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Encouraging to see an NED (via her husband) buying �10,000 of KWS shares at 1510p into an ISA: Https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/director-pdmr-shareholding/201802221505326964F/
Numis last week reiterated their Buy and 1865p target: Https://weekherald.com/2018/02/14/keywords-studios-kws-rating-reiterated-by-numis-securities.html
Nice - featured as a Buy in the Mail on Sunday: Http://www.thisismoney.co.uk/money/investing/article-5350609/TRADER-TIPS-Buy-Keywords-Studios-sell-Britvic.html "BUY THIS: Keyword Studios Berenberg thinks it is time to buy Keywords Studios after it posted a profit update ahead of the bank's expectations. The firm, which provides technical services to the video games industry, expects sales of �132m and profits of �19.9m this year. Berenberg has increased its price target by 20p to 2040p."
New video interview with the CEO - 2018 will be a "good year", happy to stay on AIM, lots of cash in the bank etc: Http ://www.proactiveinvestors.co.uk/companies/stocktube/8692/keywords-studios-in-a-good-position-with-a-strong-pipeline-of-acquisitions-8692.html Andrew sounds as confident as ever :o))
Excellent update. Still a buy!
Berenberg today raise their target price to 2040p: Http://www.morningstar.co.uk/uk/news/AN_1517477720763685400/broker-ratings-summary-morgan-stanley-neutral-on-rolls-royce-and-bae.aspx
I love to see the phrase "comfortably ahead of consensus market expectations" :o)) Plus much optimism for the future. And almost �50m of cash and facilities for more acquisitions too, so loads of headroom for more news flow to come. KWS appear to have developed the perfect strategy for the times, given this from today's RNS: "As games are becoming bigger and are higher definition, game developers are increasingly relying upon co-development arrangements with companies like Keywords to provide them with broader capability to develop both initial games and ongoing content and features post-launch."
Some stand-outs: - the CEO predicts �200m revenues for last year in the article. The latest forecast I can see from Finncap's 14th December note for 2017 is �149.5m! - he targets �300m revenues rising long-term to �1 billion - he expects 4-10 acquisitions a year - the last share placing was 3 times oversubscribed.....indicating KWS has an extremely supportive shareholder base for the future Https://www.thetimes.co.uk/article/keywords-in-hunt-for-more-players-to-join-gaming-ranks-c9w0jbdn2 "A �75m share placing to fund the VMC deal was �hugely oversubscribed�, he said. �We could have raised three times as much. We have very supportive shareholders and we can access bigger quantities of capital for ma
Some stand-outs: - the CEO predicts �200m revenues for last year in the article. The latest forecast I can see from Finncap's 14th December note for 2017 is �149.5m! - he targets �300m revenues rising long-term to �1 billion - he expects 4-10 acquisitions a year - the last share placing was 3 times oversubscribed.....indicating KWS has an extremely supportive shareholder base for the future Https://www.thetimes.co.uk/article/keywords-in-hunt-for-more-players-to-join-gaming-ranks-c9w0jbdn2 "Keywords in hunt for more players to join gaming ranks Dublin firm out to boost Irish workforce amid expansion plans in Asian market Keywords Studios, a Dublin company that counts the world�s biggest video game makers among its clients, is boosting its Irish workforce to almost 350 people and predicting further expansion. The AIM-listed company has taken extra space at its head office building in Leopardstown, south Dublin, and is looking to add 40 people to its ranks. Andrew Day, chief executive of Keywords, said the extra staff were being hired for a mix of new and existing projects. �We continue to grow year-on-year in Dublin,� said Day. �It is still a fantastic location for us, being in the EU and being English-speaking.� Keywords started in Dublin in 1998 as a translation business for tech clients including Microsoft and Sony. Day became chief executive in 2009 and focused the company on providing services to games companies, including game testing, art work, localisation and customer support. Day said the market for outsourced services to games companies was worth about $2.5bn (�2.1bn) but was very fragmented between small service providers. Keywords has established itself as a consolidator, completing 25 acquisitions since its stock market listing in 2013. It paid $27m last month for Sperasoft, a game design and development company with 400 staff in America, Russia and Poland. Day said Sperasoft worked with �the very largest game developers in the world� and had revenues of $20m. Keywords also bought a Mexican voice-over company, Lola, for $1m in December. Last October, Keywords made its largest acquisition, paying $66.4m for rival VMC in the US and Canada. The company now employs more than 5,000 people in 18 countries and should report revenues of almost �200m for 2017, according to Day. He is targeting �300m revenues by 2019 and believes Keywords can grow to be a �1bn revenue business in the long term. �This business could be a multiple of itself,� he said. �There is so much opportunity out there.� The Keywords share price has reflected the expansion, rising from �5 at the start of last year to more than �16, valuing the company at �1bn (�1.13bn). Day said the shares gave the company useful currency for doing more acquisitions."
