Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
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Interesting comments from a new Liberum note on another gaming sector company which chime with KWS' recent statements about the potential of streaming:
"Streaming could provide new monetisation possibilities
There have been a number of public comments from the major platform providers (Sony, Microsoft etc.) and possible new entrants to the gaming sector about the potential to launch new delivery and monetisation models, which could accelerate growth for the whole computer gaming sector....Google is already testing a streaming service (Google Project Stream), which is expected to be launched later this year and there has been speculation in the last few days that TMT giants such as Amazon and Verizon could also be preparing to announce new platforms.
We would expect to see these initiatives reflected in the income statements of the UK players in the form of potential development income, license revenue (there could be deals for periods of exclusivity) and possibly partnerships for the major IP developers.
Platform economics in IP developers' favour
This also comes as the Steam PC store has announced cuts in its revenue share agreements with its largest IP partners (this currently kicks-in for games generating more than $10m of annual sales....) and Epic Games has recently challenged Steam's dominance backed by a 12% revenue share model. All these factors point to potential revenue and margin upside for the whole sector over the next 24
months....
China approvals resumed, risks around future franchises reduced
The Chinese central government froze video game approvals from March 2018 onwards. The number of games approved since March 2018 has fallen to just 353, against 716 games approved in January 2018 alone. Approvals have resumed in December and, since then, a total of 75 games have been approved, although big names such as PlayerUnknown's Battlegrounds and Fortnite are yet to be granted commercial licenses......A friendlier attitude towards the video game industry by the Chinese government would clearly be helpful."
the video game companies, a lot of them reported poor earnings and a lot of them dropped
I'm guessing people have seen them and dumped this, overreaction? time will tell
Seems no actually investors around,just the lump and dump crew,fundamentals are hugely strong,how has this halved in value just about in 6 months,wtf am I missing,no doubt I’m a complete numpty left holding the baby but I just don’t get it???
Why the drop tho, this is mental for such a share with all this news,.joke really,.wish I had more to top up but without knowing why its dropped, not sure I am willing to top up, 10% is a big drop with only good news in the public domain, who knows what?
got in at 907 , hope for the bounce next week
Guys what am I missed here, only good news in the trading update and we are just dropping and dropping? Cant understand it, whats happened
i checked the dictionanry and bottom fishing has a positive as well a negative connotation- which one did you mean doze?
Https://www.investorschronicle.co.uk/tips-ideas/2019/02/04/keywords-triggers-relief-rally/
"Tip Updates 2 hours ago
Keywords triggers relief rally
Shares in Keywords Studios (KWS) soared by more than a tenth after a full-year trading update allayed fears about its future revenue growth trajectory. The company’s market value had deteriorated since its September half-year results, ostensibly reflecting concerns not only about its ability to continue driving the top line, but also to integrate acquisitions. Not to mention the threat of heightened Chinese regulation affecting the broader gaming market.
Back on 21 December, the company had guided towards sales “in the region of €250m” (£219m) for 2018 – slightly below analysts’ forecasts – with adjusted pre-tax profits of €37m, in line with consensus estimates. But Keywords’ latest update suggested that things had improved; now, it expects revenues of “at least” €250m, and adjusted pre-tax profits of around €37.8m. Altogether, this means that revenues and pre-tax profits will have grown by 65 per cent and 64 per cent respectively year-on-year.
Organic revenues rose 10.1 per cent on a like-for-like basis. And these would have grown by 14.9 per cent, excluding VMC – a provider of video-game functional testing and customer support in North America – bought in October 2017 via a £75m share placing.
Keywords acquired eight new businesses last year, but still ended up with just €0.4m net debt. This compared with €11.1m net cash in 2017. Broker Berenberg expects net cash to increase to €24m in FY2019 and believes that – with its additional debt facilities – the group appears well-positioned to continue with its M&A strategy this year. Analysts here also note that China has lifted its gaming freeze. And though Keywords cited a weaker-than-expected performance from its localisation testing business, this stemmed from some titles shifting from last year’s fourth quarter into this year – something that should provide a boost to FY2019.
