108 false false false false true true false false false false false false true false false true true true true No description of principal activity 2024-01-01 Sage Accounts Production Advanced 2024 - FRS102_2024 324,457 500,945 825,402 36,144 197,303 233,447 591,955 288,313 875,010 313,359 561,651 561,651 xbrli:pure xbrli:shares iso4217:GBP 03677408 2024-01-01 2024-12-31 03677408 2024-12-31 03677408 2023-12-31 03677408 2023-01-01 2023-12-31 03677408 2023-12-31 03677408 2022-12-31 03677408 core:DevelopmentCostsCapitalisedDevelopmentExpenditure 2024-01-01 2024-12-31 03677408 core:Subsidiary1 2024-01-01 2024-12-31 03677408 bus:RegisteredOffice 2024-01-01 2024-12-31 03677408 bus:OrdinaryShareClass2 2024-01-01 2024-12-31 03677408 bus:LeadAgentIfApplicable 2024-01-01 2024-12-31 03677408 bus:Director3 2024-01-01 2024-12-31 03677408 bus:Director7 2024-01-01 2024-12-31 03677408 bus:CompanySecretary1 2024-01-01 2024-12-31 03677408 core:WithinOneYear 2024-12-31 03677408 core:WithinOneYear 2023-12-31 03677408 core:DevelopmentCostsCapitalisedDevelopmentExpenditure 2023-12-31 03677408 core:DevelopmentCostsCapitalisedDevelopmentExpenditure 2024-12-31 03677408 core:PlantMachinery 2023-12-31 03677408 core:FurnitureFittings 2023-12-31 03677408 core:PlantMachinery 2024-12-31 03677408 core:FurnitureFittings 2024-12-31 03677408 core:PlantMachinery 2024-01-01 2024-12-31 03677408 core:FurnitureFittings 2024-01-01 2024-12-31 03677408 core:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 03677408 core:ShareCapital 2024-01-01 2024-12-31 03677408 core:RetainedEarningsAccumulatedLosses 2024-01-01 2024-12-31 03677408 core:UKTax 2024-01-01 2024-12-31 03677408 core:UKTax 2023-01-01 2023-12-31 03677408 core:ShareCapital 2024-12-31 03677408 core:ShareCapital 2023-12-31 03677408 core:SharePremium 2024-12-31 03677408 core:SharePremium 2023-12-31 03677408 core:OtherReservesSubtotal 2024-12-31 03677408 core:OtherReservesSubtotal 2023-12-31 03677408 core:RetainedEarningsAccumulatedLosses 2024-12-31 03677408 core:RetainedEarningsAccumulatedLosses 2023-12-31 03677408 core:ShareCapital 2022-12-31 03677408 core:SharePremium 2022-12-31 03677408 core:OtherReservesSubtotal 2022-12-31 03677408 core:RetainedEarningsAccumulatedLosses 2022-12-31 03677408 core:BetweenOneFiveYears 2024-12-31 03677408 core:BetweenOneFiveYears 2023-12-31 03677408 core:DevelopmentCostsCapitalisedDevelopmentExpenditure 2023-12-31 03677408 core:CostValuation core:Non-currentFinancialInstruments 2024-12-31 03677408 core:Non-currentFinancialInstruments core:ProvisionsForImpairmentInvestments 2024-12-31 03677408 core:Non-currentFinancialInstruments 2024-12-31 03677408 core:Non-currentFinancialInstruments 2023-12-31 03677408 core:PlantMachinery 2023-12-31 03677408 bus:HighestPaidDirector 2024-01-01 2024-12-31 03677408 bus:HighestPaidDirector 2023-01-01 2023-12-31 03677408 bus:Director1 2024-01-01 2024-12-31 03677408 bus:MediumEntities 2024-01-01 2024-12-31 03677408 bus:Audited 2024-01-01 2024-12-31 03677408 bus:Medium-sizedCompaniesRegimeForAccounts 2024-01-01 2024-12-31 03677408 bus:PrivateLimitedCompanyLtd 2024-01-01 2024-12-31 03677408 bus:FullAccounts 2024-01-01 2024-12-31 03677408 bus:OrdinaryShareClass2 2024-12-31 03677408 bus:OrdinaryShareClass2 2023-12-31 03677408 core:Exceptional 2023-01-01 2023-12-31
COMPANY REGISTRATION NUMBER: 03677408
Marmalade Game Studio Limited
Financial Statements
For the year ended
31 December 2024
Marmalade Game Studio Limited
Financial Statements
Year ended 31 December 2024
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
5
Independent auditor's report to the members
7
Income statement
11
Statement of financial position
12
Statement of changes in equity
13
Notes to the financial statements
14
Marmalade Game Studio Limited
Officers and Professional Advisers
The board of directors
C Mereuta
M Willis
Company secretary
F Shek
Registered office
54 Charlotte Street
London
England
W1T 2NS
Auditor
Streets Audit LLP
Chartered accountants & statutory auditor
Building 15, Gateway 1000
Arlington Business Park
Stevenage
Hertfordshire
SG1 2FP
Marmalade Game Studio Limited
Strategic Report
Year ended 31 December 2024