Berenberg have increased their target price to 2020pp (from 2000p) and say Buy: Http://investing.thisismoney.co.uk/broker-views/ And Finncap have increased their target price to 1700p (from 1677p) and say Buy. Here's a link to an Evening Standard article with a comment from Numis: Https://www.standard.co.uk/business/stateside-swoop-for-keywords-in-27m-raid-on-assassin-s-creed-firm-a3718511.html
Excellent stuff - quite a large $27m acquisition, and highly earnings-enhancing from a fast-growing company: https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/acquisition/201712130700041893Z/ "Sperasoft has grown steadily over the years increasing revenues from $10.4m in 2015 to $16m in 2016. It is anticipated to grow to approximately $20m for the year ending 31 December 2017. The underlying adjusted EBITDA for 2017 is expected to be approximately $2m." The customer list is terrific - are they all already KWS customers or will they bring new clients into the fold? "Over the years, Sperasoft has delivered consistent high quality work for its clients including Electronic Arts, Ubisoft, Warner Bros and Riot Games. For instance, the company is proud of the recent work of its St Petersburg studio, which worked alongside five of Ubisoft's internal studios to develop Assassin's Creed: Origins, which launched to critical acclaim on 27th October 2017."
Excellent (and long) article about the gaming boom fuelling KWS' growth, with quotes from KWS and including this section concluding on AR and VR: Https://slator.com/features/how-gaming-lasting-boom-is-fuelling-localization-demand/ "Finally, a PwC report estimates that consumer VR content market will experience a large upswing to USD 5bn at 88% CAGR by 2021. This will be powered by spending on VR video, which is projected to represent 58% of overall content spending in this market by 2021. This is key to the VR market, since VR video is the simplest to develop and deploy, and can be inserted anywhere, like cutscenes in games using VR gear. VR is on the rise, just not at the same rapid clip as, say, neural machine translation. For now, mobile gaming is the best bet in 2018, followed by PC and console gaming."
AR is certainly not far away - this news today for example: http ://www.proactiveinvestors.co.uk/companies/news/187654/apple-makes-augmented-reality-headset-move-with-reported-acquisition-of-a-canadian-start-up-firm-187654.html?utm_source=Sign-Up.to&utm_medium=email&utm_campaign=7163-371330-PROACTIVITY+-+22%2F11%2F2017 "Apple makes augmented reality headset move with reported acquisition of a Canadian start-up firm 13:27 22 Nov 2017 Technology news website techcrunch reported that the US tech giant has acquired Vrvana, the maker of an augmented reality headset called Totem, for about US$30mln Apple Inc. (NASDAQ:AAPL) has reportedly made a move towards its aim of providing an augmented reality headset in 2020 with the acquisition of a Canadian start-up firm, according to website techcrunch.com. The technology news site reported that the US tech giant has acquired Vrvana, the maker of an augmented reality headset called Totem, for about US$30mln, citing two unnamed sources. It noted that the only product that Vrvana shows off on its website is the unreleased Totem headset, which it says is an "extended reality" device utilising key technologies from both AR and virtual reality to allow for both experiences on a single headset. Techcrunch pointed out that Apple also has made other acquisitions that underscore its interest in developing the technology that powers the AR hardware. In June, Apple acquired SMI, an eye-tracking firm that was working on solutions for VR and AR headsets, while other AR and VR-related acquisitions have included Flyby Media, metaio, Emotient, and Faceshift."
Terrific - and long - new interview with the CEO. Just some brief highlights here, but most interesting is that he has a target of �300 million in revenue by 2019 - this is a more than doubling of the forecast 149.5m euros for 2017 in only 2 years! Https://fora.ie/keywords-studios-andrew-day-3702044-Nov2017/?utm_source=more �There is no end in sight to the acquisitions,� says Day. �We�re always working on them. I wouldn�t want to say there won�t be one or two before Christmas, but I can�t confirm, it takes two to tango after all.� "According to stockbrokers Davy, the VMC acquisition made Keywords Studios the biggest functional games tester in the world. However Day says the business is aiming to become a major player across all the services it provides." �We intend to make between four and 10 acquisitions a year for the foreseeable future. Our normal-sized deal is somewhere between �3 million and �10 million, and we�ll be definitely doing more of those. Sometimes we�ll do bigger deals.� "Another massive shift in gaming that Day sees taking place in the near future is the mainstream explosion of virtual (VR) and augmented reality (AR) games on the market. The VR and AR market is tipped to be worth hundreds of billions as soon as 2020, but the affordability of the hardware is so far holding back its growth, according to Day. He says Keywords Studios is already deeply involved in the sector and working with the likes of the Facebook-owned virtual reality firm Oculus Rift."
