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Am saddened to see the SELL instruction today - but SP will recovery gradually - and exceed Broker Target Price of 1916p
in my opinion -DYOR
https://www.britishbulls.com/m/SignalPage.aspx?lang=en&Ticker=KWS.L
Excellent article about KWS' expansion in Japan and the Far East, and the resulting synergies and cross-selling:
Https://venturebeat.com/2019/05/11/keywords-expands-game-development-outsourcing-in-japan/
"Keywords expands game development outsourcing in Japan
Dean Takahashi@deantak May 11, 2019 10:25 AM
Keywords is becoming a lot more visible as a 6,000-person company for outsourcing game development. It recently added 45 more developers with the acquisition of Tokyo-based Wizcorp,, which, oddly enough, was run by a French man named Guillaume Hansali.
The deal was one of 11 acquisitions that added nearly 750 employees in the past year. While other game companies have been cutting back, Keywords has been expanding and bringing the lower costs of outsourcing to more game companies around the world.
Mine is 7000p
Dyor of course
Brokers need to revise their targets - UPWARDS
Mine is 2500p
is 1916p
and we are well on the way to reaching that - and beyond IMHO
Kames Capital have been buying - they've increased to 3.98%, with 2.55m shares:
Https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/holding-s--in-company/201905031620050887Y/
which is the Broker Target Price
to broker target 1916p - - -
IMHO DYOR
Organic and acquisitive growth on the agenda:
Https://www.pcgamesinsider.biz/industry-icon/68900/what-keywords-studios-acquisition-strategy-looks-like-for-the-coming-year/
Extract:
"What's the ambition for the coming year?
We focus on client satisfaction, execution. We pride ourselves on doing the very best for every project we've got. That's how we run our business on a day-to-day basis. If we can carry on running things that way, I'd be happy. Organic growth is our primary motivation. We like all of our businesses to grow. It's so much nicer to be running a growing business than a static or shrinking one. If we just keep trying to grow, we have the advantage of quite a nice tailwind of serving an industry that is itself growing. There's this heading towards outsourcing as well which plays in our favour. So we should be able to grow at a decent clip. Then on the acquisitions, the year before last we did 11 or 12 acquisitions. We did eight acquisitions in 2018. We'll probably do a similar number, maybe more, in terms of value spend in this year. It's not a target as such - it's just the way that the deal pipeline works."
BUY price now is 1536p
What happened at 2:30pm today? The SP jumped 2.50%
and still heading towards broker target
Another small but perfectly formed acquisition announced today - this time in Japan, with plenty of potential given its speciality in Japanese mobile gaming and its existing and continuing sales to former parent company Ankama:
Https://uk.advfn.com/stock-market/london/keywords-KWS/share-news/Keywords-Studios-PLC-Acquisition/79740083
Extract:
"Christopher Kennedy, Regional Managing Director - Asia of Keywords Studios commented:
"We are thrilled to welcome Guillaume and the Wizcorp team to join our fast-growing operations in Tokyo where we already employ 300 people. Japan is one of the world's most significant game development hubs and has a long history in this industry. Keywords is excited at the opportunities Wizcorp will bring the Group and its clients in the Japanese market as it becomes the latest member of our global Engineering service line. Wizcorp's HTML5 expertise is a valuable extension to our console, mobile and PC games development skills, which is particularly interesting in the context of Snap's recent launch of its HTML5 based gaming platform.
"We look forward to replicating the success of our previous transaction with our long-standing client, Ankama, which saw us acquire their 23 people strong captive player support operation in Manila in March 2016 before building it into a multi-client player support hub that now employs 700 people. We see a strong opportunity to accelerate Wizcorp's growth by building on its existing services for some of Ankama's game development needs and providing it with opportunities to work with Keywords' extensive client base."
From the FT today - games subscriptions to become a "multibillion dollar business" for Apple:
Https://www.ft.com/content/44236e86-5ba3-11e9-9dde-7aedca0a081a
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."
Ignore the recent rise. This might be industry changing. Check BIDSTACK out. https://www.valuethemarkets.com/2019/04/12/we-aim-to-become-the-biggest-video-game-advertising-media-owner-in-the-world-bidstacks-ceo-james-draper-discusses-his-firms-once-in-a-lifetime-op/
Broker rating of 1,916p is looking more realistic now DYOR
Range from1415 to 1916
The numbers are absolutely spot on Edison's forecasts, with EPS slightly above those forecasts.
The outlook is promising, with an "encouraging start to 2019" and "the arrival of games subscription and streaming services from new entrants like Apple and Google" likely to drive demand for content.
Plus the reduction in investment for 2019 against the two prior years will also increase profitability as regards the non-capitalised element.
Shame about the first ever bad debts, but these look to be a one-off due to Fortnite - and KWS are now heavily involved in "considerable" work on Fortnite.
Everything looks rosy going forward:
Https://www.investegate.co.uk/keywords-studios-plc--kws-/rns/final-results/201904080700073625V/
Interesting stuff re a KWS subsidiary and its involvement in Big Data and AI:
Https://gamasutra.com/view/pressreleases/340019/Yokozuna_Datas_senior_research_data_scientist_invited_to_speak_at_QUO_VADIS_2019.php
"Founded in Tokyo in 2017, Yokozuna Data, a Keywords Studio, is the first data science company in the video game industry to develop a machine learning engine that predicts individual player behavior, an achievement that is pushing back the frontiers of behavioral data science. Yokozuna Data provides game studios with a prediction platform and recommendation system that employs next-generation machine learning algorithms and the latest techniques in big data processing and cloud computing to increase game monetization, playtime, and VIP retention, while supporting a player-focused data-driven development. Yokozuna Data is at the forefront of behavioral data science research, having published numerous peer-reviewed papers and regularly participating in top-tier international conferences and delivering seminars in academic and educational institutions. The company has won several accolades for their technology and research."
