LONDON (Alliance News) - Video games services provider Keywords Studios PLC on Monday reported strong profit growth, with revenue surging after its VMC acquisition.
Keywords bought Volt Information Sciences Inc, or VMC, for USD66.4 million in October 2017 to increase its presence in player support services in North America.
Including VMC, Keywords' revenue for 2018 climbed 66% to EUR250.8 million, and rose by 15% excluding VMC. On a like-for-like basis, revenue was up 10%.
This helped adjusted pretax profit climb 65% to EUR37.9 million, with statutory pretax profit doubling to EUR22.1 million.
Keywords is paying a final dividend of 1.08 pence per share for 2018, taking the year's total to 1.61p from the 1.46p returned in 2017.
"The group delivered a strong performance in 2018 as we increased our share of the growing video games market and expanded our range of services," said Chief Executive Andrew Day.
"This considerable progress has further improved our quality of earnings and moved us higher up the value chain with our customers," Day added.
Keywords said its adjusted pretax profit was in line with market expectations, but was held back by some projects being deferred into 2019 as well as four clients becoming insolvent due to the "Fortnite effect".
The "phenomenally" successful game harmed titles on which Keywords worked, it said, even though it does itself do "considerable" work for Fortnite.
Revenue grew in all of Keywords' service lines, being particularly strong in Localisation at 28%, Functional Testing at 20%, and Art Creation at 17%. These three are the largest contributors to revenue.
Keywords has started 2019 well, it said, with first quarter performance meeting expectations.
There is a "healthy" pipeline of acquisition opportunities, while capital expenditure is expected to fall going ahead.
"We have started 2019 promisingly, and we are seeing good overall demand for our services across the group," added Day.
"We are actively reviewing acquisitions from which we will continue to be selective, with many businesses excited about the strong platform Keywords could potentially provide for their services and people."
Shares in Keywords Studios were trading 0.5% higher at 1,326 pence each on Monday morning.
Keywords Studios Plc (KWS)
