Rapid growth confirmed
Kape have announced a full year trading update confirming the expected strong growth in top-line and adjusted EBITDA. Kape’s sales growth accelerated sequentially to 19% h/h in H2 (H1: 7%), supported by continued growth in the Group’s core Digital Privacy segment. Full year revenues of c.$66m (N1S: $68.9m) were achieved after some reallocation of marketing investment towards Digital Privacy (sales recognised over time), which has in turn led to an improvement in revenue visibility for future periods. Adjusted EBITDA is now expected to be ahead of expectations: ($14.5m; N1S: $13.9m) as a result of a higher than expected proportion of Digital Privacy sales. Management guidance targets revenue growth of 85% and adjusted EBITDA growth of >150% in FY’20E (inc acquisition of PIA), in-line with expectations, and we make no changes to forecasts at this time. FY’20E OpFCF yield is forecast at 5%, ahead of comparative high-growth peers.
20 Jan 20
FY19: Stellar execution on several fronts
In its first trading update since the game-changing acquisition of Private Internet Access (PIA), Kape has confirmed strong organic growth for the year ended 31 December 2019 (FY19). Reflecting the focus on the higher margin digital privacy segment, the business performed slightly above our expectations for EBITDA, with the adjusted figure up by 40% yoy to $14.5m (SC forecast $14.3m) alongside margin expansion. The integration of PIA is now underway, and the financial guidance issued at the time of the acquisition is confirmed. We view prospects with confidence. HOUSE STOCK.
20 Jan 20
A doubly-strong finish to 2019
Kape has today published a trading update for its 2019 year. The group, in addition to the November acquisition of PIA, has revealed a strong close to the year, with Adjusted EBITDA slightly ahead of expectations. We make no changes to our revenue and EBITDA forecastsfor 2020, which remain within the range of guidance provided, but take significant comfort from the fact that Kape has now delivered both strong organic outperformance and a transformational acquisition in recent months.
20 Jan 20
Small Cap Feast
Intention to float by Gemfields Group. No Capital Raise. Currently listed on JSE. (GML:JNB) at circa £122m. The Group's key producing assets, the Kagem emerald mine in Zambia (believed to be the world's single largest producing emerald mine) and the Montepuez ruby mine in Mozambique (one of the most significant recently discovered ruby deposits in the world), are both expected to have long mine-lives with potential for expansion. Also owns the Faberge brand. Due Valentines Day 2020. The Proof Of Trust has announced its intention to list on the Standard Market. The Blockchain based business, owns patents to a protocol which facilitates dispute resolution based upon smart contract disputes. Transaction details TBC. Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets through its subsidiaries Calvin Capital and Lowri Beck . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale. Expected Admission February 2020 The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m. Due 28 February. Investment firm Nippon Active Value fund is seeking to raise up to £200m at an issue price of 100p per share via an IPO. The company aims to invest in a portfolio of quoted Japanese stocks with market capitalisations of up to $1bn. First day of dealings expected early February.
KAPE TRB MXCT ROCK ERGO TMT SNT TXP IHC SAA
20 Jan 20
Game changing acquisition of Private Internet Access
Kape has announced the transformational acquisition of Private Internet Access, for a total consideration of $95.5m, payable in cash and shares. The spectacular move doubles Kape’s subscriber base and earnings and marks a defining moment for the company and its shareholders. Completion is expected to occur in early 2020. We have revised our FY2020F estimates, which anticipate revenue and adjusted EBITDA of $121m and $36m respectively with year end net debt of $15m. HOUSE STOCK.
19 Nov 19
Substantial deal both transformational and significantly earnings enhancing
In a deal which will have a profound effect on the prospects for the group, Kape has announced the proposed acquisition of LTMI Holdings, the holding company for virtual private network provider Private Internet Access (PIA). PIA is a Denver-based security software business, the addition of which will transform the size of Kape by doubling group revenues (including a stronger recurring revenue base) and increasing adjusted EBITDA by around 2.5 times in FY 2020E. Reflecting that, our earnings estimates increase by around 90% for FY 2020E while our new FY 2021E estimates build strongly on that much larger base. Total consideration is c. US$95.5 million with an enterprise value of c. US$127.6 million. The deal is expected to complete within 45 days and is anticipated to be immediately earnings enhancing. The transaction will create a significant player in the digital privacy market and will enable Kape to expand its footprint in North America with a broader product offering.
