DAVY VIEW

Keywords Studios (KWS) has released a 2018 trading statement confirming its December comments on revenue and adjusted profit before tax. We expect investors to focus on like-for-like (LFL) sales growth, which was 10.1% in 2018 and 14.9% excluding VMC. This compares to 15% LFL sales growth in 2017. While short, the statement reaffirms our view that KWS will continue to grow above the industry average as developers increasingly move to utilise outsourcing partners. Additionally, the KWS share price reflects limited value for its continued acquisition strategy.