£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) |
EBITDA (€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
Sector |
|---|
| TMT |
Share price graph
Balance sheet |
|
|---|---|
| Forecast net cash (€m) | 2.8 |
| Forecast gearing ratio (%) | N/A |
Price performance
% |
1m |
3m |
12m |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Key management |
|
|---|---|
| Ross Graham | Chairman |
| Andrew Day | CEO |
| David Broderick | FD |
Content on Keywords Studios
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