Company Announcements

Publication of Annual Report and Notice of AGM

Source: RNS
RNS Number : 5461L
Gamesys Group PLC
01 May 2020
 

 

GAMESYS GROUP PLC (the "Company")

2019 Annual Report and Accounts and Notice of Annual General Meeting

In compliance with Listing Rule 9.6.1, the Company has submitted a copy of each of the following documents to the National Storage Mechanism, and these will shortly be available for inspection at:

 https://data.fca.org.uk/#/nsm/nationalstoragemechanism

·      Annual Accounts for the year ended 31 December 2019 (2019 Annual Accounts)

·      Notice of the Annual General Meeting (2020 AGM Notice)

·      Proxy Form for the 2020 AGM for those holding ordinary shares (Form of Proxy)

·      Proxy Form for the 2020 AGM for the former registered holders of exchangeable shares in The Intertain Group Limited (Canadian Form of Proxy)

The 2020 AGM will be held at 2:00 pm (UK time) on Wednesday 3 June 2020 at 10 Piccadilly, London W1J 0DD.

The 2019 Annual Accounts, the 2020 AGM Notice and the Form of Proxy/Canadian Form of Proxy (as applicable) are being posted today and the 2019 Annual Accounts and the 2020 AGM Notice will shortly be available to view on the Company's website at:

https://www.gamesysgroup.com/investors

In compliance with applicable Canadian securities laws, the 2019 Annual Accounts, the 2020 AGM Notice, the Form of Proxy and the Canadian Form of Proxy will also be filed under the Company's profile on SEDAR at www.sedar.com

The information set out in the Appendix, which is extracted from the 2019 Annual Accounts, should be read in conjunction with the Full Year Results announcement released on 17 March 2020, which includes a condensed set of consolidated financial statements for the year ended 31 December 2019 and an indication of the important events that have occurred in the reporting period. That information, together with the information set out in the Appendix, constitutes the material required by Disclosure Guidance and Transparency Rule 6.3.5 which is required to be communicated to the media in full unedited text through a Regulatory Information Service. This announcement is not a substitute for reading the full 2019 Annual Accounts. Page and note references in the Appendix are page and note numbers in the 2019 Annual Accounts and Notes to the Financial Statements.

About Gamesys Group plc

Gamesys Group plc is the parent company of an online gaming group that provides entertainment to a global consumer base. Through its subsidiaries, Gamesys Group plc currently offers bingo and casino games to its customers using brands which include Jackpotjoy (www.jackpotjoy.com), Virgin Games (www.virgingames.com), Botemania (www.botemania.es), Vera&John (www.verajohn.com), Heart Bingo (www.heartbingo.co.uk), Monopoly Casino (www.monopolycasino.com) and Rainbow Riches Casino (www.rainbowrichescasino.com). For more information about Gamesys Group plc, please visit www.gamesysgroup.com.

Enquiries:

Gamesys Group plc

Dan Talisman, Chief Legal Officer & Company Secretary

+44 (0)20 7478 8100

dan.talisman@gamesysgroup.com

Finsbury

James Leviton

Andy Parnis

+44 (0) 207 251 3801

GamesysGroup-LON@finsbury.com 

APPENDIX

Principal Risks and Uncertainties

A description of the principal risks and uncertainties that the Company faces is extracted from pages 50 to 57 of the 2019 Annual Accounts.

Managing our risks

Risk is intrinsic to the industry in which Gamesys Group plc operates. Key to the successful delivery of our strategy remains considering, and accepting, the impact, both positive and negative, which risk can have on our business.

Understanding our principal risks and uncertainties and ensuring there are sufficient controls in place remains critical to our continued growth and success. We operate in a fast-changing business environment and have considered our principal risks alongside our updated strategy. Ultimate accountability for risk lies with the Board, supported by the Audit & Risk Committee, and executive management on the day-to-day management. We have continued our work with PricewaterhouseCoopers ('PwC') who have supported the business  in the implementation of a framework to allow for the identification, assessment, mitigation and monitoring of risk throughout the enlarged group. Gamesys Group plc complies with the revised 2018 UK Corporate Governance Code and supports its application in delivering a well-governed business.

We continue to develop the governance structures and processes across the enlarged Group. We established an Internal Audit & Risk function in advance of the completion of the acquisition. Our risk management framework has been developed to provide clarity on risk governance and oversight whilst encouraging ownership and accountability across the business. The framework summarises the formal process for the identification, assessment, mitigation, reporting, monitoring and review of our risks. We are continuing to implement this process across the enlarged Group during 2020 and to develop a risk-aware culture, supported by expected behaviours.

