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

Shares - China's decision to lift a ban on gaming consoles has huge significance for video games translation specialist Keywords Studios (KWS:AIM). It should result in a wealth of English - language games being adapted for sale in the country, A domestic games development market is also expected to flourish, triggering the need for translation from Chinese into a range of Eastern and Western languages. The ban was lifted on 8 Jan. Keywords already has proven skills in the Chinese market, meaning it should be well placed to capitalise on the new business opportunity.

Acquisition

RNS


RNS Number : 7762X

Keywords Studios PLC

16 January 2014




16 January 2014


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


Acquisition of Liquid Violet Ltd


Keywords Studios, the international technical services provider to the global video games industry, today announces the acquisition of Liquid Violet Ltd (Liquid Violet), a video games voice production services company.



The acquisition is in line with Keywords Studios' strategy of growing both organically and by acquisition to extend the Group's client base, market penetration or service lines, where the Group can use its existing expertise, multi-service platform, scale and global reach to generate synergies.



Under the terms of the acquisition, which will be immediately earnings enhancing, Keywords Studios has paid an initial cash consideration of £300,000 with a further £1.3 million payable in cash contingent upon Liquid Violet achieving certain financial targets in the three years to 31 March 2016.



Liquid Violet specialises in the management, on behalf of major video game publishers including Blizzard Entertainment and 2K, of the pre production and post production stages of localised voice-over assets for incorporation in the finished games. Formed in 2011 and based in London, it has established a growing base of blue-chip clients in the games industry due to its strong reputation for efficiently delivering large volumes of high quality audio assets, working with a multitude of audio studios across the globe.



Andrew Day, Chief Executive of Keywords Studios, commented:

"We are pleased to have acquired Liquid Violet, which occupies an attractive niche, with healthy margins and good growth prospects and which will extend the Group's audio services offering to its global customer base. We expect the use of audio in video games to grow thanks to the much enhanced capabilities of the new generation of consoles that were launched in November 2013 and as the capabilities of mobile devices continue to develop.

"We look forward to assisting the growth of Liquid Violet, as part of the broader based Group, and to exploring the cross selling opportunities with the new client relationships that Liquid Violet brings to the Group.

"We believe that there is a clear opportunity for Keywords to build on its existing relationships with many of the major games companies by extending its service offering or geographical coverage within the highly fragmented games services industry, both organically and by acquisition, and we continue to make good progress in reviewing a number of high quality acquisition opportunities."

Acquisition

RNS


RNS Number : 2881A

Keywords Studios PLC

18 February 2014






18 February 2014







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



Acquisition of Babel Media Ltd

Operational synergies and enlarged global presence



Keywords Studios, the international technical services provider to the global video games industry, today announces the acquisition of Babel Media Ltd ("Babel"), a leading provider of outsourced video games services with operations in the UK, Canada and India, from Quatrro Global Services Pvt. Ltd. and The D. E. Shaw Group.



The acquisition is in line with Keywords Studios' strategy of growing both organically and by acquisition to extend the Group's client base, market penetration or service lines, where the Group can use its existing expertise, multi-service platform, scale and global reach to generate synergies.



Under the terms of the acquisition, which is expected to be materially earnings enhancing in the first year, Keywords Studios is paying the sellers and settling the financing obligations of Babel to a total of £5,369,000. This is being satisfied as to £2,215,000 by the issue of 1,516,944 new shares in Keywords Studios at a price of 145.994 pence per share (being the volume weighted average price over the preceding 5 trading days) and cash amounts to settle indebtedness to a total of £3,154,000.



Founded in 1999, Babel Media is one of the most recognised technical services brands in the video games industry. The unaudited management accounts for the 10 months to 31 January 2014 show Babel has achieved revenues of £6.4m and EBITDA of £0.4m; it has net assets of £1.44m after adjusting for the loans being repaid.



Babel's strengths are in Localisation Testing, Functional Testing and the Translation of video games for leading video game publishers and developers. Combining the two businesses will significantly broaden Keywords' function testing capability (which accounted for less than 3% of Group turnover in the first half of the current financial year) whilst providing substantial operational synergies with Keywords existing Localisation Testing and Translation activities and extending the number of client relationships across the combined Group. The business will be integrated into Keywordsduring the course of 2014 and, by bringing Keywords' operational efficiency to Babel's strong brand, we anticipate the business delivering significant margin improvement as part of the wider group.



Andrew Day, Chief Executive of Keywords Studios, commented:

"The acquisition of Babel brings together two of the leading video games testing and localisation providers, firmly establishing Keywords as the market leader in its field, with operations across Dublin, Rome, Montreal, Seattle, Tokyo and now in New Delhi.

