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Share Name Share Symbol Market Type Share ISIN Share Description
Kape Technologies Plc LSE:KAPE London Ordinary Share IM00BQ8NYV14 ORD USD0.0001
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 408.00 275,178 16:35:09
Bid Price Offer Price High Price Low Price Open Price
408.00 412.00 410.00 406.00 406.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
  89.39 5.36 10.97 37.2 1,427
Last Trade Time Trade Type Trade Size Trade Price Currency
16:35:09 UT 700 408.00 GBX

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17/1/202216:21KAPE TECHNOLOGIES: cybersecurity for consumers2,839
02/12/201908:13KAPE canaveral rocket takes off. Heading for 220p 28

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DateSubject
17/1/2022
08:20
Kape Technologies Daily Update: Kape Technologies Plc is listed in the sector of the London Stock Exchange with ticker KAPE. The last closing price for Kape Technologies was 408p.
Kape Technologies Plc has a 4 week average price of 400p and a 12 week average price of 392.50p.
The 1 year high share price is 468.75p while the 1 year low share price is currently 185p.
There are currently 349,849,532 shares in issue and the average daily traded volume is 414,208 shares. The market capitalisation of Kape Technologies Plc is £1,427,386,090.56.
16/12/2021
11:57
rivaldo: The respected Techmarketview web site is very positive on KAPE today: Https://www.techmarketview.com/ukhotviews/archive/2021/12/16/kape-completes-expressvpn-acquisition "Thursday 16 December 2021 Kape completes ExpressVPN acquisition Kape completes ExpressVPN acquisitionKape Technologies will significantly expand its revenue after completing the acquisition of ExpressVPN. The US$936m deal doubles Kape’s customer base to over 6m and creates a global workforce of 720 people. ExpressVPN has seen a compound annual growth rate (CAGR) of 35.1% over the past four years, we think boosted by particularly strongly demand since the onset of the coronavirus pandemic as more people found themselves needing a virtual private network (VPN) when working from home. London-headquartered Kape (formerly Crossrider) has rapidly extended its VPN portfolio in recent years. The US$96m acquisition of Private Internet Access (PIA) in 2019 helped to push its FY20 revenue up 85% year on year to US$122m. The company’s final FY21 results are yet to be published but Kape forecast turnover would be in the region of US$197m-US$202m after the further US$149m cash addition of Webselenese announced last March. ExpressVPN will add another hefty chunk to that total in FY22 after it grew its own FY20 revenue 37% yoy to US$279m. The company is reported to have over 3m customers, 40% of which come from North America. Kape also expects synergies to shave US$19m off its opex in 2022 and a further US$30m a year from 2023 onwards on an annualised cost basis. Kape was already well on the way to becoming a leading provider of secure, remote access solutions for consumers and small businesses before the pandemic, but now looks even better placed to capitalise on continued demand for its enlarged portfolio of software and SaaS-based VPNs. The company will no doubt be keen to maintain ExpressVPN’s OEM agreements with laptop manufacturers including HP, HMD Global, Acer, Dynabook and Philips, but it looks to us very much like a case of being in the right place at the right time for Kape."
01/11/2021
20:57
tole: https://masterinvestor.co.uk/equities/another-look-at-kape-technologies/Another look at Kape TechnologiesBy Mark Watson-Mitchell 01 November 2021 5 mins. to readAnother look at Kape TechnologiesI am sure that readers will scoff at the way that I keep going on about annual recurring revenues (ARR), however I have little hesitation in once more bringing this particular company to your attention.Exactly what is Annual Recurring Revenue?Annual recurring revenue refers to contracted revenue, normalised on an annual basis, that a company expects to receive from its customers for providing them with products or services.Essentially, annual recurring revenue is a metric of predictable and recurring revenue generated by customers within a year. The measure is primarily used by businesses operating on a subscription-based model.Annual recurring revenue is considered one of the most important metrics for subscription-based companies. The metric offers some crucial applications for a company: – it quantifies the company's growth; helps to evaluate the success of the business model; and then construct forecast revenue.The predictability and stability of ARR make the metric a good measure of a company's growth. By comparing ARRs for several years, a company can clearly see whether its business decisions are resulting in any progress.Similarly, ARR can be used by bankers, corporate financiers, investors and even potential predators, when assessing the real value of a business.Of course, not all businesses exist on subscriptions, nor even have regular income, so when ARR models are shown they do stand out significantly from the crowd.I also love to see 'insider trading'Perhaps not so much the insiders within a company management actually