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(Alliance News) - Keywords Studios PLC on Wednesday set out an optimistic outlook and lifted its dividend as it hailed a "resilient" 2023 performance during what was a tricky year for the video game industry.
Keywords shares traded 13% higher at 1,549.50 pence each in London on Wednesday morning.
The provider of technical and creative services for video game production said revenue last year rose 13% to EUR780.4 million from EUR690.7 million. The firm's customers include Electronics Arts Inc, Microsoft Corp and Ubisoft Entertainment SA.
However, pretax profit declined 49% to EUR35.0 million from EUR68.0 million. Administrative expenses were 28% higher at EUR252.3 million. Adjusted pretax profit, which strips out exceptional costs, was 2.4% higher at EUR114.7 million.
Revenue rose 17% at constant currency. Organic growth at constant currency, excluding the hit from entertainment worker strikes in the US and foreign exchange, was 9%.
Keywords said: "Whilst Keywords' primary market is video gaming, it has an increasing exposure to the broader media and entertainment industry, with the crossover between the two industries growing. Both our Globalize and Engage Divisions generate revenues from the media and entertainment industry, with a large proportion of this in post-production audio services and marketing in the US. In May, the Writers Guild of America union commenced strike action following the failure of union negotiations around working conditions, residuals and AI usage."
Keywords noted the Screen Actors Guild-American Federation of Television & Radio Artists union then began striking in mid-July, "which meant a near complete stoppage of content generation in Hollywood".
The company said this led to around EUR20 million worth of lost revenue in the second half of its financial year.
Chief Executive Officer Bertrand Bodson said: "In what was a difficult year for the industry, we delivered resilient performance in 2023 and continued to extend our market leadership position, reflecting our role as a diversified enabler of the industry.
"We made considerable progress against our strategic objectives and delivered a record year of M&A, bringing greater exposure to higher growth and margin Create services, and have an extensive pipeline of acquisitions in 2024. We will continue to successfully navigate the current market conditions and are excited by the opportunities that lie ahead as we deliver against our plans and become a +EUR1 billion revenue business in the coming years."
Keywords lifted its final dividend by 10% to 1.76 pence per share from 1.60p. Its total dividend was also 10% higher at 2.61p from 2.37p.
Looking ahead it added: "We expect to deliver strong revenue and profit growth and further extend our market leadership position in 2024."
By Eric Cunha, Alliance News news editor
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