"The acquisition will not only generate considerable cost synergies but it will provide greater scale and breadth of services for our combined interactive media client base globally. Adding India to our global locations, with its significant cost advantages, is another important step in both enhancing Group margins and enabling our clients and prospects to benefit from a range of services differentiated by cost, flexibility, time zone, scalability and languages offered. "

"We look forward to welcoming Babel's highly talented employees to the fast growing Keywords group and to continuing to build upon its strong brand with Keywords' approach to focusing on the efficient delivery of high quality services to our clients."



Raman Roy, Chairman and CEO of Quatrro, commented:



"This divesture is a win-win for both companies. While it allows us to focus on our core business lines, it will also provide Babel Media with the right platform for the next phase of its growth. I would like to wish the Babel and Keywords Studios teams the very best for the future."

Keywords Studios: Numis ups target price to 180p retaining its buy recommendation

New Delivery Hub in South East Asia

RNS


RNS Number : 8033D

Keywords Studios PLC

02 April 2014






02 April 2014







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



Keywords Studios establishes a Full Service Delivery Hub for South East Asia





Keywords Studios, the international technical services provider to the global video games industry, today announced the establishment of a new subsidiary company Keywords International Pte. Ltd ("KW Singapore"). This accelerates the Group's plans for a services fulfilment centre in Singapore as an operational hub for the growing games market in South East Asia.



As part of an existing master services agreement with EA Swiss Sàrl (EA), Keywords Singapore will now also provide a range of localisation, testing and audio services for South East Asian languages effective immediately. KW Singapore will support both the new business and existing work for South East Asian languages conducted elsewhere by Keywords.



Andrew Day, Chief Executive of Keywords Studios, commented:

"We are excited about establishing a new Keywords subsidiary in Singapore. It is an important strategic addition to our Asian operations, which include our successful Tokyo operations which we grew organically over 4 years and our Babel branded, New Delhi studio, acquired last month.

Keywords expects the new studio to be at the centre of the fulfilment of our existing Thai, Indonesian, Malay and simplified Chinese business. This, together with already targeted new business opportunities with existing clients, gives us confidence that the start up studio will be profitable in its first year of operation.

The subsidiary will be staffed through key staff hires and through intercompany transfers. This new studio, together with a high calibre team, positions Keywords solidly for further organic and acquisitive growth in the fast developing Asian markets."



Ends

Final Results

RNS


RNS Number : 2733E

Keywords Studios PLC

08 April 2014






April 8, 2014





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



Maiden final results for the year to December 31, 2013



Strong revenue growth and significant expansion both organically and by acquisition



Keywords Studios, the international technical services provider to the global video games industry, today provides its audited full year results for the year to December 31, 2013 1.



Operational overview:

· Won Blizzard Entertainment, Disney, Kixeye, King, Pretty Simple Games, and Supercell as new clients and maintained excellent client retention, underpinning market share gains

· Invested in increased Localisation and Testing capacity in Dublin, Seattle, Montreal and Tokyo

· Created Managed Services operation for major client in Seattle



Financial overview:

· Group revenue increased by 14% to €16.4m (2012: €14.3m)

· Adjusted profit before tax2of €2.5m (2012: €2.9m)

· Statutory profit before tax of €1.2m (2012: €2.7m)

· Adjusted basic earnings per share3of 5.28c (2012: 7.30c); basic earnings per share of 2.14c

· Net cash of €15.3mincluding net IPO proceeds of €10.2m (2012: €3.9m)

· Operating cash flow up to €2.3m (2012: €1.9m)

· Maiden final dividend of 0.67p, giving a total dividend for the year of 1.00p per share



Post Period End

Acquired Liquid Violet and Babel Media in early 2014; integration and performance in line with expectations

· Established a new subsidiary in Singapore, from which Keywords is providing localisation, testing and audio services for South East Asian languages to Electronic Arts and other clients

· Made a solid start to the year, in line with management's expectations



1On July 8, 2013, prior to Keywords Studios plc's Admission to AIM on July 12, 2013, it acquired 100% of the Keywords group of companies, through a share for share exchange with the shareholders of Keywords International Limited. As a result, results for Keywords Studio plc would not provide a meaningful picture of the performance of the consolidated Group for the year to December 31, 2013. We have, therefore, prepared the consolidated results for the year to December 31, 2013, as if the Group had been in existence throughout the entire period, whilst the comparative results and balances comprise the consolidated results and balances of Keywords International Limited

2Profit before tax before IPO expenses, share option charges and foreign currency movements

3 Basic earnings per share before IPO expenses. Calculated using weighted average number of shares for the year of 35.8m shares



Andrew Day, Chief Executive of Keywords Studios, commented:



"Despite the uncertainty in the industry as it transitions to the new generation of consoles, we delivered strong revenue growth and we have considerably strengthened our market position, geographical spread and service offering through a combination of market share gains, organic investment and recent acquisitions. This leaves us well placed to take advantage of industry growth and structural change, which we expect to lead to an increased use of outsourced services, in the current year.



