Revenues jump 66% at Keywords Studios despite ‘Fortnite effect’
Dublin video gaming firm sees profits double to €22m on back of strong demand for services
Andrew Day, chief executive of Keywords Studios
Revenues at Keywords Studios, an Irish-headquartered but London-listed video gaming company, soared by 66 per cent in 2018, as the company benefited from strong demand for its services and an increasing share of its markets. The company pointed to an “encouraging” start for 2019, but noted that the “Fortnite effect” hit growth during 2018.
In the 12 months to December 31st, 2018, revenues jumped by 66 per cent to €250.8 million, as pre-tax profits almost doubled to €22 million. The group had net debt of €400,000 as of year-end, and said it will pay a final dividend of 1.08p, up from 0.98p in 2017, which means that its total dividend is to rise by 10 per cent to 1.61p per share. However, the group’s profit growth was held back by certain project deferrals into 2019 and bad debts of about €1.6 million relating to four clients entering insolvency processes, some of which were caused by the so-called “Fortnite effect”.
The phenomenally successful game, which Keywords Studios also works on, attracted some 200 million players last year, which disrupted other games supported by Keywords Studios, and saw some games producers cut their spending on supporting games, or terminating them altogether.
Overall, Andrew Day, chief executive of Keywords Studios, said the group’s strong performance was driven by an increase in its share of the growing video games market and an expansion of its range of services.
“This considerable progress has further improved our quality of earnings and moved us higher up the value chain with our customers,” he said, adding that the group is seeing “good overall demand” for its services across the group so far this year.
“We are actively reviewing acquisitions from which we will continue to be selective, with many businesses excited about the strong platform Keywords could potentially provide for their services and people.”
Looking ahead, Mr Day said that the likely increase in demand for content driven by the arrival of games subscription and streaming services from new entrants such as Apple and Google, “give us confidence in the outcome for the full year”.
The technical services provider to the global video games industry was founded in 1998, and now has over 50 facilities in 21 countries across Asia, the Americas and Europe. It provides services to 23 of the top 25 most prominent games companies, including Activision Blizzard, Electronic Arts, and Konami.