Our goal is to provide a fair and thorough overview of the company's performance and development over the year, along with its financial position at the end of the reporting period. This review reflects the scale and straightforward nature of our business and takes into account the risks and uncertainties we encounter. The company remains committed to offering high-quality wholesome video games and gaming experiences with a focus on accessibility, replay ability and social connection. Key Performance Indicators We consider our key performance indicators to be those that reflect the Group's overall financial results-namely, turnover, gross profit, and EBITDA The company uses a number of financial Key Performance Indicators (KPIs) as part of the ongoing management of it's operations. These include:
2024 2023
£ £
Turnover 10,770,092 11,987,795
Adjusted EBITDA 2,218,731 3,128,716
Adjusted EBITDA is defined as Earnings before interest, taxes, depreciation, amortisation and impairment, banking costs and non core or recurring items. Non core or recurring items have been excluded as they do not clearly represent on-going business activities for year-on-year comparisons. Adjusted EBITDA is calculated below:
2024 2023
£ £
Operating profit / (2024 = loss) 252,204 1,244,479
Amortisation 197,303 36,039
Depreciation 93,930 72,512
Foreign exchange 32,217 75,759
Bank charges 9,944 5,664
Minimum royalty top up payments 481,827 407,316
Non core 698,671 661,179
Video games tax relief 957,043 625,768
ADJUSTED EBITDA 2,218,731 3,128,716
Going Concern The company has reported a loss for the period, however it still has net assets. The directors have prepared and reviewed budgets for the period covering at least 12 months from the date of the approval of these financial statements and are confident that the company has the ability to meet its financial requirements as they fall due for payment and the directors are satisfied that adequate cash and working capital resources will continue to be maintained and that it is therefore appropriate to prepare the financial statements on a going concern basis. Future Developments The games industry market remains difficult, with multiple challenges stemming from regulators, the prolonged economic crisis and users having less disposable income available to be spent for leisure and entertainment. Marmalade has managed to remain robust and resilient in face of these pressures and even to grow its games portfolio through new titles and platform expansions. The main avenues for financial growth remain new games, new distribution channels and evolving monetisation across the games portfolio. In response to the various challenges in the market, we are adding a new revenue stream to our portfolio, by signing deals directly with platforms, in an effort to de-risk our upcoming releases. This will live alongside our existing revenue pillars and boost our financial performance without adding any additional risk to the business. A significant portion of this year's revenue continues to come from our core portfolio of well-established games, which remain popular across multiple platforms. These titles, known for their outstanding ratings and loyal global fan base, have maintained strong performance. Over the past year, Marmalade has actively pursued growth opportunities for these games through expanded distribution and a focused live game management strategy, which began in 2023. This approach has already delivered encouraging results and will remain a key area of investment in 2025. In parallel, our strategic expansion into subscriptions as a monetisation model has begun to gain traction. Early performance has been positive, and subscriptions are emerging as a promising revenue stream. As such, we will continue to prioritise and refine our subscription offerings going forward. Principal Risks and Uncertainties Despite ongoing challenges in the wider games industry-particularly within the free-to-play sector-Marmalade remains in a comparatively strong position. By adopting a premium+ model and capitalising on the global recognition of some of the most iconic board game brands, we are well equipped to weather current industry pressures and adapt to evolving regulatory landscapes. We acknowledge the following risks: Economic Conditions As the global economy continues to face headwinds, consumer spending on non-essential items like video games remains under pressure. This industry-wide trend reflects a broader reduction in disposable income. Despite these conditions, Marmalade games are managing to sustain their chart position and we continue to implement several resilience strategies. These include frequent price evaluations, branding