"2014 is expected to be a year of healthy activity for the games industry as it supports the fast growing new generation hardware and the existing 250m installed console base, as well as the significant growth being seen in smartphone gaming.



"We, therefore, look forward to making good progress as we realise the benefits of increased scale, of improving utilisation across our business, of the acquisitions made following the year end and of our 2013 client wins."

Keywords Studios expects a year of “healthy activity” in the video games industry

By Jamie Ashcroft

April 08 2014, 9:03am
The Dublin-based company, which provides translation, localisation and testing services as part of the computer game development process
The Dublin-based company, which provides translation, localisation and testing services as part of the computer game development process


Keywords Studios (LON:KWS) is expecting 2014 to be a year of “healthy activity” in the video games industry, as it supports the fast growing market created by the new generation of games consoles.

The company said it has made a solid start to the current year and it is performing in line with management expectations.

Disruption coming from the launch of Microsoft’s Xbox One and Sony’s Playstation 4 had, however, impacted negatively last year due to some projects being put on hold as game developers focussed on a handful of launch titles.

Nevertheless, the Dublin-based company, which provides translation, localisation and testing services as part of the computer game development process, worked on over half of all the titles launched for the new consoles.

In this morning’s results, for 2013, the company reported group revenue growth of 14% to €16.4mln and operating cash flow increased to €2.3mln, from €1.9m in the year before. Adjusted pre-tax profit was down to €2.5mln, from €2.9mln.

It ended the year with €15.3mln of cash, including €10.2mln proceeds from July’s AIM market float. And it announced a maiden final dividend of 0.67p per share, giving a total dividend of 1p for the entire year.

Andrew Day, chief executive, said: "Despite the uncertainty in the industry as it transitions to the new generation of consoles, we delivered strong revenue growth and we have considerably strengthened our market position, geographical spread and service offering through a combination of market share gains, organic investment and recent acquisitions.

“This leaves us well placed to take advantage of industry growth and structural change, which we expect to lead to an increased use of outsourced services, in the current year.”

The acquisitive service provider joined the AIM market as part of a strategy to consolidate what it sees as a fractured industry sub-sector.

Since joining AIM it has already made two acquisitions Liquid Violet and Babel Media, both in early 2014, and earlier this month it said it was opening a new operation in Singapore.

"We, therefore, look forward to making good progress as we realise the benefits of increased scale, of improving utilisation across our business, of the acquisitions made following the year end and of our 2013 client wins," Day adds.

Acquisition & Placing

a href="http://www.moneyam.com/action/news/showArticle?id=4807424">http://www.moneyam.com/action/news/showArticle?id=4807424

Keywords Studios: Numis raises target price from 180p to 205p and reiterates a buy recommendation

Director/PDMR Shareholding

RNS


RNS Number : 5962H

Keywords Studios PLC

20 May 2014

Keywords Studios plc

("the Company"

Director Shareholding

Keywords Studios plc, the international technical services provider to the global video games industry, hereby notifies the market that, on 19 May 2014, Ross Graham, an independent non-executive director and chairman of the Company, purchased 30,490 shares in the Company on the London Stock Exchange at a price of 164 pence per share. This purchase results in Ross Graham being interested in a total of 30,490 ordinary shares in the Company, representing 0.065% of the 47,105,007 ordinary shares in the Company currently in issue.

AGM Statement and Director Appointment

RNS


RNS Number : 3240K

Keywords Studios PLC

24 June 2014






24 June 2014







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



AGM Statement & Board Change



Keywords Studios, the international technical services provider to the global video games industry, is today holding its inaugural AGM at which, Ross Graham, Chairman, will make the following remarks:



The Group continues to make good progress in line with its stated strategy of growing both organically and by acquisition to extend the Group's client base, market penetration and service lines, where the Group can use its existing expertise, multi-service platform, scale and global reach to become the leader in providing outsourced services to the video games industry.



