Video game services provider Keywords Studios is on the up and up. After a strong first half, which saw Keywords’ game localization revenues climb 20%, the company said full-year performance is now expected to be ahead of market expectations.
In Keywords’ trading update for the full year (FY21), which was released on December 20, 2021, the Ireland-based video game specialist said performance continued strongly in the second half of the year.
Full-year revenue to December 31, 2021 is now expected to be at least EUR 505m (USD 572m), an increase of more than 35% from 2020. Adjusted pre-tax profit is expected to come in above EUR 85m (USD 96m), representing more than 55% year-on-year growth.
Both revenue and adjusted pre-tax profit are expected to exceed the current consensus forecasts of analysts, the latest of which place Keywords’ full-year revenues at EUR 500m and pre-tax profit at EUR 79m for 2021.
“Demand for our services [is] driven by the buoyant video games market and the industry’s focus on new content creation,” Keywords said. Moreover, “We have continued to benefit from a reduction in certain costs due to Covid-19, primarily relating to remote working, property costs, travel and business development.”
Meanwhile, Keywords said they expect momentum to continue into 2022 and are confident that group revenues will land at the upper end of analysts’ forecasts for full-year 2022, which range from EUR 552m to EUR 581m (USD 625–658m).
In addition, “We continue to expect adjusted profit before tax margins to moderate towards our historical levels of ~15%, as certain costs return with the easing of restrictions and as we continue to invest in the platform and our people,” they noted.
Adjacent Content Industries
Keywords’ Bertrand Bodson, who took up the CEO role in September 2021 following the retirement of former CEO Andrew Day, said he is excited to “deliver an even more compelling proposition for the buoyant video games market, and adjacent content industries.”
Keywords said earlier in 2021 that they remain firmly rooted in the video game sector and maintain “an active interest in neighboring markets such as film and television services.” The company acquired Germany-based media localizer TVS Synchron in 2019, and indicated at the time that they were taking “tiny, tiny, little baby steps” into the media entertainment market.
By March 2021, Keywords said they made “steady progress in developing […] subtitling, dubbing, audio description, and sound design services primarily for over the top (OTT) providers” in 2020, adding that they were “pleased to see the increasing adoption of video game based production techniques” in the media localization sector.
Keywords also made a new senior hire for its Localization division in the second half of the year, appointing former THG Fluently COO Romina Franceschina to the position of Director of Text and Audio Localization in October 2021.
Shares in Keywords climbed nearly 9% on the day of the trading update. Shares are currently trading around GBP 28, and Keywords’ current market capitalization stands at ca. GBP 2.1bn (USD 2.8bn), roughly flat from the start of 2021.
Keywords will provide a further trading update at the end of January 2022.
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