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Hi Rich62 - good timing. You can buy me a virtual beer :o))

IMO this could be quite a big winner if all goes as predicted with acquisitions, high repeat revenues, 5G rollout etc.

Nice summary from Investors Champion on Friday:

Https://www.investorschampion.com/channel/blog/coronavirus-impact-30-oct-modestly-valued-digital-security-software-busines

"Kape: interesting value at current levels

Kape Technologies (LON: KAPE), the digital security and privacy software business controlled by Israeli billionaire Teddy Sagi, raised $115.5m through a significantly oversubscribed placing and retail offer at 150p per share.

$72m of the proceeds will be used to buy out the two major vendors of Private Internet Access (‘PIA’), a company acquired by Kape in 2019. The remaining $43.5m will be used to strengthen the balance sheet as it looks to making further acquisitions - the Group carried net debt of $23.4m at 30 June.

Kape has completed five acquisitions in the last 4 and a half years at a cost of US$159m. CyberGhost, which was acquired in 2017, has grown from 150,000 to 658,000 subscribers in three years, and from $6m revenue to an expected US$34m in 2020. Intego, acquired in 2018, has grown from adding just dozens of new users each month to c.4,500 monthly new users driven by a new user acquisition strategy. PIA has already significantly contributed to the digital privacy segment reaching a 14% annualised growth rate in 3rd quarter of 2020.

Trading in the three months to 30 September 2020 was at the upper end of management's expectations and revenues for the year ending 31 December 2020 are expected to be between US$120-123m, with adjusted EBITDA expected to be US$35-38m.

At a price of 161p the shares are 26% down on the year highs hit in July, trading at approx. 13x forecast earnings of 15.8cents/12.2p for the year ending December 2020, falling to approx 12x forecasts of 17.5cents/13.5p for the year ending December 2021. Forecast free cash flow of $24m in 2020 equates to a compelling free cash flow yield of just over 7%.

With 86% of revenues on a reliable subscription basis, spread over 2.4 million subscribers, providing visibility over $106m of revenues at 30 June, the shares certainly look interesting value at current levels."

Good news - new drilling programme announced today by CAPD's partner Cora Gold at Sanankoro:

Https://www.investegate.co.uk/cora-gold-limited--cora-/rns/commencement-of-new-drill-programme-at-sanankoro/202011020700088301D/

CNIC look even better value now:

- the Codewise acquisition has successfully completed, and will be earnings-enhancing to the tune of 20%...

- confirmation that CNIC are still trading in line with expectations, and the Q3 results will be out on 30th November

Https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Completion-of-Acquisition-of/83580674

Last year saw an acquisition and a trading update on 19th December. It wouldn't surprise me to see something similar in the next month or two before the year end.

Hand sanitiser sales must have continued nicely since H1 - in my experience it's now being used everywhere I go.

Kelo-Cote production will also have commenced this half, with "significant orders" in hand.

So "with a strong order book for H2 2020" VLG should be in a good position to continue trading very nicelt indeed.

Bob Holt and Peter Smith are presenting via Proactive on November 5th (fireworks night!) from 6.00 pm:

Https://event.webinarjam.com/register/744/zyyogsxvg?j=596552&sfmc_sub=207590540&l=86_HTML&u=29808744&mid=100009383&jb=111

Good to see them out spreading the word.

Moving nicely now - overhang cleared/excess demand from institutions driving the price up?

CNIC look very cheap to me and worth adding again at these levels given especially those temptingly huge recurring revenues and excellent annual subscription in advance cash flows.

I suspect a decent part of the decline since April may be to do with Gresham House dripping out the remainder of their holding declared in their 30th April holding RNS.

Over recent days the markets in general have of course been very weak. CNIC has always been somewhat volatile and moves sharply - up or down - on relatively small volumes.

I prefer to take my cue here from:

- Kestrel continuously increasing their holding. They're now over 24% and are likely to continue adding imo given their usual modus operandi. They would have a deep understanding of the business and would certainly know more about it than most

- the September placing was "significantly oversubscribed". So perhaps at some point - hopefully soon! - those institutional investors will look to add to top up their allocations.

Progressive Equity Research have issued a new note today. They've increased their forecasts - these are the new estimates:

this year : 14.2c EPS
next year : 15.8c EPS
2022 : 17.5c EPS

Here's the summary:

"From strength to strength

Fundraise providesfuture M&A firepower

Kape has announced that it has raised gross proceeds of $115.5million through a significantly oversubscribed placing and retail offer of 59.2 million shares at 150p and will use $72 million of the proceeds to buy out the two major vendors of PIA, the transformational deal which the Group completed at the end of 2019. The remaining $43.5million will be used to strengthen the Group’s balance sheet as it looks to select further acquisitions. There is an additional tax-related cashbenefit of around $50 million over 15 years that is now available to Kape following this change to the PIA deal structure.

