Keywords Studios PLC (AIM:KWS, OTC:KYYWF) levelled up its dividend after another year of high double-digit growth for revenues and earnings, and said 2022 has started with further strong demand for all its service lines.
The provider of technical and creative services for the computer games industry confirmed revenue grew 37% to €512.2mln in the past calendar year, of which organic revenues were up 19%.
Its acquisitive model delivered the rest, with €65.5mln net cash spent on six more purchases during the year, in Australia, UK, Romania and the US, which could rise to a maximum consideration of up to €126mln.
These additions meant the company started 2022 with pro forma revenue of €528.5mln, compared to €409.2mln a year earlier.
Adjusted profit before tax jumped 56% to €86mln, with margins up to 16.8% from 14.7%. Statutory PBT rose 48% to €48mln and earnings per share 49% to 45.16 euro cents.
The board recommended a final dividend of 1.45p per share, which will make a total dividend for 2021 of 2.15p per share.
“The underlying video games market remains buoyant, with 2022 expected to be a particularly strong year for new game launches, as developers and publishers look to capitalise on higher player numbers and create ever more sophisticated content to engage players in their games for longer,” said Bertrand Bodson, the new chief executive who started in December.
Keywords, which provides services to 23 of the top 25 most prominent games companies, including Activision Blizzard, Electronic Arts, Konami, Riot Games, Sony, TakeTwo, Epic Games and Ubisoft, has worked on recent games including Uncharted 4, Call of Duty: WWII, Mortal Combat X, Assassin's Creed Origins, Battlefield 1, League of Legends, Fortnite, Clash Royale and Rainbow Six Siege.
The balance sheet has net cash of €105.6mln, backed by a €150mln undrawn revolving bank facility, as management constantly reviews a “healthy pipeline” of further acquisition opportunities, Bodson said.
Inflationary pressures and competition for talent were acknowledged, but the company said it was taking account of costs as projects were agreed with clients who are well aware of the industry-wide talent challenge.
Keywords said it is “monitoring the situation in Russia, where our teams continue to work but entirely focused on critical work for non-Russian clients” and has been working in partnership with clients and “actively looking at relocating work to other locations across the group”. A hardship fund was made available to help employees affected by the humanitarian crisis in Ukraine.
Bodson said trading in the first quarter has started with “strong demand across all of our service lines, underpinning our confidence in delivering a performance for the full year towards the top end of current market expectations”.
“We expect the group's trading momentum to continue through 2022, with the increased flow of content to our later stage service lines seen in the second half of 2021 continuing into this year, alongside further strong demand for our earlier stage services such as game development, art creation and marketing.”