Kape Technologies Share Discussion Threads

[rivaldo] 13/9/2021 14:11

Techinvest's new issue is out, so it's probably OK to post part of their review of KAPE from the prior August issue. Here's their conclusion FYI:

"Kape looks to have made a strong start to 2021 and encouragingly the company has reported that a growing number of customers are choosing to take more than one of its products. We feel that the Webselenese acquisition has the considerable potential to drive revenues and add new customers as it becomes fully integrated in the group.

For the current year, consensus broker forecast is for earnings per share of 26p, rising to 32.1p in fiscal 2022. On a prospective P/E of 9.9 for next year, the shares look good value. Strong hold."

[mrnumpty] 10/9/2021 09:49

Shaker44 recently complained here that Kape had “ no customer retention strategy “ and that the Company failed to offer him a discount as a long-standing customer . Why would they offer him a discount , as it seems to be standard practice for businesses to only chase potential new customers whilst presuming that lethargy will prevent existing customers from leaving ? Anyway , Shaker also criticised the attrition rate of existing Kape customers although , as Digitalis subsequently replied here , that loss rate has been dropping from 19% to 17% . Although I am no doubt comparing apples and bananas , there is another point about Kape’s attrition rate compared with that of another company in a completely different market but which was also tipped in the generally brilliant Small Company Share Watch . Back in the June 2020 edition of SCSW , the editor made the AA a main “ buy “ tip , even though the AA was overwhelmed with debt ( £ 2.6 billion debts against ENITDA of £ 350 million ) , and the share price of the AA did indeed rise from the tip price of 21.5p to 34.95p , when it was removed from the markets . Anyway , as a long-standing member of the AA who isn’t overwhelmed by them , I didn’t buy in to the AA . My substantive point is that , according to SCSW at the time of its “ buy “ tip for the AA , “ renewal rates are 80% “ ( obviously thus an attrition rate of 20% ) , in spite of the fact that motorists have extremely constrained choices for vehicle breakdowns : the RAC ; Green Flag ( I’ve never used them , but user reviews seem to be far from effusive ) ; no breakdown cover at all . In contrast , in spite of the fact that there is a plethora of companies competing with Kape for internet security , its loss rate is much lower . I’ve been invested in Kape since it was below 70p and intend to remain here . Sorry if my comparison of the AA and Kape seems a little strange , but I feel that Kape’s increasing customer retention rate in a crowded market is a very positive indicator . Time will tell whether Shaker44 or I am the real Numpty ! Good luck to all Kape investors .

[hedgehog 100] 09/9/2021 16:19

OSI yesterday RNSed some useful research on ransomware, which is of relevance to KAPE:

08/09/2021 07:00 RNSNON Osirium Technologies PLC Release of findings from Osirium Ransomware Index

"Osirium research finds UK businesses vulnerable to ransomware attacks

Osirium Technologies plc (AIM: OSI), a leading vendor of cloud-based cybersecurity software, has today released findings from a research report it has undertaken, suggesting many UK businesses are not sufficiently protecting their critical IT recovery systems should a cyber-attack occur.

The Osirium Ransomware Index surveyed 1,001 IT managers in the UK and found that 80% of businesses rely on backups (whereby a copy of computer data is taken and stored elsewhere) as a plan of recovery should a cyber-attack occur. Yet despite this reliance, only a minority take extra precautions of using privileged access management to protect their backups, leaving the bulk of UK businesses vulnerable to attack, as our report highlights.

Key findings of the report:

- Overall, 79% (4 in 5 businesses) surveyed admitted that they have experienced at least one ransomware attack, with 68% of these stating the attack occurred in the past year.

- Despite 98% of respondents saying they were aware that backups are a target of ransomware attacks, over half do not keep offline backups and only 35% take extra precautions to protect access to backups and backup management systems.

David Guyatt, CEO of Osirium, commented: "Cyber-attacks on UK businesses remain a very real threat and unfortunately is an everyday occurrence for organisations across all sectors with potentially profound consequences. Our report highlights the degree of vulnerability that persists, with 58% of UK businesses surveyed only feeling 'somewhat prepared' for the eventuality of a ransomware attack. M any businesses know they need to bolster their backup protection, and this awareness continues to drive new opportunities for our privileged access management solutions."

Further information on the Osirium Ransomware Index can be found here: "

[rivaldo] 09/9/2021 14:30

Customer retention rates were 83% last year, up from 81% the previous year. Which strikes me as pretty satisfactory.

Paying subscribers are now over 2.6 million, up from 2.3 million at 31/12/19. Also pretty satisfactory.

The share price chart is also reasonably impressive :o))

[shaker44] 31/8/2021 04:12

Hahaha. Yeah they don't want my cash or the other 1 in 5 that bail. Indifferent customer service. Not miserable at all, very happy to be with a better super now. Who cares about retention rates? Oh, smart shareholders maybe.

[lsoc85] 30/8/2021 20:19

Probably glad to see the back of you, miserable old goat.

[shaker44] 29/8/2021 12:41

After several years With PIA they offered me renewal at higher cost than the highly rated Nord.so of course I bailed. No attempt to retain leaving customers. No wonder they lose such a high percentage at renewal.

