Trading Update
26/07/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240726:nRSZ9255Xa&default-theme=true
RNS Number : 9255X Keywords Studios PLC 26 July 2024
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE
OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
26 July 2024
Keywords Studios plc
("Keywords Studios", "Keywords", the "Group")
Trading update
Keywords Studios, the global provider of creative and technology-enabled
solutions to the video games and entertainment industries, today provides a
trading update in respect of 2024 performance.
The Board remains confident in delivering good overall revenue growth in 2024,
with performance expected to be second half weighted as the sector starts to
emerge from the slower content creation trends that are currently dampening
industry spend and therefore Keywords' growth.
Keywords has had a small number of larger game development projects deferred
or cancelled in H1, creating capacity gaps in Create which were unable to be
filled at short notice. This, together with ongoing softer demand in Globalize
and the relatively slow ramp-up in content production in Hollywood, has meant
that reported revenue is expected to grow by around 7 per cent. in the first
half, with organic growth over the period expected to be around minus 2 per
cent.
The Group has seen spend from larger clients continue to grow strongly during
the first half, and anticipates a stronger recovery from the US strikes in H2,
reinforcing our confidence in an improved second half performance, although
further delays and project scope reductions are now expected to temper H2
organic growth from previous expectations. The Board continues to be confident
in the Group's ability to outperform the market and deliver on its medium-term
guidance beyond 2024.
Keywords continues to closely manage costs, taking a broad range of cost
actions, including the restructuring of the go-to-market approach in Globalize
set out at the full year results. Due to the timing of the cost saving
programmes and the reduction of volumes, H1 adjusted operating margins are
expected to be around 13 per cent., with H2 margins improving as the impact of
the cost savings programmes and pick-up in volumes flow through.
There continues to be a strong pipeline of active M&A opportunities. The
Group has signed a number of letters of intent with high-quality businesses,
and recently completed the acquisition of a small game development studio in
Australia, and a small creative design studio in the UK, as it continues to
build out its offering. The Group currently expects to commit around €100
million on value accretive M&A this year, in line with its medium-term
guidance.
The Group expects to post the Scheme of Arrangement documentation (the "Scheme
Document") relating to the potential acquisition of the company by Houting UK
Limited, a newly formed company indirectly wholly-owned by EQT's BPEA Fund
VIII, in the coming days.
For further information, please contact:
Keywords Studios Deutsche Numis
Giles Blackham Nomad & Joint Corporate Broker
Director of Investor Relations Stuart Skinner / Will Baunton
+44 7714 134 681 +44 20 7260 1000
gblackham@keywordsstudios.com (mailto:gblackham@keywordsstudios.com)
MHP Group Barclays
Financial Communications Joint Corporate Broker
Katie Hunt / Eleni Menikou / Charles Hirst Tom Macdonald / Stuart Jempson
+44 7884 494 112 / +44 20 3128 8100 +44 20 7029 8000
keywords@mhpgroup.com (mailto:keywords@mhpgroup.com)
This Announcement contains inside information for the purposes of the market
abuse regulation (EU No. 596/2014) as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK
MAR").
The guidance provided in this announcement constitutes a profit forecast for
the purposes of Rule 28.1 of the UK Takeover Code (the "Code") and Keywords
will provide the requisite directors' confirmation statement pursuant to Rule
28.1(c) in the Scheme Document.
About Keywords Studios (www.keywordsstudios.com
(https://protect.checkpoint.com/v2/___http:/www.keywordsstudios.com/___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzo3NGQ0N2IxN2IzYmY4NjBkZjc4ZmUwYmFkZWJkMWUxNTo2OjMzZjY6MDViZTgyMjAyNjQ0YWNjY2QxY2JlYWVlNjdjNDZkZDlmOTdjNGQ5ZmFiZWMwZDE0YjQwMTU4OTFiY2IxN2FmMDpwOlQ6Tg)
)
Keywords Studios is a global provider of creative and technology-enabled
solutions to the 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
Divisions 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 and contributing to over 70% of the 2023
Game Awards winners. 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,
Take-Two, Tencent and Ubisoft. Recent titles worked on include Starfield,
Baldur's Gate 3, Diablo IV, Hogwarts Legacy, Elden Ring, Fortnite, Valorant,
League of Legends and Clash Royale. Keywords Studios is listed on AIM, the
London Stock Exchange regulated market (KWS.L).
Rule 26.1
In accordance with Rule 26.1 of the Code, a copy of this announcement will be
available on the Company's website at www.keywordsstudios.com. The content of
the website referred to in this announcement is not incorporated into and does
not form part of this announcement.
Further information
The information in this announcement has not been audited or otherwise
independently verified and no representation or warranty, express or implied,
is made as to, and no reliance should be placed on, the fairness, accuracy,
completeness or correctness of the information or opinions contained herein.
None of the Company or any of its affiliates, advisors or representatives
shall have any liability whatsoever (in negligence or otherwise) for any loss
whatsoever arising from any use of this announcement, or its contents, or
otherwise arising in connection with this announcement.
This announcement is not intended to and does not constitute an offer to sell
or the solicitation of an offer to subscribe for or buy or an invitation to
purchase or subscribe for any securities or the solicitation of any vote in
any jurisdiction. The release, publication or distribution of this
announcement in jurisdictions outside the United Kingdom may be restricted by
law and therefore persons into whose possession this announcement comes should
inform themselves about, and observe such restrictions. Any failure to comply
with such restrictions may constitute a violation of the securities law of any
such jurisdiction.
Certain statements, statistics and projections in this announcement are or may
be forward looking. By their nature, forward‑looking statements involve a
number of risks, uncertainties or assumptions that may or may not occur and
actual results or events may differ materially from those expressed or implied
by the forward-looking statements. Accordingly, no assurance can be given that
any particular expectation will be met and reliance should not be placed on
any forward-looking statement. Accordingly, forward-looking statements
contained in this announcement regarding past trends or activities should not
be taken as representation that such trends or activities will continue in the
future. You should not place undue reliance on forward-looking statements,
which are based on the knowledge and information available only at the date of
this announcement's preparation.
The Company does not undertake any obligation to update or keep current the
information contained in this announcement, including any forward‑looking
statements, or to correct any inaccuracies which may become apparent and any
opinions expressed in it are subject to change without notice.
References in this announcement to other reports or materials, such as a
website address, have been provided to direct the reader to other sources of
information on Keywords Studios which may be of interest. Neither the content
of Keywords Studios' website nor any website accessible by hyperlinks from
Keywords Studios' website nor any additional materials contained or accessible
thereon, are incorporated in, or form part of, this announcement
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the
offer period and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of (i) the offeree company
and (ii) any securities exchange offeror(s). An Opening Position Disclosure by
a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s), save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://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 (https://www.lseg.com/privacy-and-cookie-policy)
. END TSTFFFIIDRIEFIS