gretel
05 Aug 2016
Tip update in the IC Sounds good - subscriber-only though:[link] steps up its gameTheron Mohamed,03 August 2016The good news keeps on coming from Keywords Studios (KWS). Strong organic growth, combined with a boost from acquisitions, means the video game services group's bosses expect first-half revenue and adjusted pre-tax profit to "comfortably" exceed market expectations......"
gretel
04 Aug 2016
New Edison report New Edison report out today - note that whilst they've increased forecasts for the last acquisition, they haven't yet done so following the "ahead" trading update. More upgrades are therefore likely following the H1 figures or H2 trading confirmation:[link]
gretel
02 Aug 2016
Numis increase target price to 390p Numis have increased their target to 390p (it was previously 310p):[link]
gretel
02 Aug 2016
RNS : trading ahead of expectations Nice 
))The CEO isn't mincing his words : "a first half performance substantially ahead of our expectations", compared to the second paragraph which notes "comfortably ahead of expectations".....Can't ask for more, particularly when the usual H2 bias is eliminated, which should mean we have many months of good figures and news ahead.I also like this intriguing excerpt preparing the groundwork for KWS in the long term: "Across the games industry the mediums of Virtual Reality and Augmented Reality continue to capture the headlines and while we are major recipients of services for art, audio, localisation and testing services for this innovative content, we believe the real potential is a few years hence."
gretel
29 Jul 2016
RNS : earnings-enhancing acquisition Another excellent, earnings-enhancing acquisition today - in the higher margin art space too:[link] like it's been acquired on a post-tax P/E of only around 9 or 10, so quite a bargain.And a trading update coming soon on 2 August to look forward to.
gretel
28 Jul 2016
New presentation by CEO Nice 25 minute video of the CEO doing a presentation at Amati VCT's AGM last month (see the bottom video):[link]
gretel
18 Jul 2016
BlackRock increase stake RNS this morning : good to see BlackRock increasing above 5% with 2.95m shares:[link]
piw
15 Jul 2016
Video: Keywords Studios (KWS) Andrew Day, CEO discusses the services Keywords Studios (LON:KWS) provide to the video games industry.Including: art creation, audio services, locallisation services, localisation testing, functional testing and customer support services to the top games companies, and mobile games developers.They are global providers, with offices throughout the world, to supply a global market. Largest revenue is in US$: 43% revenue, EU 38% revenue, Canadian $ 8%, Japanese Yen 6% RoW 5%.Much growth has come through the seven companies acquired, since 2015; the rationale behind the acquisitions is discussed.Day runs through the numbers, the outlook and Brexit.With Q&A from the ShareSoc audience.[link]
Wexboy
03 Jun 2016
TGISVP - Keywords Studios 2016 – The Great Irish Share Valuation Project (Part II):Company: Keywords Studios (KWS:LN)Last TGISVP Post: HereMarket Cap: GBP 151 MPrice: GBP 280pFor a company that hasn’t put a foot wrong to date (what, no profit warning just months after its IPO?!), it’s amazing Keywords still appears to be almost entirely unknown to the average investor. In fact, it’s doubly surprising, as KWS is now enjoying a real sweet spot in the new XBox/Playstation console cycle – which has seen it deliver 20%+ pa underlying organic revenue growth over the last two years. The other kicker, of course, is its consolidation strategy in a fragmented outsourcing sector for the video game industry.The acquisitions are piling up so quickly, the best way to approach valuation is to construct a current revenue run-rate. Let’s begin with FY-2015 results: Revenue was up 55% to €58 million, adjusted profit before tax was up 57% to €8.0 million, while adjusted basic EPS was up 49% to 12.71 cents (there’s been dilution in terms of placings & acquisition-related share issuance). We’ll ignore minor acquisitions, so first we’ll look at Liquid Development – cash outlay & share issuance are reflected in the FY results, but only a third of its $7.5 million annual revenue is captured, so that’s a $5.0 million revenue bump for FY-2016. Next, we have Mindwalk Studios – which was acquired in 2016, so that’s another $4.2 million in ongoing revenue. And the same for Synthesis – that’s another €16.9 million.I calculate Keywords’ adjusted operating margin was 14.4% in FY-2015. Let’s assume the same for incremental acquisition revenues (which is conservative, their average adjusted PBT margin is actually around 17%) – I’ll continue to assign a generous 1.67 P/S multiple, noting the attractive growth trajectory here. Year-end cash was at €19.0 million – Mindwalk & Synthesis will reduce this balance by $3.4 million & €10.2 million respectively (at this point, we’ll ignore some minor future cash & shares consideration), and we’ll also include another €1.0 million being paid to acquire the remaining 50% of Kite Team. We can also add a debt adjustment (KWS just signed a new €15 million revolver) – I calculate another €29 million of debt would still limit interest expense to 15% of adjusted operating margin, but as usual we’ll haircut this figure by 50%
(EUR 58 M Rev + 16.9 M Synthesis + (USD 9.2 M Liquid/Mindwalk / 1.1115 EUR/USD)) * 1.67 P/S + (19.0 M Cash – 11.2 M Synthesis/Kite Team – (USD 3.4 M Mindwalk / 1.1115 EUR/USD)) + 29 M Debt Adjustment * 50%) * 0.7601 EUR/GBP / 54 M Shares = GBP 223pKeywords remains fairly-overvalued. Which doesn’t necessarily mean we’ll see a reversal – based on the underlying organic revenue growth we’ve seen here, KWS could well grow into its current market cap in the next year (or so) anyway. And one would obviously hope to see some cost savings & revenue synergies as the company consolidates its acquisitions to date. However, I also think my valuation’s a good reminder of the risk(s), for example, of a bad acquisition & the potential impact on what’s been a pretty high-flying stock…Price Target: GBP 223pUpside/(Downside): (20)%—For related links/graphs/files, and more TGISVP analyses/price targets: Google the Wexboy investment blog.
