Keywords Studios – Strong first half but growth set to moderate
Keywords saw double digit growth across all service lines to its customer base of video game developer in the six months to June 2022. This drove a 34.5% increase in revenues to €321.1m of which organic growth contributed 21.7%.
Underlying PBT was up 38% to €54.8m reflecting a margin improvement from 16.6% to 17.1%. The group’s announced an interim dividend of 0.77p per share.
The second half has started well with recently upgraded expectations intact, albeit with second half organic growth rates expected to moderate and margins moving back to historic levels of roughly 15%, reflecting increased investment in the business.
Derren Nathan, Head of Equity Research at Hargreaves Lansdown:
“As Keywords broadens its offer to the video games industry it continues to outperform the industry which in itself is not immune to wider economic pressures. But as a provider of ‘picks and shovels,’ Keywords is not dependent on the success of individual blockbuster titles.
Keywords has been a key consolidator in this market and this trend continues as shown by today’s proposed acquisition of Canadian development studio Smoking Gun for up to C$40m, which Keywords announced alongside its impressive interim results.”