Our approach to risk management follows the three lines of defence model, whilst remaining dynamic and practical to our needs. This enables us to respond to changes in the business environment, and to deliver on our expectations of increased transparency, value protection and creation.

How we manage risk at Gamesys Group plc

In 2019, we consolidated the existing risk management information, and in light of the acquisition, we are now in a position to further extend the framework across the enlarged Group.  As part of our enhancements to the risk management framework, we have established a Group Risk Committee, where our executives, senior management and chair of the Audit & Risk Committee discuss an aggregated view of risk, both present and developing. The Board and our executives reviewed these risks to inform the Group's understanding of its principal risks and to ensure that there were adequate controls in place to mitigate these, where applicable. During these discussions, the Board concluded that it was comfortable with the potential impact of the principal risks, measured against our inherent risk appetite, and communicated the importance of risk management clearly across the business. Work will be undertaken in 2020 that will focus on embedding our approach to risk management throughout the enlarged Group and its operating divisions.

The priorities for risk management throughout 2020 will be to:

-   update our risk appetite against the principal risks to allow for informed decision-making against our strategic priorities;

-  continue to embed the risk management framework, encouraging ownership and accountability;

-     the development of bottom-up risk activities across territories, operating divisions and central functions including continued engagement with the wider business and application across the enlarged Group;

-    identification and analysis of new and emerging risks at both a strategic and operational level. This will help to ensure that, as a business, we can adapt to an ever-changing risk landscape;

-  continue to refine and develop our suite of internal controls through targeted reviews performed by the Internal Audit & Risk team supported by third-party risk management specialists; and

-     continue to embed the 'three lines of defence' (as reflected in the Risk Management Model) approach to assurance through the business, management (supported by the Risk function) and independent assurance, where appropriate.

With regard to the effectiveness of risk and internal control throughout the business, please refer to page 71, under the Corporate Governance section.

Our principal risks

A robust assessment has been undertaken by the Board to assess the principal and emerging risks facing the business. Consideration has been given to those which could threaten the successful delivery of our strategy, impact on our future performance and create a risk around our solvency or liquidity.

The radar shows the position of our principal risks and we have taken the decision to split these into three areas over which we have varying levels of control and oversight.

These three areas are:

-     External - where we have limited control over the cause of the risk and would need to focus our effort on managing the potential consequences.

-    Strategic - risks which could be influenced by external factors but over which we have the opportunity to put in place controls to better manage potential causes and consequences.

-     Operational - risks that could arise through the day-to-day operations in relation to which we could put in place effective controls. These would be for known areas of the business, in addition to risks which could potentially arise through changes which we undertake in the delivery of our growth strategy.

Further detail on the principal risks has been provided on the following pages, which includes information on the key mitigations, links to our strategic priorities, what happened in 2019 and what the focus will be in 2020.

External Risks

Regulatory and legislative change

Licensing, taxes, laws and regulatory changes in key markets could have a materially adverse impact on the Group and its operations.

Strategy links:

Key mitigations:

-     Close relationship with the key regulators who have issued licences.

-  Long-term relationship with external consultancy (Oakhill), who provide guidance and commentary on UK regulatory change.

-  Strong network of external advisers who provide guidance and support to understand incoming legislation and prospective regulation.

-    Membership and active participation with industry bodies such as the Betting and Gaming Council and its relevant sub-committees across various thematic areas.

-     Significant relationships in similar industry bodies in each of our licenced jurisdictions.

-   A diverse network of like-minded individuals with industry understanding and real-time information.

-     Comprehensive suite of regulatory and legislative controls, including regulatory reporting and internal checks and balances.

Developments in 2019:

-     Further development of the Group Compliance function including review of existing policies and process.

-    Group focus of empowering teams to be more accountable for compliance frameworks within their own operating divisions.

-    Expanded the Group's compliance expertise, as a result of the acquisition, supporting the increased number of licences.

-     Supported by the Audit & Risk Committee, the Group has introduced an ESG Committee to further Board oversight across the Group's regulatory requirements and processes. An internal management committee has also been established to ensure compliance and regulatory focus is maintained.

-    As a result of recent changes to reporting legislation, this year's Annual Report includes a Section 172(1) statement (see pages 30 and 31) and Non-financial Information Statement (see page 29).

-     Appointed a Director of Taxation, leading the in-house tax function.

Focus for 2020:

-   Ongoing review and enhancement of the suite of regulatory and legislative controls, in collaboration with the Internal Audit & Risk function.