trading their stock, but more to see the decisions of those deep inside a business.Are they buying more shares? Have they been adding to their holdings to maintain similar per centage equity positions in expanding businesses where stock issues help the funding, or have they been selling off holdings to pay for tax bills or even divorces?So, when I see executive directors of a group topping up their stakes it always gets my attention.None more so than when company bosses already have equity control of a business that is fast-expanding through the issue of more shares.Big increase in his holdingJust such an example is Teddy Sagi, the Israeli-born owner of the Isle-of-Man registered Unikmind Holdings.The 50-year-old tech sector billionaire, who has six children, recently added to his massive equity position in the Kape Technologies (LON:KAPE) group. With Unikmind as the registered holder, he now has 187,442,335 shares in the company, representing 62.25% of its enlarged equity.That stake is up fractionally from 61.30%, which may only be a small increase but it still cost around £11m in the purchase.That has risen from almost 144.5m shares (65%) in December last year, which is even more impressive because of the $936m acquisition of ExpressVPN in September this year, with the accompanying $354m fundraising and share issue.It clearly showed that he has not lost any of his faith in the group's future success.But Sagi is all about success!This entrepreneur created, built up and AIM-floated Playtech, the world's leading online gaming software company. Having sold down his holding he no longer holds any shares in that company.Subsequently he built up SafeCharge, the AIM-listed online payment service provider, he sold that off in August 2019.Amongst many other investments Sagi also owns a significant global property portfolio that includes the majority of London's Camden Market, said to cover an 11-acre chunk of local real estate.What is the business?Kape is a leading 'privacy-first' digital security software provider to consumers.The group has a 'vision' of a world where people retain their security, anonymity, and freedom online.As more of our daily lives shift to the digital world, security and privacy have never been more important.Through its range of products, it focuses on protecting consumers and their personal data as they go about their daily digital lives.The group now has some 6m paying subscribers, supported by a team of over 430 people across eight locations worldwide.Through its subscription-based platform, Kape has rapidly established a highly scalable SaaS-based operating model, geared towards serving the vast global consumer digital privacy market.The group's retention rate is an industry-leading figure for a B2C (business to consumer) SaaS business – it is a very impressive 83%.It develops, acquires, and distributes a variety of leading digital security software products.The company believes in having the best products, supported by top teams developing world class technology to deliver a superior experience to a rapidly growing audience.The ExpressVPN springboardOver the last few years, Kape has been a quite active acquisitor of companies that not only fit in, but also help to significantly expand the group's product and service offerings.None more so than the latest ExpressVPN deal, which was a colossal move by the group.It is a very well-known and well-respected leader in the privacy and cybersecurity sector with over 3m paying subscribers globally, with some 40% in the US.It is a leading Virtual Private Network (VPN) provider with premium products aimed at the consumer marketplace.Its acquisition was really quite significant, creating an effective 'global powerhouse' in the digital privacy and security space.Broker's ViewAnalyst Martin O'Sullivan, at the 'house' broker Shore Capital Markets, estimates that the current year to end December will see the revenues rise from $122m to $199m while almost doubling adjusted pre-tax profits from $39m to $74m, worth 24.4c (13.5c) in earnings per share.For the next two years he sees $618m then $697m in sales, with profits coming in at $151m then $173m, and earnings of 40.6c then 46.5c per share for 2022 and 2023 respectively.Over at Progressive Equity Research, Gareth Evans sees fairly similar revenue, profits and earnings figures.However, he points out one massive 'bull point' for the group in the recent fundraising valuation for Aura, one of the group's US-based cyber sector peers.That company has just raised some $200m based upon a valuation of between 10 to 11 times its 2022 revenues. Kape is on around three times!My ViewKape Technologies is certainly all about successful, expansive and global subscriber growth.We will have to wait until the group's Trading Update is announced in January to see just how accurate the analysts have been in their current year estimates.I have been absolutely delighted with the group's share price performance since my first profile on the company in late December last year, having risen more than 134% in just over ten months.But I foresee that the shares, now 402.5p, have still further to rise, with 600p possibly being an easy aim in 2022.
