Trading Update

RNS Number : 4107S

Team17 Group PLC

14 July 2022

 

14 July 2022

Team17 Group plc

("Team17", the "Group" or the "Company")

Trading Update

Enlarged Group delivering record half year revenue and adjusted EBITDA

Team17 Group plc, a global games label, creative partner and developer of independent ("indie") premium video games, developer and publisher of educational entertainment ("edutainment") apps for children and a leading working simulation games developer and publisher, confirms that trading in the six months ended 30 June 2022 ("H1") has been in line with the Board's expectations.

The enlarged Group, including recent strategic acquisitions, has delivered significant growth against H1 2021, once again showing record half year revenue and adjusted EBITDA performance.

Team17's core Games Label business ("Games Label") continues to show the strength and expertise in back catalogue management, delivering low double-digit year on year growth alongside one new release. The underlying quality of portfolio management and franchise building is a testament to the strength of Team17's best in class lifecycle management. The Games Label has also seen significant growth in the share of 1^st party IP revenues within its portfolio.

StoryToys, acquired in July 2021, is performing in line with expectations. The launch of LEGO® DUPLO®Marvel in December 2021 was its biggest to date and has continued to perform well during H1 benefiting from the recent Hulk and Iron Man content updates. Across the StoryToys app portfolio, both active subscribers and subscription revenues have grown significantly in H1 vs the prior year. StoryToys has also entered a longer-term extension with the LEGO Group for multiple apps over multiple future years.

astragon, acquired in January 2022, is performing in line with expectations with its own IP titles launched in 2021, in particular Police Simulator: Patrol Officers released into early access on PC, continuing to build momentum in H1 2022 and adding value to the growing own IP portfolio. The physical distribution side of astragon's business has seen strong performance across the portfolio of titles from various partners including Farming Simulator which continues to perform strongly in Germany.

Team17 USA (formerly The Label), acquired in January 2022, is now fully integrated within the Games Label and performing as expected, and is actively exploring future opportunities to bring Team17 IP to mobile platforms alongside additional 3rd party titles.

The Group has continued to add new talent to its exceptional teams, growing headcount in each of its businesses to support individual requirements. Attrition rates have remained at historic single digit levels for the first six months, below market levels.

Outlook

As outlined at the full year results announcement in March 2022, the Group has a solid and high quality portfolio of new releases planned for the second half of the year, which alongside continued back catalogue performance is expected to drive a more second half weighted performance than prior years. The Board remains mindful of ongoing macro-economic uncertainty and inflationary pressures, the impact of which remain in line with its expectations.

The latest version of Construction Simulator, astragon's successful own IP franchise launches on PC and Console on 20^th September 2022, 7 years after the last launch and is their biggest release of an own IP in the last few years. In addition, Bus Simulator: City Ride is due to launch on mobile and Switch in the second half, its first mobile launch for the Bus Simulation franchise and the highly rated Police Simulation: Patrol Officers will leave Steam's Early access and launch on consoles in in the final quarter of the year.

During the second half, the Games Label, plans to launch seven titles as part of its new release offering. Highlights will include Marauders (which is tracking above any previously launched Games Label title on internal metrics), Thymesia a 'Souls-like' Indie game, Sweet Transit and Sunday Gold, amongst others. These launches will be combined with continued support for Hell Let Loose and Golf With Your Friends with new content and multiple planned updates across the back catalogue. Team17 USA's planned mobile title releases are all on track and the latest update 'Wimblegolf' for What the Golf? is seeing strong visibility and traction on mobile.

StoryToys is planning over ten major app updates alongside multiple smaller updates across its portfolio and continues to strengthen its subscription app offering and global license partners.

The recent acquisitions have all settled well into the Group and are delivering incremental earnings. In addition, the senior management teams are already exploring Group synergies to leverage portfolio breadth as we strengthen our entertainment portfolio offering.

Results for the six months ended 30 June 2022 will be announced in September 2022.

Debbie Bestwick MBE, Chief Executive Officer of Team17, commented:

"I am delighted with Team17's first half performance, trading in line with our expectations. Pleasingly, our new acquisitions, led by our talented and committed management teams, have worked incredibly well together across all parts of the Group, and we are all looking forward to a busy and productive second half.

"The Group now has more evergreen own IP's than ever before, alongside a phenomenal back catalogue portfolio, and in StoryToys, a growing subscription model. New releases include additions to many established franchises and licensed global brands alongside exciting new original IP's that are tracking well.

"We have made a solid start to 2022 and remain confident about the near-term prospects for the Group despite the ongoing broader macro-economic climate."

For further information please contact:

Team17 Group plc Debbie Bestwick MBE, Chief Executive Officer Mark Crawford, Chief Financial Officer	via Vigo Consulting
Houlihan Lokey (Nominated Adviser) Adrian Reed / Tim Richardson	[phone] /  [phone]
Berenberg  (Broker) Chris Bowman / Toby Flaux / Marie Moy / Alix Mecklenburg-Solodkoff	[phone]
Vigo Consulting  (Financial Public Relations) Jeremy Garcia / Kate Kilgallen team17@vigocon sulting.com	[phone]

About Team17

Team17 Group plc is a global provider of games entertainment to a broad audience. The Group now includes a games entertainment label and creative partner for indie developers, a leading developer of educational apps, targeting children under the age of eight and a leading working simulation games developer and publisher.

Visit www.team17.com for more info.

 

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