partnerships, promotional bundles and targeted discounts on both base games and content expansions. Furthermore, our live game management endeavours -initiated last year in response to market contraction-continue to play a crucial role in enhancing monetisation from engaged users, helping to offset a decline in overall user numbers. Brand Competition Competition from free-to-play titles leveraging the same intellectual property remains a risk. Given the impact of Monopoly Go, we expect this competitive pressure to persist and similar titles based on some of our other brands to be launched in the future. However, Marmalade continues to differentiate itself by offering a true-to-board-game experience that appeals to a distinct audience. Strategic discounting helps to narrow the value gap between our premium+ offering and free alternatives, while live game management efforts are improving retention, conversion rates, and average revenue per paying user-mitigating potential losses. Wage Pressure Over the past year, Marmalade's London studio has continued to benefit from industry-wide layoffs, enabling it to attract experienced talent at competitive rates. However, salary pressures have intensified in Portugal, where the studio is now fully feeling the effects of sustained wage inflation. This trend, consistent with the broader Portuguese market, remains largely driven by remote work, which continues to expose local talent to international salary benchmarks. Meanwhile, the Bucharest studio-now more established-has also seen a rise in compensation expectations, mirroring those in Portugal. In response, Marmalade has maintained a proactive compensation strategy, continuing to offer competitive remuneration packages across its locations. In particular, the company has allocated proportionally higher salary adjustments in Portugal and Romania relative to the United Kingdom, in order to attract, retain, and motivate top-tier talent in these increasingly competitive labour markets. Workforce Restructuring In response to ongoing economic pressures and with a clear focus on long-term sustainability, the Board has taken proactive steps to strengthen the company's financial position. In early 2025, the company streamlined operations to reduce operational expenditure while protecting the core capabilities of the business. These strategic actions have returned the company to profitability and are aimed at maintaining profitability, supporting continued investment in our products, and ensuring the Group remains a going concern. Financial Risk Management Objectives and Policies The company's activities expose it to a number of financial risks including currency, liquidity, and interest rate risks. These are managed as follows: Currency Risk The Group mitigates currency exposure primarily by conducting transactions in GBP and USD wherever feasible. When dealing in other currencies, we aim to match income and expenditure to reduce volatility. Liquidity Risk We maintain adequate liquidity to meet foreseeable requirements through a combination of internal cash flow and access to external financing. Where appropriate, short-term funding needs are supported by loans from banks and our shareholders, providing the business with the flexibility to deliver on its operational and strategic plans. Interest Rate Risk Exposure to interest rate fluctuations, primarily from loans and borrowings, is managed through the use of fixed-rate agreements wherever possible. Financial Key performance indicators The board approves an annual budget for the following year and monitors performance on a monthly basis, both against that budget and a comparison to the prior year. Management accounts are prepared on a monthly basis and these included a detailed profit and loss accounts, balance sheet and appropriate key performance indicators as noted above.
This report was approved by the board of directors on 10 July 2025 and signed on behalf of the board by:
M Willis
Director
Registered office:
54 Charlotte Street
London
England
W1T 2NS
Marmalade Game Studio Limited
Directors' Report
Year ended 31 December 2024
The directors present their report and the financial statements of the company for the year ended 31 December 2024 .
Directors
The directors who served the company during the year were as follows:
C Mereuta
M Willis
Dividends
The directors do not recommend the payment of a dividend.