This might be interesting for some who are thinking about going long, quoting from KEY's last half year report (19 September 2017) http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/KWS/13367017.html section 5 Seasonal business The video games industry and, in particular, the console sector of the games industry, remains heavily dependent on sales of new releases of games and consoles during the traditional holiday season, including the run up to Thanksgiving in the United States and Christmas in other parts of the world. As with all other service providers to the video games industry, certain of Keywords Group's service lines typically experiences significantly higher activity as part of this release cycle during the six months from June to November. This activity drives increased revenues in that period and generates higher gross profit margins compared with the first six months of each calendar year.
Video game maker stocks surged overnight in the USA: Http://citywire.co.uk/money/overnight-markets-wall-street-posts-record-highs-as-videogame-makers-jump/a1067593?ref=citywire-money-latest-news-list "Take-Two Interactive Software jumped 10.58% after the videogame maker offered a stronger-than-expected revenue forecast for the holiday quarter. That sparked a rally among its competitors, with Activision Blizzard surging 5.89% and Electronic Arts adding 2.19%."
Commentary from an analyst at Davy Stockbrokers on KWS and on the sector in general, plus KWS have been nominated for an award: Http://www.irishexaminer.com/business/irish-video-gaming-industry-offers-major-possibilities-461881.html "Irish video gaming industry offers major possibilities Monday, October 30, 2017 A measure of the growth possibilities offered by the video games industry in Ireland was underlined in last week�s major acquisition by Dublin headquartered Keyword Studios of US-based VMC Consulting for $66m (�57m). It follows a number of smaller takeovers earlier this year by the Leopardstown-based company, which recently raised approximately �85m through a 10% share issuance. Founded in 1998, the company started out providing spoken-word audio services for game producers, but has expanded significantly over the years through a mix of organic growth and acquisition, and is now listed in London. Working with many of industry�s major players � EA Sports, Konami and Ubisoft � Keyword�s latest acquisition makes the firm one of the biggest players in its field. �While this fast-tracks Keyword to No 1 in functional testing from No 5, this deal also brings with it the company�s biggest integration lift to date,� says Davy analyst Joseph Quinn. �Outsourcing within the $100bn-plus video game industry is growing, and developers are increasingly turning to outsourcing partners to achieve faster content delivery, driven by the pace of mobile and online game development. Keywords Studios, the largest provider of outsourced technical services to the industry, is the leading consolidator within this space.� Keywords Studios have also been shortlisted in the Deloitte Technology Fast 50 Programme 2017. The company has studios in London, Barcelona, Milan, Rome, Tokyo, Singapore, Shanghai, New Delhi, Montreal, Seattle, Los Angeles and Rio de Janeiro, employing over 1,500...... .....As a pointer for the video game industry�s potential future dominance of the entertainment sector, in 2013 Grand Theft Auto V made $800m worldwide in its first 24 hours - more than any single game, film or record in history. In the same year, global video games sales were $70bn, versus cinema�s $35bn."
Berenberg have this morning increased their target price to 2000p (from 1350p) and say Buy..... Http://investing.thisismoney.co.uk/broker-views/
This has been brilliant lately, I probably topsliced a bit early to derisk, it seems there’s plenty of mileage left to go! Highly recommended, even to offer some respite from the more volatile parts of a portfolio!
New video interview with the CEO - sounds like they got tremendous institutional support to get the placing away at a "nice" price". KWS will now be "unquestionably the largest provider in North America": http ://www.proactiveinvestors.co.uk/companies/stocktube/8289/no-rest-at-keywords-studios-as-they-make-largest-acquisition-to-date-8289.html?utm_source=Sign-Up.to&utm_medium=email&utm_campaign=7163-370414-PROACTIVITY+-+Sirius+Minerals+in+focus+as+new+commercial+deal+bolsters+Yorkshire+mine+development "No rest at Keywords Studios as they make largest acquisition to date 10:13 26 Oct 2017 Andrew Day, chief executive of Keywords Studios PLC (LON:KWS), discusses with Proactive's Andrew Scott their acquisition of the North America-focused VMC Consulting for US$66mln. Day describes the move as a significant step in their consolidation of the fragmented video games services sector. Through a network of vetted private individuals, VMC is one of the leading video games beta testers and offers many cross selling and roll-out opportunities."
