Keywords is an international technical service provider to the global Video Game Industry with offices in Dublin, Tokyo, Seattle, Montreal and Rome. Working on a worldwide basis, we provide a range of linguistic, testing, and quality control services to Video Game Developers and Publishers alike.

Keywords is focused 100% on the localization and testing of video games. Our experience and dedication to this field allows us to provide our clients with games that connect to their core audience, no matter what language they speak.

With our principal operations hub in Dublin, Keywords works globally. Our business is international in every sense so we are available to clients in North America and Japan just as we are available to those based in Europe. Providing our clients access to us so we can service their needs is tremendously important. There are points of contact ready to speak with our customers during all global business hours.

http://www.keywordsintl.com/en

Broker Forecast - Berenberg issues a broker note on Keywords Studios
BFN
Berenberg today reaffirms its buy investment rating on Keywords Studios (LON:KWS) and raised its price target to 2150p (from 2060p).

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Broker Forecasts data provided by www.sharesmagazine.co.uk

Half-year Report
RNS
RNS Number : 0470B
Keywords Studios PLC
18 September 2018

18 September 2018

Keywords Studios plc ("Keywords Studios", "the Group")

Half year results for the six months to 30 June 2018

An excellent performance and a strengthened services platform

Keywords Studios, the international technical services provider to the global video games industry, today provides its half year results for the six months to 30 June 2018.

Financial overview:
· Revenue, including contribution from acquisitions, increased by 72% to €110.0m (H1 2017: €63.8m)
o On a constant currency basis, revenue would have been up by 84% to €117.5m
· 2% increase in like for like** revenue; 8.6% increase on a like for like constant currency basis
· Gross profit margin increased to 37.4% (H1 2017: 35.6%)
· Adjusted profit before tax* was up 67% to €16.0m (H1 2017: €9.6m)
· Adjusted earnings per share* were up 53% to 20.1c (H1 2017: 13.2c)
· Net cash of €0.1m (H1 2017: €1.1m; FY 2017: €11.1m) after €10.6m of net cash outlay on acquisitions
· 10% increase in interim dividend to 0.53p per share (H1 2017: 0.48p)

Operational overview:
o VMC has been successfully integrated with our margin improvement plan ahead of schedule
o Continued to invest in the development of the Group:
o Expansion of studios in response to demand including investing €3.8m in new or expanded facilities in Montreal, Dublin, London, Liverpool, Madrid, Katowice, New Delhi, Chengdu, Manila and Tokyo, providing a total of 660 additional workstations
o Acquisition of Maximal, adding further scale to our Audio capabilities in South American markets, in March
o Acquisition of Cord and Laced, which extended our Audio offering in to the provision of composed or licenced music for use in games and other media, in April
o Acquisition of Fire Without Smoke, which provides a suite of marketing services to game publishers and developers, in May
o Acquisition of Blindlight, which provides Hollywood based talent resources and services, in June
o Launch of Keywords Ventures, to invest in innovative technologies and services that can leverage Keywords' reach in the games market and that will benefit clients; first investment in automated app testing solution for GDPR compliance, AppSec Test, in June
o New revolving credit facility secured for up to €105m
o Further cross selling progression with 19% increase in clients using three or more services to 100 (H1 2017: 84)

Post period end, current trading and outlook:
· Further investment in operational capacity and Group infrastructure to support growth in future periods:
· Announced separately today:
o Acquisition of TrailerFarm, a Brighton, UK based creator of video game trailers for a total consideration of up to £2m
o. Hiring of a leading Hollywood based sound effects team of 7 people, SoundLab, bringing world-class audio design and production services for games, film and TV to our Audio service line
· Acquisition of Studio Gobo and Electric Square, both in Brighton, UK, enhancing our game development services in both scale and expertise, in August
· Acquisition of Tokyo, Japan based Yokozuna Data, developer of machine learning and AI technology bringing industry leading capabilities in video game analytics for live operations, in July
· Acquisition of Snowed In, in July adding strength to our Engineering service line and access to talent in Ottawa, Canada.
· Further strengthened the senior management team with the appointment of a Chief Commercial Officer, Chief Marketing Officer, Global Operations Director and Engineering Service Line Director, all newly created positions

Outlook
· Selectively reviewing a strong acquisition pipeline
· Trading in the second half has been good and we expect to meet market expectations for the full year before the positive impact of any additional acquisitions

* before acquisition and integration expenses of €2m (H1 2017: €0.5m), share option charges of €0.8m (H1 2017: €0.4m), amortisation of intangibles of €3.1m (H1 2017: €1.2m) and foreign currency gain/(loss) of €0.8m (H1 2017: (€1.96m))
** calculated on the basis that the H1 2017 comparative includes all of the 2017 and 2018 acquisitions as if they had been owned for the same period in 2017 as they have been in 2018.

Andrew Day, Chief Executive of Keywords Studios, commented:

"In a period in which the gaming phenomenon, Fortnite, had a significant impact on the games market and in which the US dollar which represented 54% of our revenues declined by 12% compared to the same period in 2017, we have none the less delivered yet another strong set of results for the first six months of 2018 as we continue to deepen and broaden the business for the future.

