TIDMKWS
RNS Number : 8136H
Keywords Studios PLC
01 August 2023
1 August 2023
Keywords Studios plc ("Keywords Studios", "Keywords", the
"Group")
H1 Trading Update
Good trading performance despite current market backdrop
Keywords Studios, the international provider of creative and
technology-enabled solutions to the global video games and
entertainment industries , announces its H1 Trading Update.
Highlights
-- H1 Revenue of EUR383m representing a 19% increase on H1 2022
-- Organic revenue growth of 10% and Adjusted Operating Margin of 15%, in line with medium-term guidance
-- Four acquisitions completed for total maximum consideration of up to c.EUR130m
-- Delivering against strategy, including investing in leading AI product suite and technology
Bertrand Bodson, CEO of Keywords Studios commented:
"Keywords delivered good H1 growth despite the current industry
backdrop, benefitting from our focus on strategic partnerships and
our unique provision of solutions across the full game development
cycle. We have continued to broaden our offering through
high-quality targeted acquisitions and are excited about the
pipeline ahead.
Responsibly harnessing AI and other technologies is a key
element of our strategy as we support the industry's race to create
the most immersive experience for players. We have over 4,000
dedicated engineers and technical experts in Create with a long
track record of unlocking and utilising multiple generations of new
technologies. We are also building a portfolio of world-class AI
products to address critical post-production client needs,
complementing our existing service offerings, and enabling us to do
more for our clients.
Our scale and market leadership, built on deep knowledge of our
clients' priorities and integration into their workflows, provide
an unrivalled platform from which to invest in and lead the way in
deploying innovative technologies to augment our broader offering.
We have an unparalleled opportunity to work with clients, who have
been trusting us with their games for decades, to help them
navigate the complex challenges that are currently a barrier to
adoption of Generative AI in the AAA game production process.
We are uniquely placed to capture the opportunities that
technology advancement will create over time as it increases the
bounds of possibility, leading to a proliferation of ever improving
content as our clients seek to engage the three billion gamers
globally. We are excited about the opportunities that lie ahead and
are preparing for the future whilst we continue to grow market
share and deliver against our plans for 2023 and beyond."
Performance
The Group has performed well during the first half, with the
Board expecting to report revenues of approximately EUR383m,
representing a 19% increase on the comparative period (H1 2022:
EUR321m). This performance included the impact of acquisitions and
reflects a 2% negative impact from translating studio results from
local currency into the euro reporting currency. On an organic(1)
basis, Group revenues are expected to have increased by 10%, in
line with our medium-term guidance, and having moderated from H1
2022's exceptional levels, as expected.
Adjusted operating profit(2) is expected to be approximately
EUR59m, representing an increase of around 5% from EUR56m in the
comparative period in the prior year. This reflects the
normalisation of margins towards 15% as guided, and is in line with
the margins achieved in the second half of 2022 as we continue to
invest into the business.
The Group's segmental performance reflected the varied
conditions within the video gaming market so far this year. In
Create, there continued to be strong demand for our content
creation services, with organic growth only moderating slightly
from 2022 levels. In Globalize, we have seen a more pronounced
moderation, following the very strong growth levels in H1 2022. We
have seen limited impact from the entertainment industry strikes in
the US, but are monitoring the situation whilst they continue.
Engage experienced a slower period, primarily due to the weaker
mobile market impacting demand for Player Support services and
Marketing services seeing certain short-notice delays meaning some
projects slipped into the second half of the year.
The Group continues to trade well, in line with our guidance
given at the outset of the year even with the current challenging
industry backdrop and macroeconomic conditions. As such, we expect
full year organic growth to be similar to the first half,
supplemented by acquisitions, including the four high-quality
acquisitions executed in the year-to-date, and for adjusted
operating margins to remain around 15% for the year. We remain
mindful of the continuing currency volatility that may impact on
our performance in the second half, but are confident in the
long-term growth trajectory of the business.
