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Keywords Studios (KWS)

Business description

Keywords Studios is now the largest and most diverse supplier of outsourced services to the games industry. Through regular acquisitions, the company is building its scale, geographic footprint and delivery capability.

Stock data

Market cap.£678.8m
Last close1,060.00p
High / Low (52 weeks)2065.0p / 900.0p
Stock market listingLN
Forecast net cash (€m)2.8
Forecast gearing ratio (%)N/A
TeamTechnology
SectorTechnology

Price performance

%1m3m12m
Actual(11.7)(16.4)(28.5)
Relative *(15.5)(17.9)(27.9)

* % Relative to local index

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Company news

Investment summary

Keywords has built an enviable position of strength, in an industry which we still expect to deliver solid growth, despite games developers reporting more mixed trading recently. However, we believe that Keywords has the strength of model and diversity of customer base to continue outgrowing the games market through the longer term. The recent share price fall suggests concern that the growth story is faltering - and hence continued execution should drive robust shareholder returns.

Last updated on 01/02/2019

Y/E Dec Revenue (€m) EBITDA (€m) PBT (€m) EPS (c) P/E (x) P/CF (x)
2016A 96.6 16.9 14.9 20.3 58.9 39.0
2017A 151.4 26.6 23.0 29.9 40.0 38.2
2018E 250.0 42.4 37.0 44.6 26.8 21.5
2019E 292.1 51.5 44.4 55.1 21.7 19.8

Last updated on 29/01/2019

Latest video

Executive Interview - Keywords Studios

Industry outlook

The games industry is being hit by pockets of weakness resulting in a significant sell-off in the shares of many market participants. However, we believe that the dynamics of the industry remain attractive overall, and that the downgrades / share weakness is more a reflection of expectations getting ahead of themselves than structural weakness. The trend towards outsourcing should support a low-mid teens growth rate for the service provider into the industry.

Last updated on 01/02/2019

Key management

Ross Graham, Chairman
Andrew Day, CEO
David Broderick, FD

Company address

South County Business Park
Dublin 18
Ireland
+353 1 902 2730
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