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All sounding very promising:
http://www.proactiveinvestors.co.uk/companies/stocktube/10048/keywords-studios-not-taking-its-foot-off-the-pedal-during-busy-second-half-10048.html
ACSO and KWS going through a sector downturn though I don't think they are quite the same sector, ACSO should be less affected
Bouncing nicely now after some profit-taking, with the MMs screwing the sellers nicely.
Peel Hunt today reitrates its Add recommendation with a £19 target price.
Very impressive stuff - the growth rates for revenue and PBT at 72% and 66% respectively are even greater than in last year's H1 update.
And the dollar has strengthened nicely against the pound since 30th June, which should benefit H2 profitability further, bolstering the CEO's strong H2 outlook.
With a number of acquisitions likely in the coming months there should be no shortage of news flow and forecast upgrades:
"we are actively reviewing a number of high quality acquisition opportunities, in line with our acquisition strategy. Significant headroom in our new €105m credit facility with Barclays Bank, Lloyds Bank and HSBC (announced on 5 June 2018), combined with continuing strong cash generation and the judicious use of Keywords shares to part-fund acquisitions where appropriate, leaves the Group well placed to complete further selective acquisitions this year. At 30 June 2017, the Group had no net debt."
Excellent news - firing on all cylinders.
Revenues could have been up almost 80% if it wasn't for the declining $!
"The Group has performed strongly during the first half, with preliminary unaudited revenues for the period expected to be up by 72% to EUR109.9m (H1 2017: EUR63.8m) and an anticipated 66% increase in adjusted PBT* to EUR15.9m (H1 2017: EUR9.6m). This was achieved despite the incorporation of the historically lower margin VMC business, as well as a marked weakening of the US dollar, in which approximately 60% of the Group's revenues are denominated, against the Euro with average exchange rates having declined 12% between the comparable periods."
Having a good effect on the SP and p/e goes to 167
Terrific acquisition news - very small, but excitingly its's in the area of AL and machine learning, marking KWS' entry into this field.
Importantly, these solutions "are now ready for commercial roll out", and "can leverage the worldwide reach of Keywords and its extensive client relationships. As part of the agreement, Silicon will collaborate with Keywords in introducing the technology to Japanese game developers and publishers, and it has a non-exclusive right to resell the YD solution into the non-games markets (such a healthcare), in exchange for a share of the associated revenues":
Https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/acquisition/201807230700074096V/
"Andrew Day, Chief Executive Officer of Keywords Studios, commented:
"We have been looking for opportunities to establish a foothold in the exciting area of video game analytics for a few years. This acquisition brings industry leading technology and capabilities to Keywords that we believe we can support, enhance and roll out to our clients thanks to the engineering, player research and video game specific data science skills we have within the business. While YD is pre- revenue, it is a rare asset and we expect the first clients to start implementing the software during 2018.
"As games continue to transition to a service model from a product model, the use of sophisticated analytics engines like this to automatically understand player behaviour and trigger real time decisions in-game will become increasingly valuable to our clients. The use of AI to constantly adapt the predictive models to changes that are made in the games, such as when new items, expansion packs and promotions are introduced, is critical to the future of the video games industry so we are delighted to have secured this leading-edge technology."
Nice in-fill acquisition today, but I liked this in particular showing how KWS can grow a new sector presence from nothing so quickly:
https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/acquisition-of-snowed-in/201807200700032354V/
""Having grown the Engineering service line from nothing in May 2017, we now employ over 300 software engineers in multiple regions, and I'm delighted that Jean-Sylvain, Tim, Evan and their highly talented and creative team are joining the Group as we continue to grow."
With these appointments Keywords has become a truly international focused group
Aren't they starting to gamble with the business doing this. I think they need strict expenditure limits if they are potentially churning out failures.
This is an exciting new venture - KWS pick up large stakes in early stage companies for peanuts (45% for £300k!) and use their business and customer base to commercialise the Newcos:
https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/launch-of-keywords-ventures-ltd/201807050700046483T/
A great idea which will pay off in spades if just one or two make it through, let alone the much higher percentage which should succeed given the fast track they're getting via KWS.
Innovative stuff indeed.
This reads well:
Https://www.trustnet.com/news/820083/fe-alpha-manager-lawson-my-three-uk-stocks-for-an-ever-changing-world
"FE Alpha Manager Lawson: My three UK stocks for an ever-changing world
27 June 2018
SVM Asset Management’s Margaret Lawson highlights three companies that are using disruptive technology to get ahead in the current market environment."