27/10/2021
07:14
galatea99: Latest Progressive note on KAPE: "We note that one of Kape’s peers, a US-based cyber security player named Aura, has raised a significant sum ($200m) from a group of well-known investors, at a valuation that appears to be c.10-11x revenue. We continue to believe that Kape is well-positioned within the sector, and look forward to further news as the group integrates the ExpressVPN acquisition. ▪ Aura fundraise details: Aura last week announced a fundraise of c.$200m from a group of investors including Madrone Capital Partners, a number of other tech/cyber security focused funds, as well as Warburg Pincus and Accel. These names represent a group of well-regarded, largely specialist investors that have strong track records of investing in technology businesses in the private sphere. Aura’s valuation is quoted at $2.5bn post-money ($2.3bn pre-money). Based on annual revenues the company indicates as being “more than $220m”, which we assume is a reasonably accurate current figure, this would equate to around 10-11x sales. ▪ Degree of comparability and valuation metrics: Aura is a consumerfocused business that claims over one million customers, and offers a range of products & services similar in many ways to Kape: identity theft protection; password management; monitoring of financial transactions; device and network protection (including a VPN product). A number of these products are analogous to Kape’s. Given Aura’s focus and location, it may be fair to assume that most of its customers are based in North America,similar to Kape which has over 40% of its customers in the region. As shown in the table below, Kape is currently trading on between 2x and 3x 2022E revenues (the first full year to include ExpressVPN revenue). Kape’s sales multiples have been steadily rising over the years (from below 1x sales in 2017) as the business has matured and evolved, expanded its SaaS offering, and built a clear and defensible position in the cyber security space. UK investors look to valuation criteria from multiple sources, with both public and private market yardsticks relevant to their decisions. Equally, activity in overseas markets is often considered, and for the cyber security market the US clearly is a major barometer of sentiment and valuation. The valuation read-across from this deal is clear, and despite its recent very strong performance, Kape is still trading at levels well below sector peers" Https://www.progressive-research.com/company-coverage/Kape-Technologies-plc/
21/9/2021
07:21
rivaldo: Cheers gleach23. I suspect ST will be raising his 500p target once again this year. Progressive Equity Research have issued a new note today: Https://www.progressive-research.com/research/taking-the-express-path-to-global-leadership/ They've upgraded 2022E revenues "by some 146%, with Adjusted EBITDA up 84% from $91.0 million to $167.7 million." With 41c EPS now forecast next year, KAPE's P/E remains extremely good value imho. This section is noteworthy: "What’s in it for ExpressVPN ? Kape has, for many years, been expanding through both acquisition and organic delivery.This ExpressVPN deal is, by some margin, the largest deal in Kape’s history. The attraction for Kape is clear – and we understand that the attraction for ExpressVPN is related to Kape’s existing and historic success. ▪ Both companies have been highly successful at executing on their growth strategies, both (especially PIA within Kape) already benefit from the flexibility of a largely-remote workforce, and both use offshore delivery (in the Philippines) for customer support. ▪ Crucially, Kape already provides a multi-product offering and platform, which could be quickly brought to bear on the large ExpressVPN customer base (and through its strong distribution network). This should allow for an expansion of the ARPU achieved by both businesses, and for further organic growth over time. ▪ We understand that, through a combination of these factors, as well as a clear cultural alignment, Kape was able to persuade the ExpressVPN founders and shareholders that a combination was the logical move. It is perhaps for these reasons that Kape has been able to negotiate what appears to be a very good price – paying a low-double digit EBITDA multiple for a business with genuine global scale, with a very attractive historic growth profile and with significant ongoing market opportunity. Summary and conclusion This deal is clearly a very major step for Kape. The group is becoming a material player on the world stage for personal security and privacy. The move is not without risk – the consideration is partly deferred but fixed, and the sums payable are considerable. Nevertheless, the expansion in the group’s scale and the opportunity for cross-sell and up-sell, as well as logical cost reductions, should allow the business to easily fund the deferred element of the consideration and benefit in terms of strong cash flows and the ability to reinvest in products, as well as providing a good long-term opportunity for investors. We take additional comfort from today’s strong H1 delivery, and look forward to further announcements as the transaction moves through the antitrust procedures and towards completion. We may need to adjust our forecasts again, once deal timing is clearer and as additional detail is available, but in the meantime we take comfort from the ongoing expansion in the digital security market and Kape’s clear ambition to expand and extend its role in the market."
