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Technical and creative services provider Keywords Studios reported that profit fell by more than fifth as lower margins offset a climb in revenue. The company also said it would not recommend a dividend, citing uncertainty from the Covid-19 pandemic.
'Despite the group's resilient financial position and the modest size of the dividend, the board believes it would be inappropriate to recommend a final dividend in the current circumstances,' the company said.
For the year to 31 December 2019, pre-tax profit fell 21.4% to €17.4m while revenue rose 30.2% to €326.5m.
Adjusted earnings (EBITDA) margin fell to 15.2% to 17.4% as the company continued to invest in the group's operational capacity, supporting infrastructure and management.
The company said, however, it expected margins to grow over the next year.
'Whilst that investment held back margins in 2019 and the COVID-19 disruption will place further pressure on margins in 2020, we expect to see margins increase incrementally towards our historic norms as we leverage the investments over a growing revenue base in 2021,' the company said.
Keywords Studio said 2020 started in line with market expectations for the full year and saw only limited impact from Covid-19 pandemic in the first two months at five of its China based studios.
'As it remains difficult to foresee the impact on our clients and the threats and opportunities that may arise, it is inappropriate to provide guidance for FY20 at this time,' it added. At 10:00am: (LON:KWS) Keywords Studios PLC share price was +14p at 1532p