Keywords Studios tipped to make less acquisitions

Dublin-based video game content provider Keywords Studios is expected to make fewer acquisitions this year but could well spend more on the purchases it does make.

The company - which provides design, sound and cultural localisation services for many of the world's top console game manufacturers including Capcom, Sony and Bethesda - is set to publish its 2018 annual results early next week.

Analysts are expecting a second acquisition announcement of the year to coincide with the figures.

Keywords made nine acquisitions last year for a combined €60m or so.

The company has guided for a €100m increase in annual revenues for 2018, to €250m and a 64% rise in pre-tax profit to just under €38m.

Market expectations are for 10% organic revenue growth, in line with broader industry growth.

"Keywords Studios acquired nine companies in 2018, for a combined net outlay of around €60m, in line with our forecasts, giving it a circa 5% share of the outsourced services market," said Goodbody analyst Patrick O'Donnell.

"With net debt of just €400,000 and in excess of €100m firepower, via a revolving credit facility, we expect management to address the acquisition landscape. We continue to model €60m of annual acquisitions into our valuation, given a fragmented market for outsourcers," said Mr O'Donnell.

Analysts expect Keywords to look for acquisitions in the software engineering and art areas, which could see fewer opportunities but at higher valuations.

The company's share price was up by over 8%.

More on this topic

Rising Irish actress Hannah Rose May chosen as new face of Guess clothing

120 children from Chernobyl to arrive in Ireland today

Two due in court in connection with discovery of guns in Dublin

Fire-scarred landscape looks like snow has come down in June as flowers bloom

More in this Section

'Heartbreaking for the workforce' - Kerry Foods closes UK factory with loss of 900 jobs

Top chefs to host 120 guests in a bid to inspire young people into food industry

UK utility company to pay out record €141m after ‘shocking’ Ofwat probe

Markets slow on German woes and G20 jitters


Cork media go head to head in triathlon relay

More From The Irish Examiner