Keywords Studios begins search for new CEO

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Keywords Studios PLC (LON:KWS) has said that following a temporary leave of absence for health reasons in March, its chief executive Andrew Day has decided to bring forward a longer-term retirement plan and will be leaving his role as CEO and his position as a director with immediate effect.

The video game services firm said it is now initiating a full search process to appoint a successor, adding that Day will be available to the board for an initial period of six months in an advisory capacity to support a smooth transition.

READ: Keywords snaps up game development services group Climax Studios

The firm also said Jon Hauck and Sonia Sedler are continuing as joint interim CEOs and continue to be supported by the firm’s service line and regional leadership team as well as the M&A team and the board.

“It has been a huge honour to lead the wonderful Keywordians around the world. Whilst my recent health scare has brought about a reassessment of my priorities and brought forward a retirement that I was otherwise looking forward to in the coming few years, I am pleased to be leaving the Group in such a strong position to continue to deliver on its proven strategy”, Day said in a statement.

“Whilst we are sad to see Andrew go, we fully support his decision to bring his retirement plans forward and wish him a very happy retirement. Over the twelve years since taking over the reins from the founders in 2009, Andrew has led the building of Keywords into the ‘go to’ global video games services platform it is today and it is a tribute to his leadership that he leaves the Group in great shape with a strong and broad leadership team that is well equipped to both drive the Company’s strategy forward and enhance its operational performance. On behalf of the Board, I would like to thank him for his incredible commitment and contribution to the Group over the last twelve years”, added Keywords chairman Ross Graham.

The company also issued a brief trading update, saying it has made “a very good start to the year”, with total revenue growth of 36% in the first four months of 2021, which it said had supported “good margin delivery”.

Keywords also said it is continuing to review a “healthy pipeline of acquisitions” and expects the trading momentum to continue and that it will “deliver against market expectations for the full year”.

“The market rarely bills a CEO’s departure as good news and Day saw the group through a bumper year last year, so it’s understandable if investors are nervous about the unknown”, said Laura Hoy, analyst at Hargreaves Lansdown.

“With a price-to-earnings ratio some way above the long-term average, execution is everything for Keywords. There’s no space for missteps and uncertainty, two things which may come bundled up with a new CEO. But Day’s departure doesn’t change the story behind Keywords stock—the firm is in a strong position and its long-term growth story remains intact. So far this year, the group has seen strong revenue growth and expects to deliver on the market’s lofty expectations. As the search for a new leader progresses, ups and downs are inevitable, but a fresh pair of eyes is rarely a bad thing and Keywords should continue to perform well in the accommodative environment”, she added.

Shares in Keywords were 0.5% lower at 2,492p in mid-morning trading on Tuesday.

–Adds analyst comment and share price–

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