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For the record, here's the rest of Simon Thompson's Buy tip for KAPE:
"These factors explain why Kape’s retention rates exceed 80 per cent. Kape is successfully exploiting cross-selling and upselling opportunities across its enlarged customer base, too. For example, 12 percent of new subscribers for Cyberghost(VPN) and 20 per cent for Intego (anti-malware protection software) take more than one product when they sign up. There is a huge opportunity to replicate this with ExpressVPN which already enjoys high customer satisfaction ratings (TrustPilot and industry reviews.
Furthermore, with the benefit of targeted cost savings of $19mn this year, and ongoing organic growth, analysts expect Kape’sannual cash profit to double to $169mn on revenue of $618mn. On this basis, expect free cash flow of $134mn to make a dent in net debt of $457mn. Kape’s shares have outperformed the FTSEAim All-Share Total Return index by 18 percent since I covered the half-year results (‘Bargain Shares: Technology stocks on the upgrade’, 20 September’), and are up 742 per cent on my entry price in my 2017 Bargain Shares 2017 Portfolio.
A prospective enterprise valuation to cash profit multiples of 13 times is still low for a high-growth cash-generative technology group. I maintain my 500p target. Buy"
Https://masterinvestor.co.uk/equities/taking-a-bullish-small-cap-look-at-kape-mpe-elix-and-swg/
"Kape Technologies (LON:KAPE) – a significantly undervalued growth stock
Yesterday’s announcement of the final results for 2021 from my favourite cyber technology group, showed that its revenues had exceeded even its own management’s expectations.
They came in 89% higher at $230.7m ($122.2m), while its adjusted pre-tax profits were 136% better at $72.8m ($30.1m). Earnings came in 121% to the fore at 29.8c (13.5c) per share, with no dividends paid. Its margins improved from 31.9% to 33.8%.
In the year it grew its subscriber numbers from 2.52m to 6.57m.
What I really liked to see was the fact that its annual recurring revenue was up another 5% at an impressive 92% at the year-end. That really does underpin the profitability, earnings predictability and growth potential of the group.
This is an excellent example of a group using its quotation to expand and grow.
Reflecting acquisitions and fund raising during the year, the actual earnings per share growth this year will be somewhat slower.
Analyst Caspar Erskine, at the group’s brokers Singer Capital Markets, is estimating that the current year will see revenues more than double again to $618.5m, generating doubled pre-tax profits of $159.1m, worth 39.2c in earnings per share.
For next year he sees $690.7m sales, $181.7m profits and 44.6c earnings.
Understandably he rates the group’s shares as a ‘buy’ looking for a price objective of 500p a share.
Yesterday the shares eased on profit-taking, to fall back 30p to close at 400p, on the back of some 600,000 shares traded.
I stay firmly with my most recent price aim – this group is a classic growth stock and still significantly undervalued."
with a 500p target price.
Here's the link FYI:
Https://www.investorschronicle.co.uk/ideas/2022/03/22/profit-from-cyber-security/
"Profit from cyber security
A fast-growing cybersecurity software provider is delivering double-digit organic revenue growth, and exploiting synergies from acquisitions.
March 22, 2022
By Simon Thompson
Pro-forma Ebitda (cash profit) doubles to $78mn on 89 per cent higher revenue of $231mn
Webselenese acquisition delivers 52 per cent organic revenue growth in 2021
$936mn acquisition of ExpressVPN completes in December 2021
20 per cent underlying growth in customer base to 6.5mn
Cybersecurity software provider Kape Technologies (KAPE: 403p) could not be better placed to exploit the ongoing 17 per cent annual growth in the digital and security privacy market. Digital data theft boomed during the pandemic and consumers now need to protect themselves from potential Russian cybersecurity threats, too.
Following the $936mn acquisition of ExpressVPN, a leading provider in the digital privacy space with more than 3m active users across 180 countries, and after factoring in 20 per cent growth in its customer base last year, around 47 per cent of Kape’s subscription revenue is derived from North America and 35 per cent from Europe.
