£723.7m market cap
1130p 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 that we still expect to deliver solid growth, despite major publishers reporting mixed trading recently. However, we believe that Keywords’ robust business model, global exposure and diversity of customer base will allow it to continue to outgrow 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 deliver robust shareholder returns.
Y/E Dec |
Revenue (€m) |
EBITDA (€m) |
PBT (€m) |
EPS (c) |
P/E (x) |
P/CF (x) |
|---|---|---|---|---|---|---|
| 2016A | 96.6 | 16.9 | 14.9 | 20.3 | 63.7 | 42.1 |
| 2017A | 151.4 | 26.6 | 23.0 | 29.9 | 43.3 | 41.3 |
| 2018E | 250.1 | 43.2 | 37.9 | 47.0 | 27.5 | 26.4 |
| 2019E | 293.2 | 50.2 | 43.1 | 53.4 | 24.2 | 24.8 |
| Last updated on 21/03/2019 | ||||||
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 price weakness is more a reflection of expectations getting ahead of themselves than structural weakness. The sustained trend towards outsourcing should support a low mid-teens growth rate for service providers to the industry.
Last updated on 21/03/2019
Sector |
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| TMT |
Share price graph
Balance sheet |
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|---|---|
| Forecast net debt (€m) | 0.4 |
| Forecast gearing ratio (%) | 0 |
Price performance
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1m |
3m |
12m |
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Key management |
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|---|---|
| Ross Graham | Chairman |
| Andrew Day | CEO |
| David Broderick | FD |
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