Kape Technologies PLC Trading Update (0642N)
January 15 2019 - 2:00AM
UK Regulatory
TIDMKAPE
RNS Number : 0642N
Kape Technologies PLC
15 January 2019
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014
15 January 2019
Kape Technologies plc
("Kape" or the "Group")
Trading Update
Kape (AIM: KAPE), the consumer security software business,
provides an update on trading for the year ended 31 December
2018.
The Group performed strongly in the year following initiatives
both to grow Kape's product offering and user base, and to generate
higher margin recurring revenues.
Adjusted EBITDA(1) for the year is expected to be slightly above
market consensus at $10.4 million (2017: $8.3 million),
representing an increase of 25%, with an anticipated increase in
underlying Adjusted EBITDA(2) of 70% (2017: $6.1 million). This was
achieved on revenues for the Group of $56.4 million (2017: $66.4
million), with the change in revenues anticipated, and as a result
of the divestment of the Media business, enabling the Group to
fully focus on delivery of cybersecurity solutions.
Revenues for the Group's App Distribution segment, which is now
Kape's sole focus, are anticipated to be $52.1 million (2017: $48.2
million), representing growth of 8%, with profitability and margins
continuing to improve due to the switch to a recurring
revenue-based model.
Significant progress has been made in transitioning customers to
subscriptions, with future revenue generated from existing users in
2018 anticipated to be $30 million(3) in future periods (June 2018:
$18 million). Customer retention is c.74% for the year (2017: 69%),
with the Group's subscriber base increasing by 219% to c. 830,000
users in December 2018 (December 2017: c. 260,000).
In July 2018, Kape announced the acquisition of Intego, a
leading Mac and iOS cybersecurity and malware protection SaaS
business, and in October 2018, Kape acquired ZenMate, a
multi-platform security software business with a focus on the
provision of VPN solutions. The integration of both businesses is
progressing ahead of management expectations and the benefits of
the implementation of Kape's user acquisition capabilities are
anticipated to be realised in 2019.
The Group's balance sheet remains strong with a closing cash
position of $40.3 million at year-end.
The board is pleased with Kape's strong performance during the
year. The Group has entered 2019 with increasing demand for its
products and expects to continue this growth trajectory in the
medium term.
The Group will report its results for the year ended 31 December
2018 in March 2019.
Ido Erlichman, Chief Executive Officer of Kape, commented:
"2018 was an excellent year for Kape, during which we delivered
both organic and acquisitive growth, resulting in a 70% increase in
underlying Adjusted EBITDA(1,) (2) . This success has been
underpinned by ongoing progress in growing our customer base and
recurring revenue streams, which is particularly pleasing as we
transition to a SaaS-based model.
"Both Intego and Zenmate are being integrated at pace, further
demonstrating Kape's ability to source and acquire businesses to
successfully develop our broader offering, with our digital
marketing expertise remaining central to Kape's success."
(1) 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.
(2) The Adjusted EBITDA attributable to the Web Apps and License
division for 2017 was $2.2 million. This division was discontinued
as of September 2017; as such no revenue was recorded in 2018.
(3) Calculated as expected revenues from first renewal of the
existing user base in addition to the deferred revenue balance
Enquiries:
Kape Technologies plc via Vigo Communications
Ido Erlichman, Chief Executive Officer
Moran Laufer, Chief Financial Officer
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 Group 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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