These are affluent regions that are key targets of online fraudsters, so it’s hardly surprising that adoption of Kape’s cybersecurity 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 strongly. Structural growth is driving consumer demand, too, such as double-digit annual growth in the number of personal internet of things (IoT) devices.
etc"
Decent write up on results from ST although no forward performance predictions.
https://www.investorschronicle.co.uk/ideas/2022/03/22/profit-from-cyber-security/
It'll also be interesting if we get to see who's now acquired quite large stakes in KAPE - perhaps this will take them over the 3% disclosure, or perhaps Unikmind have bought even more.
Now we know why the price fell yesterday - the two founders of Webselenese have each sold around 48% of their shareholdings acquired when Webselenese was bought by KAPE. It's been around a year since acquisition, so an understandable timeframe. Never desirable to see such large sales, but not really a surprise and at least they've retained half their holdings.
Seems like buy on rumour ( of great figures) sell on the news. Be surprised if it doesn’t bounce back the next few days.
Ditto. Strange reaction (as usual) to great results.
JUST Bought at 400. vector vest says good to buy undervalued imho
"Valuation appeals
Our model generates an FY’22e FCF yield of 6% at current valuation, rising to 8% in FY’23e; this compares to AVST’s exit FCF yield of 5% and NLOK’s current yield of 5% using cons FCF. Kape’s subscriber base has reached critical scale and an increasing proportion of customers are taking >1 software product, both of which play favourably towards higher stickiness in the base (Yr1 customers most likely to churn) and are driving further improvement in attractive LTV:CAC metrics (>4x we estimate). Combined with a favourable market backdrop (Privacy market CAGR: +17%; Source: Ommax), strong execution to date, further M&A optionality and attractive SaaS metrics, we see a higher multiple as warranted. A 5% FY’22e FCF yield generates a 500p/share TP."
Here's Singer Capital Markets' research note summary page FYI - part one:
"FY'21: Top-line growth; FCF doubles
Kape’s FY’21 finals confirm the strong underlying operational momentum flagged in the January trading update. Revenues grew +89% y/y to $231m (Proforma: +21%), with underlying adj EBITDA increasing +100% y/y to $78m (reported: $86m). Margins expanded 190bps y/y to 33.8% as operational scalability offset the near-term margin dilutive impact of the ExpressVPN acquisition. FCF grew >2x y/y to $34m – we see scope for this to ~4x in FY’22e, boosted by the inclusion of ExpressVPN renewals in that period.
The outlook looks positive, with management noting Kape has traded strongly into Q1 – as such, management have reiterated FY’22e guidance for revenues of $610m-$624m (SCMe: $620m) and adj EBITDA of $166m-$172m ($172m). The Group enters 2022 as a market-leader in the Digital Privacy space and with a scaled subscriber base of 6.6m– the twin demand drivers of increasing digital privacy and security awareness represent an attractive backdrop. Forecast organic revenue CAGR of 10-15% forecast and strong operational gearing generate a projected FY’22e FCF yield of 6% - current valuation represents an attractive entry-point.
Strong FY’21 confirmed
FY’21 sales increased +89% y/y to $231m, driven by strong underlying sales momentum and the acquisitions of ExpressVPN and Webselenese. The Group continues to invest in customer acquisition, and this has seen the Group’s subscriber base grow +20% y/y organic (+14% y/y in Digital Privacy) prior to inclusion of ExpressVPN. We note underlying Digital Privacy revenue growth moderated to ~10% y/y (ex ExpressVPN), yet this was offset by strong performance from Intego endpoint security (+20%) and stand-out proforma growth in the Digital Content segment (+53% y/y).
Forecasts unchanged; FY’24e introduced
Management have reiterated guidance for FY’22e revenues of $610m-$624m (SCMe: $619m) and adj EBITDA of $166m-$172m (SCMe: $171m). We leave near-term forecasts broadly unchanged (~1%), although we introduce FY’24e numbers targeting organic top-line growth of 7% y/y and adj EBITDA margin expansion of 80bps y/y to 29% as accelerated customer acquisition spend steadies. FY’24e FCF margin is 25%, with uplift restricted to just 1pp y/y as a function of higher corp taxes included in that year. We see a sustainable FCF margin of >30% in the long-term, in-line with peers."
Shore Capital this morning have forecasts of 40.6c EPS this year and 46.5c EPS next year.
Even cheaper!
Singer Capital Markets this morning have last year's adjusted EPS increasing 121% to 29.8c.
This year they now forecast 39.2c EPS - up another 32% after the ExpressVPN acquisition - with 44.6c EPS for next year.
