Keyword Studios results not a hit with markets

By
1 mins. to read
Keyword Studios results not a hit with markets
Master Investor Magazine

Master Investor Magazine 58Never miss an issue of Master Investor Magazine – sign-up now for free!

Read the latest Master Investor Magazine

Shares in AIM-listed software development services provider Keyword Studio (LON:KWS) fell by 7.30% to 1,270p (as of 14:00 GMT) despite reporting that revenues for 2019 were around 30% higher than the prior year. Roughly half of this improvement was generated organically which is slightly slower than in 2018.

CEO Andrew Day commented: “In what was a relatively light year for the video games industry against a backdrop of the tail end of the current generation of video games consoles from Microsoft and Sony, the Group has delivered strong growth, particularly from our two largest divisions, Functional Testing and Game Development services.

“We have also continued to invest in expanding our business, including in new and enlarged facilities, improved technology, strengthened management and additional functional support. Whilst this investment held back margins in 2019, it will enable us to continue to deliver high levels of growth as we position ourselves as the ‘go to’ global services platform for video games in a market which is seeing an accelerating trend towards outsourcing.

“Looking forward, we expect the launch of a new generation of games consoles and the further development of new streaming platforms, in addition to the structural drivers of growth across the video games market as a whole and the ongoing trend towards external development, to drive continued strong demand for our services through 2020 and beyond. The full benefit of this new generation of consoles is expected to increase over the medium term. We will continue to invest in the Group to take full advantage of these growth opportunities with margins expected to increase incrementally in 2020 towards our historic norms as we leverage these costs over a growing revenue base.

“Our recently enlarged banking facility positions us well to capitalise on this clear opportunity to take a leading share of the increasingly outsourced video games services market both organically and via acquisitions, as we further enhance shareholder value. We fully expect to make a number of selective acquisitions as we continue to build our global video games services platform and we are managing a strong acquisition pipeline as we enter 2020“.

Take part in our poll

Of the stocks covered by Master Investor in the weekly Small Cap Round Up, which ones do you hold?


The Master Investor Show 2020 tickets are now available. Join us at the Business Design Centre on Saturday 28 March 2020.

Book your FREE tickets today using code: MIBLOG

Comments (0)

Leave a Reply

Your email address will not be published. Required fields are marked *

YOUR FREE INVESTMENT MAG

Get real investment insights from some of the best minds in the business - with our free Master Investor Magazine.