This seems an intelligent way of removing any potential share overhang while also adding further to the group’s M&A firepower. Kape will cancel the shares which it acquires from the vendors and will not issue the vast majority of the deferred shares. With trading still robust and guidance unchanged, we make no alteration to our underlying business assumptions. Our EPS estimates reflect the changes to the shares in issue, both existing and prospective.

?The Company’s majority shareholder, Unikmind, has subscribed for shares worth $55.7millionand, following Admission, will hold approximately 65% of the enlarged share capital. The Company’s directors have participated in the Placing in the amount of $175,000 in aggregate.

?In a brief update on trading, Kape states that trading during Q3 2020 wasat the upper end of management’s expectations with user growth in the Privacy division reaching a run rate of 14% during the quarter. The integration of PIA is still expected to be completed by the end of 2020.

?Guidance for FY 20E is reiterated: revenues for the year are expected to be between US$120-123 million, with adjusted EBITDA expected to be US$35-38 million.

?The announcement states that current market conditions potentially present a number of acquisition opportunities which the capital raise will allow Kape to fully exploit. The extra firepower now available suggests to us that we could see another reasonably sizeable deal at some stage.

With trading continuing to be well on track for the full year, we believethat this agreement enhances Kape’s ability to take further advantage of the current business environmentthrough executing on its acquisition strategy."

Great news:

"it is a large multi-year contract generating recurring revenues"

And a big vote of confidence from the "tier 1 German pharmaceutical company" as an expansion of its already existing relationship.

A £10m placing at 1350p....impressively, no discount at all to the share price. Us PIs have a chance to get involved too.

Summarised by:

"The Directors believe the current business environment will lead to an increase in distressed and turnaround opportunities available to the Group, specifically due to the impact of Covid-19 and Brexit in the UK."

That would give VLE £26m+ of cash firepower. The Landers must have some decent-sized targets in mind.

Hi Rich62, I never have specific price targets. I mostly hold for the long (sometimes very long!) term, so targets are pointless for me. As long as my original criteria for purchase still stand, and the stock isn't too overvalued, then I'll stick with it.

For CLX, I see a long tailwind of (1) 5G, (2) increasing digitisation, and (3) increasing use of cloud computing and data centres pushing the company forward for some years to come.

So since CLX are still on a pretty reasonable P/E, are world leaders in their field, have numerous blue chip clients who will always pay up since CLX's services are absolutely necessary - you can see why I'm keen!

N+1 Singer have a new note out - the summary is worth copying here:

"Successful raise adds to firepower

Kape has today announced the successful, heavily oversubscribed raise of $115.5m from a mix of new and existing shareholders. The raise has been undertaken at a share price of 150p/share representing an 2% discount to prior close, and exceeds the initially targeted raise of $100m. $72m of the proceeds will be utilised to buy-out issued and eliminate deferred shares due to legacy founders of Private Internet Access (‘PIA’) which was acquired in Nov’19.

The remaining $43.5m will be held for acquisition and R&D investment.

We note that PIA’s executive team (CEO, CTO and COO) who joined Kape alongside the acquisition last year are all remaining in the business, with PIA’s founders only nominally involved post acquisition.

The benefits to Kape are three-fold: 1) the raise increases liquidity within the shareholder register; 2) Kape is acquiring founder shares at 145p/share, an 3% discount to the price of the raise; and 3) the beneficial tax structure created at acquisition shifts to Kape shareholders (as opposed to PIA founders) creating a c.$50m cash benefit to Kape recognised linearly over 15 years. Updated forecasts for FY’21E generate FCF of $28.2m, representing a 7% yield."

"In last week’s trading update Ken Ford went on to state that “Our business model has proved resilient, and we expect to exit the pandemic even stronger than when we entered it.”

The group has moved ahead in both sales and pre-tax profits over the last few years. From £14.5m revenues in the year to end-April 2018 to £17.4m in 2019, then on to £24.5m for 2020. In the same time frame pre-tax profits have improved to £2.3m, £3.0m, then £4.6m respectively.

For the current year, reflecting the benefit of the one-off contracts coupled with cost-savings that have been made, the group’s brokers, finnCap, are estimating £29.3m of sales and £5.1m of pre-tax profits, worth 4.2p in earnings per share.

There are 97.75m shares in issue, large holders of which include: Berenberg Investment Management (9.87%), BGF investment Management (8.97%), Herald Investment Management (8.37%), BennBridge (5.16%), Octopus Investments (3.81%), Hargreaves Lansdown Asset Management (3.71%), Dana Investments (3.58%), JP Morgan Asset Management (2.44%), Canaccord Genuity Wealth (1.41%) and Ken Ford (1.28%).

The group’s shares touched 92.8p in late January this year, then fell to 36p in late March. Since then they have been a steadily improving market and are currently trading at around 76p.

I believe that this group really does have bags of potential to expand, not only organically but also by acquisition (at which its management has proved itself as somewhat adroit).

I now set a target price of 95p for shares of the SDI Group."

Https://masterinvestor.co.uk/equities/sdi-group-could-covid-19-have-been-good-for-this-digital-imaging-group/?mc_cid=c3861b8617&mc_eid=db9f9bbaf2

""SDI Group – could Covid-19 have been ‘good’ for this digital imaging group?

