Keywords Studios Share Discussion Threads

[bigbigdave] 16/4/2019 08:08

Thanks cf456, all in the price then :o)

[cf456] 16/4/2019 07:59

It's not new news. It was all in the results the other day.



"The Company has previously declared final dividends and certain interim dividends relating to the financial years 2014 to 2016 without having had sufficient distributable reserves in the holding company as required by the Companies Act 2016 due to a failure to make the necessary upstream distributions from subsidiaries to the Company despite such reserves being available. This was recognised during 2017 and a major distribution exercise was undertaken to rectify the problem.

In addition to the above, no interim accounts were filed at Companies House prior to the payment of interim dividends previously paid by the Company in the years 2013 to 2018. This was identified by the Board in August 2018 and legal advice obtained.

It is important to make clear that no party has been or is in a worse position as a result of these oversights.

The Company is seeking authority to release all relevant parties from any potential liability via a specific shareholder resolution to be put to the shareholders at the 2019 AGM. Accordingly, the appropriate resolution, if passed, will authorise the Company to enter into deeds of release to put all relevant parties in the position in which they were always intended to be had the relevant dividends been made in accordance with the Act."

[bigbigdave] 16/4/2019 07:56

No RNS but doubt it will go unnoticed.

[newtothisgame3] 16/4/2019 06:07

#Keywords #Studios, which provides services to computer games developers, said that it had breached the Companies Act with a series of payouts between 2014 and 2016. #KWS

[rivaldo] 15/4/2019 08:44

From the FT today - games subscriptions to become a "multibillion dollar business" for Apple:



Extracts:

"Apple spends hundreds of millions on Arcade video game service

Gaming could generate more revenues than TV or news subscriptions

Apple is spending hundreds of millions of dollars to secure new video games for its forthcoming Arcade subscription service, according to several people familiar with the deals.

The substantial outlay to developers shows how seriously Apple is taking games as a new source of subscription revenues, despite the public paying more attention to its star-studded push into television and news.

It also reflects the increasing competition in Silicon Valley for exclusive rights to the best content, as the iPhone maker bids against other new games platforms from Google and Tencent, as well as the console makers Nintendo, Sony and Microsoft."

"Some analysts predict games subscriptions could become a multibillion-dollar business for Apple within a few years. But to establish itself in the market, Apple is having to make substantial upfront investments without knowing whether Arcade will be a success.

Several people involved in the project’s development say Apple is spending several million dollars each on most of the more than 100 games that have been selected to launch on Arcade, with its total budget likely to exceed $500m. The games service is expected to launch later this year.

That compares with the $1bn that Apple was said in 2017 to have budgeted for original content for TV+, though analysts believe that its video spending has already exceeded that level."

[windsor430] 12/4/2019 13:29

Regained its momentum - a lot of others riding high (like this was) until the Oct pull back have stuttered - glad KWS is proving its worth again.

[alphabeta4] 12/4/2019 09:18

This must be hurting the shorts, if indeed they're still around. It will be interesting to see the short interest figures over the next few days (they normally run 3 working days behind). Over 2% of the shares were traded yesterday, which was actually more than on results day so the rise is on chunky volume. IMO it could get interesting here if they're rushing to the exit.

[aimingupward2] 11/4/2019 16:41

Today's uncrossing trade at 1393p is, again, clearly above the offer closing price.

[aimingupward2] 10/4/2019 19:16

And the uncrossing trade at 1355p, 7p above the closing offer price, bodes well for a good start tomorrow.

[gareth004] 10/4/2019 16:11

Absolutely, think the people have got wind of this one..

[alphabeta4] 10/4/2019 16:05

Hmm, interesting move - to be flat all day then have a sudden rise suggests both a large buyer and seller around and the seller has been exhausted first. Could be a good sign as volume decent too - over 1% of shares already traded today.

[pepsiman1] 09/4/2019 20:47

Short tracker shows JPMorgan now short less than 0.5%

[togglebrush] 09/4/2019 12:53

Re: FY18 analyst presentation
'
Many Thanks tomps2 for the link … as you say a superb presentation.

[rivaldo] 09/4/2019 12:21

Berenberg say Buy today and increase their target price to 1600p:



Thanks Tomps2, sounds great - will catch up with the presentation later.

[tomps2] 09/4/2019 09:21

Keywords Studios (LON:KWS) FY18 analyst presentation given yesterday by Andrew Day, CEO & David Broderick, CFO.



A superb presentation. Really worth a watch. KWS keep on doing it very well. The market is growing at 9% a year, outsourcing is still less than 50%, so lots of market to grow, across many services lines. Clients are up selling to multiple service lines. They now supply 5 service lines to Fortnite! (Benefitting from being game agnostic.) Still a sector with loads of tiny players, so ripe for consolidate. Andrew goes into depth about each of the service lines. There are case studies of integration of VMC, Art service line and audio service line. And, you get all the analysts Q&A. It's long but worth it, even if you just skim through it.

[rivaldo] 09/4/2019 08:18

And from Goodbody.....large acquisitions are on the way from existing resources:

"Keywords Studios could target higher ticket size deals this year, given its strong balance sheet, Goodbody says. The Irish provider of technical services to the videogames industry says it has a healthy pipeline of acquisition opportunities, with a particular focus on building marketing, engineering and audio services. An untapped credit line of more than EUR100 million signed last year gives Keywords balance-sheet room to continue to pursue acquisitions, Goodbody says. The brokerage expects Keywords to spend EUR60 million on M&A this year. "Part of the attraction of Keywords, is its ability to continually unearth opportunities to consolidate a fragmented outsourced services market for video games production," Goodbody says."

