Keywords Studios Share Discussion Threads

[snew] 30/4/2018 15:56

After writing down my thoughts above I have bought some more at £18.11. Hope they stick to the business model long term. The technical indicators look good for an entry (although I am just learning the technical stuff - may not be reliable)

[scooper72] 30/4/2018 12:18

Many thanks for those estimated percentages

[aimingupward2] 30/4/2018 12:09

The AGM is on 25th May and we are told that there will be "a short presentation for investors". Presumably encouraging, otherwise why would they do it!

[aimingupward2] 30/4/2018 11:43

I don't really know the answer to that, scooper, but have read that, whereas only around 50% of the gaming industry services are outsourced (and KWS are looking to that rising to 80% in the future), the corresponding figures for the film and T.V. industries are both above 90%.

[scooper72] 30/4/2018 10:51

Appreciate the quotes from the company report - let's hope the next leg up breaks through all the brokers predictions. When they talk about moving into providing support services for the TV market what are they thinking of? Back to where they started out with games - Translation services?

[scooper72] 30/4/2018 10:47

Put that way shanklin I get the point. Thnx

[panic investor] 30/4/2018 10:44

If they did that I would sell immediately - they are not game developers - do what you know !

[aimingupward2] 30/4/2018 10:40

scooper, I concur with what snew has written and also think that KWS is still in the early stages of it’s development. They said as much at the end of August last year - “acquisitions within the gaming services industry are still at an early stage”. If you read back at what the company has said in it’s reports to shareholders it is clear that they foresee not only plenty of growth in their current areas of operation but also in several other related fields, e.g. “e-sports, e-Learning, film and T.V. remain part of our longer term road map”. Broker Berenberg has also spoken of “vast opportunities “ for KWS.

We saw adoubling of the share price from late July to late July to late October last followed by 6 months of going nowhere. A second leg upward seems to have started which, if we get clear of 1850p, could possibly see another doubling to take us well beyond brokers current target prices.

I bought in almost a year ago at just over £8, added recently at just over £15, and am now going to sit tight!

[snew] 30/4/2018 10:28

Scooper - If it is any reassurance I was doing the same at 17, 10 years later and have not turned into a zombie yet!

Still play here and there, but don't have as much time on my hands these days. I still spend too much money on games which is a good sign for KWS!

[shanklin] 30/4/2018 10:23

I think it would be most unwise for KWS to start competing with their customers by producing their own games.

[scooper72] 30/4/2018 10:21

Thanks for your thoughts snew. Good point made with your publishers analogy. Agree with u on the 18+ market. Bit worried about my 17 year old going into his adult life with gaming being his main social hobby. But like u say it is a generational thing. I used to wander the streets with my friends as a teenager on a Friday evening. The current lot are on the sofa communicating through head sets.

[snew] 30/4/2018 09:53

Scooper -

I personally think they are still quite early in their journey and hope there is plenty of growth to come.

I think it could be a mistake for KWS to start developing (and publishing) games from scratch. I think this would be further outside their current business model than many realise as they do not have the creative talent on their books to come up with the concepts and story writing for games. It may be a stretch but,the only thing I can compare it to would be a book printer deciding to start writing their own books.

Personally I hope their stick to their business model of providing a service for publishers and take on more clients. Publishers will be able to produce games cheaper if they can outsource components to KWS. This will lead to a lower entry barrier for new games publishers, more games being produced and more titles for KWS to get revenue from.

Being a millennial, I am convinced that gaming will continue to grow. People no longer stop playing video games when they become adults. Games for 18+ is now a growing market.

Just my thoughts on the wider picture.

[scooper72] 30/4/2018 09:34

Interested to know what others think about where KWS is at in terms of its long term development as a company. Personally started buying when it was around 270p per share. Been in and out since then and currently up 44 per cent on existing holding. So far stopping myself from slicing this time round. Looking for some arguments to back up my intuition. Obviously the company had been successfully executing its strategy re organic growth and acquisitions. But am wondering whether people think that because the gaming market is growing so vigorously that potentially KWS could be regarded as not only becoming the dominant player in the support services industry but potentially also move into taking a significant position in creating & designing games from scratch. Anyway if you had to describe them in the context of the long term would you say a) still in the early phase of their journey as a company?B) half way through, will still grow, but the horizon is starting to become more visible?C) they've seen incredible growth,And simply need to maintain their place in the market based on what they have consolidated so far, however as the market changes new opportunities to grow will emerge which they can then take advantage of as long as they stay on the ball etc?Maybe these are slightly spurious questions but let me know if you have anything helpful to say particularly if it cuts through my relative ignorance.