Https://www.forbes.com/sites/roystonwild/2019/04/03/2-under-the-radar-growth-stocks-whose-prices-could-rise-next-week/#220a46e66e3e
"Today I’m looking at two brilliant companies whose share prices could rise next week.
Keywords Studios
You may not have heard of Keywords Studios but it’s a stock that’s making some serious waves in the global video games industry.
The AIM-quoted company -- which provides technical assistance to game developers -- is riding the stunning popularity of the Fortnite franchise across the world, and said in January said that it expected full-year revenues for 2018 to have leapt to “at least” €250m from €151.4m the year before.
The Fortnite phenomenon is yet to show any signs of dying down any time soon as developer Epic Games stays committed to bringing out different playing modes for the popular franchise. Indeed, the company estimates that the Creative mode which was launched in December has attracted some 100 million gamers already. And this bodes well for Keywords’s bottom line for a long time yet.
For this reason I’m expecting another strong update when full-year results are put out on Monday, April 8. But Keywords is by no means a one-trick pony.
The tech titan is expanding its range of services to cover exciting new areas, ones like “predictive analytics, music services, marketing services, sound design, and Hollywood-based voice production and writing services” (as the firm itself noted in January’s update), and areas which the business has built its presence in with the help of ongoing M&A activity. It’s made nine acquisitions since the start of 2018 alone.
One other reason to be bullish: the rollout of 5G mobile networks and improvement in internet bandwidths, moves which will bolster the growth of so-called cloud gaming, also presents stunning sales opportunities for Keywords further down the line.
City analysts are certainly optimistic and they predict earnings expansion of 21% in 2019 and 12% next year, projections that make the business a bargain on paper (it sports a forward PEG reading of just 1.1 times). In fact, this low rating could provide the platform for Keywords’s share price to take off in the wake of fresh trading details next week."
New commentary from the analyst at Goodbody's stockbrokers in Ireland:
"Keywords Studios is well-positioned to gain from tech giants' move into cloud gaming, as demand for localization and videogame software engineering should rise, Goodbody says. Alphabet's Google has unveiled plans for its Stadia platform and Microsoft, Tencent and Amazon are expected to follow suit, the brokerage says. "There is an opportunity for Keywords to act as a key strategic partner to such platforms," Goodbody says. A key investor focus on the Irish provider of services to the videogames industry--which is due to report 2018 earnings next week--will be its deal pipeline, as the company is expected to spend EUR60 million on acquisitions this year, Goodbody says."
Here's the tip FYI:
Https://www.thetimes.co.uk/edition/business/geeks-have-never-been-more-in-demand-7szkcn56f
"Geeks have never been more in demand
In the video games arms race, developers have to spend big on manpower. Grand Theft Auto creator Rockstar Games is a case in point: the company employed more than 3,000 people to make the Wild West epic Red Dead Redemption 2, which sold 17m copies in eight days after release.
Keywords Studios wants to exploit that trend. The Dublin-based company, valued at £740m and listed on London’s junior market, is the largest provider of third-party services to the gaming industry, from visual effects to games testing.
Keywords is convinced that as games become more complex, developers will have to outsource more work so they can scale up quickly and release games on time.
That argument has been largely overshadowed of late. Keywords’ share price has dropped by 25% to £11.56 over a year as some of the industry’s biggest developers took a hit from the growth of online shooter Fortnite.
Activision Blizzard, the company behind the Call of Duty series and Candy Crush, surprised the market in February when it posted lower-than-expected profit forecasts for the first quarter.
However, Berenberg analyst Edward James thinks doubts over Keywords are “ill-founded” and says big developers have shown little sign of easing investment in new titles. Outsourcing could even grow faster than the video games sector as a whole, according to Liberum analyst Alexandre Schmidt, with the likes of Keywords snaffling market share by cross-selling services.
These are not the only reasons to give Keywords a second look. Google announced this month that it would break into the £100bn global computer games industry by launching the Stadia streaming service.
The American tech giant expects big things from “cloud gaming”, where players stream games from Google’s vast data centres. The move could trouble console makers such as Sony and Microsoft. For those down the food chain, it’s a big opportunity.
If cloud gaming follows the Netflix route, the cost of playing games should fall. A monthly subscription fee for access to multiple games could work out cheaper than the £45 it costs to buy a new game off the shelf.
It would also do away with the need for an expensive console, making gaming more affordable in countries such as India or areas of South America. That could prove a boon for Keywords, which is also a big provider of translation services to the video games industry.
With Amazon also preparing a push into cloud gaming, Keywords looks like a solid long-term bet. Buy."
Nice move upwards yesterday.
And KWS were tipped as a Buy in this weekend's Sunday Times.
The Group expects to announce its full year results for the year ended 31 December 2019 on 8 April 2019.
'
Trade update 31st Jan extracts:-
'
The Board expects full year revenues to be at least EUR250m (FY17: EUR151.4m) and adjusted profit before tax* of approximately EUR37.8m (FY17: EUR23.0m). The Group's effective tax rate, based on Keywords Studios' measure of profit before tax* has continued to reduce and is expected to be 19.0% (FY17: 20.5%). As a result, adjusted earnings per share are expected to be c.47.0c, which would be an increase of 51% compared to the prior year (FY17: 31.18c)
...
Almost all of the seven service lines have delivered a strong performance, with particularly strong growth in our Player Support and Engineering businesses, partially offset by a weaker than expected performance from Localisation Testing which saw a number of titles move from the last quarter of the year into the current year.