LONDON (ShareCast) - (Sharecast News) - Keywords Studios, which provides technical services to the games industry, posted a 65% jump in full-year profit on Monday as revenue surged thanks to acquisitions and solid demand, and it struck an upbeat note on the outlook.
In the year to 31 December 2018, adjusted pre-tax profit rose to €37.9m from €23m on revenue of €250.8m, up 66% from the previous year.

Adjusted basic earnings per share were up 53% to 47.75 cents and Keywords declared a final dividend of 1.08p a share, up from 0.98p in 2017 and taking the total dividend to 1.61p, up 10% on the year.

During the year, the company completed and integrated eight acquisitions, expanding new and existing service lines. In addition, it added 930 work stations across multiple studios to support organic growth.

The group said it had an "encouraging" start to 2019, with the first quarter in line with its expectations.

Chief executive Andrew Day said: "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. This considerable progress has further improved our quality of earnings and moved us higher up the value chain with our customers.

"We have started 2019 promisingly, and we are seeing good overall demand for our services across the group. 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.

"This, combined with the likely increase in demand for content driven by the arrival of games subscription and streaming services from new entrants such as Apple and Google, give us confidence in the outcome for the full year."

Liberum, which rates the stock at 'buy' and lifted the price target to 1,415p from 1,245p, said the results were "strong".

"We believe the positive news flow around the video game industry over the past weeks is likely to be beneficial to KWS and shares should continue to perform well on the back of increased development activity in the video games market and the launch of major streaming platforms in H2 and 2020."

Numis said: "We think the story remains in essence unchanged: global market leadership; a highly value-creative acquisition programme, low capital employed ex acquisitions, and exposure to a large and fast-growing market without the risks faced by content owners. We leave adjusted forecasts unchanged, and reiterate buy."

At 1335 BST, the shares were down 0.9% at 1,308p.

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