JPJ Group PLC Announces 2018 Annual Accounts and 2019 Notice of AGM

LONDON, UK / ACCESSWIRE / May 3, 2019 / 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: http://www.morningstar.co.uk/uk/NSM.

  • Annual Accounts for the year ended 31 December 2018 (2018 Annual Accounts)
  • Notice of the Annual General Meeting (2019 AGM Notice)
  • Proxy Form for the 2019 AGM for those holding ordinary shares (Form of Proxy)
  • Voting Instruction Form for the 2019 AGM for registered holders of exchangeable shares in The Intertain Group Limited (VIF)

The 2019 AGM will be held at 2.00 p.m. (UK time) on Thursday 13 June 2019 at The Holiday Inn, 3 Berkeley St, Mayfair, London, W1J 8NE.

The 2018 Annual Accounts, the 2019 AGM Notice and the Form of Proxy/the VIF (as applicable) are being posted today and the 2018 Annual Accounts and the 2019 AGM Notice will shortly be available to view on the Company’s website:

www.jpjgroup.com/investors/

In compliance with applicable Canadian securities laws, the 2018 Annual Accounts, the 2019 AGM Notice, the Form of Proxy and the VIF 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 2018 Annual Accounts, should be read in conjunction with the Full Year Results announcement released on 19 March 2019, which includes a condensed set of consolidated financial statements for the year ended 31 December 2018 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 2018 Annual Accounts. Page and note references in the Appendix are page and note numbers in the 2018 Annual Accounts and Notes to the Financial Statements.

About
JPJ Group plc

JPJ Group plc is the parent company of an online gaming group that provides entertainment to a global consumer base through its subsidiaries. JPJ Group plc currently offers bingo and casino games to its customers through its subsidiaries using the Jackpotjoy (www.jackpotjoy.com), Starspins (www.starspins.com), Botemania (www.botemania.es), Vera&John (www.verajohn.com), and InterCasino (www.intercasino.com) brands. For more information about JPJ Group plc, please visit www.jpjgroup.com.

Enquiries:

JPJ
Group plc

Dan Talisman, Chief Legal Officer & Company Secretary

+44 (0)20 3907 4025

dan.talisman@jpj.com

Amanda Brewer, Vice President of Corporate Communications

+1 416 720 8150

amanda.brewer@jpj.com

Finsbury

James Leviton

Andy Parnis

+44 (0) 207 251 3801

JPJ@finsbury.com

APPENDIX

Principal
Risks and Uncertainties

A description of the principal risks and uncertainties that the Company faces is extracted from pages 26 to 33 of the 2018 Annual Accounts.

Managing
our risks

Understanding our principal risks and uncertainties whilst we ensure there are sufficient controls in place will be critical to our continued growth and success. Although we operate in a fast-changing business environment, we have considered our principal risks alongside our updated strategy over the next three years. 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) supporting the Group in the implementation of a framework to allow for the identification, assessment, mitigation and monitoring of risk throughout the Group and operating divisions. JPJ Group plc complies with the UK Corporate Governance Code and supports its application in delivering a well-governed business.

Following the Group’s move to a premium listing, we continue to develop the Group’s overall governance. This has influenced the development of our risk management framework, providing clarity on risk governance and oversight whilst encouraging ownership and accountability for risk management. The framework summarises the formal process for identification, assessment, mitigation, reporting, monitoring and review. We are continuing to implement this process whilst developing a risk-aware culture, supported by expected behaviours, throughout the business during 2019.

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

How we manage risk at JPJ Group plc

In 2017, we completed a review of the existing risk management information, with the support of PwC, which provided the focus of our work in 2018 to implement our revised approach to risk management. Our executives and senior management discussed an aggregated view of risk from the operating divisions alongside their view on our strategic risks and considering any wider external risks. 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, against our inherent risk appetite, and communicated the importance of the risk management clearly across the business. Work will be undertaken in 2019 that will focus on embedding our approach to risk management throughout the operating divisions and our key partners to build a richer picture of risk information.

The priorities for risk management throughout 2019 will be to:

– Review the UK Corporate Governance Code using the comply or explain basis against the 2018 update.

– 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 throughout the operating divisions.

– The development of bottom-up risk activities across territories, operating divisions and central functions including continued engagement with the wider business.

– 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 and engagement with third-party risk management specialists.