21/9/2021
07:03
gleach23: Simon Thompson's write up from last night appears to be in the public domain, so copied below - Over 40 per cent of ExpressVPN’s users are based in North America, which scales up Kape’s global offering, and almost half its 290 employees are R&D engineers, thus adding valuable expertise. There are also material opportunities to cross-sell and generate cost savings by combining the two groups which will service 6m paying customers. ExpressVPN is fast-growing, reporting revenue of $279m and cash profit of $74.8m in 2020, both metrics up by more than a third year on year. Kape is now forecast to deliver cash profit of around $172m in 2022, up from $74m expected in 2021 and $38m in 2020. When I included the shares, at 47.9p, in my 2017 Bargain Shares portfolio, Kape was making cash profit of $8m. Given the structure of the deal, analysts expect earnings per share (EPS) of 41c (30p) in 2022, implying 61 per cent year-on-year growth. On a forward price/earnings (PE) ratio of 13.8, the rerating has further to run. Kape’s earnings-accretive game-changing acquisition Earnings-accretive $936m acquisition of ExpressVPN Cost savings of $19m targeted in 2022 and $30m annualised from 2023 Guidance cash profit of $166m to $172m in 2022 on revenue of $610m to $624m Forecast earnings per share (EPS) of 41¢ in 2022 The $936m Kape Technologies (KAPE: 415p) is paying for ExpressVPN looks a fair price as it represents 10.8 times 2022 cash profits (7.8 times after targeted cost savings and synergies), a deep discount to rival Avast’s recent take-out price of 16 times cash profit. The funding structure is sensible, too, as the consideration is being settled by the issue of $237m new ordinary Kape shares to the vendors, $354m cash on completion (financed by a placing and retail offer at 337.5p), with a further $172m cash payable on both the first and second anniversaries of the deal. Importantly, deferred consideration can be fully funded from Kape’s operational cash flow and by using undrawn lines from its existing credit lines. Net debt is expected to decline from three times cash profit on completion to 1.5 times by the end of 2022. Factoring in $19m of targeted cost savings in 2022, the £1.2bn market capitalisation group is being valued on an enterprise valuation to cash profit multiple of 11 times. That’s a low rating for a group run by a shrewd management team who are proving adept at increasing its customer base, cross-selling products, successfully integrating acquisitions and entering new lucrative revenue generating agreements. Kape’s share price has risen by 35 per cent since I last suggested buying the shares, at 303p (‘Bargain shares: Building momentum’, 26 July 2021), and the holding has produced a 763 per cent total return on my 2017 entry point. I raise my fair valuation by a third to 500p to reflect a target enterprise valuation of 13.4 times 2022 cash profit estimates. Buy.
13/9/2021
20:45
magic: I would be very surprised if the share price rises tomorrow. Will the placing price be announced tomorrow? I would think it is in the company's interest to do this. Admission of placing and retail shares only after the General Meeting 1st October. "It is envisaged that the Bookbuild will close no later than 7.00 a.m. BST on 14 September 2021. The results of the Placing will be announced as soon as practicable after the closing of the Bookbuild." and "The Placing and Retail Offer are conditional upon, inter alia, approval of shareholders being received at the General Meeting" also "In conjunction with the Placing, the planned Retail Offer will provide both new and existing retail investors with an opportunity to participate in the equity fundraising alongside institutional investors. A separate announcement will be made shortly regarding the Retail Offer and its terms. For the avoidance of doubt, the Retail Offer is not part of the Placing." Additionally "The Placing is not conditional on the completion of the Acquisition." Invariably a placement price is below the market price. It wouldn't surprise me if the placement price is say around 330 pence. The sellers tomorrow might be: - new and old shareholders hedging until the shares are listed - some shareholders who are sceptical of acquisition, have seen share price rise a lot and want to get out - some shareholders who may not be sceptical of the acquisition, but were comfortable with organic growth, but now uncomfortable with this different "beast" The buyers may be: - Individuals and others who did not participate in placing, or will be allocated less than they wished - Possibly investors who are looking for higher risk / reward - Possibly some US investors who can now back ExpressVPN as a quality company - Identifying a lower valuation than equivalent US listed companies and anticipating a future US listing - Maybe some stabilisation It would not surprise me if the hedging predominates which could see a short term share price below the placing price. This co is still on the AIM and this may create problems for some institutional buyers mandates. In the medium term a FTSE 250 place in the upper half would be a positive move. All large acquisitions / mergers have execution risks and mergers often develop integration/culture problems. There may be some hesitancy to back this company until some risks have been reduced and progress observed. Although the company has great promise, it still "only" has £200m expected turnover in 2021 and £30m profit in 2020. I'm in on the retail offer, watching pre and post admission opportunities, good luck everyone.
10/9/2021
08:49
mrnumpty: 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 .
