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Keywords forecasts profits ahead of guidance after strong finish to 2020

The provider of video game development services said it expects its revenues and adjusted pre-tax profit for the period to be €373mln and €55mln respectively, higher than forecast in an update in November

Keywords Studios PLC - Keywords forecasts profits ahead of guidance after strong finish to 2020

Keywords Studios PLC (LON:KWS) has said it expects its full-year profits will be “marginally ahead” of guidance after a strong finish to 2020.

In a trading update for the year to December 31, 2020, the provider of video game development services said it expects its revenues and adjusted pre-tax profit for the period to be €373mln and €55mln respectively compared to guidance of €367mln and €52mln issued on November 24.

READ: Keywords Studios appoints chief operating officer

The company attributed the performance to “robust demand” for its services continuing through the second half of the year, although production constraints caused by coronavirus (COVID-19) had continued to delay the flow of some of its service lines.

Despite this, Keywords said it has delivered “good underlying margin improvement”, driven in part by cost reductions such as travel expenses during the pandemic.

Meanwhile, the company said it has made seven acquisitions since a fundraising in May which it said is “further strengthening the breadth and depth” of its value-added services. In total, the seven acquisitions with cost a maximum of €92mln, while net cash at the end of the year is expected to be around €100mln.

"The group has delivered another robust performance, delivering good organic growth despite the obvious challenges of COVID-19 across our global operations. This is testament to the dedication of our talented Keywordians, who have continued to provide our clients with the excellent service they have come to expect, despite these challenging circumstances”, chief executive Andrew Day said in a statement.

The CEO noted that the company will “continue to actively review a healthy pipeline of acquisition opportunities” and had the financial resources to execute purchases.

"With a robust and flexible model and a strong market position in the buoyant video games market, we look forward with confidence to continuing to deliver on our organic and acquisitive growth strategy", Day said.

Quick facts: Keywords Studios PLC

Price: 2416 GBX

AIM:KWS
Market: AIM
Market Cap: £1.8 billion
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