IC View
At 1,146p, shares in Keywords trade at around 28 times forecast earnings – undemanding against their own history. Given Q3’s encouraging signals, this could offer an attractive entry-point; the broader video games market is predicted to keep growing, and with such growth should theoretically come a need for greater outsourcing. Buy.
Last IC view: Buy, 1,860p, 19 Sep 2018"
Growth is accelerating per Jefferies:
"Keywords Studios' organic revenue growth accelerated in the second half of 2018, showing market panic late last year was excessive, Jefferies says. Investors were doubtful about whether the Irish provider of services to the videogames industry could deliver on its goal of achieving 10% organic growth over the medium term, the bank says. Keywords now confirms organic growth came in at 10% in 2018, which implies a second-half acceleration from the 8.6% increase it posted in the first half, Jefferies says. "The associated share price collapse now looks wholly overdone to us," analysts at Jefferies say. Shares rise 8.7% to 1,174 pence."
still in bottom fishing territory rivaldo.
Berenberg are positive going forwards:
"Keywords Studios is set to benefit from tailwinds in the year ahead, which should give its equity story plenty to run, Berenberg says. "The headwinds that held back the entire video game industry in 2018 are unlikely to have the same impact in 2019," analysts at the investment bank say. China has already lifted its gaming-license freeze, the impact of the "Fortnite effect" has passed its peak and game launches delayed to 2019 from 2018 should boost the first-half performance of the Irish provider of services to the videogames industry, Berenberg says. Shares rise 8.9% to 1,176 pence"
Excellent trading statement - revenues, PBT and EPS are all above Edison's latst expectations.
EPS in particular at 47.0c is well ahead of Edison's forecast 44.6c, helped by a reducing tax charge.
Good to see KWS heavily involved in cloud-based gaming too.
Hopefully we could see quite a sharp rise today.
Good new article on KWS:
Https://www.proactiveinvestors.co.uk/companies/news/213433/keywords-studios-on-course-to-meet-full-year-expectations-as-it-continues-expansion-213433.html
Extract:
" Inflection points:
Keywords expects to post full-year adjusted profit before tax of around €37mln on revenues of about €250mln, representing increases of 61% and 65% on the prior year, respectively.
Keywords selectively reviewing a strong acquisition pipeline
Strengthened management team with newly created positions of chief commercial officer, chief marketing officer, global operations director, engineering service line director
In the first half, the group spent €3.8mln in new or expanded facilities in Montreal, Dublin, London, Liverpool, Madrid, Katowice, New Delhi, Chengdu, Manila and Tokyo, adding 660 workstations
Credit facility for up to €105mln secured in the first half to help fund acquisitions
What analysts think
Investment bank Citi has a ‘buy’ recommendation and target price of £21.50 on Keywords. Citi thinks the recent addition of 660 new workstations is a “lead indicator of growth momentum” and sees “higher acquisition assumption”.
“We increase our annual revenue contribution from acquisitions to €35mln, which results in an increase to our acquisition upside valuation to £5.65,” it said.
“This compares to an average of c.€40m since listing in FY14 and is in line with the mid-point guidance range for bolt on acquisitions, excluding any larger transactions.”
Numis also has a ‘buy’ rating on Keywords and a target price of £24.20.
The broker said it continues to view Keywords as a “top technology sector pick”. The broker noted that management is confident of meeting market expectations for the full year, meaning organic growth of 13%, and thinks this demonstrates “ongoing market share gain within an already attractive market”."
Nice upgrade today from Davy Stockbrokers in Ireland:
"Keywords Studios is poised to benefit from the industry's move to cloud-based gaming, Davy says, upgrading the stock to outperform from neutral. The Dublin-based provider of services to videogame developers continues to grow its sales above the industry average and should benefit further in 2019 and 2020 from the shift to cloud gaming, Davy says. As key players invest substantially in cloud gaming, Keywords stands to gain in areas such as the re-engineering of existing gaming content and its porting to cloud platforms, as well as in testing and language-and-support services, the brokerage says."