– Continue to embed the ‘three lines of defence’ (as reflected in the Risk Management House) 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, this has been covered on page 53, under the Corporate Governance section.

Our principal risks

A robust assessment has been undertaken by the Board to assess the principal 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. We have included a trend to show year on year how these have changed in priority and have taken the decision to split these into three areas over which we can have varying levels of control and oversight.

These three areas are:

– External – where we can 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 are those over which we could put in place effective controls. These will 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 has happened in 2018 and what the focus will be for 2019.

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 operation.

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 participation with the Remote Gambling Association.

A diverse network of likeminded 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 2018

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.

Group Head of Operational Compliance appointed during the year.

Expanded the Group’s compliance expertise, through targeted recruitment of industry experienced individuals, to support the increasing number of licences applied for and awarded in the year.

Focus for 2019

Ongoing review and enhancement of the suite of regulatory and legislative controls.

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.

Fully embed the new compliance approach and ensure each business continues to be assisted by the central support, guidance and checking mechanism.

Financial and economic

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

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 customers.

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.

Developments in 2018

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

Appointed Director of Taxation to boost the tax control environment, provide commercial decision support and be a champion for the Board’s tax risk management policy.

Focus for 2019

Monitoring the hedging in place to minimise our exposure.

Continuous review and evolution of our products, as shown in greater detail in our strategic summary on page 12.

Strategic Risks

Brand and reputation

A major incident could leave a negative impact on the Jackpotjoy brand.

Key mitigations

Key response plan in place.

Business impact analysis of the key areas that could impact the business, including proactive plans in place to manage.

Developments in 2018

Our multiple brand and customer-focused strategy has been adopted during 2018.

Implementation of a Board-level Corporate Social Responsibility team.

Successful premium listing on the London Stock Exchange.

Enhanced our Group compliance function and empowered operating divisions to take further regulatory responsibility and ownership.

Focus for 2019

Review of the compliance checks in place across the business.

Further development of the customer charter placing the customer at the heart of our decision-making process.

Continued review of our socially responsible gambling processes and controls, led by the Corporate Social Responsibility team.

Competitive landscape

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

Key mitigations

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

Customer insights, business development and data analytics capabilities in place.

Developments in 2018

Appointed an experienced Chief Product Officer and increased the headcount and skillset of the product team. Improvement in product balance between regulated markets and business verticals in less mature markets.

Development of in-house marketing capability and more advanced data compilation and analytics.

Competitive assessment of platform against the industry, verified by third-party consultants.

Increased local autonomy through changes to country management structure.

Investment in own gaming content and distribution technology.

Focus for 2019

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

Ensuring sufficient internal technological and operational capabilities are available to facilitate working in emerging markets and with new revenues.

Further development of technical internal capabilities in order to accommodate increased games capacity and marketing.

Socially responsible gambling

JPJ Group plc recognises the need to apply high standards to the welfare of our customers.

Key mitigations

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

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

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

Developments in 2018

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

Continued to embed corporate responsibility as a key part of our business strategy.

Formed Corporate Social Responsibility team focusing on providing a safe and enjoyable experience for the entire length of the customer journey.

Achieved compliance with GDPR regulation.

Launch of the sustainability group initiative.

Focus for 2019

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

Development of social responsible gambling KPIs to inform our customer-centric strategy.

Our approach to corporate responsibility will continue to be discussed with our peers and suppliers to encourage a proactive approach to embed this into established ways of working.

Integration and growth

Timely integration of the legacy business and delivering a clear strategy is key for the growth of JPJ Group plc.

Key mitigations

Quarterly governance meetings with platform providers.

Regular joint working groups with platform providers.

Use of external consultants for marketing advice as required.

Strategy is reviewed on a quarterly basis and updated as required.

Developments in 2018

JPJ Group plc has continued to grow strongly in 2018, achieving significant increases in operating revenues.

Appointed both a Marketing Director and a Chief Data Officer with respective, valuable industry experience and knowledge.

Recruited Non-Executive Director with a wealth of executive digital and marketing experience.

Developed our in-house platform capability. This is driven by a clear strategy at a brand and platform level.

Focus for 2019

Implementation of 2019 strategy for growth as approved in November 2018.

Continue to engage with platform providers on integration requirements.