Since the Group's admission to AIM in July 2013, we have acquired Liquid Violet, Babel Media and Binari Sonori; all of which have been positively received amongst the respective customers of Keywords and the acquired businesses. The integration of these acquisitions is proceeding well.



We have also been successful in line with our strategy of securing outsourcing arrangements with major clients; in April 2014 we announced a Singapore based outsourcing arrangement with Electronic Arts thereby demonstrating the attraction, to large developers and publishers of video games, of a high quality independent global provider of technical services.



The Group continues to review a healthy pipeline of acquisition opportunities with a view to selectively acquiring attractive opportunities to extend its range of services, in line with the stated strategy.



Change of Group Finance Director



After two years with the Group, which included the Group's successful flotation on AIM and the Group's first acquisitions, David O'Connor is leaving to pursue other opportunities. David will continue with the Group until 31 July, to ensure a smooth handover of roles. We would like to thank him for his contribution over this very exciting period in our development. Andrew Lawton (ACA, BEng, aged 51), who has already spent some time in the Group as a consultant will be appointed to the role of Group Finance Director, on 1 July 2014. Andrew was previously CFO of Sony Computer Entertainment Europe where he joined at the start of the PlayStation business in 1994 and supported its growth to over €3bn and 1000 employees. We extend a warm welcome to Andrew as we continue to develop the Keywords Group through organic and acquisition led growth.



In relation to Andrew Lawton's appointment to the board, there is no further information required to be disclosed pursuant to paragraph (g) of Schedule 2 of the AIM Rules for Companies.



Summary and Outlook



Revenue for the first five months of the year increased to €10.1m (2013: €5.3m), including the revenues from the acquisitions since their incorporation into the Group. As previously stated, these acquisitions have historically achieved lower margins than Keywords, partly due to a different mix of services but also due to the more rigorous focus Keywords places on lean and agile operations. We anticipate that the benefits of the roll out of Keywords' approach to operational efficiency will be realised incrementally over the course of the respective earn-out periods.



The Group continues to grow market share and win new clients. We typically experience lower levels of activity in the first half of the year compared to the second half, but the seasonal ramp up has begun with encouraging signs of activity from our key clients.



The board anticipates a strong trading performance for the year ending December 2014 albeit there will likely be a €300,000 impact from the reductions to Multi Media Tax Credit in Montreal announced on June 4th by the newly elected government of Quebec Province.



Overall, we look forward to enhancing the returns from our recent acquisitions, and continuing to grow our client base and range of titles, whilst selectively acquiring businesses that will extend our service offering to our global client base.

Keyword Studios - Andrew Day, CEO, discusses the H1 2014 highlights

Click here

Acquisition

RNS


RNS Number : 9379T

Keywords Studios PLC

10 October 2014






10 October 2014







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



Acquisition of Lakshya Digital Pvt. Ltd

Services extension into outsourced art asset creation and operational synergies



Keywords Studios, the international technical services provider to the global video games industry, today announces the acquisition of Lakshya Digital Pvt. Ltd ("Lakshya"), a leading provider of outsourced art services for the video games industry internationally with centres of operation in New Delhi and Pune, India, for a total consideration of $4.0m.



The acquisition is in line with Keywords Studios' strategy of growing both organically and by acquisition to extend the Group's client base, market penetration or service lines, where the Group can use its existing expertise, multi-service platform, scale and global reach to generate synergies.



Founded in 2004 and employing 270 people, most of whom are highly trained artists, Lakshya is one of the most recognised brands in the large and highly fragmented market for the provision of outsourced art services to the video games industry. It provides Keywords Studios an entry point into this fast growing market, where the demand for art assets (such as characters, vehicles, landscapes, cityscapes, space ships and weapons) is growing in line with the increase in game content as games on consoles, social media, PCs, tablets and smart phones become more complex and richer in their definition.



Under the terms of the acquisition, which is expected to be earnings enhancing in the first full year of ownership, Keywords Studios has agreed to pay the sellers of Lakshya a total of $4.0m for 100% of Lakshya, being satisfied in two tranches. 91% of the shares of Lakshya have been acquired for $3.0m in cash. The remaining 9% will be acquired for a total of $1.0m in October 2015, of which up to $400,000 at sole discretion of Keywords will be used to subscribe for shares in Keywords Studios at a price determined by the volume weighted average price per share in the 5 days prior to completion of this second stage. Two of the sellers will each be granted options over 450,000 shares of Keywords at the prevailing market price.