[bamboo2] 27/4/2018 10:44

could go higher today, but resistance at 1800-1832.

Took the 5.7% [revised due to miscalculation]. Back soon. :-)

[villarich] 27/4/2018 09:52

Rumours of Xbox 2 and PS5 have started circulating too. Talk of more focus on game streaming and subscriptions. The gaming industry is moving more towards games that put out new content on a regular basis eg GTA V.

[windsor430] 27/4/2018 07:53

Sony PlayStation sales jump 300% & Nintendo sales doubled (mainly on the back of Switch)... this industry is growing at tremendous rates

[panic investor] 26/4/2018 14:59

It's all in that crystal ball :-)

[bamboo2] 26/4/2018 09:59

Started averaging back in this morning on potential turn. Price finding support 1656-1685.

[christh] 24/4/2018 08:07

Next step is moving to £19 as £18.30 was breached.
Very positive move from "Synthesis" surely they will treble their investment.

More aquisitions on the way and more contracts signed.

Growth is unstoppable with KWS

[rivaldo] 24/4/2018 07:23

Encouraging to see that the vendors of Synthesis have decided to take €1m of deferred consideration in KWS shares rather than cash....

[rivaldo] 23/4/2018 23:19

I assume this will be in tomorrow's Daily Mail - should bring in some interest....



It's a long article, so I thought this extract was the most interesting, with some titbits of info not previously known:

"SMALL CAP SHARE IDEAS: Video games outsourcing firm Keywords Studios expands amid growing industry

By Philip Whiterow, Proactive Investors, For Thisismoney.co.uk
Published: 12:49, 23 April 2018 | Updated: 16:47, 23 April 2018

"Examples of ‘larger purchases’ include North America-focused VMC Consulting, which it bought for $66million last October, financed by an underwritten share placing.

The new shares were sold through a book-build exercise and snapped up in about two hours, which underlines how highly regarded is the video games services group at present.

Shares over the last three years have rocketed from 153p to 1,746p as the carefully built portfolio, which ranges from translation services through to augmented and virtual reality services, has driven large rises in sales and earnings.

VMC looks to be more of the same. Keywords expects the latest addition to be ‘significantly earnings enhancing’ almost immediately.

Adjusted revenue of the US group in the year to October was $57.4million and underlying profits an annualised $6.4million.

The purchase will more than double Keywords' customer support operation in the North American market as well as growing market share and footprint.

Cross-selling has been a fundamental plank of the strategy and the number of clients using three or more of Keywords’ services increased to 93 in 2017 from 64 in 2016 and 51 in 2015.

German bank Berenberg, which rates the shares a ‘buy’ and has a price target of 2,060p, sees this trend as evidence that computer games publishers and developers are moving away from ‘tactical outsourcing’ towards strategic arrangements with trusted partners.

Crucially, it has made its first inroads into the eSports market, mostly through the provision of its services for game development and in-game support, but also via marketing.

ESports – football, rugby, Formula One to name three - are played electronically by teams with increasingly large numbers of people watching.

By 2020, the market is tipped to be generating £1billion annually in revenues and, like video games, there is a requirement for localisation and consistent quality.

Keywords highlights that it is continuing to seek out ways to ‘leverage the growth in eSports further,’ Berenberg observed.

The most recent acquisitions have focused on adding extra music and audio services to the group’s offering."

[discodave4] 23/4/2018 22:09

Hi Villa,Had these on my watch list for a good while now, waiting and waiting for it to dip to a reasonable rating........and missing out on some decent capital appreciation because I'm tight! Lol. So looking again, fancied ZOO but that's got to a ridiculous PE now.My only concern here is their acquisition strategy and how any amortisation/depreciation may suddenly wallop the bottom line.Plus I fear that Christh is here, which is a major red flag to be honest!........or a very good barometer as not to be buying at the all time high!.DDps If this was at, or below, its NAV would be in like a shot (I reckon 261p based on the latest results)