Keywords Studios Share Discussion Threads

[bigbigdave] 14/2/2017 09:24

MM's trying it on yesterday trying to hit stops, seen it many times with KWS. New highs in the next week or so imo.

[bamboo2] 14/2/2017 08:20

Dave, Like FEVR, KWS has a chart history with unfilled Gaps. Mainly Breakaway Gaps, that often act as support zones. These seem to be a feature of this kind of chart.

[discodave4] 14/2/2017 02:51

Thanks bamboo.Will be interested to see if 563/564 provides support or if it prefers to fill that gap from the 2nd Feb (550-553).Looking at the daily RSI it does tend to come off over bought periods and head back towards RSI 50, so think it may try to fill that gap as the RSI is on a downtrend and currently at 57.6.Apologies holders, am looking to get in so forgive me for hoping that it falls a bit more..........it may just decide not to! :)DD

[bamboo2] 13/2/2017 22:53

Dave, I liked 520 as I see that as the start of the recent up move, but both 507 and 520 look like good points for the 100% line.

Using 507 would make a 50% retrace approx 563.

[gucci] 13/2/2017 22:41

Date Ticker Broker Name New Old Price target New Price target Broker change
08-Feb-17 KWS FinnCap Buy 0.00 6.92 Reiteration
08-Feb-17 KWS numis Buy 0.00 7.15 Reiteration

[discodave4] 13/2/2017 20:53

bambooA question if I may, why isn't your 100% fib retrace not at 507 from the low 20th Jan, this is also not far off SMA50, ?.50% would be 564 with 100% at 507.No TA just curious as have been watching these for a while.TIADD

[melody9999] 13/2/2017 19:30

Been watching for weeks (unfortunately for me!) but finally nipped in for a few just before the close.

[panic investor] 13/2/2017 17:32

Good old fibs very rarely do they let you down

[nurdin] 13/2/2017 17:06

Yes I see what you mean :o(

[bamboo2] 13/2/2017 17:01

edit, my working chart, sorry it's a bit messy

[nurdin] 13/2/2017 16:46

50% retrace bamboo? Dont get it.

[bamboo2] 13/2/2017 16:30

Bought back half my holding. 570 is approx 50% retrace of the latest move up.

Could still test support at recent breakaway gap around 560 ish, but think this would likely be intraday if at all.

[bigbigdave] 13/2/2017 15:35

Shakes like this not uncommon with KWS, mm's searching for stops knowing there is a seller around. Usually bounces hard in the following days.

[nurdin] 11/2/2017 11:11

Incidentally consensus forecast for 2018 is 29c...that is 24.6p at the current exchange rate.However it is not inconceivable that, with a couple of good acquisitions this year,they could achieve that in 2017.A pe of some 24x then looks very attractive given the earnings growth rate.

[nurdin] 10/2/2017 12:34

Looks like consensus eps forecast for 2017 is averaging out at 25c,with Finncap well ahead at 27.7c.

Numis,Berenberg and Edison are all around 24c

[rivaldo] 09/2/2017 11:02

Berenberg today reiterate their Buy and 760p target:

[cfro] 09/2/2017 09:56

All acquired businesses are integrating well and performing to managements expectations according to the broker note i read yesterday.

This was a concern of mine as ive seen so many companies come unstuck by buying too many companies too quickly. But doesnt look like any problems here.

In fact the broker says that shareholders can expect more acquisitions as management continue to build Keywords into a major player in the games outsourcing industry.

[nurdin] 09/2/2017 09:29

A useful snippet of information from their previous annual report:

'Our business is not exposed to the uncertainties of fixed
price, fixed term contracts for project deliveries. Instead, we charge per hour, per man month, per
word or per asset created and with low capital expenditure requirements, the business has good profit to cash conversion.'

Didnt know that..

[bigbigdave] 09/2/2017 08:30

Expecting early April again togglebrush.

[togglebrush] 09/2/2017 08:15

When will Final Results be published...I cannot find Financial Calendar...Any Ideas ???
'
Historical dates were:-
'
05 Apr 2016
08 Apr 2015

[rivaldo] 08/2/2017 22:54

New interview with the CEO FYI (haven't even had a chance to listen myself yet):

http ://www.proactiveinvestors.co.uk/companies/stocktube/6883/keywords-studios-business-continuing-to-grow-very-strongly--6883.html?utm_source=Sign-Up.to&utm_medium=email&utm_campaign=7163-362190-Proactivity+-+08%2F02%2F2017

"Keywords Studios business continuing to grow "very strongly"
08 Feb 2017

Keywords Studios PLC (LON:KWS) boss Andrew Day says he's very pleased with the group's 2016 results, which show a business, which is continuing "to grow very strongly".

Revenues of around £97mln was about 67% up on the figure last year, while adjusted pre-tax profit was £14.8mln was up 85%, he noted.

"The Keywords story is working. We're delivering on everything we said we would," he told Proactive's Andrew Scott."

[bigbigdave] 08/2/2017 20:00

Keywords beats expectations once again in 2016

11:10 08 Feb 2017
Keywords smashed forecasts last summer with its interims and it has done the same again with its full-year results
Keywords Studios PLC (LON:KWS) told investors back in November it expected to beat forecasts and post a full-year profit before tax of at least €14mln, and the early signs suggest it will be even better.

The company – which provides services to the video games industry – has announced a preliminary, unaudited adjusted pre-tax profit of €14.8mln for the year ended 31 December 2016, on revenues of €96.6mln (also unaudited).

