Keywords Studios PLC (AIM:KWS, FRA:KS3, OTC:KYYWF) saw organic revenue growth of 23% in the first half of 2021, driven by robust demand for the group’s services.
The group, which provides services to computer game developers, expects to report first-half revenues of around €238mln, up roughly 37% on the €173.5mln in the same period of 2020.
All service lines performed well compared to last year when parts of the business were affected by the pandemic. On the plus side, the global lockdown has seen an increase in the number of gamers and gameplay, which has boosted demand for Keywords’ services.
Adjusted profit before tax in the first half of 2021 is expected to rise by more than 80% to about €40mln from €21.7mln in the first half of 2020.
The group said some parts of the business continue to experience some operational constraints caused by the COVID-19 pandemic, but it has seen some short-term benefit in terms of reduced costs relating to travel, business development and marketing.
The acquisitive company said it had net cash of €84mln at the end of June, down from €102.9mln at the end of 2020 after spending €45mln on acquisitions in 2021.
READ: Keywords snaps up game development services group Climax Studios
The search continues for a chief executive officer to replace Andrew Day, who retired after a health scare, and a number of high-calibre candidates have been identified.
"Keywords has made a strong start to the year, continuing the momentum seen in the second half of 2020, with demand for our services being driven by a buoyant video games market, structural trends towards outsourcing, and a renewed focus on content creation," said Jon Hauck, the joint interim chief executive officer of Keywords.
" Looking forward, we expect strong demand to continue across most service lines underpinning our confidence of delivering a performance that is at least in line with market expectations for the year, albeit with growth rates and margins expected to moderate against stronger H2 2020 comparatives, and as some costs return with the easing of restrictions," he added.
"Our unrivalled breadth of services and sought after 9,000 people-strong specialised resource base positions Keywords well to increase our share of our buoyant market, whilst our financial strength supports further acquisitions to enhance the scale and reach of our services as we cement our position as the 'go to' services platform for the global video games industry," Hauck concluded.
Peel Hunt noted that although all service lines performed well with strong demand, the year-ago comparatives were hit by COVID-19 issues.
"Adjusted PBT [profit before tax] is expected to be €40mln, more than half the full-year consensus numbers of €73.4mln. The group's cash position remains strong at €84mln, allowing for further acquisitions, the broker said.