gretel
16 May 2016
News re KWS and Microsoft Good news:[link] "Keywords now a Microsoft-authorized Xbox tester James Batchelor May 11th 2016 at 28PM A Keywords article that's NOT about an acquisition? What's going on? Growing services empire Keywords has announced that it has been selected as an official Microsoft Authorised Xbox Test Program vendor. Catchily acronymed as Microsoft AXTP, this initiative highlights companies that have proven their ability to test games and apps for Xbox One, Xbox 360, Windows and Windows Phone. Thanks to its acquisition of Babel back in 2014, Keywords is able to provide QA for Xbox One and Xbox 360 titles from multiple locations around the globe. “Joining Microsoft’s AXTP program officializes the achievements we’ve been making towards our goal of helping all of our partners build awesome games.� said Mathieu Lachance, Functional QA Director, Keywords Studios. “We’ve had the privilege of working closely with Microsoft for over 12 years now, and on hundreds of products for their platforms for companies across the world. We will continue our efforts so we can add many more fun years to this great partnership." Keywords has been growing dramatically over the past two years, acquiring more companies than we have time to link to. The most recent addition to the group was fellow QA firm Synthesis."
gretel
03 May 2016
RNS - more acquisitions soon? Good news today. The new credit facility means an increased likelihood of further acquisitions - as flagged by the CEO in his comments:[link] Day, Chief Executive of Keywords, commented:"We are pleased to have further strengthened our relationship with Barclays and the introduction of this long term credit facility provides the Group with additional flexibility in the financing of acquisitions and the Group as a whole."
gretel
13 Apr 2016
Numis increase target to 310p Numis have raised their target price to 310p (from 275p):[link]
gretel
13 Apr 2016
Big earnings-enhancing acquisition Wow - a superb and LARGE acquisition...KWS now the "global leader in localisation and voice-over recording for video games world-wide"...and lovely and earnings-enhancing too, with €18m paying for €2m PBT, so pretty cheap:[link] can see this stock going a long, long way over time. One to hold and hold hopefully.
gretel
10 Apr 2016
Tipped in Mail on Sunday Nice update in today's Mail on Sunday should lead to more interest this week....[link] SHARE TIPS UPDATE: Life is sweet as gaming tip soars 50% Joanne Hart, Financial Mail on Sunday Published: 23:28, 9 April 2016Candy Crush Saga, the addictive video game, is played by about 500million people, mostly on their smartphones. The world’s most popular game, it is just one of thousands available on mobile devices. And as phones become increasingly sophisticated, the games do too.Parents and partners may despair at how much time family members spend gaming, but Keywords Studios is thriving on the back of this £60billion industry.The company started out translating games played on the Xbox and PlayStation into different languages, but as the gaming market has expanded, so has Keywords.As well as working on Candy Crush, it translates games into more than 50 languages, tests them for defects, provides voice-overs in a variety of tongues, creates artwork for popular games such as Halo and provides customer support for gamers.Tipped by Midas last April at 153p, the stock has sprinted through the past 12 months and is now 50 per cent up at 230p.The company delivered strong results last week, with 2015 revenues up 55 per cent to €58 million (£47million) and pre-tax profits 50 per cent ahead at €5.1million.The company is based in Dublin, so its figures are in euros, but the dividend is paid in pence, and is up from 1.1p to 1.21p. Brokers expect further growth this year and next, as the market continues to expand and Keywords plays an increasing role within it.Games producers are increasingly focused on designing and marketing their creations, outsourcing other functions to companies such as Keywords.Many of its competitors are much smaller, however, so Keywords is in a much stronger position, because it has expanded both organically and by acquisition and now offers a range of services from Shanghai to Seattle.Midas verdict: Keywords Studios has had an excellent year and the stock has risen by 50 per cent. However, the outlook is bright so investors should retain at least 75 per cent of their shares. New investors could pick up a few as well, particularly if they show any sign of short-term weakness."
gretel
05 Apr 2016
Results ahead of expectations Top-notch results today, nicely ahead of expectations (especially at current exchange rates of €1.25): - adjusted PBT of €6.4m compares to €6.1m forecast - EPS of 10.2p compares to 9.58p forecast - 1.21p divi is spot on the consensus forecastPlus KWS have around €13.5m cash to play with for more acquisitions after the recent one.Also interesting to see that the tax charge will reduce this year, further benefiting EPS.2016 trading is going well.Very happy shareholder.
