REG - Team17 Group PLC - Trading Update

Team17Announcement

24/11/2023 07:00

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RNS Number : 5304U  Team17 Group PLC  24 November 2023

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

24 November 2023

 

Team17 Group plc

("Team17" or the "Group" or "Company")

 

Trading Update

 

Team17 Group plc (the "Group"), a global games label, creative partner,
developer and publisher of independent ("indie") premium video games,
educational entertainment apps for children, and working simulation games,
today announces a trading update and an updated outlook for the current
financial year ending 31 December 2023.

 

FY23 outlook

 

While the important trading periods of Black Friday and Christmas are not yet
complete, management believes the Group remains well positioned with strong
traction across its new release and back catalogue titles, and currently
expects FY23 revenues to be modestly ahead of current market expectations.

 

Despite this overall robust revenue performance, certain titles within the
Games Label are not meeting internal expectations, resulting in a less
favourable mix between higher margin own-IP titles and third-party titles
(with higher royalty payments) than anticipated. In addition, the Group was
too slow to address some project overspends and has faced some delays in
implementing key cost initiatives at Team 17 Games Label. These are now at
advanced stages and will continue to bring benefits into next year.

 

Management continues to be pleased with the performance of astragon and
StoryToys. However, since the H1 results, and in the light of the post
Covid-19 dynamics, management has re-evaluated the cost structure within
Team17 Games Label to align with its core competencies as an indie game
developer and publisher. In addition, it is also reviewing a number of titles,
both under development and already launched, to assess the revenue potential
in the current market environment, which is expected to result in impairments
recognised in FY23.

 

Consequently, the Group now expects to deliver full year adjusted EBITDA of at
least £28.5m, which includes non-cash title impairments of up to £11.5m.

 

FY24 outlook

 

The Group has an exciting schedule of high-quality new releases planned across
the Group in 2024, while back catalogue investments will continue to support
revenue growth. Management will provide greater clarity on FY24 at the full
year results, but currently expects to see an improved underlying trading
performance compared to FY23.

 

 

Enquiries:

 

 Team17 Group plc                                                     via Vigo Consulting

 Debbie Bestwick MBE, Chief Executive Officer

 Steve Bell, Chief Executive Officer Designate

 Mark Crawford, Chief Financial Officer

 James Targett, Group Investor Relations Director

 Houlihan Lokey UK Limited (Nominated Adviser)                        +44 (0)161 250 3577

 Adrian Reed / Tim Richardson

 Berenberg (Joint Corporate Broker)                                   +44 (0)20 3207 7800

 Toby Flaux / Ben Wright / Marie Moy / Alix Mecklenburg-Solodkoff

 Peel Hunt (Joint Corporate Broker)                                   +44 (0)20 7418 8900

 Neil Patel / Paul Gillam / Richard Chambers / James Smith

 Vigo Consulting (Financial Public Relations)                         +44 (0)20 7390 0233

 Jeremy Garcia / Fiona Hetherington / Aisling Fitzgerald

 team17@vigoconsulting.com

 

 

About Team17

Team17 Group plc is a global provider of games entertainment to a broad
audience. The Group now includes a games entertainment label and creative
partner for indie developers, a leading developer of educational apps,
targeting children under the age of eight, and a leading working simulation
games developer and publisher.

 

Visit www.team17.com (http://www.team17.com/) for more info.

 

 

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