Given its relentless quest to boost capabilities and geographic spread through acquisitions, it might seem slightly moot highlighting Keywords Studios' (KWS) 24 per cent organic growth rate for 2016 revenues, but the measure remains a "key focus" for the digital games service provider. The reported top line was effectively swollen by Keywords' expanding geographic footprint, as only 3 per cent of revenues are now denominated in a weakened sterling. The group ended the year with 27 operating locations globally, against 17 at the beginning of 2016.
The group continues to deliver strengthening cash flows and improved synergies, reflected in a 25 per cent increase in the number of clients using 3 or more of the group's services. The gross margin was maintained at an impressive 38 per cent, which fed through to a 61 per cent increase in adjusted earnings to 20.6¢ a share.
Eight acquisitions were completed, the most significant being the €18m (£15.3m) deal to acquire Synthesis, positioning Keywords as the frontrunner in localisation, audio and localisation testing services. The deal helped to drive divisional revenues up 89 per cent to €32.3m, although they were up a third on a like-for-like basis. There was also a doubling in revenues at the art creation services business.
Numis expects adjusted pre-tax profits and EPS of €16.8m and 24.1¢ for the December 2017 year-end (from €14.8m and 21¢ in 2016).
| KEYWORDS STUDIOS (KWS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 702p | MARKET VALUE: | £382m | |
| TOUCH: | 700-703p | 12-MONTH HIGH: | 713p | LOW: 212p |
| DIVIDEND YIELD: | 0.2% | PE RATIO: | 73 | |
| NET ASSET VALUE: | 123¢* | NET CASH: | €8.7m | |
| Year to 31 Dec | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 14.3 | 2.7 | 7.3 | na |
| 2013 | 16.2 | 1.2 | 2.1 | 1.00 |
| 2014 | 37.3 | 3.4 | 4.9 | 1.10 |
| 2015 | 58.0 | 5.1 | 7.0 | 1.21 |
| 2016 | 96.6 | 9.4 | 11.2 | 1.33 |
| % change | +67 | +86 | +61 | +10 |
Ex-div: 1 Jun Payment: 23 Jun £1 = €1.17 *Includes intangible assets of €55m, or 102¢ a share | ||||
