REG - Winking Studios Ltd - Admission to AIM and First Day of Dealings

Winking StudiosAnnouncement

14/11/2024 07:00

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RNS Number : 1445M  Winking Studios Limited  14 November 2024

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA,
AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE
SUCH DISTRIBUTION WOULD BE UNLAWFUL.  FURTHER THIS ANNOUNCEMENT SHALL NOT
CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION TO BUY, SUBSCRIBE FOR
OR OTHERWISE ACQUIRE ORDINARY SHARES OF WINKING STUDIOS LIMITED (THE
"COMPANY") IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD
BE UNLAWFUL.

 

Neither this announcement, nor anything contained herein, nor anything
contained in the Admission Document prepared and published by the Company on
11 November 2024 (the "Admission Document") in accordance with the AIM Rules
for Companies published by London Stock Exchange plc shall form the basis of,
or be relied upon in connection with, any offer or commitment whatsoever in
any jurisdiction. Investors should not purchase any shares referred to in this
announcement except solely on the basis of the information contained in the
Admission Document including the risk factors set out therein.

 

14 November 2024

 

Winking Studios Limited

(the "Company" and together with its subsidiaries, the "Group")

 

Admission to AIM and First Day of Dealings

 

Winking Studios Limited (SGX:WKS), the AAA Art Outsourcing and Game
Development business listed on the Catalist board of the Singapore Exchange
Securities Trading Limited, is pleased to announce the admission of its shares
to trading on the AIM Market of the London Stock Exchange ("Admission") ("Dual
Listing"). Dealings will commence today at 8.00 a.m. (UK) under the ticker WKS
(ISIN: KYG9722U1040).

 

As part of the Dual Listing, the Group has successfully raised £7.9 million
by way of a placing (the "Placing"). The Placing was supported by the
Company's existing majority shareholder Acer Gaming Inc, while Johnny Jan, the
Founder and Chief Executive Officer, and Oliver Yen, the Finance Director and
Group Chief Financial Officer, of the Company also participated in the
Placing. Pursuant to the Placing, the Company has allotted and issued
52,666,667 new ordinary shares, including 40,000,000 shares, 666,667 shares
and 266,667 shares issued to Acer Gaming Inc, Johnny Jan and Oliver Yen
respectively.

 

Based on the placing price of 15 pence(1) per share ("Placing Price"), the
Company's market capitalisation on Admission will be approximately £66
million(2).

 

The Admission Document was published on 11 November 2024 on the Company's
website (https://investor.winkingworks.com/) and SGXNet
(https://www.sgx.com/securities/company-announcements) .

 

Strand Hanson Limited is acting as Financial and Nominated Adviser with S.P.
Angel Corporate Finance LLP acting as Broker in relation to the Dual Listing.

 

Johnny Jan, Founder and Chief Executive Officer of Winking Studios Limited,
said: "Dual Listing on AIM is a significant milestone in our 20-year history
and I believe will serve as a powerful catalyst in our mission to become a
global leader in video game art services. A London listing opens up a wealth
of new opportunities, granting us access to a large pool of technology
investors well-informed on the sector while enhancing our ability to expand
our footprint and grow our client base across Europe and the Americas.

 

"I am grateful to our long-term investors for their continued support and
welcome those who are joining us through the Dual Listing. I would also like
to take this opportunity to thank our team for their hard work and dedication
in getting us to this point. It has been an exciting journey to date, but I
firmly believe we are still just getting started."

 

Jerry Kao, Chief Operating Officer of Acer and Member of the Board of
Directors of Winking Studios Limited, commented: "Acer's increased investment
in Winking Studios reflects our confidence in its potential to accelerate
global growth and build on its achievements to date. An important part of
Acer's strategy is to expand its interests in higher margin services and
content markets, and we see Winking Studios as a valuable long-term enabler of
this.

 

"On behalf of Acer, I would like to congratulate Johnny and his team on their
AIM Dual Listing. We are pleased to reaffirm our support and remain committed
to helping Winking Studios realise its ambitions."

 

Winking Studios Limited

 

Founded in 2004 and headquartered in Singapore with nine offices across Asia,
the Company is led by its founder Johnny Jan and is ranked third in Asia and
fourth in the world in terms of global revenue in the global game Art
Outsourcing market(3).

 

Working across a range of platforms including console, PC and mobile, the
Company has collaborated with 22 of the world's top 25 game development
companies, including Ubisoft, EA, Activision and Tencent, on high profile
titles such as FIFA, Call of Duty and Assassins Creed.

 

Through its Art Outsourcing Services segment, the Group develops art,
animation and visual effects including characters, environments, props and
effects. Through its Game Development segment, the Group delivers development
services from concept to programming and script writing to post-release
support and maintenance.

