Keywords Studios' revenue increases due to acquisitions

Video game technical service provider Keywords Studios’ revenue increased due to several acquisitions during the first half of the year.

Revenue increased by 77% to €42.4m for the six months to 30 June, in comparison to the same period last year, which resulted in a 177% rise in profit before tax to €6m.

Earnings per share nearly doubled to 8.55 cents from 4.29 cents in 2015.

Net cash fell about 43% to €3.5m after the company spent €13.5m on four acquisitions during the period.

To invest in development, the company acquired audio and localisation testing company Synthesis and bought the remaining 50% in Spanish and Latin American audio and localisation firm Kite Team, both in April.

In May it bought China-based outsource art creation firm Mindwalk and in March it bought the Philippines-based customer support team from Ankama.

The AIM-listed company reported a 30% increase in like-for-like revenue, which included an “exceptional second quarter performance” by Synthesis.

The acquisition of Quebec-based Volta in July, extended the company’s services into concept art.

It secured a five year revolving credit facility of up to €15m with Barclays bank to fund further acquisitions and working capital. The interest rate is 2% above Euribor and there is a 0.4% margin which is charged for unutilised facility.

Trading in the first two months of the second half of the year was in line with the company's expectations, and it said “the particularly strong first half leaves the board confident in delivering market expectations for the full year” as it said it is also reviewing a pipeline of acquisitions.

Chief executive Andrew Day, said: "The group has delivered a first half performance comfortably ahead of our expectations, driven by good organic growth, but also substantially complemented by acquisitions which have further extended our service offering, market penetration and geographic reach.

"The group's strong trading in the first eight months of the year means that we do not expect this year to be characterised by the typical weighting towards the second half. This performance gives us increased confidence in delivering against our expectations for the full year.”

The interim dividend increased by 10% to 0.44p per share and will be paid on 28 October.

Shares in Keywords Studios were up 5.84% to 417p at 1216 BST.