This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
24 November 2023
Team17 Group plc
("Team17" or the "Group" or "Company")
Trading Update
Team17 Group plc (the "Group"), a global games label, creative partner, developer and publisher of independent ("indie") premium video games, educational entertainment apps for children, and working simulation games, today announces a trading update and an updated outlook for the current financial year ending 31 December 2023.
FY23 outlook
While the important trading periods of Black Friday and Christmas are not yet complete, management believes the Group remains well positioned with strong traction across its new release and back catalogue titles, and currently expects FY23 revenues to be modestly ahead of current market expectations.
Despite this overall robust revenue performance, certain titles within the Games Label are not meeting internal expectations, resulting in a less favourable mix between higher margin own-IP titles and third-party titles (with higher royalty payments) than anticipated. In addition, the Group was too slow to address some project overspends and has faced some delays in implementing key cost initiatives at Team 17 Games Label. These are now at advanced stages and will continue to bring benefits into next year.
Management continues to be pleased with the performance of astragon and StoryToys. However, since the H1 results, and in the light of the post Covid-19 dynamics, management has re-evaluated the cost structure within Team17 Games Label to align with its core competencies as an indie game developer and publisher. In addition, it is also reviewing a number of titles, both under development and already launched, to assess the revenue potential in the current market environment, which is expected to result in impairments recognised in FY23.
Consequently, the Group now expects to deliver full year adjusted EBITDA of at least £28.5m, which includes non-cash title impairments of up to £11.5m.
FY24 outlook
The Group has an exciting schedule of high-quality new releases planned across the Group in 2024, while back catalogue investments will continue to support revenue growth. Management will provide greater clarity on FY24 at the full year results, but currently expects to see an improved underlying trading performance compared to FY23.
Enquiries:
| Team17 Group plc Debbie Bestwick MBE, Chief Executive Officer Steve Bell, Chief Executive Officer Designate Mark Crawford, Chief Financial Officer James Targett, Group Investor Relations Director
| via Vigo Consulting
|
| Houlihan Lokey UK Limited (Nominated Adviser) Adrian Reed / Tim Richardson
| +44 (0)161 250 3577 |
| Berenberg (Joint Corporate Broker) Toby Flaux / Ben Wright / Marie Moy / Alix Mecklenburg-Solodkoff
| +44 (0)20 3207 7800 |
| Peel Hunt (Joint Corporate Broker) Neil Patel / Paul Gillam / Richard Chambers / James Smith
| +44 (0)20 7418 8900 |
| Vigo Consulting (Financial Public Relations) Jeremy Garcia / Fiona Hetherington / Aisling Fitzgerald team17@vigoconsulting.com | +44 (0)20 7390 0233 |
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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