 

Investment Highlights

 

 ·             Proven capabilities in art outsourcing and game development with a blue-chip
               customer base: Partnerships with three major game publishing platforms: Sony,
               Microsoft and Nintendo;

 ·             High-growth market: The video gaming sector, in particular the mobile and
               online gaming segments, is expected to continue to demonstrate strong growth;

 ·             Compelling cost advantage of outsourcing: Outsourcing represents an increasing
               proportion of game development budgets, and this trend is expected to continue
               going forward;

 ·             Limited product risk: Given its "work-for-hire" business model, the Group is
               not exposed as principal to the risks associated with ownership and
               development of these games;

 ·             Fragmented market: The global game art outsourcing industry remains
               fragmented, with most service providers being relatively small independent
               studios. The Group completed its first two acquisitions in H1 2024, is
               currently evaluating several targets and has a pipeline of potential
               acquisitions under consideration;

 ·             Strong growth: Significant organic growth over past four years, doubling
               headcount to 800+, increasing revenue to US$29.3m and growing Adjusted EBITDA
               to US$5.3m (FY23);

 ·             Forward earnings visibility from growing follow-on revenues: Focusing on
               successful multi-year, high growth mobile / online titles provides the Group
               with repeat revenue opportunities and enhanced earnings visibility with 18+
               months indicative bookings; and

 ·             Backed by the Acer group(4): Supportive shareholder (an aggregate direct and
               indirect shareholding interest post-Placing of 64.2%) with Acer Gaming's
               extensive network of relationships in the game development and art outsourcing
               industries as well as an in-depth understanding of the global gaming industry.

 

Use of Placing Proceeds and Dual Listing Rationale

 

The funds raised will supplement the Group's available cash resources, which
exceeded US$30m(5) before the Placing, and will be allocated to:

 

 ·             Actively pursuing strategic acquisitions, alliances and joint ventures in Asia
               and Europe to grow the Group's market share and increase operational capacity;

 ·             Establishing a stronger presence and broadening the Group's customer base in
               the North American and European markets, including by (i) increasing the
               Group's marketing and business development efforts; (ii) establishing a
               UK-based regional hub; and (iii) pursuing acquisitions of smaller studios in
               this region;

 ·             Enhancing the Group's current operational capabilities, which includes
               continuous development and improvement of the Group's AI capabilities; and

 ·             In addition to supporting strategic acquisitions and its growth strategy, the
               Dual Listing will provide access to a larger pool of knowledgeable tech
               investors, in order to diversify the Company's shareholder base.

 

(1)The trading currency of the shares on AIM is in pence (GBX)

(2)Based on the Placing Price and the post-placing issued share capital
440,364,942 shares

(3)Source: Independent Market Report by China Insights Industry Consultancy
Limited, October 2024

(4)Refers to Acer Gaming Inc and Acer SoftCapital Inc (both subsidiaries of
Acer Inc)

(5)Comprising cash and cash equivalents, bond investments and proceeds raised
in Company's placement exercise in July 2024

 

Enquiries

 Singapore                                                        UK
 Winking Studios Limited                                          Via Alma

 Johnny Jan, Founder and Chief Executive Officer

 Oliver Yen, Finance Director and Group Chief Financial Officer

 8PR Asia (Investor Relations)                                    Alma Strategic Communications

 Alex Tan                                                         Justine James / David Ison / Emma Thompson

 +65 9451 5252                                                    +44 (0)20 3405 0205

  alex.tan@8prasia.com (mailto:alex.tan@8prasia.com)              WKS@almastrategic.com (mailto:WKS@almastrategic.com)

 PrimePartners Corporate Finance Pte. Ltd.                        Strand Hanson Limited

 (Financial Adviser in Singapore)                                 (Financial and Nominated Adviser)

 Marcus Yong / Pang Xu Xian                                       James Harris / James Bellman

 +65 8282 9938 / +65 9692 0195                                     +44 (0)20 7409 3494

                                                                  SP Angel Corporate Finance LLP (Broker)

                                                                  Stuart Gledhill / Charlie Bouverat (Corporate Finance)

                                                                  Abigail Wayne / Rob Rees (Corporate Broking)

                                                                  +44 (0)20 3470 0470

 

IMPORTANT NOTICES

This Announcement has been issued by and is the sole responsibility of the
Company.

This Announcement is for information purposes only and does not constitute an
offer to sell or issue or the solicitation of an offer to buy, acquire or
subscribe for shares in the capital of the Company in the United States,
Canada, Australia, Japan, Singapore or the Republic of South Africa or any
other jurisdiction where such offer or solicitation may be restricted,
unlawful or unauthorised. Any failure to comply with these restrictions may
constitute a violation of the securities laws of such jurisdictions. Subject
to certain exemptions, the securities referred to herein may not be offered or
sold in Canada, Australia, Japan, Singapore or the Republic of South Africa or
to, or for the account or benefit of any national resident or citizen of
Canada, Australia, Japan, Singapore or the Republic of South Africa. The
ordinary shares in the capital of the Company ("Ordinary Shares") have not
been and will not be registered under the United States Securities Act of
1933, as amended ("Securities Act") or the securities laws of any other
jurisdiction of the United States, and may not be offered, sold, taken up,
exercised, resold, renounced, delivered or transferred, directly or
indirectly, in the United States absent registration under the Securities Act
or an available exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and the securities laws of any
other jurisdiction of the United States. There will be no public offer of the
securities in the United States. Neither the US Securities and Exchange
Commission nor any securities regulatory body of any state or other
jurisdiction of the United States, nor any securities regulatory body of any
other country or political subdivision thereof, has approved or disapproved of
this document or the securities discussed herein or passed on or endorsed the
merits of the Placing or the accuracy or adequacy of the contents of this
Announcement. Any representation to the contrary is a criminal offence in the
United States.

