Keywords Studios' pre-tax profit to be 'significantly ahead' of expectations

AIM-listed services provider to the gaming industry Keyword Studios anticipates that revenues and pre-tax profit for the year will be “significantly ahead” of current market expectations.

The company said it was due to the recent acquisition of Synthesis, an audio company, and higher levels of activity after a strong second quarter which benefitted from a number of large projects alongside its normal activity.

It expects profit before tax to be no less than €14m for the year.

Also, like-for-like growth across the business reflected the better-than-anticipated performance in localisation and audio, and an increase in demand for art services.

During the year, the company bought Manila-based customer support team Ankama, China-based outsourced art creation firm Mindwalk, Volta studio, a concept art service provider, and 50% of Kite Teamd which was not previously owned.

In October it bought Player Research, a UK-based provider of player behavioural research and user experience testing services, for £1.3m.

Chief executive Andrew Day said the company has a healthy pipeline of acquisition targets, which have the potential to extend its service offering, geographical reach and market penetration and to offer operational synergies.

He added: "We are starting to see signs of consolidation of the supplier base at a number of our clients which is something we welcome and have expected as a natural response from the games industry to an increasingly complex environment of multiple games platforms, now including virtual and augmented reality, expanding geographies and languages and a multitude of monetisation models.

“We believe we are uniquely well positioned to benefit from this consolidation and, although there will inevitably be both wins and losses, overall we expect to be a net beneficiary of this process. We, therefore, remain very confident of our strategy and, at this early stage, maintain our current, cautiously optimistic expectations for 2017."

Shares in Keyword Studios were up 8.61% to 461.60p at 0908 GMT.