Lakshya's audited accounts for the year to 31 March 2014 show it achieved revenues of INR 249m ($4.05m); it had net assets of INR 78m ($1.3m) including net debt of INR 9.1m ($0.15m). Underlying PBT after adjusting for a non-continuing activity amounted to INR 23m ($0.37m).



Lakshya's well-established position with game development studios, particularly in the US and Japan, will open up new sales channels for the Keywords group where the focus is primarily on video game publishers. The business development team of Lakshya will be integrated into the Keywords sales force to further facilitate cross selling between the Group's extended range of services.



Andrew Day, Chief Executive of Keywords Studios, commented:

"By providing us with an entry point into the large, growing yet fragmented art outsourcing market, the acquisition of Lakshya provides Keywords with additional growth opportunities as well as cost and revenue synergies. It will enable the Group to have earlier involvement in the development cycle of video games titles, it will enable us to share one facility at Gurgaon (New Delhi) where both Lakshya and Babel Media are located and it will provide us with a base from which to expand further in the art outsourcing market."

"We look forward to welcoming Lakshya's highly talented employees to the fast growing Keywords group and to continuing to build upon its strong brand, leveraging Keywords' unparalleled geographic footprint, client relationships and financial strength. Amalgamating Keywords and Lakshya business development resources will further strengthen the breadth of our offering, while ensuring that we take full advantage of opportunities to introduce all clients to the full range of services available from Keywords studios around the world."

10 Oct Numis 200.00 Buy

SMALL CAP IDEAS: Providing services for video games such as Assassin's Creed proves lucrative for Keyword Studios

By Ian Lyall, Proactive Investors

Published: 14:17, 1 December 2014 | Updated: 15:14, 1 December 2014


Here’s a little nugget of information film buffs already probably know - the most expensive big screen epic of all time, weighing in at $300million, is the third in the Pirates of the Caribbean series.

You’d have to sell a lot of seats and popcorn to cover those costs.

But mind boggling as that figure is, it still falls $200million short of covering the development and marketing budget for Destiny, the latest blockbuster video game from Activsion.

Here’s the thing - and for all the oldies out there this will come as a huge shock: the games industry, worth a staggering $65billion, is now bigger than Hollywood.



Gae play: Keywords offers a range of ‘creative translation services’ such as local language text and audio for games such as Assassin's Creed (pictured) as well as providing functional testing of the latest release







+1
Gae play: Keywords offers a range of ‘creative translation services’ such as local language text and audio for games such as Assassin's Creed (pictured) as well as providing functional testing of the latest release

So, hitching your trailer to this juggernaut represents a great business model, particularly if you can withstand its periodic troughs.

Keywords Studios, which listed on AIM last July, has done just that. But rather than developing the latest best seller, it provides services that are integral to making hits such as the likes of Assassin’s Creed, Forza, Farmville and Candy Crush international best sellers.

Keywords offers a range of ‘creative translation services’ such as local language text and audio for games as well as providing functional testing of the latest release.

The acquisition of Lakshya Digital recently took Keywords into the business of art creation too. And that’s the model - widening the offering while cementing its position in the markets where it already thrives.



The group works with 18 of the top 25 names in the game business, including Microsoft, Sony and NAMCO Bandai.

It’s an industry that’s growing 8-9 per cent annually, while the proliferation of games via smartphones hits Keywords’ sweet spot.

'Video games used to be defined as things that went out on a console, or PC. The language set was fairly limited, perhaps four or eight languages,' chief executive Andrew Day told Proactive Investors.

'But with smartphones, the language mix is 28 regularly and 40 plus sometimes. The other driver is games as a service rather than a retail product. So, they now exist in live mode, so you have packs and expansions.

'There is always some more content to buy, and we are all about content.'

The company, founded in 1998, now has 11 offices in nine countries employing 600 staff. The workforce rises to 1,500 when demand is higher and that doesn’t count freelancers.


KEYWORD IN NUMBERS


Value: £67mln

Current price: 140p

Year-high: 167p

Low: 98p

AIM ticker: KWS
.
This year Keywords’ revenues are predicted to be around €35million, while analysts expect pre-tax profits of €5million. Those profits will rise to €6.7million by the end of 2015 and then to €7.6million 12 months later, according to City broker Numis.

The group is a rarity on AIM for being a dividend payer, while net cash of around €9.6million means that combined with stock and borrowing it could afford to spend €20million on acquisitions.

Close inspection of Keyword's profit and loss account reveals gross margins are in the order of 33-35 per cent, giving a net margin of up to 15 per cent.

The customers, meanwhile, are fairly sticky. 'Most of our revenues are recurring if not always contracted,' said Day.

