16th Apr 2020 11:15
(Alliance News) - Keywords Studios PLC on Thursday reported a revenue rise but a double-digit profit slump during what it labelled as a "light year" for the video game industry.
Keywords, which provides services to video game makers, was meant to report 2019 results at the end of March. However, the UK Financial Conduct Authority asked for companies to delay annual reports amid the market volatility caused by Covid-19.
In 2019, Keywords saw its revenue jump 30% to EUR326.5 million from EUR250.8 million. However, pretax profit fell 21% to EUR17.4 million from EUR22.1 million.
Administrative expenses were 35% higher at EUR98.7 million.
On an adjusted basis, without the impact of acquisition costs, share option expenses and amortisation, pretax profit rose 7.9% to EUR40.9 million from EUR37.9 million.
Keywords cut its 2019 dividend by 64% to 0.58 pence per share from 1.61p. It decided against a final payout in light of the "current circumstances".
Chief Executive Andrew Day said: "2019 was a year of strong growth as we continued to build our platform to become the 'go to' service provider to the video games industry which, in turn, enabled us to take advantage of the accelerating trend towards external development in the industry.
"Some of our service lines felt the effects in 2019 of a light games release schedule at the tail end of the existing console cycle. 2020 is expected to see stronger demand from a fuller release schedule as a result of the launch of a new generation of games consoles, in addition to the further development of new streaming platforms, content demands for virtual and augmented reality, and the underlying drivers of growth across the video games market."
This year, Microsoft Corp's Xbox and Sony Corp's Playstation are pencilled in to release their latest consoles, following the Xbox One and Playstation 4 range, respectively.
"Whilst we are seeing some operational disruption to the provision of our services due to the Covid-19 pandemic, with some of our service lines and locations affected more than others, the underlying drivers of growth across the video games market remain intact. It has also been encouraging to see our clients turning to us for support in these difficult times and our teams responding with extreme agility to support them, whilst rapidly implementing our own contingency plans," Day added.
During the first two months of 2020, the impact from the virus outbreak was limited to just Keywords' Chinese operations, but since then the ramifications have stretched further across the business.
Keywords added: "Following the near-term disruption, the group is well placed, with a strengthened and diversified business and stronger client relationships, to deliver on pent-up client demand and to incrementally return margins to historic norms."
Shares in the company climbed 2.3% at 1,553.00p each in London on Thursday morning.
By Eric Cunha; [email protected]
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