Two FTSE Stocks Under Watch – MKS and KWS

  • Sep 23, 2019 BST
  • Team Kalkine
Two FTSE Stocks Under Watch – MKS and KWS
Marks and Spencer Group Plc

Marks and Spencer Group Plc (M&S) (LSE: MKS) is a general retailer based in the United Kingdom that operates globally through more than 1400 stores around the world. The group specialises in the clothing segment but also engages in home products as well as packed foods. The Company sells womenswear, menswear, kidswear, beauty and home products through its 910 brick and mortar stores in the United Kingdom and approximately 500 stores outside of United Kingdom, as well as through its virtual presence from its website and an application. The company has two major divisions: the United Kingdom, which consists of both its own retail business as well as its franchise operations, domestically, in the United Kingdom itself, and International division, which includes the M&S brand in the Republic of Ireland, other European countries, Asia Pacific and other countries as well. The company has various brick and mortar stores which are engaged in its food business. The company has approximately 32 million customers across the world, mainly targetting the “Young Adult segment” and “Women’s Segment” when it comes to clothing.

MKS Latest News

On 4th September 2019, FTSE Russel, in a Press release announced that the Marks and Spencer Group Plc would be downgraded from FTSE 100 Index to FTSE 250 Index after they had conducted their Quarterly review in September. This was the first time for Marks and Spencer Group to be outside of the FTSE 100 index since the launch of Index in 1984. This came after a significant decline in the MKS Share price (The stock has shed 30.79 per cent since the last year, at the time of writing), which in turn meant the decline in the market capitalisation. All the changes as per the review were implemented at the close of market business on Friday, 20th September 2019 and have taken effect from the start of trading, as at 23rd September 2019. As per some news sources, the challenges have come from the mix of Brexit and the knock-on effects of a disappointing property market, with competition arising from online and eCommerce businesses that has made the trading environment very difficult.

On 23rd September 2019, the company made a press release in which it announced that Humphrey Singer, Group Chief Financial Officer (CFO), had decided to leave the business and a succession process is now underway. The company also mentioned that an exact departure date had not yet been determined but will be confirmed by the company in due-course and until then, Mr Singer will continue with his responsibilities.

MKS Financial Performance (Annual results)

On 22nd May 2019, the company presented its full-year results for the 52 weeks ended 30 March 2019. The company reported a 3 per cent year on year decline in the group revenue from £10.69 billion in 2018 to £10.37 billion in 2019. The major driving factor behind this was the disappointing performance from the international division, the revenue for which fell by 13.9 per cent year on year from £1.08 billion in 2018 to £936.6 million in 2019. This performance also flew into Profit Before Tax (PBT) and adjusting items which were reported at £523.2 million in 2019, a decline of 9.9 per cent year on year, from £580.9 million reported at the end of 2018. Albeit, the company reported an increase of 28.2 per cent year on year on the Profit After Tax (PAT) from £29.1 million in 2018 to £37.3 million in 2019. The company also announced that the Basic Earnings per share (BEPS) increased 31.3 per cent year on year from GBX 1.6 per share in 2018 to GBX 2.1 per share in 2019. The company’s net debt as on 30th March 2019 was £1.55 billion. The company declared an ordinary dividend of GBX 13.9 per share in 2019, a decrease of 25.7 per cent year on year from GBX 18.7 per share in 2018. The company also announced a joint venture with Ocado, to boost its M&S Food brand operations as well.

MKS Share Price Performance

On 23rd September 2019, at 08:35 AM GMT, while writing, MKS stock traded at GBX 189.46 per share; a decline of 3.26 per cent or GBX 6.39 in comparison with the previous day’s closing price at GBX 195.85 per share. While writing, Marks and Spencer Group Plc traded 5.43 per cent above its 52-low price of GBX 179.7, set on August 16, 2019.

