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Makes you wonder if JP Morgan had wind of this based on their recent short. Would be terrible if so, but seems a very suspicious coincidence.
Also don't get the timing.
If the results were good, as they were, why not see where the SP settles and raise at the new higher rate, less dilution.
SP has struggled here as part of the general market trend & it's galling to see the benefit of 6 months results being knocked back where it came from the following day.
Hey Rivaldo...always interested to hear your views. How do you think about this placing?
I was a little surprised....not sure if I totally agree with philosophy of it...
Well, well....a placing and retail offer at 265p, with the minimum $110m entirely bankrolled by Unikmind (Teddy Sagi)! Which just shows his confidence here:
Https://uk.advfn.com/stock-market/london/kape-technologies-KAPE/share-news/Kape-Technologies-PLC-Proposed-Placing-to-raise-US/89044036
Looks like more acquisitions are on the way then. The placing price is somewhat disappointing, though no doubt arranged with yesterday's opening share price in mind, but if it results in the kind of growth we've seen to date then both Unikmind and other shareholders should see significant benefits.
https://twitter.com/surprised_trade/status/1569442485990223874
IC highlighting excellent results today and a 500p target
Thank you, that's really helpful. Sounds like an excellent one for the portfolio.
There had been worries recently that customer retention rates had fallen away causing increased customer acquisition costs.
These results show that retention rates have actually improved by 1%.
Google 'Kape Technologies malware company'
Funnily enough, I took out a big position (for me) at 2.55 the same day JPM shorted this. Time will tell, but pretty pleased so far. I really can't see why you'd short such a lowly valued company with a great track record, especially given the recent takeover activity in the sector.
Thank you
They've also just opened a similar 0.5% short position against Alphawave. Looks to me like it's part of a bearish stance on the UK tech sector. Seems crazy to me, as I would say Kape and Alphawave are two of the best companies to invest in right now. Kape especially is an absolute steal right now.
Nice summary from the respected Techmarketview:
Https://www.techmarketview.com/ukhotviews/archive/2022/09/12/demand-for-digital-privacy-security-powering-growth-for-kape
"Monday 12 September 2022
Demand for digital privacy & security powering growth for Kape
Kape TechnologiesKape Technologies plc (AIM: KAPE), a UK based consumer-focused security software provider, announced strong growth for H1 FY22, driven by the growing amount of personal data online and subsequent heightened demand for digital privacy and security solutions.
Revenues increased by 216.6% to $302m, a 19% increase yoy on an organic basis. The business also saw strong growth in recurring revenues to $268m, an increase of 353.5%. Most of the growth in recurring revenue was due to the acquisition of ExpressVPN in December 2021. Kape now have c.7 million paying customers across their products.
Kape's privacy segment revenues grew 19% yoy in H1 2022 on a pro forma organic basis, with the security division growing 15.7%. The company says it has made ‘exceptional progress’ integrating ExpressVPN. The business has created unified teams across the privacy business, on track to realise $9 million in synergies in 2022. Kape's content division, based on the Webselenese acquisition, generated organic growth of 25% yoy.
Kape expects to generate revenues for the year ended 31 December 2022 of between $610-624m and adjusted EBITDA of between $166-172m for the year ending 31 December 2022.
With individuals owning a wider collection of personal digital devices, and phishing and social engineering attacks growing in sophistication, consumers are increasingly seeking to obtain more comprehensive cybersecurity coverage across their range of appliances. With personal devices also increasingly being used to access corporate networks, it is more important than ever for businesses to ensure employees understand the need for strong digital security in the home, as well as when accessing company systems."
I'm interested in this stock and the trading update looks incredible, but has there been any insight into why JP Morgan would have started a short here 4 days ago? It's the only negative I can see right now
Shore Capital note that adjusted operating cashflows for H1 represented 101% cash conversion of the porfirma adjusted EBITDA.
They retiterate their 40.6c EPS forecast this year, i.e a P/E of only around 7.5.
The EPS rises to 46.5c next year, with net debt falling massively to $160.5m at the close of next year.
They summarise that "the valuation multiples appear extremely modest and attractive".
Excellent H1 results - slightly ahead of the figures in the trading update for both revenues and EBITDA.
And the outlook shows complete confidence in the expectations of 40.6c EPS this year, i.e around 35.4p EPS.
There's also now the possibility of prepayment of the ExpressVPN deferred consideration, which would save a large amount of money:
"Our excellent operational and financial progress across H1 2022 has underpinned a period of record profitable growth for Kape, reinforcing our widely recognised status as a leading player in the global digital privacy and security arena.