[robow] 09/4/2019 08:17

and also from yesterday's Citywire

Keyword Studios (KWS)
Who’s trading? Citywire AA-rated Richard Power

The trade: Octopus’ micro-cap stock picker upped his stake in computer game translator Keywords Studios from 5.9% of shares to 6% worth £43 million at a price of £11.26.

How have the shares performed? Shares in Keyword have near halved since October last year, falling from a peak above £20. They remain almost 430% higher over the last three years, however.

What does the company say? Factoring in a solid diet of acquisitions the Irish company reported a 72% boost to revenue in the first half of last year to €110 million (£93.5 million) and a robust profit margin of 37.4%, with pre-tax profits rising 67% to €16 million.

What’s the outlook? The plunge in Keywords’ value has coincided with investor fears about the impact of the free-to-use gaming phenomena Fortnite on sector margins, with short interest in the stock rising from zero to a steady 4% in the last six months. Liberum initiated coverage this month on a buy at £12.45. The shares closed at £13.26 on Friday, up 60p on the day.

[rivaldo] 09/4/2019 07:49

More re Liberum's upgrade:



"Keywords to benefit from gaming changes, says Liberum

A strong set of full-year results shows that video games platform Keywords Studios (KWS) looks set to benefit from changes in the market, says Liberum.

Revenues for 2018 of £217 million, representing like-for-like growth of 10%, were in line with consensus. Gross margins grew to 38%, while adjusted earnings came in at £38 million, 1% ahead of forecasts.

Keywords had also seen a positive start to the year with important contract wins, including the acquisition of GetSocial, enhancing the platform’s cloud-based solutions and games analytics services.

Analyst Alexandre Schmidt said the sudden and continued success of online game Fortnite was a tailwind for Keywords given its ‘considerable’ amount of work with the ‘important franchise’.

With Google, Tencent, Microsoft and Amazon all getting closer to launching their own streaming platforms, he said this could become a ‘major delivery channel sooner than expected’.

‘Keywords has stated that it is already working with major game makers and platform providers in order to port old and new games to the cloud,’ he said.

‘That, in combination with the increased reach of the cloud among gamers and higher game complexity (allowed by nearly unlimited processing power) should be a catalyst for higher demand for games services in the coming months.’

Schmidt revised the target share price to 1415p from 1245p."

[newtothisgame3] 09/4/2019 02:50

#Keywords #Studios (#KWS) Tip Update: Buy at 1313p

[alphabeta4] 08/4/2019 11:45

Me too, just added a few this morning - I actually quite like these numbers.

My add was mainly centred around feeling I can derisk the organic calculation which the market seems to have latched on to following the weak H1 last year.

2017 was 15% and they've now produced an outcome of 10.1% or 15% ex VMC. By my calculation the market is pricing in a figure of 8% organic for the year having done a pro rata revenue calculation on each acquisition.

On the revenue side I think there's a decent amount to go for. I've calculated VMC lost €8m revenue last year, the biggest loss being in the functional testing line as growth is stated at 6.4% from a €30m base (€1.92m) and 26.5% outside VMC (€7.95m) where they now expect VMC to grow at the same rate as it now has the same processes. So that's up to 3% organic there.

The bad debt took 5% off adj pbt (which would have been a beat outside btw), if you crudely take the gross profit percentage of 38% this works into €4.2m revenue (1.6/0.38) so 1.7%.

Localisation had a €6m Fortnite effect from one client (2.4% of rev) of which most has now been done in Q1 so up to 2.4% there.

Then there's the potential porting work from the move to streaming which we know Google has gone live and Microsoft looks well advanced.

IMO looking at games such as PUBG which seem to be running at 1/3 of sales via looking at review numbers on Steam vs H1 last year these games seem to tail off quite rapidly in yr 2. Apex Legends looks a risk but I suspect this is most likely to capture ex Fortnite/PUBG players with the genre stabilising, there's only so much you can add to entice new players from shifting from two battleground style games to three. Some existing players will also get bored by the genre. Seeing as KWS had kept at 15% organic growth ex VMC for 2018 anyway this looks a bit of a red herring to me.

So overall I have predicted organic potential of 10.1% + 3% + 1.7% + 2.4% + streaming, i.e. 17.2% + streaming overall. I think the market is going to be pleasantly surprised by just how well this year is going to go and forecasts are well covered.

[aimingupward2] 08/4/2019 11:09

Liberum raises it’s price target from 1245p to 1415p.

[gareth004] 08/4/2019 09:38

Been in this share for a while and topped up myself on dip... in for the long haul prospects all looking good!

[scooper72] 08/4/2019 08:54

Just bought a few on the dip. It has obviously being making relatively steady progress from the low at around 900p. So if it starts to reverse further will have to take the hit and make sure I have some cash to top up if it goes back under 950p. But this is definitely one I want to have some exposure to for the long term.

[rathean] 08/4/2019 08:38

There will always be disruptive games but the wider KS net gets the more of a positive it will become. Numbers impressive only concern as a medium term investor is the pace of cross selling services. It's improving but not setting the world alight, more work to be done there.Exciting business to be in though with US tech giant entering their market makes KS attractive from more than just a growth story imo dyor ofc.

[rivaldo] 08/4/2019 08:30

Interesting then that KWS said today that, as stated above, KWS are now heavily involved in "considerable" work on Fortnite.