TIDMKWS
RNS Number : 1148N
Keywords Studios PLC
28 January 2021
28 January 2021
Keywords Studios plc ("Keywords Studios", "the Group")
Full year trading update
12% organic revenue growth despite COVID-19 constraints
Keywords Studios, the international technical and creative
services provider to the global video games industry, today
provides the following unaudited trading update for the year ended
31 December 2020 ahead of full year results which will be issued on
24 March 2021.
Trading Update
The Board now expects revenue and adjusted profit before tax* to
be EUR373m and EUR55m, marginally ahead of the guidance issued on
24 November 2020 of c.EUR367m (2019: EUR326.5m) and c.EUR52m (2019:
EUR40.9m), respectively. On an organic** basis, full year Group
revenues are expected to increase by approximately 12% (H1 2020:
8.0%, 2019: 15.5%).
This performance reflects a strong finish to the year with
robust demand for the Group's services continuing throughout the
second half, albeit the previously stated COVID-19 production
constraints continued to delay the flow of some content in certain
service lines. Despite these revenue constraints, Keywords
delivered good underlying margin improvement, driven by operational
leverage and good cost control, together with a reduction in
certain costs due to COVID-19, such as travel.
Since the placing in May 2020, Keywords Studios has made seven
high quality acquisitions in the US, UK and Italy, further
strengthening the breadth and depth of the Group's value-added
services offered to our global video games clients. Three of these
were in Game Development (High Voltage, Heavy Iron, Coconut
Lizard), three in Marketing Services (g-Net, Maverick, Indigo Pearl
) and one in Audio (Jinglebell).
Total consideration for these seven acquisitions, which includes
performance related contingent deferred consideration elements, is
up to a maximum of c.EUR92m, including the acquisition of Heavy
Iron that completed in January 2021. For 2020, cash invested in
acquisitions totalled approximately EUR40m, which comprised
c.EUR38m (net of cash acquired) in respect of those companies
acquired during the year and c.EUR2m in settlement of deferred
consideration payments for earlier acquisitions that became due in
the period. Net cash at 31 December 2020 is expected to be
approximately EUR100m (EUR101m at 30 June 2020, net debt EUR17.9m
at 31 December 2019).
Andrew Day, CEO, commented:
"The Group has delivered another robust performance, delivering
good organic growth despite the obvious challenges of COVID-19
across our global operations. This is testament to the dedication
of our talented Keywordians, who have continued to provide our
clients with the excellent service they have come to expect,
despite these challenging circumstances.
"We are pleased to have welcomed seven high quality businesses
into the Group over the last year, extending the scale,
capabilities and geographical reach of our Game Development and
Marketing Services in particular as we seek to grow those services
to become the suppliers of choice for our global client base. We
continue to actively review a healthy pipeline of acquisition
opportunities and we retain the financial resources to selectively
execute on these as we build the 'go to' global video games
services platform .
"With a robust and flexible model and a strong market position
in the buoyant video games market, we look forward with confidence
to continuing to deliver on our organic and acquisitive growth
strategy."
* Adjusted profit before tax comprises Profit before taxation as
reported in the Consolidated statement of comprehensive income,
adjusted for costs including share option expense, costs of
acquisitions and integration, amortisation of intangible assets,
non-controlling interest, foreign exchange gains and losses, and
unwinding of discounted liabilities. In order to present the
measure consistently year-on-year, the impact of COVID-19
government subsidies claimed is also excluded.
** 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.
Notification of Full Year Results
The Group expects to announce its full year results for the year
ended 31 December 2020 on 24 March 2021. To register your interest,
please contact Keywords@mhpc.com .
For further information, please contact:
Keywords Studios (www.keywordsstudios.com)
Andrew Day, Chief Executive Officer
Jon Hauck, Chief Financial Officer +353 190
Joseph Quinn, Investor Relations 22 730
Numis Securities
Stuart Skinner/Kevin Cruickshank/Will +44 20
Baunton 7260 1000
MHP Communications (Financial PR) +44 20
Katie Hunt/James Midmer/Charles Hirst 3128 8193
keywords@mhpc.com
About Keywords Studios ( www.keywordsstudios.com )
Keywords Studios is an international technical services provider
to the global video games industry. Established in 1998, and now
with over 65 facilities in 21 countries strategically located in
Asia, the Americas and Europe, it provides integrated art creation,
marketing services, software engineering, testing, localization,
audio and customer care services across more than 50 languages and
16 games platforms to a blue-chip client base of over 950 clients
across the globe.
Keywords Studios has a strong market position, providing
services to 23 of the top 25 most prominent games companies,
including Activision Blizzard, Bandai Namco, Bethesda, Electronic
Arts, Konami, Microsoft, Riot Games, Square Enix, Supercell,
TakeTwo, Epic Games and Ubisoft. Recent titles worked on include
Call of Duty: Modern Warfare, Anthem, Star Wars Jedi: Fallen Order,
Assassin's Creed Odyssey, Valorant, League of Legends, Fortnite,
Clash Royale and Doom Eternal. Keywords Studios is listed on AIM,
the London Stock Exchange regulated market (KWS.L).
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