Company Announcements

16 June 2020

Team17 Group plc

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

Pre-close trading update

Team17, a global games entertainment label, creative partner and developer of independent ("indie") premium video games, provides the following trading update ahead of results for the six months ended 30 June 2020.

The Company has experienced strong sales traction during the period. This good performance has been delivered against the backdrop of the global COVID-19 ("C-19") pandemic and subsequent lockdown. During these unprecedented times the Company has seen above expected demand for its back catalogue, which has outperformed pre C-19 expectations, especially at the height of the lock down during April and May.

In addition, further sales traction and increased playtime was generated across our more socially orientated or multi-player co-op and online games, which has enhanced earnings specifically on key franchise titles such as Worms, Overcooked and The Escapists alongside 2019 new game IPs Golf with Your Friends, Hell Let Loose and the recently released Moving Out.

C-19 update and key highlights H1

Throughout the impact of C-19, our priority has been the safety and wellbeing of our Teamsters and our partners. We are extremely proud of how our teams moved to seamlessly switch to remote working as various lockdowns were imposed globally. Their performance has been terrific, and as a testament to how well the Company has responded, we will not be seeking a speedy return to office-based working until we are certain it will be permanent and most importantly safe.

Yippee Entertainment Limited ("Yippee"), which was acquired in January 2020, is now fully integrated with the team 100% focussed on Team17 games. In addition to Yippee actively recruiting as we seek to expand our second UK development studio location, we have also maintained our broader recruitment targets during the period.

Our successful greenlight process has thrived during the lock-down period with new highly successful virtual gaming events being held to combat the loss of physical events such as the Game Developers Conference and others, and we now have more games in later stage discussion than at any other time in our history. We continue to increase the number of games viewed and assessed and can confirm that we have signed an additional seven new games in the first half of the year for release in future years. This includes for the first-time partners in Mexico and Russia which is testament to how respected our award-winning games label is for delivering excellent results for our label partners around the world.

Importantly, our development and commercial teams have successfully launched three new games during remote working with Moving Out and Golf with Your Friends (console) being released as planned in April and May respectively. Furthermore, on 11 June 2020, Main Assembly was launched into early access on Steam. We have continued to support our back catalogue portfolio with a number of paid and free downloadable content throughout the first half which shows the strengths of our lifecycle management, QA, development, production and marketing teams across an ever-growing portfolio of 300+ digital revenue lines.

Outlook

Despite the challenges generated by C-19 we are delighted with an excellent start to FY2020 and, as previously announced, we have a solid pipeline of new releases weighted towards the second half of 2020. We have more games in development across our label than at any time in our history, including owned IP and are engaging with more partners seeking to have their games be part of our label and continue to see more new gamers playing our games and franchises during C-19. 

Gaming has historically shown good resistance in uncertain economic situations; however, we are in unprecedented times. We have started to see the unusually high levels of demand during April and May returning to a more normal level. C-19 has proven the resilience of the business during this period, however, there clearly remains a degree of uncertainty as to the longevity and socio-economic effects of C-19 on our markets. This, combined with next generation consoles and new IP launches across H2, creates a more unpredictable backdrop to maximise the best commercial opportunities for each game both digitally and physically. 

As such, the Board believes it is too early to assess what impact the strong trading in recent months may have on the full year results given the unpredictable trading environment due to C-19. Team17 will announce half year results for the six months ended 30 June 2020 on 10 September 2020.

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About Team17

Team17 is a leading games entertainment label and creative partner for independent ("indie") developers, focused on the premium, rather than free to play market, and creating games for the PC home computer market, the video games console market and the mobile and tablet gaming markets. Alongside developing the Company's own games in house ("first party IP"), Team17 also partners with independent developers across the globe to add value to their games in all areas of development and production alongside bringing them to market across multiple platforms for fixed percentage royalties ("third-party IP"). Since foundation in 1990, we have launched over 100 games, including the iconic Worms franchise, the Overcooked franchise, the Escapists franchise, Yooka-Laylee, Yoku's Island Express, My Time at Portia, Hell Let Loose and Blasphemous, making Team17 one of the most prolific developers and partners of games for the indie market.

 Visit www.team17.com for more info.