By Mark Watson-Mitchell 28 October 2020

Already bouncing back from the pandemic, SDI Group has bags of potential to expand, writes Mark Watson-Mitchell.

On Wednesday 9 December this designer and manufacturer of scientific and technology products will announce its interim results for the six months ending this coming Saturday. They should report some encouraging management confidence, certainly good enough to give impetus to its share price.

Previously known as Scientific Digital Imaging, the SDI Group (LON:SDI) designs and manufactures scientific and technology products for use in digital imaging and sensing control applications by the life science, healthcare, astronomy, consumer manufacturing and art conservation markets.

The group has some 11 brands through which it operates.

SDI has a strategy of continuing to grow by developing its own technology advancements and by improving its global sales channels, while also adding to its strength by pursuing strategic, complementary acquisitions.

On Thursday of last week chairman Ken Ford, a ‘markets man’ of no mean ability, informed shareholders that the group had made a very good start to the current financial year.

Apparently two of the group’s brands, Atik Cameras (which is the group’s largest business) and MPB Industries, secured significant contracts to supply cameras and flowmeters, respectively, for PCR DNA amplifiers and for respirators. Both are benefiting from one-time contracts in this year.

(Polymerase chain reaction, or PCR, is a laboratory technique used to make multiple copies of a segment of DNA. PCR is very precise and can be used to amplify, or copy, a specific DNA target from a mixture of DNA molecules.)

Understandably the need for digital imaging and sensing and control products, particularly in the life science and medical industries, has been robust and there has been strong demand for several of the group’s products for use in the fight against the Covid-19 pandemic.

Understandably the need for digital imaging and sensing and control products, particularly in the life science and medical industries, has been robust and there has been strong demand for several of the group’s products for use in the fight against the Covid-19 pandemic.

The group has worked hard to keep its businesses profitable and cash generative in the first half, all have remained operational during the pandemic, with customer orders beginning to show a return to the pre-Covid-19 levels.

In fact, the group’s management believes that it will achieve revenues and profitability similar to its expectations for the year prior to the ‘lockdown’. In just over a month’s time we will see just how well the group has actually performed."

Nice summary of CAPD by Mark Watson-Mitchell from a few days ago - he sees them going up above 100p.

Https://www.mw-m.com/post/capital-drilling-so-very-much-more-than-just-picks-and-shovels-1

Conclusion:

"At the current 61p that puts the shares out on 13 times historic, 10 times current year and just over 8 times prospective earnings.

It was no wonder why Craig Browns shares were snapped up so quickly.

My end July profile put out a 76p Target Price by the end of next year, now with these latest announcements I see them easily trading up through the 100p level."

Good news this morning, with the fundraising "significantly oversubscribed" and at 150p, which is about the best price KAPE could have got given where the share price is now.

Evidently the City has known about this being likely for some time, and the buyout was obviously the reason for the share price falling back.

With this now behind the company, and likely decent demand for shares in the aftermarket following the oversubscription, perhaps we'll see a nice share price rise. Hopefully back to 200p again. Particularly as it seems acquisitions are imminent given KAPE's now huge firepower.

Quite apart from Teddy Sagi's huge participation, and decent buying by the directors, Kape's employees bought almost 300,000 shares at 150p. A pretty big commitment and vote of confidence.

Excellent news - this $1.5m win is 4% of last year's revenue at a stroke, and in a relatively new market for MWE too:

Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-US-1-5-million-Contract/83557209

"US$1.5 million Contract Win

MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, is pleased to announce that the St Petersburg office of MTI Summit has secured a significant order for delivery in 2021 from a Russian customer. The contract is worth approximately US$1.5 million and is a repeat order for the supply of radio frequency components.

Operating under the Group's Distribution & Professional Consulting Services Division, MTI Summit represents 40 international suppliers of radio frequency and microwave components and sells these products to customers. Expert knowledge of both the international suppliers and customers further enables MTI Summit to act as a consultant to all parties and assist with devising radio frequency and microwave solutions, as was the case with this contract win.

MTI's CEO, Moni Borovitz, commented: "We are very pleased to have received this significant follow-on order through our St Petersburg office. While still a relatively new market, our reputation in Russia for being a reliable partner and consultant to major corporations is growing. This is reflected in the increase in revenues from this office and the size of orders being received."

N+1 Singer have today reintroduced forecasts for this year (next year's will follow 2020 results).

They see a total $2.8m revenues for the year, with H1's $1.1m revenues rising to $1.7m in H2, and "cautiously" estimate a similar loss in H2 as in H1. Year end cash is forecast at $1.3m.

N+1 Singer have today reintroduced forecasts for this year (next year's will follow 2020 results).

They see a total $2.8m revenues for the year, with H1's $1.1m revenues rising to $1.7m in H2, and "cautiously" estimate a similar loss in H2 as in H1. Year end cash is forecast at $1.3m.