-   Further integration and development of the controls within the business and operating divisions.

-   Sustain good governance and compliance framework in order to maintain the licences acquired and facilitate expansion into emerging territories.

-   Further our participation and activity at organisations across the gaming industry and our licensed territories.

-  Enhancement of our 'anti-money laundering' and 'know your client' capability through additional training, resourcing and collaboration with third parties. We will also complete a review of our risk-based triggers to support our commitments to our players.

Financial and economic

Potential macroeconomic change, including currency fluctuations and interest rates, have a negative impact on Gamesys Group plc.

Strategy links:

Key mitigations:

-   Online gaming has a proven track record of being resilient to recession and economic decline.

-     Wide range of products and geographical spread of players.

-     External debt is denominated in the currencies in which we generate revenue.

-    From a working capital perspective, there is limited exposure due to the cash nature of the business.

-     Monitoring changes in the macroeconomic environment on an ongoing basis.

-   Improved the tax control environment with an in-house tax team, providing commercial decision support and championing the Board's tax risk management policy.

Developments in 2019:

-   Continued to monitor the wider macroeconomic environment for significant changes or developments that may have an impact on the Group.

-     Continuously review our hedging processes and instruments.

Focus for 2020:

-     Monitoring the hedging in place to minimise our exposure.

-   Continuous review and evolution of our products, as shown in greater detail in our Strategic Report on pages 18 and 19.

Strategic Risks

Brand and reputation

A major incident could leave a negative impact on Gamesys Group plc and the suite of brands offered.

Strategy links:

Key mitigations:

Developments in 2019:

Focus for 2020:

-    Review of the incident management processes, across areas such as compliance, technology and data privacy.

-   Focus on one of the Group's strategic priorities, 'Putting the player first', to evolve our approach to responsible gambling, as mentioned on page 19.

-   Enhance the Group's proprietary technology and player-facing tools across all our markets, with special focus on recreational gambling.

Competitive landscape

Gamesys Group plc potentially fails to adapt and innovate to maintain its position as a market leader.

Strategy links:

Key mitigations:

-     Ongoing competitor and market analysis to ensure wider awareness, and drive discussion on innovation required.

-     Player insights, business development and data analytics capabilities in place.

-     Balanced approach between regulated markets and verticals in mature markets.

-     Increased local autonomy through changes to country management structure.

Developments in 2019:

-     Significant investment to our technological abilities through the acquisition, in turn offering players a greater choice of major brands and different games, such as our launch of Rainbow Riches Casino in the UK.

-     Continued to develop in-house marketing capability and more advanced data compilation and analytics as part of our 'Be The Player' strand of our cultural DNA.

-     Greater efficiencies through our marketing approach, with aligned strategies across territories we operate in.

Focus for 2020:

-    Emphasis on evolving the robustness of the business operating models to ensure they are more sustainable in emerging markets.

-  Leveraging the Group's proprietary technology and its operational capabilities to facilitate working in emerging markets and with new revenues.

-  Execution of our product roadmap, enhancing our games and product offerings across platforms in all our markets.

Responsible gambling

Gamesys Group plc recognises the need to apply high standards to the welfare of our players.

Strategy links:

Key mitigations:

-     Suite of safer gambling processes and controls across all of the Group's proprietary platforms

-     KPIs in place which allow the business to monitor the key player metrics in relation to potential trends that could be of concern.

-   Increased personalisation of the player experience with a culture based around growing player numbers.

-     Processes in place to allow a proactive approach to the management of potential issues with the development of the player charter and industry engagement.

-     Adviser and regulatory assurance through ongoing audits and reviews.

Developments in 2019:

-     Leveraged position as market leader to draw attention to player welfare as a priority within the broader industry.

-     Continued to embed safer gambling as a key part of our business strategy.

-   Our Malta-based business met the GamCare Safer Gambling Standard in the year. The Standard is a quality mark that recognises gambling operators who have both met and gone beyond the requirements of gambling industry codes of practice in respect of their player protection measures.

-     Weekly and monthly meetings held to ensure we understand changes across the regulatory and legislative landscape and increased focus on player behaviour.

-     Supported the development of the Safer Gambling Commitments alongside the Betting and Gaming Council. The commitments work to support a culture of safer gambling for our players.

Focus for 2020:

-   Refinement of suite of responsible gambling processes and controls including third party review.

-     Enhancement of the Group's responsible gambling KPIs to inform our player-centric strategy.

-    A global leader within the gaming industry, we will continue to develop the remit and activities of our ESG Committee. The Committee ensures that responsible gambling and ESG are embedded within the highest levels of the business and that we meet our commitments to our players.

