- Video games services play raises full-year guidance
- Buys Mighty Games for AUD$10 million
- Sees ‘healthy’ pipeline of acquisitions
Video gaming industry services provider Keywords Studios (KWS:AIM) delivered news of strong first-half trading, an upgrade to full-year guidance and fresh acquisitions, sending its shares up 3.6% to £25.40.
Chief executive Bertrand Bodson said his charge was confident of delivering a full-year performance ‘comfortably ahead’ of market expectations.
Accordingly, Shore Capital plans to nudge up its year to December 2022 sales forecast from €610 million to €635 million and its adjusted pre-tax profit estimate from €94 million to €101 million.
However, Keywords also cautioned that organic growth rates were set to moderate and its bumper first-half margins would normalise during the second half as the company invests in the business, shifts people and work away from Russia and more costs return with the easing of Covid restrictions.
DEMAND REMAINS ROBUST
Keywords, which provides technical and creative services to the booming global video games sector and counts the likes of Activision Blizzard, Electronic Arts, Microsoft, TakeTwo and Tencent as clients, reported strong trading for the six months to 30 June 2022 amid ‘robust’ demand for its services.
The acquisitive company now expects to deliver a 34% year-on-year increase in total revenue to roughly €320 million along with 22% organic growth.
Adjusted pre-tax profit for the half is expected to be approximately €54 million, an impressive a 35% increase versus last year and representing a healthy margin of 17%, supported by the strong US dollar.
STAYING DEAL-HUNGRY
Keywords also announced the acquisition of Melbourne-based games testing solutions firm Mighty Games for a maximum AUD$10 million and said it has completed the takeover of game development studio Forgotten Empires.
These latest acquisitions will ‘further the group’s strategy to become the “go to” technical and creative services platform for the global video games industry’, enthused Keywords.
According to the company, Mighty Games also brings ‘an innovative and proprietary AI-based testing technology platform, which will allow us to do more for our clients and remain at the forefront of our industry, in line with our strategy to develop more technology-enabled solutions.’
Bodson said Keywords continues to review ‘a healthy pipeline of acquisitions that extend the services Keywords is able to offer its global video games clients’ and has ‘started the year very strongly, building on the momentum achieved in 2021 as we continue to benefit from a renewed focus on content creation post pandemic and the structural trends towards outsourcing.
‘Whilst we are mindful of a more uncertain macro-economic environment and some volatility in the scheduling of certain projects we continue to see strong demand for our services.’
Shore Capital commented: ‘We continue to see Keywords as well placed to benefit from favourable structural growth opportunities as demand for bigger and more content-rich games remains and look forward to further progress in the second half.’
