Kape Technologies Share Discussion Threads

[investordave] 24/9/2018 08:19

A terrific set of results and yet, as expected, lots of sales. Idiots.

[igoe104] 24/9/2018 08:13

Kape has delivered on a very strong H1 period – revenues from core ongoing operations up 14%, with Adjusted EBITDA tracking well towards our full-year estimates. We make no changes to profit forecasts, but take comfort from the strength of the H1 delivery. More strategically, the recent Intego deal has added malware protection to the expanding technology suite, offering a steadily-more-holistic solution to users’ technology security needs.

H1 saw strong growth in core revenue (up 14%), adjusted EBITDA (up 178% on a like-for-like basis) and cash from operations (up 90%). The group ended the period with net cash of $62.7m, still very well funded for further acquisitions, and/or material investment in the product and strategic roadmap.

Performance in the long term will be driven by new customer subscriptions, client retention and strong margin generation. H1 saw impressive delivery on all three: customer subscriptions more than doubled, to 561,000; customer retention rose from 69% to 74%, and EBITDA margins rose from 10% to 15%.

Post the period end, Kape acquired a pure-SaaS malware protection business, Intego. The deal offers significant opportunities both in its own right, and through applying Kape’s customer acquisition skills…we comment further overleaf.

Given the strength in H1 delivery, the group appears to be well on track for our full-year 2018 estimates. We chart the EBITDA progression, in particular, overleaf. At this point we feel it prudent not to raise estimates – although the balance of risk has perhaps shifted to the upside. We have nudged down our net cash estimate to reflect the capitalised investment in subscription customers.

Overall, these results demonstrate a business that is delivering on its longheld and clearly-enunciated plan: focus on high quality consumer-facing products in the cyber security arena, and use excellence in customer acquisition to build a large body of loyal and profitable customers. The RNS shows all elements of this – product enhancements, M&A into new areas and ongoing rigour on customer marketing. We look forward to further developments, both organic and through acquisition…

[fozzie] 24/9/2018 08:07

"We expect the momentum achieved in H1 to continue into the second half of the year, as we integrate Intego and begin to realise the synergies this acquisition presents, as well as continue to execute on organic growth initiatives and evaluating select acquisition opportunities. Kape is now in an excellent position to become a leading provider of online security and privacy in the growing consumer cybersecurity mkt"

[ayl30] 24/9/2018 08:03

Results look good!

[investordave] 21/9/2018 16:26

There are lots of sheep out today.

[investordave] 21/9/2018 12:38

I suspect a lot of the folks who have been selling over the past few days will be hoping to buy back cheaper on Monday. I know the price of most shares tends to dip on results day but hopefully KAPE won't be one of them and the sellers have to scramble to get back in at a higher price. That'll be fun to watch.

[rampmeister] 20/9/2018 10:58

In for a few more this morning can’t afford to be underweight ahead of interims. ST’s TP at 180p last time I looked that’s nearly 40% up on today’s price.

RM

[aishah] 19/9/2018 11:52

Let's re-cap trading statement from 25th July:

Strong Underlying Adjusted EBITDA(1) growth of 172%

Kape (AIM: KAPE), the consumer security software business, provides an update on trading for the six months ended 30 June 2018, and announces the divestment of the Company's non-core Media assets.

The Company continues to trade strongly with Adjusted EBITDA(2) for the six month period expected to be c. $4.3 million (H1 2017: $2.9 million), representing growth of 48%. This was achieved on revenues(3) of $26.4 million for the period (H1 2017: $30.1 million), with revenues from the Company's App Distribution division increasing by 14%.

Strong Underlying Adjusted EBITDA growth of c. 172% from core activities was achieved in the period, highlighting the Company's success in driving organic growth. This was underpinned by the solid performance of Kape's core software solutions, including CyberGhost, which has exceeded management expectations since its acquisition in March 2017.

The Company's balance sheet remains strong with a closing cash position of $62.7 million for the period



Interims out on Monday 24th.

[investordave] 19/9/2018 10:23

Large amount of sells today. Have I missed some bad news?

[rivaldo] 07/9/2018 08:45

The BA data breach overnight and other recent data breaches all add grist to the mill regarding the need for cybersecurity in general, be it consumers in KAPE's case or in corporate terms.

[deltrotter] 28/8/2018 11:46

There appears to have been a real summer doldrums in many small caps IMO... maybe now they are waking up.

[gswredland] 28/8/2018 11:43

Cheers Del

[deltrotter] 28/8/2018 09:33

Friday's volume took out a seller?

Level 2 strengthening on each buy at the moment...

[aishah] 24/8/2018 12:22

MFM Techinvest Special Situations Fund acquired KAPE last month:

During the month of July, the Fund acquired a position in Kape Technologies. The Company is an online cyber-security vendor, primarily focused on the consumer market, and operates a monthly subscription model. It has made solid progress in refining its product portfolio over the last couple of years, and added to this in July by acquiring Integro, a supplier of malware protection software for Mac, for $16 million. Kape has $64 million in cash, and is actively targeting other acquisitions. Together with the online distribution model, the Company has the potential to deliver strong growth. Kape reported adjusted PBT of $6.7 million in FY2017 and broker forecasts for FY2018 are for this to grow to $8.3 million, and to $11.7 million in FY2019.

[igoe104] 24/8/2018 12:16

RESULTS a month away, which we know will be fantastic. so I expect these to start creeping upwards in anticipation.

[deltrotter] 14/8/2018 10:02

Nice quiet thread...

Possibly had a seller cleared this morning and a move up ahead of us.

[gswredland] 08/8/2018 10:35

Thanks for that guys

[rivaldo] 08/8/2018 10:10

There was also a tip update in this month's SCSW following the Intego acquisition, which concluded as follows:

"More upgrades seem likely; Kape’s well oiled digital marketing machine means the previous acquisition of Cyberghost VPN is going like a train and this latest deal throws up a further big cross selling opportunity. Results 24 September. I remain a buyer."

[dround87] 07/8/2018 20:19

Also tipped in IC

[longshanks] 06/8/2018 07:44

I can't say that I know anything about their products but I am more computer savvy than most and I suspect their offerings are more appropriate for people with limited IT knowledge.As for BritishBulls, I really hope you don't make investment decisions based on what that site comes up with. I haven't checked it out for some time but I suspect it is still more in the "horoscope" model of investment rationale than one based on tangible evidence.

[nw99] 06/8/2018 07:43

Results 24/9

[malcolmmm] 03/8/2018 08:59

Does anyone here use KAPE security systems? I use AVG at present ,Tune Up and VPN and find them very effective. I own shares here ,British Bulls.com say that they are a buy.Must have a look at their security products.

[rimau1] 02/8/2018 19:20

No problem. 18 times cash adjusted earnings in the cyber security sector is just too cheap!

[rivaldo] 02/8/2018 10:16

Cheers rimau1, appreciated - reads very well (and thanks also to the other poster who sent it to me privately).

[robow] 02/8/2018 08:35

thanks rimau1