JPJ : 2018 Annual Accounts and 2019 Notice of AGM

RNS Number : 9399X JPJ Group PLC

03 May 2019

3 May 2019

JPJ GROUP PLC (the "Company")

2018 Annual Accounts and 2019 Notice of Annual General Meeting

In compliance with Lis ng Rule 9.6.1, the Company has submi!ed a copy of each of the following documents to the Na onal Storage Mechanism, and these will shortly be available for inspec on 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)

• · Vo ng Instruc on 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 me) on Thursday 13 June 2019 at The Holiday Inn, 3 Berkeley St, Mayfair, London, W1J 8NE.

The 2018 Annual Accounts, the 2019 AGM No ce 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 securi es laws, the 2018 Annual Accounts, the 2019 AGM No ce, the Form of Proxy and the VIF will also be filed under the Company's profile on SEDAR atwww.sedar.com.

The informa on set out in the Appendix, which is extracted from the 2018 Annual Accounts, should be read in conjunc on 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 indica on of the important events that have occurred in the repor ng period. That informa on, together with the informa on set out in the Appendix, cons tutes 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 Informa on Service. This announcement is not a subs tute 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 visitwww.jpjgroup.com.

Enquiries:

JPJ Group plc

Dan Talisman, Chief Legal Officer & Company Secretary [phone]

Amanda Brewer, Vice President of Corporate Communications [phone]

Finsbury

James Leviton

Andy Parnis [phone]

[e-mail]

APPENDIX

Principal Risks and Uncertainties

A descrip on of the principal risks and uncertain es that the Company faces is extracted from pages 26 to 33 of the 2018 Annual Accounts.

Managing our risks

Understanding our principal risks and uncertain es whilst we ensure there are sufficient controls in place will be cri cal to our con nued 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. Ul mate accountability for risk lies with the Board, supported by the Audit & Risk Commi!ee, and execu ve management on the day-to-day management. We have con nued our work with PricewaterhouseCoopers (PwC) suppor ng the Group in the implementa on of a framework to allow for the iden fica on, assessment, mi ga on and monitoring of risk throughout the Group and opera ng 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 lis ng, we con nue 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 prac cal to our needs. This allows us to respond to changes in the business environment, whilst con nuing 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.