20th Dec 2021 14:57
(Alliance News) - Keywords Studios PLC on Monday confirmed itself as one of the London market's lockdown winners, as playing and working from home contributed to both the top and bottom line.
Keywords said it expects its 2021 performance to be ahead of market expectations following strong trading boosted by a "buoyant" video games market, combined with Covid-related cost savings.
Shares in Keywords Studios were up 9.6% at 2,752.00 pence on Monday afternoon in London, though down 3.4% so far in 2021.
The Dublin-based company provides technical and creative services to the video games industry, for example localization of content. It claims to provide services to 23 of the top 25 games companies, including Activision Blizzard Inc and Electronic Arts Inc.
Keywords Studios said it now expects 2021 revenue of at least EUR505 million, which would be up 35% on EUR373.5 million the year before.
It expects adjusted pretax profit of EUR85 million, which would be up 55% on EUR55.0 million in 2020.
The company said the raised expectations were due to its strong performance across the year, driven by a "buoyant" video games market and new content creation.
"The gaming industry got a boost from lockdowns as more of us were sat at home twiddling our thumbs looking for things to do," commented Matt Britzman, an equity analyst at Hargreaves Lansdown.
"There were concerns that the boom would dry up when restrictions eased, but as we thought, at least a good chunk of that increased demand is sticking around for now. With fresh controls on socialising outside of the home now looming with the spread of the Omicron variant, it's likely gaming once again will surge in popularity."
Keywords Studios said it also benefited from a reduction in some costs due to Covid-19. These related to remote working and saved property costs, as well as less travel, the company explained.
Keywords Studios said it expects this trading momentum to continue into 2022 but added that adjusted pretax profit may moderate towards historic levels as some costs return following the easing of Covid-19 restrictions.
It will provide its next trading update at the end of January.
Chief Executive Officer Bertrand Bodson joined the company at the start of this month from Swiss drugmaker Novartis AG.
"Having started to meet with many of our people, studios and customers, I am excited about the opportunity to capitalise on the group's unique full-service platform to deliver an ever more compelling proposition for the buoyant video games market, and adjacent content industries," he said.
By Heather Rydings; [email protected]; and Tom Waite; [email protected]
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