Management of the revenue growth gap between the UK and the Rest of the World.

Operational Risks

Recruitment and retention

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

Key mitigations

Recruitment and succession plans in place.

Cross-business collaboration to bring efficiencies and best practice.

Ongoing investment in people and development.

Developments in 2018

Introduced a Group approach to management of people and their development, by implementing Group organisational structure and cross-functional reporting.

New HR system implemented, providing real-time analytics and enabling more informed decisions.

Launched global training and development function, a more structured, consistent and scalable function.

More focused recruitment drives according to strengths of population.

Recruited widely across the Group to bring in additional capacity and capability, including a Chief Product Officer, Marketing Director and Chief Data Officer.

Focus for 2019

Further develop the global training and development function.

Continue Group-wide drive to diversify locations, considering spread and flexibility of new talent pools, whilst maintaining sense of cohesion through travel opportunities and technology.

Implement key retention initiatives in line with feedback from global employee survey.

Continue to focus on building a global and diverse team with senior specialists experienced in key areas such Product, Data and Marketing.

Focus on remaining competitive in the Maltese job market.

Harness the data analytic outputs provided by new HR system more effectively.

Technology and IT systems

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

Key mitigations

Systems improvement plan is in place and is being rolled out.

Wider controls are covered in the key supplier risk.

Developments in 2018

Implementation of the systems improvement plan.

Successful delivery of the single customer view project.

Extensive investment within our in-house capabilities, including development of own proprietary technology.

Focus for 2019

Monitor and further develop systems improvement plan.

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

Further develop portfolio of data management processes.

Further in-house development of gaming platform software.

Breakdown in the relationship with a key supplier

JPJ Group plc is reliant on a number of third parties for the operation of the business through provision of our platforms and systems.

Key mitigations

Established and mutually beneficial relationships with key suppliers.

Understanding of the additional providers available in the market.

Developments in 2018

Continued maintaining key relationships with suppliers (including Gamesys).

Planning to transition key in-house operating functions currently supplied by Gamesys.

Significant investment in proprietary platform to provide technical optionality.

Significant investment in people across the business, increasing the volume and overall skillset of the workforce.

Development of in-house marketing team and improved operational capabilities.

Focus for 2019

Continue developing key relationships with suppliers (including Gamesys).

Transition key in-house operating functions currently supplied by Gamesys.

Data management

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

Key mitigations

Data access is managed through a wholly owned system called Active Directory, which is a management system to control access to customer data.

Strict access procedures and audit trail capability are in place.

Corporate office data is cloud based and customer-facing data is hosted in owned data centres.

System change access is managed through management processes and permissions.

Device and individual orientated controls.

Adviser and regulatory assurance (e.g. United Kingdom Gambling Commission) through ongoing audits and reviews.

Developments in 2018

Achieved compliance with GDPR regulation during the year.

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.

Implementation of the Enterprise Mobility Suite, a collection of technological security systems that provide added functionality and accountability around data management.

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

Recruitment of Chief Data Officer to assist in growing our data management and security capabilities.

Focus for 2019

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.

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

Further expansion of the Enterprise Mobility Suite initiative.

Additional development of data recovery plan including investment in shortening the disaster recovery timeframe.

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 Parent Company financial statements in accordance with applicable United Kingdom law and regulations. Company law requires the Directors to prepare Group and Parent 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 Parent Company financial statements on the same basis.

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

– present fairly the financial position, financial performance and cash flows of the Group and Parent Company;

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

– present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

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

– make an assessment as to the Company’s ability to continue as a going concern;

– 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 Parent Company’s financial position and financial performance; and

– state whether the Group and Parent 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 Parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Parent 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 Parent 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 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.

Responsibility statement under the Disclosure and Transparency
Rules

Each of the Directors whose names and functions are listed on pages 42 and 43 confirm that to the best of their knowledge:

– the Consolidated Financial Statements of JPJ 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, 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 Directors’ Report, is fair, balanced and understandable, and that it provides the information necessary for shareholders to assess the Company’s performance, business model and strategy.

Related party transactions

As disclosed in note 12, the Group entered into loan and services agreements with Gaming Realms plc. Jim Ryan is a Director of both JPJ Group plc and Gaming Realms plc. Mr. Ryan recused himself from all discussions related to these agreements.

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.

SOURCE: JPJ Group PLC

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