Keywords Studios Share Discussion Threads

[the white house] 07/4/2020 10:30

Great quote ; Unable to satisfy increased demand in some areasChina is virtually fully back up Big releases end of year for new hardware All staff can wfhAll is well

[njones01] 03/4/2020 08:14

Most other gaming stocks have recovered to above early March COVID 19 dip. Does anyone know why KWS is lagging behind? I appreciate it is a service provider to the sector, but would have thought it would have a stronger correlation to gaming stocks.

[rivaldo] 26/3/2020 09:39

Liberum say Buy today, with an 1860p target price (adjusted slightly from 1875p):

[rivaldo] 25/3/2020 15:28

Exactly. It's all explained in the RNS anyway.

[scooper72] 25/3/2020 15:25

I saw something on my IG account that they are delaying release of FY results. Presumably this is in line what companies have been told to do cuz of covid19?

[rivaldo] 25/3/2020 15:03

This morning's RNS saw results in line with expectations, and COVID-19 disruption looks pretty minimal and short-term to date, with the Chinese operations in full production. Indeed, KWS are:

"currently seeing an increase in the demand for certain services, as existing and new clients look to us for support during this challenging time and as they reappraise their production arrangements".

Goodbody Stockbrokers are positive:



"Keywords sells to 23 of the top 25 most prominent games companies, including Activision Blizzard, Electronic Arts, Microsoft and Ubisoft.

In an analyst note, Patrick O’Donnell of Goodbody said Keywords has the balance sheet and network to consolidate further.

“Our view is it will strengthen its focus on the game’s development space as it expands its footprint,”he said.

Given the scale of its services by geography and service line, it is well positioned to serve that growing market demand for its services as this global lockdown eases and early indications are positive for its Chinese studios which are now back near to full production, Mr O’Donnell added."

[tomps2] 12/2/2020 09:16

KWS's CMD last week.

Overview of all services lines. The MDs of the recent acquisitions are particularly impressive c. 2hrs in.

[rivaldo] 07/2/2020 07:31

More re Berenberg's upgrade:



"Berenberg ups Keywords Studios to 'buy'

Analysts at Berenberg raised their target price on video games industry outsourcer Keywords Studios from 1,400p to 1,700p and upped its rating on the firm from 'hold' to 'buy' on Tuesday, saying it was time to back a "multi-year winner".

Berenberg noted that 2019 was "a year of investment" for Keywords and while the spending put pressure on margins and earnings delivery in the near term, the analysts said they had always argued that Keywords was a multi-year winner.

The German bank highlighted that Keywords had delivered 15% organic growth in 2019, something it called "a very strong result" in what was a relatively weak year in terms of development for the games industry.

"Looking to 2020, the launch of the next-generation consoles and further development of streaming platforms, which we anticipate will drive an industry-wide acceleration in content generation and increased development spend, provide a strong demand backdrop," said Berenberg.

"Coupled with its significant increase in capacity during 2019, this means Keywords is well placed to deliver material growth in 2020 and beyond."

As a result, Berenberg said it was now time for a re-evaluation. With a very strong growth outlook, margin expectations sufficiently rebased and M&A likely to increase in the coming months, Berenberg also said it felt Keywords' outlook was "robust".

"We increase our FY 2020-22 EPS estimates by c5% as a result. With its valuation materially below historical levels and attractive versus its growth profile, we upgrade Keywords to 'buy'," said Berenberg."

[rivaldo] 06/2/2020 07:24

Expansion in Singapore:



"Keywords Studios is opening a new Electric Square office in Singapore
February 5th, 2020 - 09:25am

Tech giant Keywords Studios has expanded into Singapore with a new Electric Square office.

This new outfit has 13 employees at the moment, with the firm set to expand that figure to 50 by 2022.

This follows Keywords acquisition of Brighton's Studio Gobo and that company's Electric Square subsidiary, which is based in Leamington Spa, last year for $33.5m. The games giant also has in multi-national work-for-hire outfit Sperasoft, which Keywords bought for $27m, and Scotland's d3t, which cost the company $3.9m, in its development business.

Through the expansion, Keywords can offer five of its seven services from the area - game development, functionality QA, localisation, localisation QA and player support.

"We’re delighted to expand the Electric Square family. Singapore is a major player in the region for game development," said Electric Square studio head Julien Girard-Buttoz.

"The innovation and training ecosystem, the experience and talent of local developers and Singapore’s desirability as a location for attracting talent from all over the world, position Electric Square in the ideal environment to grow and deliver world-class content and experiences.”

Electric Square head of studios Jon Gibson added: "Opening the Singapore studio has been an important milestone in the growth of Electric Square. There’s a shortage of experienced developers in the industry, so in order to recruit top talent we wanted to establish a presence in the world’s leading gaming hubs.

"We have studios in Brighton and Leamington Spa, two of the UK’s leading development communities, so Singapore was a logical next step, being a leading light for game development talent and services in Asia.”

In December 2019, Keywords made three acquisitions - Kantan, Ichi Holdings and Syllabes - to expand its marketing, translation and audio businesses.

Last year, the company expanded its foothold in Poland and Mexico. A new recording studio was opened in Sao Paulo in July 2019. Further acquisitions in 2019 included audio description firm Descriptive Video Works and Wizcorp.

We caught up with CEO Andrew Day at GDC last year to discuss Keywords' acquisition strategy, with the company having around $114m to play with at that point in time."

