RNS Number : 5685D
Keywords Studios PLC
01 February 2018

1 February 2018
Keywords Studios plc("Keywords Studios", "the Group")
Full year trading update
Strong financial performance- strengthening our market
leading position
Keywords Studios, the international technical services provider to theglobal video games industry, today provides an unaudited trading
update for the year ended 31 December 2017, following a year offurther strong organic growth and geographic expansion,
complemented by a number of significant and successful acquisitions.
The Board is pleased to announce that it expects revenues to be notless than €150m (FY16: €96.6m) and adjusted PBT* of at least€22.5m (FY16: €14.9m), both of which are comfortably ahead ofconsensus market expectations. Strong organic growth remains afeature of the Group's performance and this has been supplemented
by acquisitions as the Group continues to deliver on its strategy inorder to become the "go to" supplier of technical services to theglobal video games industry. The Group is now comprised of sevenglobally managed service lines operating from 42 production studios
in 20 countries, compared to four service lines operating from ﬁveproduction studios in five countries at the time of our IPO in July 2013.
During the year, we welcomed eleven businesses into the Groupacross all its existing service lines as well as its newly establishedEngineering service line. 2017 saw two of the Group's largest
acquisitions to date, VMC and Sperasoft, which have furtherstrengthened our service oﬀerings and client penetration andextended our geographic reach and access to talent. Sperasoft
enabled our entry into Co-Development, in which multiple services
including game programming and art creation are deliveredholistically in the game development phase, whilst VMC has bolstered
our Engineering capabilities. These signiﬁcant acquisitions represent
yet further steps in the pursuit of our strategy and we are pleased
with how smoothly they are being integrated with the rest of theGroup.
The Group has invested net cash of €89.1m in the acquisitions
described above, funded by the Group's strong cash generation,
available debt facilities and a successful £75m equity placing inOctober 2017. The placing further demonstrated the support of ourexisting shareholders as well as enhancing our shareholder basethrough the addition of a number of new institutional investors.

Following these acquisitions, the Group had €30.5m in cash at theyear end and had utilised €18.3m of its €35m rolling credit facility,
which leaves the Group well placed to complete further selectiveacquisitions in 2018.
The Group's eﬀective tax rate has continued to decrease as we makebetter use of our brands, operating models and tools from our Dublin
operational headquarters in support of our business around the world,much of which is in higher tax rate jurisdictions including Canada, theUS, Japan, India and Italy. The Group's eﬀective tax rate based on
Keywords Studios' measure of proﬁt before taxation in the period was20.5% (2016: 21.7%). We note the enactment of the Tax Cuts andJobs Act in the United States on 22 December 2017. Our preliminary
view is that we can expect a devaluation of some of our deferred tax
liabilities in 2017 due to the reduction in the statutory federal tax rate
to 21%. While we continue to review the full future impact of the newUS tax legislation on the Group, we currently anticipate that thechanges will not have a material impact on the Group's eﬀective tax
rate. We will give updated guidance on the impact of these provisions
together with our final results later this year.
Andrew Day, Chief Executive of Keywords, commented:"We are delighted with the Group's performance as we grew revenues
and proﬁts strongly again this year. Our ever-increasing geographic
footprint and broader range of services have combined to growmarket share, introduce additional services to established clients andwin new clients.
"The eleven acquisitions in 2017 demonstrate strong progress in ourstrategy to selectively consolidate the fragmented video games
market and generate synergies through scale, and our entry intoEngineering and particularly Co-Development, enhances ourpositioning as a strategic partner to game developers and publishers,
whilst continuing to ensure we are not directly exposed to thecommercial performance of individual titles. As games are becoming
bigger and are higher deﬁnition, game developers are increasingly
relying upon co-development arrangements with companies like
Keywords to provide them with broader capability to develop bothinitial games and ongoing content and features post-launch.
"We look forward to another year of strong progress as we continue
to invest in existing and new businesses, building our talent pool andintegrating the newer members of our Group."*The Group reports adjusted PBT before acquisition and integration
expenses, share option charges, amortisation of intangibles andforeign currency gains
For further information, please contact:
Keywords
Studios (www.keywordsstudios.com)
Andrew Day, Chief Executive Officer
David Broderick, Chief Financial Officer
Numis (Financial Adviser)
Stuart Skinner / Kevin Cruickshank+353 190 22 730

020 7260 1000(Nominated Adviser)
James Black / Tom Ballard (CorporateBroker)
MHP Communications (Financial PR)
Katie Hunt / Ollie Hoare020 3128 8100
keywords@mhpc.com

About Keywords Studios (www.keywordsstudios.com)
Keywords Studios is an international technical services provider to theglobal video games industry. Established in 1998, and now with 42
facilities in 20 countries strategically located in Asia, the Americas
and Europe, it provides integrated art creation, software engineering,testing, localisation, audio and customer support services acrossmore than 50 languages and 16 games platforms to a blue-chip clientbase of over 400 clients across the globe. It has a strong market
position, providing services to 23 of the top 25 most prominent games
companies, including Activision Blizzard, Bandai Namco, Bethesda,
Electronic Arts, Konami, Riot Games, Sony, Square Enix, Supercell,
TakeTwo, and Ubisoft. Recent titles worked on include Uncharted 4: A
Thief's End, Call of Duty: WWII, Mortal Combat X, Assassin's Creed
Origins, Battleﬁeld 1, Overwatch, World of Warcraft: Legion,Hearthstone, Clash Royale, and Mobile Strike. Keywords Studios islisted on AIM, the London Stock Exchange regulated market (KWS.L).

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