative expenses in profit and loss. This adjustment has resulted in a decrease in prior year opening reserves of £935,077, a decrease in prior year assets of £1,948,259, an increase in prior year cost of sales of £1,116,758, an increase in prior year administrative expenses of £234,151, and a decrease in the tax on profit of £337,727; an overall decrease in profit before tax for the year ended 30 September 2023 of £1,350,909 and and decrease in profit after tax of £1,013,182. The directors believe this more accurately reflects the nature of the underlying transactions, that being development costs incurred for games being developed but not yet released.
The comparative figures have been restated to gross up both turnover and cost of sales following a reassessment by management of the Group's role in relation to a significant revenue contract. Based on revised judgements in accordance with FRS 102, the Group has concluded it is acting as a principal rather than an agent in the arrangement. As a result, prior year revenue and cost of sales have both been increased by £23,874,980. There is no impact on profit before tax, profit after tax or retained earnings. The directors believe this presentation more accurately reflects the substance of the Group's performance obligations and provides more relevant information to the users of the financial statement.
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At 30 September 2024 the Group had capital commitments as follows:
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Contracted for but not provided in these financial statements
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The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to £200,837 (2023 - £95,757). Contributions totalling £30,294 (2023 - £16,436) were payable to the fund at the reporting date and are included in creditors.
There are no directors accruing benefits under the pension scheme (2023 - £Nil).
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FACEPUNCH GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
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Commitments under operating leases
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At 30 September 2024 the Group had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The company has taken advantage of the exemption in FRS 102 (section 33) “Related Party Disclosures” with respect to disclosure of related party transactions with wholly owned group companies.
At the reporting date the group owed the directors £11,111 (2023 - £11,111) in respect of directors' loan accounts. These amounts are included within creditors and are unsecured, interest free and repayable on demand.
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The company was under the control of Mr G J Newman, director, throughout the current and previous year by virtue of his majority shareholding.
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