Disclosure of information in the strategic report
The company has chosen to set out in the strategic report information about the future developments of the company and the financial instruments.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 10 July 2025 and signed on behalf of the board by:
M Willis
Director
Registered office:
54 Charlotte Street
London
England
W1T 2NS
Marmalade Game Studio Limited
Independent Auditor's Report to the Members of Marmalade Game Studio Limited
Year ended 31 December 2024
Opinion
We have audited the financial statements of Marmalade Game Studio Limited (the 'company') for the year ended 31 December 2024 which comprise the income statement, statement of financial position, statement of changes in equity and the related notes, 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 FRS 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 company's affairs as at 31 December 2024 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
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 auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company 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
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 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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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. In connection with our audit of the financial statements, 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 or a material misstatement of the other information. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which 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.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 company'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 company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the 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. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: - the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the company and sector in which it operates; - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and employment legislation; - we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: - making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and - considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we: - performed analytical procedures to identify any unusual or unexpected relationships; - tested journal entries to identify unusual transactions; - assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 3 were indicative of potential bias; and - investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: - agreeing financial statement disclosures to underlying supporting documentation; - enquiring of management as to actual and potential litigation and claims; and - reviewing correspondence with HMRC, relevant regulators and the company's legal advisors. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Use of our report
This report is made solely to the company'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 company's members those matters we are required to state to them in an auditor's 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 company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Heather McConnell
(Senior Statutory Auditor)
For and on behalf of
Streets Audit LLP
Chartered accountants & statutory auditor
Building 15, Gateway 1000
Arlington Business Park
Stevenage
Hertfordshire
SG1 2FP
17 July 2025
Marmalade Game Studio Limited
Income Statement
Year ended 31 December 2024
2024
2023
Note
£
£
Turnover
4
10,770,092
11,987,795
Cost of sales
( 2,835,795)
( 2,768,149)
-------------
-------------
Gross profit
7,934,297
9,219,646
Administrative expenses
( 8,186,501)
( 7,817,891)
Exceptional costs
(157,276)
------------
------------
Operating (loss)/profit
5
( 252,204)
1,244,479
Other interest receivable and similar income
9
13,196
2,387
Interest payable and similar expenses
10
( 60,245)
------------
------------
(Loss)/profit before taxation
( 239,008)
1,186,621
Tax on (loss)/profit
11
957,043
625,769
---------
------------
Profit for the financial year
718,035
1,812,390
---------
------------
All the activities of the company are from continuing operations.
The company has no other recognised items of income and expenses other than the results for the year as set out above.
Marmalade Game Studio Limited
Statement of Financial Position
31 December 2024
2024
2023
Note
£
£
£
Fixed assets
Intangible assets
12
591,955
288,313
Tangible assets
13
116,281
163,142
Investments
14
561,651
561,651
------------
------------
1,269,887
1,013,106
Current assets
Debtors
15
6,545,394
5,653,356
Cash at bank and in hand
1,098,407
1,177,353
------------
------------
7,643,801
6,830,709
Creditors: amounts falling due within one year
16
2,359,360
2,007,545
------------
------------
Net current assets
5,284,441
4,823,164
------------
------------
Total assets less current liabilities
6,554,328
5,836,270
------------
------------
Net assets
6,554,328
5,836,270
------------
------------
Capital and reserves
Called up share capital
18
877,991
877,968
Share premium account
19
22,492,675
22,492,675
Other reserves, including the fair value reserve
19
613
613
Profit and loss account
19
( 16,816,951)
( 17,534,986)
-------------
-------------
Shareholders funds
6,554,328
5,836,270
-------------
-------------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 10 July 2025 , and are signed on behalf of the board by:
M Willis
Director
Company registration number: 03677408
Marmalade Game Studio Limited
Statement of Changes in Equity
Year ended 31 December 2024
Called up share capital
Share premium account
Other reserves, including the fair value reserve
Profit and loss account
Total
£
£
£
£
£
At 1 January 2023
877,968
22,492,675
613
( 19,347,376)
4,023,880
Profit for the year
1,812,390
1,812,390
---------
-------------
----
-------------
------------
Total comprehensive income for the year
1,812,390
1,812,390
At 31 December 2023
877,968
22,492,675
613
( 17,534,986)
5,836,270
Profit for the year
718,035
718,035
---------
-------------
----
-------------
------------
Total comprehensive income for the year
718,035
718,035
Issue of shares
23
23
----
----
----
----
----
Total investments by and distributions to owners
23
23
---------
-------------
----
-------------
------------
At 31 December 2024
877,991
22,492,675
613
( 16,816,951)
6,554,328
---------
-------------
----
-------------
------------
Marmalade Game Studio Limited
Notes to the Financial Statements
Year ended 31 December 2024
1. General information
The company is a private company limited by shares, incorporated in the United Kingdom, registered in England and Wales. The address of the registered office is 54 Charlotte Street, London, W1T 1RR, England. The principal activity of the company during the year was that of ready made interactive leisure and entertainment software development.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The company has reported a loss for the period, however it still has net assets. The directors have prepared and reviewed budgets for the period covering at least 12 months from the date of the approval of these financial statements and are confident that the company has the ability to meet its financial requirements as they fall due for payment and the directors are satisfied that adequate cash and working capital resources will continue to be maintained and that it is therefore appropriate to prepare the financial statements on a going concern basis.