"Our continued organic investment and acquisitions have extended our geographical reach, added further scale to our existing service lines, and broadened the range of capabilities we can offer our clients to include co-development, analytics, music, marketing services and sound effects.

"We are particularly pleased with our performance in respect of acquisitions and their subsequent integration. Our largest acquisition to date, VMC, which was absorbed into the Group with a track record of reducing revenues and an operating margin of 9.1% in October 2017, has been fully integrated and the resulting synergies are already significantly enhancing operating margins as can be seen by the overall group profit margin of 14.5%. We are confident of being able to return it to revenue growth in the near to medium term.

"The games market is starting to focus on the prospect of games being streamed and played live across all connected devices. Advances in technology and increases in internet bandwidth including the forthcoming 5G mobile networks and the resultant reduction in latency of communications could enable streaming of games for the first time which we believe will drive record demand for gaming content. We are excited by the prospect of assisting the industry in creating and repurposing content for this new medium over the coming years and Keywords is already working on interactive streaming content and porting games to upcoming streaming platforms.

"Our focus on organic and acquisition led growth is being maintained and we continue to invest in additional talent and better facilities as well as in acquisitions of synergistic businesses as we build our global games services platform and lead the consolidation of a highly-fragmented market."

A presentation of the half year results will be made to analysts later this morning at MHP's offices. There will also be a live, listen only webcast of the presentation and a recording will be made available via www.keywordsstudios.com. To register for access, please contact Charles Hirst at MHP Communications on +44 20 3128 8193 or email keywords@mhpc.com.

Acquisition
RNS
RNS Number : 0409B
Keywords Studios PLC
18 September 2018

18 September 2018

Keywords Studios plc ("Keywords", "the Group")

Leading sound production team, known as Sound Lab, joins Keywords Studios in Los Angeles

and

Acquisition of The TrailerFarm Ltd ("TrailerFarm") in Brighton to complement the Group's marketing services and games trailer production capability


Keywords Studios, the international services provider to the global video games industry, today announces that renowned Hollywood sound designer, Scott Gershin and his Sound Lab team in Burbank, California, have joined Keywords Studios from Technicolor. Sound Lab at Keywords is a leader in the video game and immersive entertainment market (VR / AR) and provides sound services for movies and streaming (over the top - OTT content). In support of the Sound Lab team joining The Group, Keywords is investing in new, state of the art production equipment to fit out a sound design studio in Burbank already occupied by Sound Lab.

With more than 30 years' experience in sound design, Scott Gershin and his team have been credited on an extensive list of bestselling video games including the likes of Final Fantasy XV, Resident Evil, Gears of War, Fable and Epic Mickey, and worked on projects for Riot, Capcom, Activision, Infinity Ward, Amazon and a host of others.

At Keywords, Gershin will also be continuing his work in the film and broadcast industry having worked on such titles as Nightcrawler, Pacific Rim, American Beauty, Hellboy 2, Chronicles of Riddick, Team America, Blade II, The Strain, Shrek and The Book of Life. Joining Keywords alongside Gershin is a team of five passionate audio professionals, sound designers, mixers, musicians and creative managers.

Separately, Keywords is also announcing the acquisition of The TrailerFarm Ltd. Based in Brighton, UK, TrailerFarm produces trailers for the marketing and support of video games, and will complement Keywords' recently acquired Fire Without Smoke marketing services business in producing high impact, cost-effective trailers for a broad range of games.

Founded in 2011 by brothers Tony and Dan Porter, TrailerFarm's team of 12 creative directors, video game artists, project managers and motion graphic designers produce trailers for both mobile and console/PC games for use in game launches and ongoing promotional events.

In the year ending 30 June 2018, TrailerFarm posted revenues of £1.0m and adjusted EBITDA of £165k. Under the terms of the acquisition, Keywords is paying a total consideration of up to £2m. The initial consideration of £1.0m is being satisfied by the payment of £790k in cash and 11,070 new ordinary shares in Keywords, which are to be issued to the sellers on the first anniversary of the acquisition. The remaining consideration of up to £1m is payable in cash, subject to the increase in profit before tax of TrailerFarm over the 12 month period post acquisition.

Andrew Day, CEO of Keywords Studios commented:

"I'm delighted to welcome Scott and his team into the Keywords family. As games become ever more immersive, sound design quality is getting ever closer to that of movies. Our new Sound Lab studio, created around Scott and his team, will be integrated within the Keywords Audio Services Line and will benefit accordingly from our global network of studios and our extensive video game client base around the world.

"Our presence in audio services continues to grow. In Los Angeles, with our long-established voice-over studio in Burbank, the recently acquired Blindlight LLC, which focuses on Hollywood voice-over production and writing services, and our specialist music services through recent Keywords joiners, Cord and Laced. The sound design services we are adding with this investment help round out the full suite of audio services we are now able to offer to clients in interactive and linear media.

"Trailers are the primary marketing asset for video games and Keywords' ability to produce trailers across the spectrum from cost effective small productions to the very high end trailers for AAA games positions us well in this interesting segment of the games services market. Bringing together art, animation, sound effect, music and voiced audio, trailers can further act as a showcase for our range of services and creative abilities."

Ends

8 Nov
Berenberg
N/A
Buy