-     We are launching the Gamesys Foundation, a charity focusing on mental health and social isolation.

Integration and growth

Timely integration of the legacy businesses and delivering a clear strategy whilst maintaining our focus on growth.

Strategy links:

Key mitigations:

-   Long-established partnership already in place, with many successful working relationships already in place across teams. 

-    Strategic alignment of the two legacy businesses, both with a history of high growth and performance.

-    Complementary nature of legacy businesses' activities resulting in minimal resource-related upheaval.

Developments in 2019:

-    Launched our cultural DNA across the Group, under a single Company purpose (refer to page 9).

-     Use of an independent third party for extensive employee engagement by holding structured interviews with all the senior leadership team and multiple workshops. 

-     Standardisation of the employee appraisal and bonus schemes, and terms and conditions for employees in jurisdictions where offices from both legacy organisations were present.

Focus for 2020:

-     Roll out training to enable employees to internalise and articulate what the DNA means to them.  The DNA will also be integrated into the employee appraisal and recruitment processes.

-    Streamline the procedural framework by utilising the best of the two businesses where possible.

-     Continue to build on our employee engagement activities, as outlined on page 36.

Operational Risks

Talent attraction and retention

Failure to build the internal capability and capacity to deliver the growth targets identified.

Strategy links:

Key mitigations:

-     Recruitment and succession plans in place in key roles and in areas of specialism.

-     Cross-business collaboration to bring efficiencies and best practice.

-     Ongoing investment in people and development.

-  Quarterly business updates are provided by our CEO, covering strategic, financial and operational matters, available to all staff.

-     Focus on communicating and engaging with employees, and responding to their priorities (see pages 35 to 37).

Developments in 2019:

-     Launched our Company purpose, supported by the cultural DNA across the enlarged Group, encapsulating new corporate values.

-  Improved engagement, through anonymous surveys across the workforce, with findings published and corresponding actions taken.

-    Enhanced communication channels, through the use of emails from the CEO, the intranet and management cascades. 

-    Increased focus on learning and development, with training opportunities, across induction, mandatory compliance training, soft skills, role-specific, managerial and leadership training.  Extensive learning resources and leadership coaching are also available.

-   A formal graduate training programme as well as apprenticeships are offered in order to facilitate the entry of new people to the industry.

-     We provide market-aligned rewards and benefits to our employees.  Standardising bonus and benefit schemes across the Company has been a priority for 2019 and new schemes were launched in 2020.

Focus for 2020:

-     Further embed our DNA into recruitment and appraisal processes.

-     Streamline and harmonise policies and procedures across legacy operating segments

-   Run a refreshed employee engagement survey to reflect the united business and the new Gamesys DNA, during spring 2020.

Technology and IT systems

A failure of or damage to our technology or systems will negatively impact our operations.

Strategy links:

Key mitigations:

-     Roll out of systems improvement plan ensuring better service availability and system resilience

-     Key metrics are in place to monitor key systems and platforms globally and identify potential emerging issues for all regions.

-    Formal incident management process for identifying, escalating and resolving issues and a post incident process to ensure that similar issues cannot happen again.

-     Robust development and change management processes help reduce the risk of unplanned outages

-     Regular review of our Business Continuity Plans and IT Disaster Recovery capability to ensure an appropriate failover solution is available and seek to limit single points of failure where possible.

Developments in 2019:

-     Extensive investment within our in-house capabilities, and now through control of the Group's proprietary technology.

-     Alignment of best practice processes across a single technology function across the enlarged Group.

Focus for 2020:

-     Develop further our systems monitoring, change management and incident management processes.

-   Improve our global reach with platforms sited in appropriate geographical locations, including consideration for disaster recovery.

-     Continue to implement the structured roadmap in place, maintaining its flexibility.

-     Further in-house development of gaming platform software.

Data management

Gamesys Group plc processes player data and recognises the need to comply with the highest standards of data protection.

Strategy links:

Key mitigations:

-     Data access is managed through a wholly owned system called Active Directory, which is a management system to control access to player data. Strict access procedures and audit trail capability are in place.

-     Corporate office data is cloud based and player-facing data is hosted in either our own data centres or within a virtual private cloud hosted by an external provider.

-     System change access is managed through management processes and permissions.

-     Device and individual orientated controls.

Developments in 2019:

-     Data management policies and processes reviewed and updated during the period. Further GDPR training provided to relevant persons.

-     Compiled a comprehensive Data Dictionary, defining data in different parts of the business and allowing a refined portfolio of data management processes.

