(Sharecast News) - Security and privacy software company Kape Technologies ended the year ahead of expectations, it said on Wednesday, as revenues increased 85% to $122.2m (£87.88m).
The AIM-traded firm said that was driven by a 31% improvement in organic growth in the digital privacy segment, and a full-year contribution from the Private Internet Access business.
Recurring revenues totalled $106.4m, which was up 106.6% year-on-year, helping to underpin the company's earnings visibility.
Adjusted EBITDA beat expectations, rising 168% to $39m, while operating profit was 158% higher at $10.7m.
Kape said its adjusted EBITDA margin was 31.9% for the year ended 31 December, up from 22% in 2019.
Net profit was $28.9m, rocketing from $2m in the prior year, with 2020's figure including a $25.6m one-off tax benefit as a result of the increased tax base of intangible assets in Private Internet Access.
Fully-diluted earnings per share were up 771% at 14.8 US cents, while adjusted cash flow from operations surged 1,994% to $20.4m, which the board put down to the firm's enhanced cash profile due its growing customer base.
Adjusted cash flow from operations attributable to the current year, excluding investments in future growth, was $43.6m, rising from $17.9m and representing cash conversion of 112%, excluding movement in deferred contract costs.
Cash balances at year-end stood at $49.9m, with net cash coming in at $11.1m.
Looking ahead, the board said it expected the enlarged group, following the March acquisition of Webselenese, would generate revenues of between $197m and $202m, and adjusted EBITDA of $73m to $76m for the 2021 full year on a reported basis.
The board said it remained confident in the group's growth prospects in 2021 and beyond.
"2020 marks a key year in Kape's progression; with strong growth across the business," said chief executive officer Ido Erlichman.
"We have successfully completed the integration of Private Internet Access, realising cost savings which were 50% higher than we anticipated, alongside strong traction in new users in the fourth quarter.
"Our product development efforts have accelerated as we launched a complete privacy and security suite, providing our users with a wider set of Kape products available from one point of purchase."
Erlichman said the company had made a "strong start" to 2021, accelerating its merger and acquisition activities with the "highly strategic" acquisition of Webselenese, its largest to date.
"Kape is also experiencing strong growth momentum across all our business units during the first quarter of the year and we expect these trends to continue as we deliver on our strategic roadmap."
At 0926 GMT, shares in Kape Technologies were down 3.68% at 262p.
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