[tole] 29/8/2021 12:04

Just seen the techinvest update.. thanks for posting Rivaldo. Good summary.A further bit of coverage from TMF yesterday.A top UK cybersecurity shareKape Technologies (LSE: KAPE) is a UK-listed cybersecurity company with products focused on privacy and digital security. It's growing strongly. In 2020, revenues increased 85% to $122.2m (£87.88m). It's little surprise then that the share price is also doing very well. Shares in Kape Technologies have more or less doubled over the last year. Analysts at Progressive Equity Research expect revenue growth to remain very strong, while the price-to-earnings ratio will fall over the next few years due to strong earnings. The analysts expect revenues in 2021 to be £200m and £250m in 2022. For context, revenue in 2018 was £52.1m. It's not all about the top line though. In 2021, profit before tax is expected to be £64.3m.Demand for VPNs, privacy on the Internet, and cybersecurity will only grow as the world moves increasingly online. I think these trends will underpin further growth in the Kape Technologies share price. The biggest risk is competition, along with a high P/E that means any future underperformance could see it heavily punished.

[mirabeau] 26/8/2021 10:49

What a ripper this has been since it sliced through 200p

[rivaldo] 26/8/2021 10:48

Indeed. Much better to utilise funds for capital growth imo - KAPE have now proven that they can successfully target and integrate acquisitions which heavily enhance earnings.

[johndoe23] 25/8/2021 22:52

Very unlikely i would say. Though they did pay a special divi in 2018 i think it was, so you never know!

[wad collector] 25/8/2021 21:54

What prospect a dividend announcement?

[suetballs] 25/8/2021 11:22

I'll get me coat!
Suet

[rivaldo] 25/8/2021 11:15

I'm not wowed at all yet suetballs.

There's still so much upside, considering KAPE are on a prospective P/E of only 14 or so per Simon Thompson's latest article, which is incredibly low given its high profile within the cybersecurity sector and with such high recurring revenues.

[suetballs] 25/8/2021 09:48

wow!
Suet

[rivaldo] 25/8/2021 09:33

...and there are those new highs....

[rivaldo] 24/8/2021 15:49

Consolidating nicely - ready for another burst upwards perhaps.

We know the H1 results in mid-September will be strong given the trading update. I suspect another acquisition isn't far away too if all goes well.

[blackfinance] 14/8/2021 12:43

Cheers for the Techinvest update Rivaldo.

[rivaldo] 12/8/2021 10:31

KAPE were picked as one of Techinvest's six Best Buys for the second half of 2021 in last month's issue.

The new issue is now out, so it's probably OK to post what Techinvest said in their Best Buy feature:

"Kape Technologies develops and distributes a range of digital products in the online cybersecurity space, mainly aimed at the security market. Revenues have almost quadrupled over the last five years as the company has acted as a consolidator in its sector, completing a string of acquisitions and adding new products from its in-house development programme.

Revenue for the year ended 31 December increased by 85% to US$122.2m, driven by a 31% increase in organic growth in the digital privacy segment and a full year contribution from the transformational acquisition of PIA. Operating profit was up 158% to US$10.7m, and adjusted cash flow surged to US$20.4m reflecting the enhanced cash profile of the business due to the growing customer base.

While Kape's aim of becoming a global leader in consumer digital privacy and security is ambitious, progress to date in building out the business can hardly be faulted. For the current year, consensus broker forecast is for earnings per share of 18.78p rising to 23.16p for fiscal 2022. A prospective P/E of 13 for eighteen months out looks more than reasonable for a company with an outstanding growth profile."

[mrnumpty] 11/8/2021 09:16

Small article on page 24 of today’s Telegraph , titled “ Norton LifeLock to buy Avast “ . It states “ Avast has agreed to a merger with its US peer Norton LifeLock , in a deal that values the FTSE 100 Cybersecurity firm at up to £ 6.2 billion . Shareholders of Avast , which makes free and premium security software , will receive cash and shares in Arizona-based Norton . The deal values Avast at $ 8.1 bn to $ 8.6 bn ( £ 6.2 bn ) , against a market capitalisation of £ 5.2 bn the day before initial reports of a deal in mid-July . The combined company will be headquartered in Prague and Arizona , and listed on New York’s Nasdaq . Norton’s chief executive Vincent Pilette and finance chief Natalie Derse will both stay on in their roles , while Avast’s boss Ondrej Vlcek will become president and join the board “ .

[dicktrade] 11/8/2021 09:04

Ive been in since 80p and been buying steadily on pull backs up to 317p .
No thoughts of slicing ATM

Avast and Norton deal cant do Kape any harm IMHO

[suetballs] 11/8/2021 08:46

A 2 bagger for me now - I would normally take some profits at this juncture but I'm sticking with it.
Very excited about the future here.
Suet

[rivaldo] 10/8/2021 10:36

I've updated the thread header post as I thought it was about time, since I hadn't done so since I set up the thread in 2018!

Happy to incorporate any further reasonable suggestions/corrections.....

[gleach23] 06/8/2021 09:31

Only reported as Buys riv....the 347.1 trades were Sells.

Nonetheless the main thing is we are on the up and that underlying Bid has moved up from 347.1 to 349.77

Hopeful that we'll continue to break out strongly ahead of the Sept Interims.