Yep, good to see a new American shareholder. TIAA-CREF Investment Management (managing various funds) now have 1.93m shares, or 3.03%:
Https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/holding-s--in-company/201901071727054297M/
have declared bigger interest today- a vote of 'secure investment' status I would say
Here's "30 sci-tech leaders we’ll be following in 2019" from Silicon Republic:
Https://www.siliconrepublic.com/companies/sci-tech-100-2019-leaders
"Andrew Day. Image: Keywords Studios.
A major games services firm located in Dublin, Keywords Studios has been at the centre of several success stories of late. Recently, the studios made its eighth acquisition of 2018, snapping up Studio Gobo and Electric Square.
CEO Andrew Day is keen to position Keywords Studios as “a go-to game development partner, and give us ever greater visibility of games in the pipeline, at the outset of their development”. Keywords also reported stellar earnings in August 2018, with revenues for H1 rising by a massive 72pc. Describing company performance as “very encouraging”, Day looks set to help it stay the course."
Today's acquisition of Sunny Side up is from my count the 12th acquisition of 2018, and possibly not even the last with a few days left!
KWS still has lots of firepower for further, and larger, acquisitions.
Even if organic growth slows, cross-selling and synergies should provide decent tailwinds.
And KWS' core sectors of gaming and entertainment/production/animation will only continue to grow given the entrance to the content marketplace of the likes of Amazon, Netflix etc.
Today's update states that the expected €37m of adjusted profits are "within" the range of current forecasts.
Edison's forecast for the coming year is around 50p EPS - without any uplift for today's or future acquisitions. A P/E of 20 or so for a company in a growing sector with such a good track record and substantial acquisition action to come isn't particularly challenging if that P/E soon reduces to say 14 or 15 post-acquisitions.
Looks like the shorters may have started buying back?
https://shorttracker.co.uk/company/GB00BBQ38507/
Oberweis Asset Management, Inc. have bought almost another 300,000 shares in the first 3 days of this week.
They now own 4.14%, or 2.64m shares:
Https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/holding-s--in-company/201812070924298044J/
I hope the executives of the above are still busy and cheerful. It must be hard to see their equity tumble but as I have not sold up here, I am in it with them and expect the business will retrace upwards in due course. I expect gaming is flying off the shelves atm.
Https://www.gamesindustry.biz/articles/2018-11-22-keywords-studios-we-are-going-to-keep-acquiring-new-companies
A small extract:
"Keywords Studios: “We are going to keep acquiring new companies”
The video games outsourcing giant on expanding its services, fixing crunch and how it will avoid competing with its clients"
"Keywords believes that outsourcing will become a more prominent side of the industry. Speaking to Gamesindustry.biz earlier in the year, CEO Andrew Day said that, in time, he expects more of game development will be outsourced, much like it is in the movie industry.
As the biggest video game outsource specialist, it's not surprising to hear them say that. If the industry transitioned to more outsourcing, you can expect Keywords will be the biggest beneficiary."
"There's clearly more to the outsourcing life than meets the eye. It may not be the sexiest part of the video games business, but beneath the surface there are exciting things happening. And if the games industry follows in the path of movies - which outsources almost all of its functions - we'll be likely talking a lot more about the likes of Keywords in the years to come."
Edison's analyst forecast that using reasonable assumptions on organic growth, and with further acquisitions from its plentiful financial headroom, KWS could grow its EPS to around 85c exiting next year.
That equates to around 75p EPS, leaving KWS on a forward P/E of 13.6 assuming delivery on acquisitions etc.
The risk/reward equation has certainly shifted at these levels.
Strange, in the first hour+ of the day trading seems to have stopped or at least ground to a halt ...
So quite here so I just going to share something that might be useful :)
For those who are invested or considering investing in the 'video game tech' tracking this EFT 'GAMR' to you Watch list
ref https://seekingalpha.com/symbol/GAMR/overview
I will also add this report on October sales (sorry US related) https://seekingalpha.com/news/3411488-key-october-releases-pace-videogame-sales-record plus it's Black Friday today (good for hardware/game sales)