Keywords Studios


£708.3m market cap

1106p last close

Keywords Studios is now the largest and most diverse supplier of outsourced services to the games industry. Through regular acquisitions, the company is building its scale, geographic footprint and delivery capability.

Investment summary

Keywords has built an enviable position of strength, in an industry which we still expect to deliver solid growth, despite games developers reporting more mixed trading recently. However, we believe that Keywords has the strength of model and diversity of customer base to continue outgrowing the games market through the longer term. The recent share price fall suggests concern that the growth story is faltering – and hence continued execution should drive robust shareholder returns.

Y/E Dec
Revenue (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2016A 96.6 16.9 14.9 20.3 61.5 40.7
2017A 151.4 26.6 23.0 29.9 41.8 39.9
2018E 250.0 42.4 37.0 44.6 28.0 22.5
2019E 292.1 51.5 44.4 55.1 22.7 20.6
Last updated on 21/02/2019
Industry outlook

The games industry is being hit by pockets of weakness resulting in a significant sell-off in the shares of many market participants. However, we believe that the dynamics of the industry remain attractive overall, and that the downgrades / share weakness is more a reflection of expectations getting ahead of themselves than structural weakness. The trend towards outsourcing should support a low-mid teens growth rate for the service provider into the industry.

Last updated on 21/02/2019
Share price graph
Balance sheet
Forecast net cash (€m) 2.8
Forecast gearing ratio (%) N/A
Price performance
Actual (14.3) (6.3) (27.5)
Relative* (17.1) (9.9) (26.9)
52-week high/low 2065.0p/900.0p
*% relative to local index
Key management
Ross Graham Chairman
Andrew Day CEO
David Broderick FD

Content on Keywords Studios