'So, they come from major clients that partner with us to give us 60-80 per cent of their requirements year on year.

'So, we are not hunting for individual orders. We are there with master agreements in place.'

Listed at 123p, Keyword shares hit 167p in June, but have since drifted down and are now changing hands for 140p each.

At that price the stock is trading on 20 times current-year earnings, falling to a more reasonable 16 times 2015 EPS.

'We think this remains attractive for a business with robust underlying growth and profitability,' the company’s broker Numis said recently. It thinks the stock is worth 200p, representing a 43 per cent gain if it hits this target.

Day said: 'The new consoles are now going to more territories than the previously. The target audience has changed. It used to be predominantly males [playing video games]; but that isn’t the case now. Over 50 per cent of gamers are women.

'Smartphones, meanwhile, are a very explosive multiplier for where games go to. So, the fundamentals of the industry are good

Acquisition and Trading Update
RNS
RNS Number : 4761B
Keywords Studios PLC
07 January 2015

7 January 2015







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



Acquisition of Alchemic Dream Inc

Services extension into Customer Support for video games

and

Acquisition of Reverb Localização - Preparação de Documentos Ltda.

Geographic Expansion in South America

and

Trading Update



Keywords Studios, the international technical services provider to the global video games industry, today announces the acquisition of Alchemic Dream Inc. ("Alchemic Dream"), a well-established provider of multi-lingual customer support services for the video games industry internationally for a total consideration of up to CAD$1.25m



In addition, Keywords has completed the acquisition of Reverb Localização - Preparação de Documentos Ltda. ("Reverb") for a total cash consideration of up to €300k.



The acquisitions are in line with Keywords Studios' strategy of growing both organically and by acquisition to extend the Group's client base, market penetration or service lines, where the Group can use its existing expertise, multi-service platform, scale and global reach to generate synergies.



Founded in 2001, Alchemic Dream is a well-known brand in the video games industry for cost effective and flexible customer care services. Based in Shawinigan near Montreal, Canada where it employs 38 people, it also works with remote collaborators in 36 countries. The acquisition provides Keywords Studios with an entry point into the fast growing market for community management services, either within the game, in the game forums or within the wider social media channels. The demand for live operations support services designed to ensure players continue to engage with the game for longer is expanding due to the transition from games as a packaged product, sold through traditional retail stores, to games as a service for mobile, online, or console games.



Under the terms of the acquisition, which is expected to be earnings enhancing in the first year of ownership, Keywords Studios has agreed to pay the sellers of Alchemic Dream a maximum total consideration of CAD$1.25m for 100% of Alchemic Dream dependent on certain closing balance sheet related adjustments. The consideration is to be satisfied in cash.



Alchemic Dream's management accounts for the 10 months to 31 October 2014 show the business achieved revenues of CAD $4.33m and profits before tax of CAD $480k. The accounts for the year to 31 December 2013 show it achieved revenues of $3.7m, a loss before tax of $220k and it had net assets of $0.48m including net debt of $0.2m.



Alchemic Dream's know how and expertise in managing communities of gamers for leading online and mobile game operators across all forms of social media, within the games themselves and on the official game forums will be used as a platform from which to develop customer care services throughout the Group internationally.



Reverb was founded in 2012 and is based in Rio de Janeiro. Its small team of 5 employees and its freelance collaborators have established a solid reputation providing localisation and audio management services for Brazilian Portuguese for some leading games including World of Warcraft and Magic the Gathering. This will be Keywords' first office in South America where computer games are growing fast. The market in Latin America is predicted to grow at a compound annual growth rate of 13% from $3bn in 2013 to $5.1bn in 20181.



Trading and Market Update



As anticipated, the second half of the Group's financial year has seen Keywords supporting many game titles where the anticipated release dates fall in the first three months of 2015. We have made good progress with the introduction of Keywords' operational efficiency to our recently acquired businesses and have seen strengthened demand for our higher margin services in the second half. As a result, we expect the outturn for the full year to be in line with expectations.



The games market as a whole continues to develop strongly with the rejuvenation of the console market as some developers refocus on the console game sector and Microsoft and Sony actively solicit independent games developers to develop titles for their new consoles. In particular, we welcome the launch during September of the Xbox One by Microsoft into 28 territories which were omitted from the initial launch in November 2013 and the opening of the Chinese market to the sale of video game consoles for the first time; this will help to drive a proliferation of content and territories and will serve us well as developers seek to maximise revenues by localising games to increase their target audiences.



