Kape Technologies PLC Trading Update and Notice of Results (8029V)
July 26 2018 - 1:02AM
UK Regulatory
TIDMKAPE
RNS Number : 8029V
Kape Technologies PLC
26 July 2018
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 EBITDA(1) 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 EBITDA(2)
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
revenues(3) 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 million(4) . 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.
(4) The 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 via Vigo Communications
Ido Erlichman, Chief Executive
Officer
Moran Laufer, Chief Financial Officer
Shore Capital (Nominated Adviser
& Broker) +44 (0)20 7408
Toby Gibbs / James Thomas 4090
Vigo Communications (Financial
Public Relations)
Jeremy Garcia / Antonia Pollock +44 (0)20 7390
kape@vigocomms.com 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
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END
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