In a market where more video game developers are releasing titles across multiple platforms and in a multitude of countries, Keywords Studios' (KWS) acquisition-heavy strategy makes good sense. The games technical service provider bought three new companies during the first half of the year, expanding its geographical coverage and broadening its services in audio. Taking advantage of the cross-selling opportunities these acquisitions have thrown up meant Keywords grew the number of clients using three or more services to 60 from 51 the previous year.
Audio services - which provides multi-language voice-over and original language voice recording services to blockbuster games - almost quadrupled sales to €9.1m (£7.7m). This was driven by the newly acquired audio testing company Synthesis, which completed some very large new audio projects in addition to its usual work. This acquisition, as well as contributions from last year's acquisition of Kite Team, also helped drive an almost 80 per cent increase in sales for the localisation business to €14m.
In line with management plans, the sales contribution of the localisation testing business - which identifies out of context video game translations, age rating and cultural issues - declined as a proportion of the group total. However, like-for-like sales were down 4 per cent due to particularly strong comparables last year - yet management expects increased trading activity in the second half.
Analysts at Numis expect adjusted pre-tax profits of €12.1 for the year to December 2016, giving EPS of 16¢, against €8m and 12¢ in 2015.
KEYWORDS STUDIOS (KWS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 411.5p | MARKET VALUE: | £224m | |
| TOUCH: | 406-417p | 12-MONTH HIGH: | 415p | LOW: 163p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 76 | |
| NET ASSET VALUE: | 112p* | NET CASH: | €3.5m | |
| Half-year to 30 June | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 23.9 | 1.56 | 3.02 | 0.40 |
| 2016 | 42.4 | 2.61 | 2.42 | 0.44 |
| % change | +77 | +68 | -20 | +10 |
Ex-div: 6 Oct Payment: 28 Oct *includes intangible assets of €48m, or 89¢ a share £1=€1.18 | ||||