Capital Allocation & Balance Sheet
During the first half, Keywords continued to deliver against our
strategy of extending our capabilities and geographical reach in
our Create and Engage service lines, as well as scaling our
technology offering. The Group has completed four high-quality
acquisitions, adding approximately EUR50m of annual pre-acquisition
revenue(3) , for total maximum consideration, including performance
related contingent deferred consideration, of up to c.EUR130m.
Two acquisitions broadened our Engage offering in the US, the
largest global market for gaming, 47 Communications and Digital
Media Management (DMM), with both enhancing our media and
entertainment capabilities, and DMM bringing market leading social
media capabilities and an innovative technology platform which
partners content creators with brands. In game development, we
acquired Hardsuit Labs, a 70-person studio focused on AAA games and
specialising in the Unreal engine. In addition, we expanded our
Climax game development studio through the acquisition of Playboss
Interactive in the UK, providing Climax with a second location to
grow from.
As of 30 June 2023, the Group had net debt of EUR11m, (31
December 2022: net cash of EUR82m) due to its acquisition
programme, EBT purchases, and an H1 weighting to capex. Cash flow
and cash conversion are traditionally significantly stronger in the
second half of the year. The Group has drawn US$60m on its
committed revolving credit facility, which has recently been
extended to US$400m, and together with its strong cash generation,
this leaves the Group well placed to pursue its organic growth
strategy, including through investment in technology, and to fund
our healthy acquisition pipeline.
Notification of Half Year Results
The Group expects to announce its half year results for the six
months ended 30 June 2023 on 12 September 2023. To register your
interest, please use the following link:
https://brrmedia.news/KWS_HY23 or contact Keywords@mhpgroup.com
.
For further information, please contact:
Investor Contacts: Media Contacts:
Keywords Studios MHP Group
Giles Blackham Katie Hunt / Eleni
Director of Investor Menikou / Charles
Relations Hirst
+44 7714 134 681 +44 20 3128 8794
gblackham@keywordsstudios.com keywords@mhpgroup.com
Numis Securities
Nominated Adviser &
Broker
Stuart Skinner / Will
Baunton
+44 20 7260 1000
(1) Adjusted operating profit consists of the Operating profit
as reported in the Consolidated statement of comprehensive income,
adjusted for share-based payments expense, costs of acquisition and
integration, and amortisation of intangible assets. In order to
present the measure consistently year-on-year, the impact of other
income is also excluded.
(2) Organic Revenue at constant exchange rates is calculated by
adjusting the prior year revenues, adding pre-acquisition revenues
for the corresponding period of ownership, and applying the prior
year foreign exchange rates to both years, when translating studio
results into the Euro reporting currency.
(3) Combination of 2022 revenues for each of the acquisitions.
About Keywords Studios ( www.keywordsstudios.com )
Keywords Studios is an international provider of creative and
technology-enabled solutions to the global video games and
entertainment industries . Established in 1998, and now with over
70 facilities in 26 countries strategically located in Asia,
Australia, the Americas, and Europe, it provides services across
the entire content development life cycle through its Create,
Globalize and Engage service lines to a large blue-chip client base
across the globe.
Keywords Studios has a strong market position, providing
services to 24 of the top 25 most prominent games companies. Across
the games and entertainment industry, clients include Activision
Blizzard, Bandai Namco, Bethesda, Electronic Arts, Epic Games,
Konami, Microsoft, Netflix, Riot Games, Square Enix, Supercell,
TakeTwo, Tencent and Ubisoft. Recent titles worked on include
Diablo IV, Hogwarts Legacy, Elden Ring, Fortnite, Valorant, League
of Legends, Clash Royale and Doom Eternal. Keywords Studios is
listed on AIM, the London Stock Exchange regulated market
(KWS.L).
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTFZGFNRMRGFZM
(END) Dow Jones Newswires
August 01, 2023 02:00 ET (06:00 GMT)
Keywords Studios (LSE:KWS)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Keywords Studios (LSE:KWS)
Gráfica de Acción Histórica
De May 2023 a May 2024