We are experiencing growing demand across our full range of product suite, reinforced by our premium service offering. This is testament to the efforts of the entire Kape team who have worked tirelessly to deliver cutting-edge products to market and drive innovation.
From the successful integration of ExpressVPN to expanding our burgeoning product stack, we believe we are now ideally placed to capture the global demand from individuals who want to grow their control over their digital lives."
Article in today's Telegraph suggesting Kape is one of four UK companies rope for takeover.
http://m4.emails.telegraph.co.uk/nl/jsp/m.jsp?c=%40mcw6wJJill8yMKSLLfrHn6y1oQ31%2FJZw%2F9UTiKoLWLe9DlV4qhOoZYmhxzXA3RVI1AcXiO8u%2Fg60zYOgPaCovA%3D%3D&WT.mc_id=e_DM33694&WT.tsrc=email&etype=Edi_Inv_New&utmsource=email&utm_medium=Edi_Inv_New20220908&utm_campaign=DM33694
Today's RNS confirms the H1 results will be on Monday (a good sign!) 12th September, with an Investor Meet presentation too:
Https://uk.advfn.com/stock-market/london/kape-technologies-KAPE/share-news/Kape-Technologies-PLC-Notice-of-Results-Analyst/88912042
Shore Capital currently forecast 40.6c EPS for this year rising to 46.5c EPS next year.
That's 34.3p EPS for this year at the current exchange rate, rising to 39.3p EPS next year - a P/E of just 7.1 at 280p.
We already know the H1 results will be very good from the trading statement:
"Kape has made a strong start to 2022, delivering on our organic growth ambitions and, more importantly, servicing c.7 million customers who choose to use our products.
This has been our strongest H1 to-date, having delivered six consecutive years of growth and, with the integration of ExpressVPN progressing to plan, we are ideally placed to further capitalise on this rapidly growing market."
Surpised that nobody else has mentioned this so far today....
Apologies, £984m.
Darktrace announce interest from Thoma Bravo. Up 25% and currently valued at £3.42b. Their fundamentals not a patch on what we have here. Our mcap £942m. Makes a lot of sense…
Anything in Techinvest about Checkit?
Techinvest have published their new issue, so it should be OK to copy their Buy update on KAPE from the July issue:
"Kape Technologies 340p (KAPE; AIM)
In an AGM statement, Kape reported a record first quarter performance driven by robust organic growth. Management added that this leaves the company well-positioned to deliver revenues of between US$610-624m and proforma adjusted EBITDA of between US$166-172m for the full year 2022. For the prior year ended December 31, Kape achieved revenue of US$230.7m and proforma adjusted EBITDA of US$78.0m. The integration of ExpressVPN, acquired in December 2021, is underway and has strengthened Kape’s go-to market and R&D capabilities.
Moreover, operational benefits have already been realised, including cost-savings on back-office consolidation and leveraging economies of scale as well as ongoing synergies in the infrastructure and marketing spheres. Following a transformational 2021, Kape looks to have continued the positive momentum as recent acquisitions bed-in and further products are added, generating additional cross-sell opportunities. Now serving around seven million paying subscribers worldwide, we believe that Kape is in a strong position to lead the fast-evolving market for consumer security and privacy services. Buy."
A detailed critique which (thankfully) ends with a recommendation:
https://www.cnet.com/tech/services-and-software/features/expressvpn-is-a-case-study-in-why-vpn-reviews-require-more-legwork/
Rivaldo, nice write ups. Thank you.
Decent blocks of buys going through today, too.
ATB
There's been three analyst research reports published since the excellent H1 trading update, but only the Singer report with the 405p valuation has been mentioned here via the Master Investor summary.
Singer forecast $170.8m EBITDA and 39.2c EPS this year, but with $88.5m EBITDA in H1 alone KAPE should easily beat that number.
Shore Capital go for $169m EBITDA and 40.6c EPS. They say the valuation looks "extremely modest", "EPS risk is low" and "the underlying growth story robust".
Progressive Equity go for $167.7m EBITA and 39.1c EPS, so once again these figures look easily beatable. They conclude:
Https://progressive-research.com/company/kape-technologies-plc/
"This trading update demonstrates the growth and resilience of the privacy and security markets, the fundamental strategic logic of both the ExpressVPN and Webselenese acquisitions, and the management team’s ability to deliver. We believe there is much further to go with Kape, both in terms of its scale and the market’s appreciation of the quality of management and earnings."