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
Giles Blackham
Director of Investor
Relations
+44 7714 134 681
gblackham@keywordsstudios.com
|
Deutsche Numis
Nomad & Joint Corporate
Broker
Stuart Skinner / Will
Baunton
+44 20 7260 1000
|
MHP
Group
Financial Communications
Katie Hunt / Eleni Menikou / Charles
Hirst
+44 7884 494 112 / +44 20 3128
8100
keywords@mhpgroup.com
|
Barclays
Joint Corporate Broker
Tom Macdonald / Stuart
Jempson
+44 20 7029 8000
|
|
|
|
|
|
|
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)
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
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which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
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announcement in which any securities exchange offeror is first
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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
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the date of the relevant dealing.
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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.