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Project Bridgerton Bidco Limited which can be obtained from Companies House. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) Disclosures in respect of each class of share capital have not been presented. (b) No cash flow statement has been presented for the company. (c) Disclosures in respect of financial instruments have not been presented. (d) Disclosures in respect of share-based payments have not been presented. (e) No disclosure has been given for the aggregate remuneration of key management personnel.
Consolidation
The entity has taken advantage of the exemption from preparing consolidated financial statements contained in Section 400 of the Companies Act 2006 on the basis that it is a subsidiary undertaking and its immediate parent undertaking is established under the law of the UK.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant judgements The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are detailed in revenue recognition policy note, investment, employee share option, intangible assets and creditors due after one year notes to the financial statements and are as follows: 1) Principal vs agent assessment Management assess the contractual agreements with its distributors and customers to establish whether the agreement constitutes a principal or an agency arrangement. This is a material judgement as the disclosure of revenue is significantly different. The company considers that online retailers are its customers as the company has no direct contact with the end users and once a product is provided to an online retailer (upon release) the company has satisfied all performance obligations associated with the agreements with these parties. Where the company has acted as agent, income is recognised as net commissions received. 2) Capitalisation of Development costs Management review development costs and where the criteria as per section 18 of FRS102 is met, the development costs are capitalised as intangible assets. Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: 1) Deprecation and amortisation charges The annual depreciation and amortisation charge for each class of tangible and intangible asset is based on an estimate of the useful economic life of the respective assets. This is reviewed periodically by the directors to ensure that they reflect both the external and internal factors.
Revenue recognition
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding Value Added Tax. Royalties are accounted for in the period in which they are earned. Product development income is recognised as contract activity progresses to reflect milestones achieved during the year. Amounts received in advance are carried forward until recognised as turnover. Licence sales are recognised over the course of the licensing agreement.
Exceptional items
Exceptional items are disclosed separately in the financial statements in order to provide further understanding of the financial performance of the entity. They are material items of income or expense that have been shown separately because of their nature or amount.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in respect of all material timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Development costs
-
33% straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant and machinery
-
25 - 33% Straight line
Fixtures and fittings
-
50% Straight line
Financial instruments
The company holds basic financial instruments as defined in FRS102. The financial assets and financial liabilities of the company and their measurement basis are as follows: Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. Cash at bank is classified as a basic financial instrument and is measured at amortised cost. Financial liabilities - trade creditors, accruals and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Turnover
Turnover arises from:
2024
2023
£
£
Sale of goods
10,770,092
11,987,795
-------------
-------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Operating (loss)/profit
Operating profit or loss is stated after charging:
2024
2023
£
£
Amortisation of intangible assets
197,303
36,039
Depreciation of tangible assets
93,930
72,512
Foreign exchange differences
32,217
75,759
Fees payable for the audit of the financial statements
20,700
20,000
---------
--------
6. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2024
2023
No.
No.
Administrative staff
106
86
Management staff
2
4
----
----
108
90
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2024
2023
£
£
Wages and salaries
4,515,907
4,070,908
Social security costs
631,526
550,955
Other pension costs
139,729
127,616
------------
------------
5,287,162
4,749,479
------------
------------
7. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2024
2023
£
£
Remuneration
473,077
597,018
Company contributions to defined contribution pension plans
23,231
23,750
---------
---------
496,308
620,768
---------
---------
Remuneration of the highest paid director in respect of qualifying services:
2024
2023
£
£
Aggregate remuneration
247,115
329,518
Company contributions to defined contribution pension plans
12,356
10,375
---------
---------
259,471
339,893
---------
---------
In addition to the above, in the comparative year, the company incurred additional directors remuneration totalling £157,276. This cost was considered to be exceptional and non-recurring.
8. Exceptional costs
2024
2023
£
£
Exceptional costs
157,276
----
---------
During the comparative year the company uncured £157,276 in exceptional director remuneration costs.
9. Other interest receivable and similar income
2024
2023
£
£
Interest on cash and cash equivalents
13,196
2,387
--------
-------
10. Interest payable and similar expenses
2024
2023
£
£
Other interest payable and similar charges
60,245
----
--------
11. Tax on (loss)/profit
Major components of tax income
2024
2023
£
£
Current tax:
UK current tax income
( 957,043)
( 625,769)
---------
---------
Tax on (loss)/profit
( 957,043)
( 625,769)
---------
---------
Reconciliation of tax income
The tax assessed on the (loss)/profit on ordinary activities for the year is lower than (2023: lower than) the standard rate of corporation tax in the UK of 25 % (2023: 23.52 %).
