Kape Technologies Share Discussion Threads

[rivaldo] 07/10/2021 15:39

Today's Shares Magazine has a feature on Mark Slater's Growth Fund, and Slater has this to say - good to see that he added more in the ExpressVPN acquisition placing:

"Slater Growth has been very active in terms of new purchases in 2020 and 2021. Last year, Slater Growth invested in Kape Technologies (KAPE:AIM), the acquisitive digital security-to-privacy software business, then topped up the holding by participating in the group’s recent share placing.

Reassuringly, Slater says the business is cash generative and has ‘good growth dynamics and pricing power’, the latter quality welcome in an era of rising inflation."

[suetballs] 06/10/2021 10:03

Got my PrimaryBid shares yesterday and bed and isa'd.
sp holding pretty steady given all the turmoil.
Suet

[galatea99] 30/9/2021 16:19

Progressive Research company presentation on KAPE:

[galatea99] 29/9/2021 17:37

From "Master Investor":

"Kape Technologies (LON:KAPE) – a softly purring noise from Teddy?
In the last month this privacy security software group has announced its biggest deal to date, a $936m acquisition, a $354m placing at 337.5p per share, and its $10m profits interim results all of which pleased the market. Its shares have moved upwards significantly in response.

Therefore, it is pleasing to see Teddy Sagi, the Israeli billionaire entrepreneur behind the group, actually increasing his Isle of Man held stake from 60.44% to 61.18% in the process. That is a whopping 137m shares, which are currently 422.5p each in the market.

Hold very, very tight."

[wad collector] 28/9/2021 23:10

Tipped in IC @415 by Simon Thompson with a 500 fair value price. FWIW.

[death by donut] 27/9/2021 09:44

Traders buying breakout early?No expert on TA .Or much else tbh.DbD :-)

[malcolmmm] 27/9/2021 09:25

None at all available to buy on H/L something is going on?

[the white house] 27/9/2021 09:23

Is Teddy looking to get back to his 73% holding. Nice squeeze up if he us.

[malcolmmm] 27/9/2021 09:10

As most companies drop after posting results I bought in ,added. they usually take a few weeks to recover highs. I think I posted. 1199% rise in 5 years WOW

[lsoc85] 27/9/2021 07:54

You just beat me to the punch, Rivaldo! All I can add is that the additional shares are at a cost to his company of c.£7m and it is a strong signal of his confidence in a growing share price As good as a Director's Buy.

[rivaldo] 27/9/2021 07:22

Looks like Unkmind Holdings have been buying more shares on the open market, even before the additional 45,941,924 shares they're taking up in the placing.

Per KAPE's web site they last had 135,396,897 shares, but per today's RNS they now have 137,045,026, so they've bought around another 1.7m shares and have 61.18% prior to the placing:

[rivaldo] 26/9/2021 07:21

Nice write-up on Master Investor by Mark Watson-Williams:

"Kape Technologies (LON:KAPE) – a really cracking performance

Yesterday’s announcement of its interim results to end June helped to push the shares of this digital security and privacy software business even higher.

After last week’s news of its massive £635m bid and fund raising for the ExpressVPN virtual private network operator, investors are showing even more interest in the group’s potential.

Revenues were 61.9% higher at $95.5m in the first half, of which nearly $60m are recurring revenues (I love it). Operating profit was up almost 300% at $13.6m, helping to boost earnings 70% to 9c a share.

Estimates for the end December year suggest $200m ($122.2m) of sales, $64m ($30.8m) of profits, with earnings of 24c per share.

Next year already looks very exciting with almost $620m of sales, $160m profits, with 41c of earnings being predicted.

In less than nine months we have done very well with this group’s shares, rising over 240% in the period.

However, I consider that they have a great deal higher to climb and are a strong hold at 415p."

[dogwalker] 23/9/2021 16:31

They're definitely good points Valueye. Recent notable scandals - which I forget the names of - have been built off malpractice along the lines you allude to emerging down the road following years of apparently amazing growth.
Meanwhile, here, the projections for growth/'profits' are great. I can't comment further!

[valueye] 23/9/2021 16:15

@Dogwalker - when I look at underlying growth for the Digital Security segment, growth is negative YoY since 2018, and overall revenue/subscriber rate is declining.

What I'm wondering is the growth rates look off the charts with the PIA and Webselence acquisitions now, but are these masking the core (legacy??) business which may be declining?

