Kape Technologies PLC Trading Update & Notice of Results (2403A)

TIDMKAPE

RNS Number : 2403A

Kape Technologies PLC

20 January 2020

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014

20 January 2020

Kape Technologies plc

("Kape" or the "Group")

Trading Update

&

Notice of Results

Kape (AIM: KAPE), the digital security and privacy software business is pleased to provide an update on trading for the year ended 31 December 2019.

2019 was a pivotal year for Kape, during which the Group achieved both strong organic and inorganic growth. Delivering on its vision to create a dominant player in the privacy and security space, Kape acquired Private Internet Access ("PIA") in December 2019, bringing one of the most respected product suites and well recognised brands in the market into the Group.

The acquisition of PIA will be significantly earnings enhancing for Kape, and further bolsters the Group's SaaS operating model. Kape's user base grew to 2.35 million subscribers at year-end (30 June 2019: 1 million), comprising 74.3% organic growth within the privacy vertical not including PIA. Reflecting the growth in our customer base, Kape expects to deliver $98.8 million(1) in revenues from existing customers in future financial years, up 260% (30 June 2019: $38.0 million).

Kape traded strongly throughout 2019 with a focus on profitable growth. Adjusted EBITDA(2) is expected to be slightly above market expectations at c.$14.5 million (2018: $10.4 million), representing an increase of 40%, with revenues up 26% to c.$66.0 million, reflecting the Group's focus on customer acquisition investment towards the higher margin digital privacy segment. At the time of the PIA acquisition, the Group issued guidance for the year ending 31 December 2020, with revenues expected to be in the range of $120 million to $123 million and Adjusted EBITDA(2) between $35 million and $38 million.

The integration of PIA is now underway with management focused on enhancing the enlarged Group's growth, developing the product suite and leveraging synergy opportunities. The initial focus has been on consolidating operations, coordinating sales and marketing capabilities and exploiting the Group's expanded 'privacy first' suite of software solutions.

The Group expects to report its results for the year ended 31 December 2019 on 17 March 2020.

Ido Erlichman, Chief Executive Officer of Kape, commented:

"In 2019 we transformed Kape into one of the most prominent global digital privacy companies, combining rapid organic growth with further expansion of our portfolio through development and the PIA acquisition.

"The enlarged group boasts an enviable product suite of privacy-based software solutions focused on browsing, encryption and connectivity, in addition to a strong global brand within the fast-growing digital privacy arena.

"We have entered 2020 in a very strong position, focused on driving earnings growth and maintaining our historic levels of strong cash generation, alongside maximising the positive impact of our acquisitions."

(1) Calculated as expected revenues from first renewal of the existing user base in addition to the deferred revenue balance

(2) Adjusted EBITDA is a non-GAAP measure and a company specific measure which excludes other operating income and expenses which are considered to be one off and non-recurring in nature.

Enquiries:

 
 Kape Technologies plc                               via Vigo Communications 
  Ido Erlichman, Chief Executive Officer 
  Moran Laufer, Chief Financial Officer 
 Shore Capital (Nominated Adviser & Broker) 
  Mark Percy / Toby Gibbs / James Thomas             [phone] 
 N+1 Singer (Joint Broker) 
  Harry Gooden / George Tzimas                       [phone] 
 Vigo Communications (Financial Public Relations) 
  Jeremy Garcia / Antonia Pollock / Fiona Norman 
  [e-mail]                                 [phone] 
 

About Kape

Kape is a leading 'privacy-first' digital security software provider to consumers. Through its range of privacy and security products, Kape focusses on protecting consumers and their personal data as they go about their daily digital lives.

To date, Kape has over 1 million paying subscribers, supported by a team of over 300 people across eight locations worldwide. Kape has a proven track record of revenue and EBITDA growth, underpinned by a strong business model which leverages our digital marketing expertise.

Through our subscription-based platform, Kape has fast established a highly scalable SaaS-based operating model, geared towards capitalising on the vast global consumer digital privacy market.

www.kape.com

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January 20, 2020 02:00 ET (07:00 GMT)