Andrew Day, Chief Executive of Keywords Studios, commented:

"The acquisition of Alchemic Dream provides us with an important point of entry into the increasingly important market of customer care services for the video games industry. Our ability to offer a full range of gamer support services by leveraging our highly committed pool of 1,500 game specialists spread across 12 locations and 3 continents will be a huge asset. The systems, knowledge and experience of Alchemic Dream will allow us to greatly accelerate our otherwise organic growth in this arena.

"Adding customer care and community management to our offering allows us to provide services to our clients through all stages of the video game life cycle from conception through to live operations. With changing monetisation models which rely on keeping players engaged in the game for as long as possible high quality customer care has become an essential part of the game experience. Dealing in a professional manner and in the language of video games with varied issues such as helping players to reach the next level, intervening in cases of online bullying, understanding and resolving in-game bugs, representing the game operator on social media platforms is a service which protects the clients' brands and adds value through increased consumer spend.

"We are also pleased to be announcing our first investment in the fast developing game economy in Brazil. Brazilian Portuguese has risen to take its place in our top 5 languages alongside the more established languages of French, Spanish, German and Italian. The acquisition of Reverb provides us with a small but high quality foothold in this important growth market and we expect to be able grow our revenues and improve our margins for this language as a result.

"We warmly welcome our new colleagues at Alchemic Dream and Reverb to the fast growing Keywords group and look forward to working with both businesses to integrate them fully into the Group to strengthen and broaden the services we can offer to our clients globally."

Ends

Final Results
RNS
RNS Number : 0861K
Keywords Studios PLC
14 April 2015



14 April 2015







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



Full year results for the year to 31 December 2014



Transformational growth



Keywords Studios, the international technical services provider to the global video games industry, today provides its full year results for the year to 31 December 2014.



Financial highlights:



A strong financial performance driven by organic and acquisitive growth



· Group revenue increased by 130% to €37.3m (2013: €16.2m)

· Adjusted profit before tax* increased by 104% to €5.1m (2013: €2.5m)

· Adjusted basic earnings per share* up by 48% to 8.54c (2013: 5.76c)

· Net cash of €11.0m (2013: €15.3m), after €8.9m net cash consideration for acquisitions, €3.0m repayment in Babel Media borrowings upon acquisition, €1.5m costs of acquisitions and integration expenses, and €7.3m (net of expenses) raised in a Placing

· 10% increase in total dividend to 1.10p per share (2013: 1.00p)



*before acquisition and integration expenses of €1.5m (2013: nil), IPO expenses of nil (2013: €1.12m), share option charges of €0.2m (2013: €0.1m), amortisation of intangibles of €0.5m (2013: nil) and foreign currency gains of €0.5m (2013: losses of €0.1m).



Operational overview:



The only international provider of the full range of outsourced services



· Strong organic growth; revenues up 23% excluding all acquisitions:

· Continued to gain market share adding clients like Ankama, Bioware, Carbine, Frontier Developments, Nexon and Tencent

· Invested in new Singapore operation to support Electronic Arts' move to outsourced services in South East Asia

· Significantly extended service capabilities and geographical reach through four acquisitions:

· Liquid Violet, acquired in January 2014, extended our audio services offering

· Babel Media, the only other full service provider in the industry, was acquired in February 2014, giving Keywords good exposure to Functional Testing and a presence in India

· Binari Sonori, acquired in May 2014, further strengthened our audio and localisation services, giving the Group a presence in Milan and Los Angeles

· Lakshya Digital, acquired in October 2014, provided an entry into art outsourcing and giving Keywords visibility further up the game development supply chain

· Delivered operational synergies in Montreal and in New Delhi through co-locating production facilities with those acquired








Post period end / current trading:



· Acquired Alchemic Dream and Reverb in January 2015, providing an entry into customer care services and a presence in Rio de Janeiro, respectively

· Opened an office in Barcelona in January 2015

· Trading in the first 3 months in line with our expectations



Andrew Day, Chief Executive of Keywords Studios, commented:



"2014 was a significant year in the development of Keywords: in addition to delivering organic growth of over 20%, the effect of the six acquisitions made during 2014 and early 2015 has been to strengthen our leading market position in localisation and testing, to provide scale to our audio services offering and to extend our range of services upstream to art creation and downstream to customer support.



"Those acquisitions are integrating well and we feel confident that the synergies already experienced between the business units will continue to build through 2015 and beyond, as we continue to identify and convert cross selling opportunities and leverage the expanded pool of talent across the Group.