"Keywords Studios
Also playing the outsourcing theme is gaming services provider Keywords Studios – another stock which has jumped in value over the past few years.
Lawson said: “Before you wouldn’t invest in a gaming company because they might have one game that was a success but you wouldn’t know the value of the franchise.
“What you are finding now is that all of this is going to subscription and there are two things. First is you are getting more stability because once people buy into subscription they have tournaments and compete with other people and can buy products and different tiers.”
The second is that these large companies are beginning to outsource the development to specialists who can conduct the work for cheaper than taking it in-house.
This “structural growth trend” leaves Keywords, a company specialising in translation and art & design services, well-positioned.
“The big gaming companies are going to outsource their businesses and IP [intellectual property] to capable hands and a company like that is Keywords Studios,” Lawson said.
“That’s another one that is taking advantage of changes in the market and is growing through acquisition and organic growth.”
I think the SP has a good chance of closing just below the 1900 level today .... it's been wanting to higher for days, the downside is profit takers may prevent the SP closing above the 1900 (...my guess is that there will be a high level of sell orders just under that level) Still very much a long term hold :)
Looks a very good acquisition once again - a maximum $10m being paid for an average of $1m EBITDA per annum from a company KWS already know very well. And sensible allocation of the purchase price between upfront cash, large deferred consideration based on earn-outs and some locked-in shares. Plus potential cross-selling and synergy opportunities for growth in the USA and "around the world (including Bethesda, NCSoft, Sony Interactive Entertainment, and Ubisoft)". Numis retain their 2180p target and increase forecasts by 1.6%: Https://uk.webfg.com/news/broker-recommendations/inmarsat-in-play-after-echostar-bid-analysts-divided--3339002.html "Numis, which rates the stock at 'buy', said the acquisition of Blindlight gives the wider Keywords business much better ability to access Hollywood talent to help its customers in their production of games and game-related materials. The brokerage added 1.6% to its 2019 earnings per share forecasts and said its unchanged 2,180p price target is based on a scenario analysis for organic growth and acquisitions out to 2022."
Of Blindlight. A company based in LA that provides voice overs, over sees celebrity game appearences, motion capture, among other services.
Indeed. And the revenues generated by games are just staggering. "The people making money from Fortnite It managed to generate $296m (�222m) in April from in-app purchases alone. And that's more than double the revenue for February, according to market research firm SuperData Research" https://www.bbc.co.uk/news/business-44395095 Could be some big acquisitions coming up - KWS now has really significant firepower - cash, the new facility and a sky high share price.
being very well received by investors
Good to see KWS confirming today the new loan facility, which (1) is cheaper than the prior facility and (2) gives them substantial headroom for more and large acquisitions: Https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/new-revolving-credit-facility/201806050700032610Q/
Video interview with the CEO about the new acquisition: Http://www.proactiveinvestors.co.uk/companies/stocktube/9415/keywords-studios-says-acquisition-of-video-game-trailer-specialist-is-an-important-development-for-the-company-9415.html "Keywords Studios says acquisition of video game trailer specialist is an important development for the company 14:39 31 May 2018 Andrew Day, CEO of Keywords Studios PLC (LON:KWS) tells Proactive that acquisition of Fire Without Smoke Ltd is an important development for the company. He said: �The business provides game trailers, that are used in the marketing campaigns for the launch of the original game."
Could be this downard trend was to enable them tl scoop up shares at bargain prices. I cant see a reason for it otherwise.
I note that Kames Capital have been buying and have gone above 3% with 1.9m shares: Https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/holding-s--in-company/201805291331425616P/
Lets hope this news and new target reverses this downward trend that for some reason has been marching on like a baby sea turtle walking away from the sea.
Numis have today increased their target price to 2180p (from 1865p) and say Buy: Http://investing.thisismoney.co.uk/broker-views/
Excellent new acquisition - and highly earnings-enhancing with a maximum �5.2m paid for �0.7m PBT: Http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/KWS/13658903.html Good to see the further expansion into esports, and the customer list is terrific, including Sony, Square Enix, Riot Games, Deep Silver, Sega, Capcom and Ubisoft. Endion, thx re the comments on Shenmue, sounds exciting. Moorhey, that's interesting, I also hold SCH and XLM.....
Shenmue was a blockbuster game of the late 90's. It was THE most expensive game ever made at the time, one of the first with elements of rpg, life sim, turn based combat etc. It got good reviews but was a commercial flop along with its successor. However it went on to develop a cult following and there is a lot of excitement about the HD re-release coming along with a third game in the series due for release in 2019, the first sequal in what will be 18 years!