Keywords Studios PLC (AIM:KWS, OTC:KYYWF) reported what it called “resilient” growth in revenue and profit for 2023, in the face of headwinds from Hollywood strikes and currency swings.
The provider of creative and other services to the video games industry said the top line came to roughly €780 million for the past calendar year, representing growth of 13% compared to 2022, or 17% on a constant currency basis.
US industrial action resulted in an estimated €20 million hit to revenues, around 2.6%, while five acquisitions were completed during the year for a total cost of £225 million.
"In what was a difficult year for the industry, we delivered resilient performance in 2023 and we continued to grow our market share and industry leadership position,” said chief executive Bertrand Bodson.
Excluding the impact of the new purchases, US strikes and currency swings, organic revenue growth was 9%, or when they are all included, reported organic revenue growth was around 6%.
Adjusted operating profit is expected to come in around €122 million, representing margins of 15.6%, up from €114.6 million the prior year.
Cash flows were said to be strong in the second half of the year, with full-year adjusted cash conversion above 80%, which was ahead of management’s previous guidance.
Net debt stood at €68 million at the end of December and the company said its balance sheet and strong cash generation provide it with “significant flexibility to invest in growing our platform, and we have a strong pipeline of opportunities as we move into 2024”.
The outlook for the new year is “strong revenue and profit growth”, driven by improving organic growth, recent M&A, including the addition of The Multiplayer Group in December, and the intention to maintain adjusted operating profit margins above 15%.
Organic growth is expected to improve from current levels as the year goes on, Keywords said, “as the industry's appetite for new content returns and allowing time for the output from Hollywood to increase post the 2023 strikes”.