"The games market has gone through a transitional period over the past two years, but with the installed base for the new generation of consoles having reached what many believe to be the tipping point following the 2014 holiday season, 2015 is expected to be the first solid, post transition year in the console game sector and we are looking forward to a return to more normal trading patterns in this segment as a result. Moreover, our business in the high growth mobile games market segment is going from strength to strength having built up strong relationships with many publishers including Supercell, King, Electronic Arts, glu, Machine Zone, Zynga and Kabam all of whom are listed in the top 10 mobile games developers by Pocket Gamer.biz (March 2014)



"As a market leader with a strong financial position we are well placed to deliver on the potential for high margin growth we see in our growing markets, both traditional and emerging. We expect to benefit in 2015 from a more settled console games market, the full year effects of acquisitions made during 2014 and in early 2015 and continued growth both organically and through additional selective acquisitions particularly in newer services lines such as art outsourcing, as we further consolidate our market leadership. We, therefore, look forward with confidence to making further progress as we move through the current year and beyond."

Keywords Studios is mobilising

By John Harrington

April 14 2015, 2:58pm
With the increased popularity of smartphones over the last couple of years, especially in Asia, mobile gaming is really taking off



Computer gaming services provider Keywords Studios’ (LON:KWS) kept its focus on the core business last year, even as it integrated new acquisitions.

Organic growth of more than 20% was augmented by contributions from a clutch of acquired companies in 2014.

The top line grew by 130% to €37.3mln from €16.2mln in 2013, while adjusted profit before tax doubled to €5.1mln from €2.5mln.

Revenue was ahead of house broker Numis Securities’ estimate of €35.5mln, while profits were bang in line.

Speaking to Proactive Investors, chief executive Andrew Day said the underlying growth rate is higher still, as the results do not factor in a full-year’s contribution from recently acquired companies.

The group, which provides language, testing and localisation services to some of the game industry’s top developers, including Ubisoft, Zynga, Electronic Arts and Konami, has made “a good start to the current year,” Day told investors, and is well-placed to delivery on the potential for high margin growth that it sees in its expanding markets.

The company may be operating in a specialised niche, but the market it services is already bigger than the US film industry, and is growing at 8% per annum, while the content side – which is the part Keywords services – is growing even faster than that, Day observed. Numis suggested the group’s market is growing at 10% a year.

“We expect to benefit in 2015 from a more settled console games market, the full year effects of acquisitions made during 2014 and continued growth both organically and through additional selective acquisitions, as we further consolidate our market leadership,” Day said in the results statement.

The group is growing its share in the fast-expanding mobile and social media gaming space, and according to Day it counts seven of the top 10 mobile gaming companies on its customer list.

With the increased popularity of smartphones over the last couple of years, especially in Asia, mobile gaming is really taking off and the games are becoming more polished, which is increasing demand for Keywords’ services, Day asserted.

“Increasingly, we are becoming to the go-to company for this sort of work, as the development cycle quickens and higher resolution art gets incorporated into these sorts of games,” Day explained, adding that around 30% of the company’s business comes from the mobile and social media space.

The group ended the year with net cash of €11.0mln, down from €15.3mln at the end of 2014, after spending €8.9mln (net) on acquisitions and receiving €3.7mln (net) from a share placing.

"Those acquisitions are integrating well and we feel confident that the synergies already experienced between the business units will continue to build through 2015 and beyond, as we continue to identify and convert cross selling opportunities and leverage the expanded pool of talent across the group,” Day revealed.

Asked by Proactive Investors what the company looks for in its acquisition target, Day stressed the importance of cultural fit.

“We seek companies that look and behave like Keywords people. A solid economic performance is important, or maybe the opportunity to turn a business around.

“Mainly it is about extension, whether it be extending the skill base of the geographical presence.”

Day added that the artwork business is probably one of the most fragmented sectors in which the company operates, and it would probably look at making more acquisitions in this area.

Broker Cantor Fitzgerald called the update “confident full year results”.

“The games market has gone through a transitional period over the past two years, but with the installed base for the new generation of consoles having reached what many believe to be the tipping point following the 2014 holiday season, 2015 is expected to be the first solid, post transition year in the console game sector,” the broker said.

House broker made modest upgrades to its forecasts in the wake of the results, nudging up its current year earnings per share (EPS) forecast to 12.2 cents from 12 cents.

“We expect the group to continue to look for acquisitions, and to the extent that the group uses cash, these would be likely to be very EPS accretive,” Numis said.

The full-year dividend has been bumped up by 10% to 1.10p.

Shares were up 1.7% at 10p in late afternoon trading.

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