RNS Number : 9086F
Keywords Studios PLC
02 August 2016

2 August 2016

Keywords Studios plc ("Keywords Studios" or "the Group")
Half year trading update

Strong first half performance provides confidence for the fullyear
Keywords Studios, the international technical services provider to theglobal video games industry today provides an update on trading
after another half year period of good like for like* growth
substantially complemented by acquisitions.
The Group is pleased to announce that it expects to report revenues
and adjusted PBT** comfortably ahead of expectations when itannounces its interim results for the six months ended 30 June 2016
in mid-September 2016. The outperformance was driven primarily by
the recently acquired Localisation and Audio business, Synthesis; thisdelivered an excellent ﬁrst half performance due in large part to a
beneﬁcial phasing of revenues between the ﬁrst and second half.
Given that it remains relatively early into our typically importantsecond half, we are maintaining guidance for the year as a whole
although the strong performance in the ﬁrst six months naturallygives us a good level of conﬁdence in delivering against ourexpectations for the full year.
Since the start of the year we have made four acquisitions. Synthesis
has been exceptionally busy delivering its normal ﬂow of audio,localisation and localisation testing projects in addition to managing
some very large new localisation and audio projects that have cometogether in the past three months, contributing to an atypical trading
pattern in which their peak production period has been both sharp
and early in the year. The Manila based customer support teamacquired from Ankama is moving to larger, newly ﬁtted out oﬃces
and is expanding to deliver services to additional clients. Mindwalk
joined the Group with eﬀect from 1 June 2016 and is trading verymuch in line with our expectations. The acquisition of the Volta studio(announced on 29 July 2016), which provides concept art services,
has extended the Group's Art service oﬀering further upstream. TheGroup also brought forward the acquisition of the 50% of Kite Team it
did not already own, a move that allowed for the integration of theoperations of Synthesis in Spain, Brazil and Mexico with those of Kite
Team and existing Keywords business in those territories. In addition,
we are announcing today that the earn-out associated with theacquisition of Liquid Violet that was acquired in January 2014 hascome to its planned conclusion. The ﬁnal payments due under thisagreement have now been made making the total paid for Liquid
Violet c. £1.1m.
Across the games industry the mediums of Virtual Reality andAugmented Reality continue to capture the headlines and while weare major recipients of services for art, audio, localisation and testing
services for this innovative content, we believe the real potential is a
few years hence.
The Group is continuing its acquisition strategy and maintains ahealthy pipeline of high quality acquisition opportunities. The credit
facility of up to €15m established with Barclays Bank, which wasannounced in May 2016 and has been used to help fund the Mindwalk
and Volta acquisitions, leaves us well placed to complete further
selective acquisitions this year.
The Group has not seen and does not expect any impact on trading of
the UK referendum vote. The Board attributes this to the global
nature of the business's earnings, and the fact that only 3% ofrevenues are denominated in sterling.
Andrew Day, Chief Executive of Keywords, commented:"We are delighted with our progress so far this year and areparticularly pleased with the excellent contribution from Synthesis.
This has enabled us to deliver a ﬁrst half performance substantiallyahead of our expectations such that we do not expect this year to be
characterised by the typical weighting towards the second half.
However, the strong ﬁrst half underpins our conﬁdence in our ability
to meet expectations for the year as whole.
"We continue to win new clients and grow market share and are
regularly seeing the beneﬁts of our wide geographic reach and broad
range of services as we introduce additional services to establishedclients.
"Overall, we look forward to another good year of progress as wecontinue to invest in existing and new businesses, building our talentpool and integrating the newer members of our Group."* calculated on the basis of revenues being included for 2016acquisitions from the date of acquisition and for the same period in
the prior year** The Group reports adjusted PBT before acquisition and integrationexpenses, share option charges, amortisation of intangibles andforeign currency gains
For further information, please contact:
KeywordsStudios(www.keywordsstudios.com)
Andrew Day, Chief Executive Officer
Andrew Lawton, Chief Financial Officer
Numis (Financial Adviser)
Stuart Skinner / Kevin Cruickshank(Nominated Adviser)
James Black / Tom Ballard (CorporateBroker)+353 190 22 730

020 7260 1000

MHP Communications (Financial PR)
Katie Hunt / Jade Neal / Ollie Hoare020 3128 8100

This information is provided by RNS
The company news service from the London Stock ExchangeENDTSTLLFSDTVILIIR