Also, I know management highlight adjusted operating cash conversion metrics that appear quite strong, but taking 2020 actual FCF was just $11.5m or conversion of 29%, which is extremely low for Saas business, and the issue is that they have very large marketing costs which they captialise, which makes EBITDA look great for FCF weak.

Just an observation and I'm wondering am I missing anything ? I always get a bit suspicious when there's loads of acquisitions, hard to follow accounting around revenue recognition and deferred/capitalised expenses and low cash generation vs. reported EBITDA.

Others thoughts welcome - not trying to malign this business, what its become since the crossrider days is impressive but I would like to see a better story here in terms of cash flow.

[dogwalker] 23/9/2021 12:22

No not really.
Why do you ask? Do you have any concerns? If so, do say & 'educate' the rest of us. Thanks.

[valueye] 23/9/2021 11:57

Does anyone have concerns around weak FCF generation and deferred contract (marketing) costs ? Also any thoughts on constant M&A masking slowing growth in core Cyberghost/zenmate/intego business segments ?

[malcolmmm] 23/9/2021 08:19

Yes bought this morning ,an old SCSW tip and in their portfolio, up 1100% in 5 years. 450p in a couple of weeks after results

[tole] 22/9/2021 14:29

https://masterinvestor.co.uk/equities/small-cap-round-up-featuring-cohort-kape-technologies-and-strix/Kape Technologies (LON:KAPE) – a really cracking performanceYesterday's announcement of its interim results to end June helped to push the shares of this digital security and privacy software business even higher.After last week's news of its massive £635m bid and fund raising for the ExpressVPN virtual private network operator, investors are showing even more interest in the group's potential.Revenues were 61.9% higher at $95.5m in the first half, of which nearly $60m are recurring revenues (I love it). Operating profit was up almost 300% at $13.6m, helping to boost earnings 70% to 9c a share.Estimates for the end December year suggest $200m ($122.2m) of sales, $64m ($30.8m) of profits, with earnings of 24c per share.Next year already looks very exciting with almost $620m of sales, $160m profits, with 41c of earnings being predicted.In less than nine months we have done very well with this group's shares, rising over 240% in the period.However, I consider that they have a great deal higher to climb and are a strong hold at 415p.

[valueye] 22/9/2021 10:23

Thanks Rivaldo, that's helpful. Treasury shares should be excluded.

Does anyone have links or pdfs of the Mello presentation or Shore or other broker reports ?

Thanks

[blackfinance] 22/9/2021 08:12

bluntnib - please continue to post, all here are welcome. You make valid points. What I would say is that house brokers bigging up their client is fairly routine, you can take it or leave it. I also know about the vpmonitor....again we are all big enough here to do research/due diligence. I have a substantial holding in kape (in profit)and will continue to hold/add until the picture changes for me, thats all any of us can do. Let's keep it civilised on this board...it's a good one!

[rivaldo] 21/9/2021 22:59

This afternoon's presentation at Mello was very impressive. As per AdamB1978's post above, it also included a question as to a potential listing in the USA, to which the CEO replied that now KAPE had reached a suitable size they could consider all options, including a move up to the Main Market here or a possible NASDAQ and/or dual US listing.

Valueye, Shore Capital have 348.3m shares in issue at completion - presumably excluding the shares in treasury. The acquisition is of course highly earnings-enhancing as we know....

[valueye] 21/9/2021 16:03

Hi all, question on the share dilution that will result from the ExpressVPN deal:

Current shares (including employee trust of 600k shares and 9.82m shares held in treasury)in issue is 234.4m shares.

Share consideration as part of Express VPN deal is issuance of 47.78m shares to ExpressVPN vendors (valued at $237m).

Share placing which raised $358m (institutional placing of $354m, plus retail raise of $2.5m) results in further 76.5m in new shares being issued.

So a total of 124.3m new shares being issued to fund the acquisition.

So new share count on PF basis is 234.4m + 124.3m = 358.75m, meaning existing shareholders get diluted by 35% or so - am I correct in my thinking here?

[bluntnib] 21/9/2021 13:39

"There are none so blind as those who will not see" Especially if you filter me

[suetballs] 21/9/2021 13:31

A Nasdaz listing would really be great.
Suet

[adamb1978] 21/9/2021 13:04

I lobbed in a question to the analyst presentation. They confirmed that the board have started to look at a main market or Nasdaq listing and/or a dual-listing