No prospectus will be made available in connection with the matters contained
in this Announcement and no such prospectus is required (in accordance with
the UK Prospectus Regulation (as defined below)) to be published.

This Announcement is addressed to and directed only at persons who are (a)
persons in member states of the European Economic Area who are "qualified
investors" within the meaning of Article 2(e) of the EU Prospectus Regulation
(Regulation (EU) No 2017/1129), or (b) persons in the United Kingdom who are
"qualified investors" within the meaning of Article 2(e) of the UK Prospectus
Regulation (Regulation (EU) No. 2017/1129, which is part of UK law by virtue
of the European Union (Withdrawal) Act 2018) (the "UK Prospectus Regulation"),
who (i) have professional experience in matters relating to investments and
fall within the definition of "investment professionals" in Article 19(5) of
the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005,
as amended (the "Order"), or (ii) are high net worth companies, unincorporated
associations or partnerships or trustees of high value trusts as described in
article 49(2) of the Order, or (c) persons to whom it may otherwise be lawful
to communicate it (all such persons together being referenced to as "relevant
persons"). Any investment in connection with the Placing will only be
available to, and will only be engaged with, relevant persons. Any person who
is not a relevant person should not act or rely on this Announcement or any of
its contents.

This Announcement is not being distributed by, nor has it been approved for
the purposes of section 21 of the Financial Services and Markets Act 2000 (as
amended) ("FSMA") by, a person authorised under FSMA. This announcement is
being distributed and communicated to persons in the UK only in circumstances
in which section 21(1) of FSMA does not apply. Strand Hanson Limited
("Strand"), which is authorised and regulated in the United Kingdom by the
FCA, has not authorised the contents of this Announcement and is acting
exclusively for the Company, and no one else, in connection with Admission and
the other matters referred to in this Announcement, and is not advising or
treating as a client any other person nor will it be responsible to any person
other than the Company (whether or not a recipient of this Announcement) for
providing the protections afforded to its customers or for providing advice in
relation to Admission or any other matters referred to in this Announcement.
Neither Strand nor any of its affiliates accepts any responsibility whatsoever
for the contents of the information contained in this Announcement or for any
other statement made or purported to be made by or on behalf of Strand or any
of its affiliates in connection with the Company or Admission.

SP Angel Corporate Finance LLP ("SP Angel") is acting only for the Company in
connection with the matters described in this Announcement and is not acting
for or advising any other person, or treating any other person as its client,
in relation thereto and will not be responsible for providing the regulatory
protection afforded to clients of SP Angel or advice to any other person in
relation to the matters contained herein.

Such persons should seek their own independent legal, investment and tax
advice as they see fit. The distribution of this Announcement and the offering
of the Placing Shares in certain jurisdictions may be restricted by law. No
action has been taken by the Company, Strand or SP Angel that would permit an
offering of such shares or possession or distribution of this Announcement or
any other offering or publicity material relating to such shares in any
jurisdiction where action for that purpose is required.

This Announcement contains (or may contain) certain forward-looking statements
with respect to certain of the Company's current expectations and projections
about future events. These statements, which sometimes use words such as
"aim", "anticipate", "believe", "intend", "plan" "estimate", "expect" and
words of similar meaning, reflect the directors' beliefs and expectations and
involve a number of risks, uncertainties and assumptions that could cause
actual results and performance to differ materially from any expected future
results or performance expressed or implied by the forward-looking statement.
Statements contained in this Announcement regarding past trends or activities
should not be taken as a representation that such trends or activities will
continue in the future. The information contained in this Announcement is
subject to change without notice and, except as required by applicable law or
regulation, neither the Company nor the Banks nor their respective affiliates
assume any responsibility or obligation to update publicly or review any of
the forward-looking statements contained herein. You should not place undue
reliance on forward-looking statements, which speak only as of the date of
this Announcement.

No statement in this Announcement is or is intended to be a profit forecast or
profit estimate or to imply that the earnings of the Company for the current
or future financial years will necessarily match or exceed the historical or
published earnings of the Company. The price of shares and the income from
them may go down as well as up and investors may not get back the full amount
invested on disposal of the shares.

Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.

 

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