26 Jul 2018 07:00
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014
26 July 2018
Kape Technologies plc
("Kape" or the "Company")
Trading Update and Notice of Results
Strong Underlying Adjusted EBITDA1 growth of 172%
Kape (AIM: KAPE), the consumer security software business, provides an update on trading for the six months ended 30 June 2018, and announces the divestment of the Company's non-core Media assets.
The Company continues to trade strongly with Adjusted EBITDA2 for the six month period expected to be c. $4.3 million (H1 2017: $2.9 million), representing growth of 48%. This was achieved on revenues3 of $26.4 million for the period (H1 2017: $30.1 million), with revenues from the Company's App Distribution division increasing by 14%.
Strong Underlying Adjusted EBITDA growth of c. 172% from core activities was achieved in the period, highlighting the Company's success in driving organic growth. This was underpinned by the solid performance of Kape's core software solutions, including CyberGhost, which has exceeded management expectations since its acquisition in March 2017.
The Company's balance sheet remains strong with a closing cash position of $62.7 million for the period.
As part of the focus on the Company's core activities, Kape is pleased to announce the sale of the Media division to Ecom Online Ltd. This sale is in-line with the Company's strategy to develop and distribute its own cybersecurity products. As consideration, Kape will receive a 50% share of EBITDA from the Media division for the next five years following the sale, which will be reinvested in Kape's core App Distribution segment, where all Media division employees will be transferred to. In the year to 31 December 2017, the Media division generated revenues of $15.8 million, with an Adjusted EBITDA contribution of $0.2 million4. The carrying value of the assets of the Media division on the Company's balance sheet as at the date of the sale is $2.5 million.
Kape continues to make progress against all strategic priorities, including the generation of recurring income, with c. 40% of new Reimage sales in the first six months of the year sold on a subscription basis. The increase in subscription sales, coupled with an increasing contribution from CyberGhost's SaaS-based revenues is resulting in increased revenue visibility for the Company. This will be further strengthened following the acquisition of Intego, as announced on 24 July 2018, which is a pure SaaS solution.
The Company will report its interim results for the six months ended 30 June 2018 on Monday 24 September 2018.
Ido Erlichman, Chief Executive Officer of Kape, commented:
"We have made a strong start to 2018, as demonstrated by growth in our underlying EBITDA. In the second half of the year, we expect to build upon this solid growth by integrating the recently acquired Intego and continuing to focus on developing our existing product stack to accelerate user acquisition and broaden our reach in order to become a leading SaaS-based consumer cybersecurity business."
1 The Adjusted EBITDA attributable to the Web apps and license division for H1 2017 was $1.4 million, this division was discontinued as of September 2017; as such no revenue was recorded in H1 2018. Underlying Adjusted EBITDA from core activities, excluding the discontinued Web Apps and License division for H1 2018 is $4.3 million (H1 2017: $1.5 million).
2 Adjusted EBITDA is a non GAAP measure and a company specific measure which excludes other operating income and expenses which are considered to be one off and non-recurring in nature.
3 The movement in revenues is mainly due to the discontinued activity of the web apps as well as the sale of the media business in July 2018, resulting in the media business being treated as a discontinued activity from April 2018.
4The loss before tax attributable to the Media division was $3.8m (after deducting an amortisation charge of $4.0m) for the year ended 31 December 2017.
Enquiries:
Kape Technologies plc Ido Erlichman, Chief Executive Officer Moran Laufer, Chief Financial Officer
| via Vigo Communications |
Shore Capital (Nominated Adviser & Broker) Toby Gibbs / James Thomas
| +44 (0)20 7408 4090 |
Vigo Communications (Financial Public Relations) Jeremy Garcia / Antonia Pollock kape@vigocomms.com | +44 (0)20 7390 0237 |
About Kape
Kape is a cybersecurity company focused on helping consumers around the world to have better experience and protection in their digital life. Kape develops and distributes a variety of digital products in the online security space. The Company utilises its proprietary digital distribution technology to optimise its reach and create a superb user experience. Kape offers products which provide online security, privacy and an optimal online experience. Kape's vision is to provide online autonomy for a secure and accessible personal digital life, with team of over 350 people across seven locations worldwide.
www.kape.com