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MARKET REPORT: Lockdown gamers spur big profits for Keywords

MARKET REPORT: Lockdown gamers spur big profits for Keywords 2

Computer game services group Keywords surged as investors cheered a solid set of annual results.

The AIM-listed firm, which has helped create games including the Madden American football and NBA Live basketball franchises, jumped 10.1 per cent, or 236p, to 2574p after reporting a 56 per cent rise in pre-tax profits to £73million in 2021.

Revenue climbed 37.1 per cent year-on-year to £433million as it avoided a repeat of project delays caused by the pandemic. 

Keywords, which has helped create games including Madden American football (pictured) and NBA Live basketball, jumped 9.2% after reporting a 56% rise in pre-tax profits to £73m in 2021

Keywords, which has helped create games including Madden American football (pictured) and NBA Live basketball, jumped 9.2% after reporting a 56% rise in pre-tax profits to £73m in 2021

It attributed the profit surge to ‘high levels of demand’ as the industry continued to benefit from a boost received in lockdown when some people turned to computer games to stave off boredom.

The trend has sparked a boom in the UK’s gaming market, which last year hit a record value of £7.16billion, 33 per cent larger than it was just before the pandemic.

The final dividend was set at 1.45p per share after being cancelled in 2020 due to Covid.

Buoyant trading continued into 2022, and it expects the rest of the year to be ‘particularly strong’ as several games are launched.

As a result, it expects its results for the year to be ‘towards the top end’ of market expectations.

However, there was less good news elsewhere as game publisher Team 17 sank 6.8 per cent, or 40p, to 550p after it predicted the war in Ukraine would knock around £4million off its revenues this year.

The company, whose more famous titles include the Worms and Overcooked series, said the conflict meant the release date for two games being developed by partners in Ukraine was now unclear, while revenues would also take a hit from suspending sales in Russia and Belarus. 

Stock Watch – Gulf Keystone Petroleum

MARKET REPORT: Lockdown gamers spur big profits for Keywords 3

Gulf Keystone Petroleum gained on the back of strong annual results.

The Kurdistan-focused oil and gas group swung to a pre-tax profit of £124.4million in 2021 from a £36million loss the previous year while revenue nearly tripled to £229million from £82.4million.

It boosted its average production by 19 per cent year-on-year to 43,440 barrels of oil per day, while the average price per barrel more than doubled to £37.78, from £15.89 in 2020.

The figures sent the shares up 12.9 per cent, or 29.5p, to 259p.  

It also warned about the impact of Covid, and expected to increase its costs for 2022 by about £1.7million.

The assessment overshadowed record results. It reported a pre-tax profit for 2021 of £29.1million, 11 per cent higher than the year before, while revenues rose 9 per cent to £90.5million.

The FTSE 100 climbed 0.6 per cent, or 41.50 points, to 7578.75 while the FTSE 250 slumped 1 per cent, or 219.50 points, to 21,272.47.

Uncertainty about Ukraine continued to roil markets as investors remained sceptical about the possibility of a ceasefire after a lack of progress in recent peace talks.

Markets were also unsettled by rising inflation and the soaring cost of living, which threatened to dampen economic activity and potentially cause a recession.

Pessimism over a diplomatic breakthrough has once again pushed oil prices higher, lifting BP by 3.1pc, or 11.4p, to 382.75p and Shell by 4.4pc, or 89.5p, to 2111.5p.

Miners also propped up the Footsie amid firmer metal prices, with Glencore gaining 4.2 per cent, or 20.55p, to 500.7p while Anglo American rose 4.6 per cent, or 175p, to 3976p, Rio Tinto climbed 4 per cent, or 231p, to 6076p and Fresnillo added 4.1 per cent, or 29.2p, to close at 744.4p.

Lloyds shares fell 3.8 per cent, or 1.88p, to 48.12p after it was hit by a double downgrade from RBC.

Analysts at the investment bank lowered the stock to ‘underperform’ from ‘outperform’, and trimmed their target price to 44p from 45p after saying its growth drivers ‘do not appear to be game changing’ and that Lloyds looked overvalued compared to peers.

Credit rating group Experian also slipped 2.9 per cent, or 90p, to 2978p after it was cut to ‘neutral’ from ‘buy’ by analysts at Citigroup, who lowered their target on the stock to 3146p from 4150p.

Meanwhile, Electrocomponents announced that it will become RS Group in early May. 

Boss Lindsley Ruth said the change will bring the business together under one brand and leave it ‘united behind a common ambition’. The shares were down 0.7 per cent, or 7p, at 1078p.

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