Keywords Studios profit set to fall short of target

Keywords Studios profit set to fall short of target
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Full-year profits at Keywords Studios, the Dublin-based video game content company, are set to fall short of market expectations.

The company provides design, sound and cultural localisation services for many of the world’s top console game manufacturers including Capcom, Sony and Bethesda.

It expects adjusted pre-tax profit for the year to be around €37m, with revenues amounting to around €250m.

Those figures would amount to respective annual growth of 61% and 65%.

However, the profit figure is at the bottom end of market consensus forecasts and is more than 8% below the profit forecast of Davy, which sees Keywords’ finish to the year as being “softer-than-expected”.

We believe that while the stock has corrected 50% from its high in August, this update will result in further share price weakness given the implied lower organic growth and margins,” said Davy analyst Joseph Quinn.

The company’s share price is down by over 29% in the past 12 months, Yesterday it was up by around 2%.

Keywords also announced the acquisition of Sunny Side Up Creative, a Canadian-based marketing and trailer production studio for the games industry for €3.8m.

It is the Dublin firm’s ninth acquisition this year, following 11 made last year, and is expected to be completed early next month at the latest.

Earlier this year Keywords agreed a €105m credit facility to fund ongoing acquisitions.

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