Just back from hols! And thrilled by KWS' latest acquisition - "transformational" is sometimes overused, but this is genuinely so. KWS is now an 11-bagger for me from my initial purchase, but I see every reason to continue to hold for more. The lack of comment here seems fairly typical of bulletin boards - sadly, most still appear to be obsessed with striking lucky with resource companies or penny shares rather than identifying growth companies like KWS. Numis say Buy and have upgraded to an 1865p target price, with good coverage in this article: http://www.proactiveinvestors.co.uk/companies/news/186181/keywords-studios-tipped-to-work-its-magic-on-slumbering-vmc-186181.html "Keywords Studios tipped to work its magic on slumbering VMC 10:49 25 Oct 2017 Keywords announced a big acquisition yesterday and it may have added "a sleeping giant" to its portfolio Numis Securities has given the thumbs-up to the acquisition of VMC by Keywords Studios PLC (LON:KWS) and upgraded the stock to 'buy' from 'hold'. The technical services provider to the video games industry has a history of shrewd acquisitions and Numis said the latest one is �at a typically attractive valuation� albeit, at 11.5 times annual earnings, a tad higher than usual, reflecting the scale of the company being acquired, which is three times the size of Keywords' previous largest acquisition. �Based on the expected total cash paid of c.$71m, Keywords is acquiring VMC for 1.25x trailing revenues and we estimate a post synergy P/E [price/earnings ratio] of 11.5x,� Numis said, as it readjusted its target price to 1,865p. For comparison purposes, Numis noted Keywords itself is valued at six times 2017 pro forma revenues and trades on a P/E of more than 50. In addition to US$2.5mln of targeted synergies, VMC brings two new service approaches to Keywords: 1) embedded technical services; 2) the "Global Beta Test Network", described by Keywords' chief executive Andrew Day as �testing games in a real world scenario". Numis said VMC's embedded technical services expertise could open the door to �long hoped-for broader outsourcing contracts�, which in turn could deliver significant longer-term organic growth. �We model VMC delivering flat revenues in 2018, and look for improved processes to generate growth in 2019,� Numis said. In yesterday's analysts' call, Day noted the significant disparity in VMC's margins and Keywords' own, and expressed confidence that Keywords could get VMC's margins up to Keywords' level. �VMC's revenue excluding discontinued low margin contracts has been flat over 2015-2017, which we think is a poor result in a growing market, and we think better execution should deliver an improved performance in due course,� Numis said."
Stuart, I bought this share on your recommend and I'm happy that I did. It seems to be going up every week. Is it worth putting more in or has it been gone up too high, what do you think? I know I have make my own decision but just asking your opinion.
I came across this nice summary of KWS' analyst briefing from two weeks ago not posted here before - some choice snippets: Https://slator.com/financial-results/keywords-ceo-says-sdl-lionbridge-dont-play-strongly-gaming/ "Keywords is bullish on the USD 109bn global games market, as estimated by NEWZOO in its 2Q 2017 Global Games report, and which is forecasted to grow at 6% CAGR through 2020. The services segment is estimated at USD 5bn per annum and nearly 50% is currently outsourced by games developers to third parties. Amongst Keywords client base of about 400 developers, they claim to service 23 of the top 25 games companies by revenue (as ranked by Newzoo in June 2017) and seven of the top mobile games (as ranked by PocketGamer in May 2017)." "Emphasizing his confidence in localization, Day shared a comment to him from his Managing Director for Europe Fulvio Sioli who said "it just feels like it's become a tipping point and Keywords has become the go-to player for game localization." "Keywords remains committed to acquisitions as a driver of growth, with Day telling analysts they "have plenty of opportunity to do accretive deals." It is targeting 4 to 10 acquisitions a year at USD 2-10 million per acquisition and it has a new EUR 35m revolving credit facility from Barclays Bank with which to fund the purchases." "Asked by an analyst if he were open to acquisitions that are not immediately earnings-accretive but more strategic in nature, CEO Day said "I think it's fair to assume that if we do a larger deal it might come at a larger multiple than the deals we've done so far" but he stressed that he "would hope we don't get to the point where we do deals that are not accretive."