We begin the week with an overview of financial news coming from three firms based in Ireland, the US, and Japan. One, where key leaders are cashing in on a strong stock market performance since IPO by selling off some of their shares. Another announced a buy-back and experienced a significant, if fleeting, boost in its stock price. Meanwhile, the largest Japanese LSP reported a slight decrease in revenues for the year ended March 31, 2016.
The founder and the CEO of acquisitive game localizer Keywords Studios are cashing in on the company’s strong stock performance. Shares of Keywords are up nearly 80% since its IPO in 2013.
The company said it is selling the shares to institutional investors via a bookbuild immediately following the May 12, 2016 announcement. The final share price will be agreed upon by brokers and vendors at the end of the bookbuild. Acting as brokers for the sale are Numis Securities and finnCap.
Vendor PEQ Holdings (holding company of Keywords founders led by Giorgio Guastalla, also non-Executive Director of Keywords) will sell up to 4m shares. Keywords CEO Andrew Day will sell up to 1.5m shares. The total of up to 5.5m shares represents around 10.2% of Keywords.
At the current stock price, that would represent a GBP 3.84m windfall for CEO Day, and GBP 10.24m for founder Guastalla.
If the sale is fully completed, PEQ will retain 14.8% and Day, 7.2%, for a total two thirds of their current stake. This is the first sale of shares by either party since Keywords’ IPO in June 2013.
Keywords’ directors “have agreed to lock-in arrangements” for the balance of their ordinary shares; which arrangements will last until the first anniversary of the completion of sale. Keywords said it expects settlement of the sale within two days after the transaction date.
According to Keywords CEO Andrew Day, the sale enables the company “to satisfy institutional demand” for its shares and broaden its shareholder base, while “also allowing Giorgio to diversify his family’s portfolio of investments which has substantively been in Keywords since he and his wife founded the business in 1998.”
On the same day Keywords announced it was selling its stock, US-based Sajan announced both its Q1 2016 results and a share buyback. Sajan generated revenues of USD 6.78m in the quarter. This represents a 9% drop from revenues of USD 7.48m for the same period last year, which missed analysts’ expectations by USD 530,000. Adjusted EBITDA for Q1 2016 was USD 27,000, compared to USD 346,000 for Q1 2015.
“Our first quarter is typically impacted by slower translation spending by our customers,” CEO Shannon Zimmerman explained.
In the same earnings release, Sajan announced it was buying back USD 300,000 worth of common stock. The company said that “Our Board of Directors and senior management strongly believe that Sajan’s growth prospects and long-term strategy are not reflected by the Company’s current stock price.”
The buy-back initially gave the stock a boost, pushing it up by over 10% on May 10, 2016. Later in the week, the stock gave up most of those gains and closed the week at USD 4.65.
In Japan, meanwhile, language service provider Honyaku published its annual results for the 12 months ending March 31, 2016. On the top line, revenues at Japan’s largest translation company were slightly down from JPY 9.19bn (USD 84.4m) in the same period last year to JPY 9.18bn (USD 83.3m) in the current reporting period. Operating income was improved somewhat from JPY 505m (USD 4.64m) to JPY 535m (USD 4.92m).
The company commented on some major developments Slator covered during the year, such as how US regulations helped its patent translation business. It also briefly touched on the closure of its Beijing subsidiary.
In its outlook, Honyaku said it was going to look for additional market share in the life sciences field, following a strategy adopted by many other global LSPs. It guided for revenues in the coming 12 months of JPY 9.6bn (an increase of 4.5%) and operating income of JPY 620m (up 15.9%).