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Keywords Studios expects a year of “healthy activity” in the video games industry

Published: 18:03 08 Apr 2014 AEST

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Keywords Studios (LON:KWS) is expecting 2014 to be a year of “healthy activity” in the video games industry, as it supports the fast growing market created by the new generation of games consoles.

The company said it has made a solid start to the current year and it is performing in line with management expectations.

Disruption coming from the launch of Microsoft’s Xbox One and Sony’s Playstation 4 had, however, impacted negatively last year due to some projects being put on hold as game developers focussed on a handful of launch titles. 

Nevertheless, the Dublin-based company, which provides translation, localisation and testing services as part of the computer game development process, worked on over half of all the titles launched for the new consoles.

In this morning’s results, for 2013, the company reported group revenue growth of 14% to €16.4mln and operating cash flow increased to €2.3mln, from €1.9m in the year before. Adjusted pre-tax profit was down to €2.5mln, from €2.9mln.

It ended the year with €15.3mln of cash, including €10.2mln proceeds from July’s AIM market float. And it announced a maiden final dividend of 0.67p per share, giving a total dividend of 1p for the entire year.

Andrew Day, chief executive, said: "Despite the uncertainty in the industry as it transitions to the new generation of consoles, we delivered strong revenue growth and we have considerably strengthened our market position, geographical spread and service offering through a combination of market share gains, organic investment and recent acquisitions. 

“This leaves us well placed to take advantage of industry growth and structural change, which we expect to lead to an increased use of outsourced services, in the current year.”

The acquisitive service provider joined the AIM market as part of a strategy to consolidate what it sees as a fractured industry sub-sector.

Since joining AIM it has already made two acquisitions Liquid Violet and Babel Media, both in early 2014, and earlier this month it said it was opening a new operation in Singapore.

"We, therefore, look forward to making good progress as we realise the benefits of increased scale, of improving utilisation across our business, of the acquisitions made following the year end and of our 2013 client wins," Day adds.

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