-     Continued our migration of data to cloud-based systems and completed an internal review of cloud design and security controls.

-   Brought all additional systems into the scope of Active Directory, the centralised authentication system already used for core systems.

-  Completed a review of access and IT security controls to cater for the changes in organisational structure and listing obligations of the business during the year.

-  Continued to actively manage and secure our data with reviews of our retention and destruction policies.

Focus for 2020:

-     Further development of data management systems and security capabilities.

-   Increased focus on retention periods of data, continuing the emphasis on applying good practice rather than meeting minimum standards.

-     In light of the wider geo political and macro economic environment we continue to review our alignment to GDPR legislation.

-     Implementation of more advanced procedures for anonymisation and erasing of data.

-     Group-wide harmonising of security practices and processes alongside the Group-wide data management policy framework.

New and emerging risks

Emerging risks have the potential to increase in significance and affect the performance of the Group and, as such, are continually monitored through our existing risk management processes by risk owners at all levels of the Group. We also use tools such as horizon scanning, operational risk aggregation and external sources, such as our relationship with Oakhill, to support our analysis. The outputs of these processes are reported to the Audit & Risk Committee and the Board for their review and assessment.

Our ERM process ensures emerging risks are considered to aid the Audit & Risk Committee's assessment of whether the Group is adequately prepared for the potential opportunities and threats they present. The process enables new and changing risks to be discussed at an early stage, allowing us to analyse them thoroughly and assess potential exposure.

We closely monitor emerging risks and with time they may become principal risks as they mature. Emerging risks may also be superseded by other risks or cease to be relevant as the internal and external environment in which we operate evolves. A non-exhaustive list of some current emerging risks of relevance to Gamesys are set out below.

-     Social Attitudes - The perception of the gaming industry within society continues to evolve and change. We continue to monitor for any shifts in behaviour, awareness or attitudes that may impact our business or our key stakeholders.

Horizon: Near (<2 years)

-  Compliance and Regulation - Meeting our compliance and regulatory requirements is fundamental to the success of Gamesys. As a business we continue to demonstrate industry leadership and to engage with the relevant legislative and regulatory bodies for which we are a part.

Horizon: Near (<2 years)

-     Sustainability - In an ever-changing world, we recognise that we have a responsibility to meet our sustainability commitments and obligations. This includes failing to understand our social, environmental and economic impact or reporting requirements.

Horizon: Medium (<5 years)

Statement of Directors' responsibilities in relation to the Annual Report and financial statements

The Directors are responsible for preparing the Annual Report and the Group and Company financial statements in accordance with applicable United Kingdom law and regulations. Company law requires the Directors to prepare Group and Company financial statements for each financial year. Under the law, the Directors are required to prepare Group financial statements in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union and applicable law and have elected to prepare the Company's financial statements on the same basis.

 

Under the Companies Act 2006, the Directors must not approve the Group and Company financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group and the Company for that period. In preparing each of the Group and the Company's financial statements the Directors are required to:

 

·   select suitable accounting policies in accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;

·   make judgements and accounting estimates that are reasonable and prudent;

·  provide additional disclosures when compliance with the specific requirements in IFRSs as adopted by the European Union is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's and the Company's financial position and financial performance; and

·  state whether the Group and the Company financial statements have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements.

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006 and, with respect to the Group financial statements, Article 4 of the IAS Regulation.

 

They are also responsible for safeguarding the assets of the Group and the Company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The Directors are also responsible for preparing the Strategic Report, Directors' Report, the Directors' Remuneration Report and the Corporate Governance Report in accordance with the Companies Act 2006 and applicable regulations, including the requirements of the Listing Rules and the Disclosure Guidance and Transparency Rules of the United Kingdom Listing Authority. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

Website publication

The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors.

 

The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

 

Responsibility statement under the Disclosure Guidance and Transparency Rules

Each of the Directors whose names and functions are listed on pages 58 and 59 confirm that to the best of their knowledge:

 

·    the Consolidated Financial Statements of Gamesys Group plc have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole (the 'Group'); and

·    the Annual Report and Accounts, including the Strategic Report, include a fair review of the development and performance of the business and the financial position of the Company and the Group, taken as a whole, together with a description of the principal risks and uncertainties that they face.

 

Statement under the UK Corporate Governance Code

The Board considers that the Annual Report and Accounts taken as a whole, which incorporates the Strategic Report and the Directors' Report, is fair, balanced and understandable, and that it provides the information necessary for shareholders to assess the Company's position, performance, business model and strategy.

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
MSCSDFFLSESSELL