Given that analysts expected a pre-tax profit of around €13.1mln before November’s statement and still only €14.2mln afterwards, today’s figures make for good reading for Keywords investors.

The Dublin-based firm said organic growth as well recent acquisitions all contributed to the strong growth, although the star performer was new addition, Synthesis.

Keywords bought the audio and localisation business back in April in a deal which could be worth up to €18mln – its biggest purchase so far.

Synthesis was largely responsible for the forecast-beating interim results last year and the strong trading performance continued into the second half.

“Our group continues to grow revenues and profits whilst also growing a talent pool that is increasingly recognised as a resource that enables clients around the world to reduce complexity and focus on their core business of designing and publishing great video games,” said chief executive Andrew Day.

“The development of new Virtual and Augmented Reality platforms only adds to that complexity and, whilst we have not assumed stronger demand for our services in this area in 2017 compared to 2016, it's an exciting new form of content delivery that brings greater interactivity to many content types and requires the skills and services that we have developed over many years.”

WATCH: Keywords boss discusses 2016 progress

Aside from Synthesis, Keywords acquired six other businesses in 2016 – Ankama, Mindwalk, Volta, Player Research, Enzyme and Sonox – which it said all had a positive impact. It also bought the remaining 50% of Kite Team it didn’t already own.

The company paid out €20.7mln in cash for these new additions. At the end of the year, Keywords still had €17mln in the bank and had used €8mln of its €15mln rolling credit facility.

The strong cash generation and the available debt facilities, means the group has the headroom required to make further purchases and it already has a few ideas in mind, Day added.

Big business

If you needed proof that computer games are very big business just look at global sales, which are expected to be around US$115bn by 2018.

Keywords Studios services are used by 21 of the top 25 games developers.

Established in 1998 and headquartered in Dublin, it operates across Europe and Asia, as well as from studios in Canada, US and Brazil.

There are 120 permanent staff members flexing to over 1,000 at peak times.

Most video games are developed in English, but sales are global and that has created a business in translating games into local languages and cultures.

Keywords specialises in these localisation services; the translation and cultural adaptation of video games across different platforms for international distribution.

Its regional studios provide voiceover recordings, script translation and actor selection in more than 15 countries and 30 languages.

It also provides localisation testing to ensure the adapted content fits the context of the game as well as functionality testing for in-game defects and console specifications compliance.

Its current model involves native language testers playing through localised versions of the games, covering cultural, linguistic and functionality aspects simultaneously.

Following a number of strategic acquisitions, Keywords has also branched out into artwork creation for video games, such as concept art and character animation.

As Day highlighted, virtual reality (VR) and augmented reality (AR) are expected to play a big part in the evolution of gaming in the coming years and this is another aspect of the industry that Keywords is targeting.

The potential for this type of technology has already been highlighted by last year’s smash hit gaming app Pokémon Go, while VR headsets seem to be gaining traction among consumers.

Biggest deal and the star performer

The group's acquisition of Synthesis last April was its largest deal to date and also took out its main rival.

Keywords paid €18mln for the firm, split €10m in cash at the time of purchase, €1mln in cash due this year based on 2016 revenues, and €7mln in equity over one and two years.

The studio's primary operations are in audio and localisation, alongside modest-sized localisation testing.

It has a strong customer base and an impressive list of games to its name, including Call of Duty, Grand Theft Auto, World of Warcraft and Assassins Creed.

The acquisition was seen by analysts as a significant consolidation move, as Synthesis was the group's closest competitor and it gives the group a 15% of the global outsourced localisation market.

Obviously it hasn’t completed a full year in the Keywords stable so we’ll have to wait a little while for its first year figures, although in 2015 it reported pro forma revenue of €16.9m and profit before tax of €2.0mln.

Given the numerous positve updates from management regarding its performance, it wouldn’t be a surprise to see it blow these numbers out of the water in 2017.

Outlook for the coming year

Keywords has made great strides over the past year or two and it and it has put in place several measures to make sure this growth continues.

It has increased its global sales and sales support team by 50% over the past few months which it hopes will help it to keep on delivering organic growth.

As mentioned at the top, there’s plenty of cash and accessible funds knocking around Keywords’ coffers, paving the way for more earnings enhancing acquisitions.

“We remain well-funded and continue to review a healthy pipeline of complementary acquisition opportunities, which will add to the talent pool, range of services, production capacity and the choice we can offer our clients,” says Day.

“Although it's early in 2017, we are confident of making continued progress in the year ahead.”

What the brokers are saying

“Today's year-end update is comfortably ahead of revised guidance and confirms an extremely strong 2016, driven by both organic and acquired growth,” said finnCap analyst Harold Evans.

“Thanks to the company's aggressive consolidation strategy, Keywords is now uniquely positioned to capitalise on key trends, namely industry growth, the push to outsource and consolidation of suppliers.”

Evans – who has the stock as a buy – added he was confident that the growth will continue and upgraded his adjusted profit before tax forecast for the current financial year to €20.6mln on revenues of €126.1mln.

What is it worth?

As you’d expect, after the forecast-busting prelims were announced shares gained 3% to change hands for 610p a pop.

That’s an all-time high and values Keywords at around £326mln, or just under four times sales.

Despite its rapid rise – the stock has almost tripled in the past year – finnCap’s Evans reckons there’s still more headroom for price growth though, and upped his price target to 692p.

[bamboo2] 08/2/2017 17:52

Took profit this afternoon as felt disappointed by the price action intraday.

Think that we could see a longer consolidation period

[nurdin] 08/2/2017 17:33

Thanks Tomps.