04/6/2021
11:36
rivaldo: Here's Simon Thompson's tip for the record: "Kape makes strong start to 2021 New US$220m debt facility includes US$90m acquisition facility. Borrowings expected to be wiped out by end of 2022. Business adding 25,000 new customers per month. New product launches and cross-selling initiatives helping to drive up average order values. Cyber security software provider Kape Technologies (KAPE: 315p) has issued a bullish trading update and announced a new senior secured bank facility on enhanced terms. Kape is on bang track to deliver 2021 revenues of $197-202m (representing 65 per cent growth) and underlying cash profit of $73-76m (90 per cent growth), in line with guidance at the time of the US$149m earnings accretive acquisition of Webselenese (‘Tap into an eye-catching earnings cycle’, 8 March 2021). Webselenese is an independent digital platform that provides 8.5m users with unbiased insight driven content focused on cyber security and privacy trends that attracts software vendors (McAfee, NortonLifeLock, Dashlane and Kape). Kape has launched multiple cross-company initiatives since making the acquisition which are enabling it to benefit from Webselenese's substantial technology knowhow as well as enhancing the group’s product development and go-to-market capabilities. Kape’s digital privacy division continues to deliver bumper growth. Since the start of 2021, the business has added 25,000 new customers per month to take the total to 2.61m paying subscribers, with growth rates expected to accelerate. The directors also report that over 12 per cent of new Cyberghost customers and 20 per cent of new Intego users are purchasing more than one product. New products are helping to drive growth, too. For instance, Kape launched its Privacy First Anti-Virus for PC, which will initially be Intego branded, and in the coming months will be rolled-out to both CyberGhost and Private Internet Access users as part of a wider initiative. Adoption of Kape’s cyber security software (which protects data security and privacy against piracy and phishing attacks), and virtual private network (VPN) solutions (which encrypt and secure internet connections) have been rising notably in both North America and Europe, regions that account for three-quarters of Kape’s revenue. The new US$220m debt facility is priced at a keen 2 per cent margin above the applicable reference rate and includes a US$90m acquisition facility. It replaces the existing US$40m term loan and US$120m bridging loan facility that funded the Webselence acquisition. Analysts at Progressive Equity are forecasting 2021 closing net debt of US$77.7m and predict 2022 operating cash flow of US$92.7m will wipe out borrowings by the end of next year. The deleveraging of the balance sheet is important as it means that more of the economic interest in the entity transfers from debt holders to shareholders. The shares have achieved my 325p target price, having risen by a third in the past three months, and have produced a 555 per cent total return since I included the company in my 2017 Bargain Shares portfolio. However, I feel that a 2022 PE ratio of 13 offers scope for further upside. Not only is the company forecast to deliver 87 per cent and 28 per cent EPS growth in 2021 and 2022, so there is a strong earnings tailwind, but clearly Kape’s management are on the look out for more earnings accretive acquisitions. I am raising my target price to 375p based on a target 2022 PE ratio of 16.5 and enterprise valuation to cash profit multiple of 13 times. Buy."
08/3/2021
19:10
cravencottage: Tap into an eye-catching earnings cycle Simon Thompson highlights a cyber security software company set for an earnings boost March 8, 2021 By Simon Thompson Acquisition of Webselense massively earnings accretive. Debt funding could be repaid from free cash flow by end of 2022. Analysts push through 60 and 85 per cent EPS upgrades for 2021 and 2022. It certainly paid to buy shares in cyber security software provider Kape Technologies (KAPE: 245p) ahead of this month’s annual results. Not only had the figures been well flagged – full-year cash profit of $39m was well ahead of guidance ($35m-$38m) with margins surging from 22 to 32 per cent on the back of the transformational acquisition of Colorado-based Private Internet Access – but the risk to 2021 earnings remained heavily skewed to the upside, a factor not reflected in an enterprise value to cash profit multiple of 13 times (‘Profit from the small-cap bull market’, 25 January 2021). Even after Kape’s share price soared 27 per cent following its US$149m earnings accretive acquisition of Webselense, an independent digital platform that provides 8.5m users with unbiased insight driven content focused on cyber security and privacy trends that attracts software vendors (McAfee, NortonLifeLock, Dashlane and Kape), the valuation is not stretched by any means. Like Kape, Webselense is fast growing and hugely profitable: cash profit trebled to US$30.7m on 91 per cent higher revenue of US$64.5m in 2020, with both financial metrics increasing more than 10-fold in the past three years. Its