Life is sweet as gaming tip soars 50%
CANDY Crush Saga, the addictive video game, is played by about 500 million people, mostly on their smartphones. The world’s most popular game, it is just one of thousands available on mobile devices. And as phones become increasingly sophisticated, the games do too.
Parents and partners may despair at how much time family members spend gaming, but Keywords Studios is thriving on the back of this £60billion industry.
The company started out translating games played on the Xbox and PlayStation into different languages, but as the gaming market has expanded, so has Keywords. As well as working on Candy Crush, it translates games into more than 50 languages, tests them for defects, provides voice-overs in a variety of tongues, creates artwork for popular games such as Halo and provides customer support for gamers.
Tipped by Midas last April at 153p, the stock has sprinted through the past 12 months and is now 50 per cent up at 230p.
The company delivered strong results last week, with 2015 revenues up 55 per cent to €58million (£47million) and pre-tax profits 50 per cent ahead at €5.1million.
The company is based in Dublin, so its figures are in euros, but the dividend is paid in pence, and is up from 1.1p to 1.21p. Brokers expect further growth this year and next, as the market continues to expand and Keywords plays an increasing role within it.
Games producers are increasingly focused on designing and marketing their creations, outsourcing other functions to companies such as Keywords. Many of its competitors are much smaller, however, so Keywords is in a much stronger position, because it has expanded both organically and by acquisition and now offers a range of services from Shanghai to Seattle.
Midas verdict: Keywords Studios has had an excellent year and the stock has risen by 50 per cent. However, the outlook is bright so investors should retain at least 75 per cent of their shares. New investors could pick up a few as well, particularly if they show any sign of short-term weakness.
Traded on: AIM Ticker: KWS Contact: keywordsstudios.com or +353 1902 2730