2024
2023
£
£
(Loss)/profit on ordinary activities before taxation
( 239,008)
1,186,621
---------
------------
(Loss)/profit on ordinary activities by rate of tax
( 59,752)
279,093
Effect of expenses not deductible for tax purposes
7,673
Effect of capital allowances and depreciation
( 7,056)
Utilisation of tax losses
59,752
( 416,726)
Other tax adjustment to decrease tax liability
137,016
Video game tax credits
(957,043)
(625,769)
---------
------------
Tax on (loss)/profit
( 957,043)
( 625,769)
---------
------------
Factors that may affect future tax income
The company has estimated tax losses of £22m (2023 - £22m) available to carry forward against future trading profits. No provision has been made for a deferred tax asset in respect of the carried forward losses as it is uncertain as to when these may be utilised.
12. Intangible assets
Development costs
£
Cost
At 1 January 2024
324,457
Additions
500,945
---------
At 31 December 2024
825,402
---------
Amortisation
At 1 January 2024
36,144
Charge for the year
197,303
---------
At 31 December 2024
233,447
---------
Carrying amount
At 31 December 2024
591,955
---------
At 31 December 2023
288,313
---------
13. Tangible assets
Plant and machinery
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2024
313,188
7,795
320,983
Additions
47,069
47,069
---------
-------
---------
At 31 December 2024
360,257
7,795
368,052
---------
-------
---------
Depreciation
At 1 January 2024
150,046
7,795
157,841
Charge for the year
93,930
93,930
---------
-------
---------
At 31 December 2024
243,976
7,795
251,771
---------
-------
---------
Carrying amount
At 31 December 2024
116,281
116,281
---------
-------
---------
At 31 December 2023
163,142
163,142
---------
-------
---------
14. Investments
Shares in group undertakings
£
Cost
At 1 January 2024 and 31 December 2024
875,010
---------
Impairment
At 1 January 2024 and 31 December 2024
313,359
---------
Carrying amount
At 31 December 2024
561,651
---------
At 31 December 2023
561,651
---------
Subsidiaries, associates and other investments
Registered office
Class of share
Percentage of shares held
Subsidiary undertakings
MGS 2019 Limited
54 Charlotte Street, London, W1T 2NS
Ordinary
100
MGS 2019 Limited is a dormant company.
15. Debtors
2024
2023
£
£
Trade debtors
34,857
7,561
Amounts owed by group undertakings
2,955,848
2,114,316
Prepayments and accrued income
2,324,746
2,690,886
Corporation tax repayable
1,104,869
744,896
Other debtors
125,074
95,697
------------
------------
6,545,394
5,653,356
------------
------------
16. Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
159,630
144,700
Amounts owed to group undertakings
561,651
561,651
Accruals and deferred income
1,443,008
1,118,010
Social security and other taxes
158,992
149,981
Other creditors
36,079
33,203
------------
------------
2,359,360
2,007,545
------------
------------
Amounts owed to the subsidiary undertaking is unsecured.
17. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 139,729 (2023: £ 127,616 ).
18. Called up share capital
Issued, called up and fully paid
2024
2023
No.
£
No.
£
Ordinary shares of £ 0.01 each
87,799,087
877,991
87,796,800
877,968
-------------
---------
-------------
---------
All shares rank pari passu.
19. Reserves
Share premium account - This reserve records the amount above the nominal value received for shares sold, less transaction costs. Profit and loss account - This reserve records retained earnings and accumulated losses.
20. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2024
2023
£
£
Not later than 1 year
66,164
421,460
Later than 1 year and not later than 5 years
53,736
119,129
---------
---------
119,900
540,589
---------
---------
21. Charges on assets
The company has provided a cross guarantee to Silicon Valley Bank and to LDC (Managers Limited) for the ultimate parent undertaking.
22. Related party transactions
The company has taken advantage of the exemption from disclosing transactions with group companies.
23. Controlling party
The company's immediate and ultimate parent company is Project Bridgerton Bidco Limited, a company incorporated in England and Wales. The smallest group in which the results of the company are consolidated is Project Bridgerton Bidco Limited. Copies of the consolidated financial statements of Project Bridgerton Bidco Limited are available from Companies House. The Directors consider do not consider there to be an individual ultimate controlling party.