They say Buy with a 500p target, which still sems pretty conservative imho.
Terrific results, even slightly ahead of the already hugely increased forecasts for revenue and EBITDA.
The outlook for this year is bullish, with early trading very strong.
Guidance is aligned nicely with forecasts post-acquisition for ExpressVPN, i.e around 41c EPS.
Which puts KAPE on an extremely low multiple for its sector. Lots of upside here imho:
Https://uk.advfn.com/stock-market/london/kape-technologies-KAPE/share-news/Kape-Technologies-PLC-Final-Results/87615556
Continued growth here. Any idea what price its going to open at?
Amazing set of results
Nice
Today's premium 'Investors Chronicle Alpha' stock pick section has noted KAPE as one of the top rated companies in it's screen for momentum and security stocks .
Security stocks for the new era..
'...Cyber security is another theme that was already important but has only become more pertinent given the breakdown in relations between the West and Russia and deep mistrust with China. Kape Technologies (KAPE) rates highly ....'
Buyers paying 405p now. Back to 450p and more soon at this rate.
The "substantially ahead of previous guidance" results are on 22nd March:
Https://www.investegate.co.uk/kape-technologies--kape-/rns/trading-update--presentation---notice-of-results/202201180700057407Y/
Must be good news for KAPE:
Https://www.economist.com/graphic-detail/2022/03/10/russians-are-trying-to-escape-online-censorship
"A month ago Russia’s most popular apps from the Apple store were broadly similar to the West’s. The top five by downloads showed people in Russia were conferencing on Zoom, messaging on Telegram and scrolling through Instagram. Today the app store looks very different. On March 8th the first three were tools aimed at disguising the user’s location, according to Data.ai, which monitors app downloads across the world. It is a similar story on Google’s Play store, for Android devices, where three of the top five apps are designed to obscure where the user is based, using ruses such as virtual private networks (VPNs).
The sudden popularity of such software follows a tightening of online censorship by Vladimir Putin’s government. On March 4th Russia blocked access to Facebook, after the social network imposed restrictions on Russian state-controlled media on its app. Twitter says its Russian users are reporting difficulty gaining access to its service. TikTok has banned people in Russia from uploading videos, after the passage of a law on March 4th criminalising the dissemination of information about the war that is not the official version. Mainstream media firms such as Netflix have suspended their services. Privacy apps could allow users to circumvent these bans.
VPN downloads are one way to measure concerns over access to the internet during a crisis. At its peak on March 5th, the number of online searches for VPNs in Russia was nearly 12 times the average, according to data from Top10VPN, a VPN review website. Demand in Ukraine peaked on March 2nd, at seven times the usual. The extra stress on Ukrainian servers in wartime has made it harder to use popular social-networking apps, such as Telegram, without a VPN.
Spikes in demand were also noted in other countries this year where citizens faced a cyber-crackdown. In Myanmar demand rose by 53% from its average after the military junta proposed updated cyber legislation in early 2022 (which included the criminalisation of VPNs). The Chinese government, another enthusiastic censor of the internet, ordered Apple to remove VPNs from its app store in 2017. The company has complied. But in Russia, it can afford to be bolder. Whereas China is an enormous market for Apple, Russia is a tiddler; the firm said on March 1st that it was suspending sales of its hardware there.
For now, Russians should be free to download location-disguising software—whether to seek information about Mr Putin’s war in Ukraine or to binge a series on Netflix."
Not according to https://www.marketscreener.com/quote/stock/KAPE-TECHNOLOGIES-PLC-18118032/calendar/ and investing.com
https://kalkinemedia.com/uk/video/ftse-listed-cyber-security-stocks-you-should-keep-on-your-watchlist
Kape no1 stock to watch....
Experts believe that fears of cyber-attacks from Russia have increased with the UK imposing tougher sanctions on the country. According to ICO data, between July and December 2021, around 1,345 cyber attacks took place in the UK, including phishing attacks and ransomware attacks, which is a 20% increase as compared to the same period in 2019. In line with this, the global cybersecurity market is expected to grow by 12.5% every year from 2021 to 2028.
The Group expects to report its results for the year ended 31 December 2021 on Tuesday, 22 March 2022.
Earnings out tomorrow, must be expecting good news