owners will receive 12.1m Kape shares worth US$32.5m in part consideration to give them a 5.44 per cent stake in the software group. That’s important as Kape will benefit from their extensive expertise in growing the business. Kape part funded the US$116m cash element from its own cash resources and an US$85m bridging loan provided by its majority shareholder which will be refinanced in due course. The point is that after factoring in Webselense’s contribution, Kape’s directors are guiding investors to expect proforma 2021 cash profit of US$78m to US$81m on a margin of 38 per cent. Prior to the acquisition, Kape was expected to deliver 2021 cash profit of US$41.5m, so profit estimates have doubled. However, the share count only rises 5.8 per cent, so even after factoring in higher interest costs, earnings per share (EPS) will soar. To put this into perspective, analysts at Progressive Equity Research raised their 2021 cash profit estimate by 80 per cent to US$74.5m on revenue of US$200m, an outcome that will see 2020 pre-tax profit of US$34.4m surge to US$64.6m in 2021. On this basis, expect EPS to rise 60 per cent to 25.4¢ (18.4p). The 85 per cent EPS upgrade to 32.5¢ (23.5p) for 2022 is even greater as Kape will benefit from a full 12-month contribution from Webselense, as well as ongoing organic growth across all its businesses. Moreover, because free cash flow is set to surge by more than half to US$31.3m in 2021, and could almost treble to US$81m in 2022, Kape is set to pay down all debt by the end of 2022. On this basis, the shares are trading on PE ratios of 13 and 10, respectively, for 2021 and 2022. However, enterprise value to cash profit multiple is a better measure – 2021 multiple of 11 times drops to 8.5 times in 2022 – as it takes into account the transfer of debt holders’ economic interest in Kape to shareholders as debt is reduced. Kape’s share price is up 412 per cent since I advised buying, at 47.9p, in my 2017 Bargain Shares portfolio, and the re-rating is far from over. In fact, I am raising my target price from 275p to 325p given the scale of the earnings upgrades. For good measure the shares have registered a major chart break-out, too. Buy.
05/2/2021
08:38
ggbarabajagal: tipped by Simon Thompson, Investors Chronicle, at 12pm today. Kape Technologies (KAPE:198p), a provider of cyber security software, has released a bullish pre-close update ahead of annual results on Wednesday, 17 March 2020. It’s hardly surprising given that home working and remote working restrictions due to the Covid-19 pandemic has led to increased adoption of Kape’s cyber security software (which protects data security and privacy against piracy and phishing attacks). Demand for virtual private network (VPN) solutions that encrypt and secure internet connections has been rising notably in both North America and Europe, regions that account for almost three-quarters of Kape’s annual revenue. Kape is also benefiting from the transformational acquisition of Colorado-based Private Internet Access (PIA) at the end of 2019. These strong drivers have delivered full-year cash profit of $39m, well ahead of previous guidance ($35m-$38m), on 85 per cent higher revenue of $122m. Margins shot up from 22 to 32 per cent, helped in part by a 31 per cent reduction in PIA’s operating expenses. On this basis, analysts at Progressive Equity Research forecast a trebling of full-year pre-tax profit to $34.4m, EPS of 15.8¢ (11.6p), up from 6.4¢ in 2019, and closing net cash of $25.7m. Furthermore, higher marketing activity in the final quarter of 2020 has laid the platform for accelerated organic growth in 2021. In addition, Kape has completed a cutting-edge infrastructure upgrade that has significantly cut costs as well as enhancing the customer experience for its 2.5m paying subscribers, a tenfold increase since I first advised buying the shares, at 47.9p, in my 2017 Bargain Shares portfolio. Analysts forecast a further increase in cash profits to $41.5m in the current year, but I expect this to be easily beaten. However, even on this basis, the shares are not highly priced on an enterprise value to cash profit multiple of 13 times, one reason why they have made decent headway since I last suggested buying at 170p (‘Four tech companies with high growth potentialâ€482;, 18 November 2020). I expect the positive share price momentum to be maintained. A chart breakout above last summer’;s highs around 225p would signal that a share price move towards my 275p target price is under way. Buy. mfhmfh - 22 Dec 2020 - 10:22:35 - 2268 of 2397 KAPE TECHNOLOGIES: cybersecurity for consumers - KAPE nice start this morning. ST's last target price was 275p. ONJohn - 29 Oct 2020 - 08:05:20 - 2137 of 2397 KAPE TECHNOLOGIES: cybersecurity for consumers - KAPE ic Fifthly, the shares registered an important triple top chart break-out when they smashed through the 200p resistance level into blue sky territory. On a 2020 price/earnings (PE) ratio of 18.8, and with potential to deliver double-digit EPS growth in 2021 and beyond, I lift my target price to 275p. Buy.
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