Playing to win: Dublin’s Keywords Studios reports a 66pc hike in profits

3 Aug 2018

Image: Atmosphere1/Shutterstock

Acquisitive global games services company Keywords is playing to win.

Dublin-headquartered games services player Keywords Studios has reported that first-half revenues rose 72pc to €109.9m, up from €63.8m a year ago.

The company reported that PBT (profit before tax) has also surged 66pc to €15.9m compared with €9.6m from H1 2017.

‘We have made significant investments, most notably in enlarged facilities and senior and mid-level management, which are further supporting our organic growth’

The Irish company, which is listed on London’s AIM stock market, has been notably acquisitive of late, acquiring London’s Fire Without Smoke for £5.2m, Hollywood firm Blindlight for $10m, Ottawa’s Snowed In for €2.59m and Yokozuna Data from Silicon Studio Corporation, a Japanese developer of video games and middleware, for $1.5m.

In 2017 alone, Keywords made 11 acquisitions worldwide, including VMC last October for $66.4m to give it leadership in functional testing, and Sperasoft in December for $27m.

In recent weeks, the company also set up its own venture capital fund, Keywords Ventures (KWV), and made a £300,000 Series A investment in AppSecTest, a cloud company that tests mobile apps for GDPR compliance.

Keywords has methodically laid out the tapestry for a global video games services business that takes into account engineering, design, security and middleware.

Headed by CEO Andrew Day, Keywords Studios was established in Dublin in 1998 by Giorgio Guastalla and Teresa Luppino. It works on video game development for multibillion-dollar gaming giants such as Electronic Arts, Activision Blizzard, Warner Bros, Riot Games, Sony, Supercell, Take-Two, Ubisoft and Nintendo.

The company has more than 42 facilities in 20 countries worldwide.

A winning streak

The second half of 2017 and the first half of 2018 saw Keywords invest substantially in the expansion of facilities in Montreal, Dublin, London, Liverpool, Madrid, Katowice, New Delhi, Zhengzhou, Manila and Tokyo.

It invested net cash of nearly €10m for five acquisitions in 2018.

To fund future acquisitions, Keywords has established a new €105m credit facility with Barclays Bank, Lloyds Bank and HSBC. This will be used in conjunction with its own cash generation.

“Our progress so far this year has been very encouraging,” Day said.

“We have made significant investments, most notably in enlarged facilities and senior and mid-level management, which are further supporting our organic growth in the second half and beyond. Despite the incorporation of the lower growth and margin VMC business, our largest acquisition to date, and a weaker US dollar, we have delivered a first half in line with our expectations while also strengthening the business for the future.

“With the benefits of a full six months’ contribution from first-half acquisitions, a strengthening dollar, a healthy pipeline of activity and expanded capacity to deliver it, we anticipate a strong second-half performance in line with current market expectations for the full year.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years