2.06 million stocks of the company have been traded by the time of writing. The average volume of trading per day for last one year has been 12.92 million. The stock has plunged by 30.79 per cent in the previous one year from the price of GBX 284.4 per share.

The beta of the stock was at 1.1398, showing that the share price movement is slightly more volatile compared to the benchmark market index.

Keywords Studios Plc

Keywords Studios Plc (KWS) is an Ireland based company that is engaged in the process of providing technical services to leading video game content creators and publishers in the world. The company acts as an external development partner that is also engaged in the supply of localisation and localisation testing. Along with these, the company is also involved in providing, art services, engineering, audio services, functionality and functionality testing as well as in-game player support. The company’s clients can engage with the group at a service line level or at a group level leveraging all its studios. At Service Line and Group level the company configures and creates best end to end solutions for their clients from around 50 plus partner studios, all leaders in their own fields of expertise of gaming and content creation, located across four continents and 20 countries. The company’s clients include the who’s who of the digital and gaming world like – Warner Bros., Konami, Nintendo, Google, Microsoft, Sega, Oculus, Electronic Arts Brand, etc. The company’s primary objective is to become a “Go-to” global service platform for video games as well as other digital services across media.

KWS Latest News

On 18th September 2019, the company made a press release, through which it announced that it had entered into an agreement for the acquisition of TV+SYNCHRON Berlin GmbH (TVS) from Thomas Wolfert by purchasing the entire equity share of the entity. TVS is a leading company in the German Dubbing Business. The company reported that the acquisition would be completed on 1st October 2019, subject to certain conditions being fulfilled. The purpose of this purchase is to extend KWS’ existing range of Audio Services to double the operations in German Video game recording abilities. TVS is predicted to generate about €4.1 million in revenues by the end of this year on 31st December 2019. The acquisition includes consideration of €2.8 million in cash at the time of completion €0.9 million by issuing new ordinary shares in Keywords.

KWS Financial Performance

On 18th September 2019, the company announced its half-year results for the six months ended 30th June 2019. The company reported that the revenue, including the contribution from the acquisitions, had increased by 39.3 per cent to €153.2 million in H1 2019 from €110.0 million in H1 2018. This was driven by increasing demands for the company's services across all service lines in the first half of the year, as the market is expanding the use of external development in this sector. The gross profit margin decreased from 37.4 per cent in H1 2018 to 36.1 per cent in H1 2019 due to increase in activity in the recruitment of new staff as well as their training as well as a new project brought in through an acquisition. Adjusted Earnings Before Interest Taxes Depreciation and Amortization (on a pre-IFRS basis) was reported at €25.8 million in H1 2019, as compared to €18.7 million in H1 2018, a year on year increase of 37.97 per cent. Adjusted profit before tax (PBT) increased by 14.3 per cent year on year to €18.4 million, as compared to H1 2018 Adjusted PBT of €16.1 million. Adjusted earnings per share (EPS) was Euro cent 18.36 per share, compared to H1 2018 Adjusted EPS at Euro cent 18.30 per share. The company declared a dividend of GBX 0.58 per share, approximately a 10 per cent year on year increase from a dividend of GBX 0.53 per share in H1 2018.

KWS Share Price Performance

On 23rd September 2019, at 10:00 AM GMT, while writing, KWS stock traded at GBX 1240.00 per share; a decline of 0.56 per cent or GBX 7.00 in comparison with the previous day’s closing price at GBX 1247.00 per share. While writing, Keywords Studios Plc traded 40.11 per cent above its 52-low price of GBX 885.00, set on Feb 08, 2019. The company’s Market Capitalisation was around GBP 811.53 million.

185,680 stocks of the company have been traded by the time of writing. The average volume of trading per day for last one year has been 691,470. The stock has plunged by 34.25 per cent in the previous one year from the price of GBX 1926.0 per share.

The beta of the stock was at 1.2122, showing that the share price movement is more volatile compared to the benchmark market index.

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