[rivaldo] 05/2/2020 07:12

The Capital Markets Day today as per this morning's RNS should give a further boost to sentiment:



"The event will provide an overview of the structural growth drivers of our market and opportunities for each of our service lines, including a number of case studies which illustrate the strength of our offering across two of our newer service lines, Game Development and Marketing Services."

And more on Berenberg's upgrade:



"Berenberg is much more keen on Keywords Studios, the for-hire video games studio rollup.

"2019 was a year of investment for Keywords Studios. While this put pressure on margins and earnings delivery in the near term (the reason for our downgrade to Hold in June 2019), we have always argued that Keywords is a multi-year winner. It is now time for a re-evaluation. With a very strong growth outlook, margin expectations sufficiently rebased and M&A likely to increase in the coming months, Keywords’ outlook is robust. We increase our FY 2020-22 EPS estimates by c5% as a result. With its valuation materially below historical levels and attractive versus its growth profile, we upgrade Keywords to Buy and increase our price target to 1,700p."

[global nomad] 04/2/2020 12:34

well done those who added ...i've missed the chance..

Berenberg (or something else) has had a particularly strong effect on the share price ..

[rivaldo] 04/2/2020 11:33

More on today's upgrade:



"Keywords Studios upgraded to ‘buy’ by Berenberg, sees next-gen consoles boosting demand

The German bank's analysts think the firm is “well placed” to deliver “material growth” in 2020 and beyond

Keywords Studios PLC (LON:KWS) shares jumped on Tuesday helped by an upgrade to ‘buy’ from ‘hold’ by Berenberg, which thinks the launch of next-generation consoles will boost demand for the firm's products in 2020.

The German bank's analysts also hiked their price target for Keyword to 1,700p from 1,288p, noting that the firm - a technical service provider to the games industry - is “well placed” to deliver “material growth” in 2020 and beyond.

According to the Berenberg analysts, mergers and acquisitions (M&A) activity for the group is set to increase in the near term as those deals that were paused in the second half of 2019 are back on the cards in 2020.

Plus, they noted that the AIM-listed company delivered 15% organic growth in 2019, which they deemed “a very strong result in what was a relatively weak year” for the industry.

“We have always argued that Keywords is a multi-year winner,” the analysts said in a note to clients.

“With a very strong growth outlook, margin expectations sufficiently rebased and M&A likely to increase in the coming months, Keywords’ outlook is robust,” they added."

[rivaldo] 04/2/2020 10:26

Berenberg have today raised their target price to 1700p (from 1400p) and say Buy:

[scooper72] 31/1/2020 09:04

Looks like you might get them for that.

[bulltradept] 31/1/2020 08:30

I'd prefer them a little lower perhaps the £12.10 mark.

[scooper72] 30/1/2020 18:38

Bought a few more at the end of the afternoon today. Some at 1295 but more at the better price of 1260. Hope I haven't gone back into early.

[scooper72] 30/1/2020 18:37

Been reading the inferior write up on HL website. They are always very cautious in expressing an opinion. They mention that Net debt is now at 18M which to me sounds quite healthy when taking into account all their acquisitions

[rivaldo] 30/1/2020 11:47

New note from Edison, confirming that EBITDA and PBT were ahead of forecasts.

KWS have lots of headroom for much larger acquisitions than they've made recently - a decent-sized acquisition from existing facilities would bring the rating down very nicely:



Summary:

"Although we expected strong growth in H219, FY19 revenue of €326m, reflecting 30% overall growth and 15% organic growth, represents a sparkling performance. EBITDA and PBT were ahead of forecast at €49.5m and €41.0m, respectively. Given the higher revenue base, we are revising our FY20 revenue estimate up by 4%, but prudently holding operating profit and PBT at previous levels as margins normalise through FY20.

We retain our view that Keywords remains strongly positioned as the only games service provider at a global scale. The company’s P/E rating (25.0x FY20e) reflects its leading market position, track record and potential, and should fall further as Keywords continues its buy-and-build strategy."

"Market leader in a growth industry

As management emphasised at the Montreal capital markets day (CMD), as well as strong industry growth (Newzoo forecasts 8.4% growth 2019–22), Keywords benefits from the growth of outsourcing and increasing market share as a market leader in a fragmented global industry. Growth is further boosted by M&A through Keywords’ successful buy-and-build strategy. With the next console transition in Q420, the medium-term growth outlook remains robust and next week’s London CMD will provide further insight into the opportunities for each of Keywords’ business lines."

[bulltradept] 30/1/2020 11:36

Oh I get that, just that I keep to bigger more established AIM companies, one's making a profit and are more transparent.

[steeplejack] 30/1/2020 11:18

Well if that's the case,it's strange that some funds simply won't touch AIM stocks,it's not allowed in their memorandum of association,the very construct of the fund.The AIM market is a poorly regulated market which has happily entertained fraudulent enterprises like Quindell,which grew to a market cap of over £3bn.Some stocks like ASOS or Majestic Wine have proved to be excellent investments but as a rule,AIM stocks should be approached with deep rooted scepticism.As for KWS,it would do itself a favour if it joined the main market and enhanced its credibility with institutional investors.

[bulltradept] 30/1/2020 10:54

I've never bought the argument about MM's if AIM stocks are big enough (market cap of 750 mil plus), and are liquid enough, I find they trade like ordinary LSE stocks, or perhaps that's just me..