19 Nov 19
Significant earnings accretive acquisition
Kape is set to acquire Private Internet Access (“PIA”) for a cash-free/ debt-free total consideration of $127.6m, representing an EV/FY’18 EBITDA multiple of 8.7x (presynergies). The strategic rationale is compelling, immediately doubling Kape’s paying subscriber base, creating an estimated $4.5m cost synergy – resulting in pro-forma sales and EBITDA of $110m and $27m respectively - and further, improving Kape’s Data Privacy geographic footprint and functionality stack. PIA is cash-generative (FY’18 CFO: $16.3), growing sales +5% pa. and is expected to quickly benefit from Kape’s digital marketing capabilities. Revenue is expected to be 57% higher for both FY’20E and FY’21E, with the deal forecast to be 13% EPS accretive in FY’21.
19 Nov 19
Small Cap Feast
The Pebble Group, a provider of products, services and technology to the global promotional products industry, announces its intention to seek admission of its shares to trading on the AIM market of the London Stock Exchange, which is expected to take place in early December 2019.The Group delivered revenue of £99.8m in the year ended 31 December 2018.No mention of bottom line and a suggestion that funds raised would provide an exit to private equity shareholders and the repayment of debt. Offer TBA. Longboat Energy raising £10m. Expected admission November 2019. The company has been established by the former management team of Faroe Petroleum to create a new full-cycle North Sea oil and gas company .The strategy to achieve this will initially be through the acquisition of assets where the management team can add value through subsurface and operational improvements, follow-up deal opportunities and nearfield exploration; and by value creation through the drill bit.
KAPE ORR CORA ECSC SCPA GAN UPR ITM EQLS ARCM
19 Nov 19
More Netflix originals; Avast hacked; Apple manufacturing in India
Netflix is raising another US$2 billion in debt to fund additional content creation and other expenses, the company announced on Monday. The company routinely raises debt to help fuel its growing library of original TV shows and movies. The streaming giant offered US$2 billion in new debt in April after issuing another round of notes several months earlier. Netflix said it plans to use the proceeds to fund "Content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.". We’re unsurprised and anticipate the competition will also up their game to capture market share – all the better for the localisation market.
KAPE 7DIG ZOO AMO AVST CNS DFX ECSC FLX IGP NCC OSI MIRA
22 Oct 19
Quarterly Research Outlook Autumn 2019
Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.
KAPE ABBY AMS ANX ARS ATYM AVON BLVN PIER BUR CGS CAML CDM CSRT TIDE CYAN DTG DEMG ELM EMR FPO FDEV GTLY GENL GHH GRI GEEC GKP HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KEYS KWS KCT KGH LAM LIT LOK MACF MANO MOD OXIG PCA PANR APP SRE PHC PMO RBW RMM RBGP REDD RSW RNO ROR SUS SCPA SEN SHG SOLG SOM SUMO TM17 INCE TWD TRAK TRI VNET VTC ZOO ZTF
21 Oct 19
Microsoft unveils folding phone, Samsung ends China production, Google updates privacy features
Microsoft unveiled the new Surface Duo, which runs on Android, at its annual hardware event on Wednesday. The folding phone features two side-by-side 5.6-inch displays that are connected by a 360-degree hinge. Microsoft said it partnered with Google to “bring the best of Android” to the device, while incorporating elements of Windows 10X, a new operating system meant for hybrid devices. It can also run two different apps at the same time. Specifically, the Surface Neo will rely on a new "Expression" of its Windows 10 operating system called Windows 10X.
KAPE EYE IMO
03 Oct 19
TV’s record what we watch, Comcast announces free streaming box, Huawei forecasts 5G revenue uplift
TVs have joined the ranks of websites, apps and credit cards in the lucrative business of harvesting and sharing user information. Whilst TV records may not contain sensitive search queries or financial data, they are able to store data on user interests, personality, joys and embarrassments, as tens of millions of users have given TV brands permission unknowingly. Many TV makers say tracking what users watch helps provide personalized recommendations. However, there is much belief that TV tracking is mostly about filling in a missing chunk of data which is only useful for advertisers and media companies.
KAPE 7DIG ZOO AMO EYE MIRA
19 Sep 19
Strong progress, 24.2% growth in revenue
Kape Technologies has reported first half revenue a touch ahead of the guidance given in July’s trading update with Adjusted EBITDA in line with the suggested $5.8 million. The results show strong progress in growing SaaS revenues with the number of subscription users increasing by 24% to over 1 million and the retention rate improving again to a very healthy level. The first half also saw further investment in customer acquisition paying off with ZenMate and Intego – now both fully integrated into the Group - benefitting. New product launches and high-profile successes by Intego’s macOS security analyst team helped augment Kape’s market positioning. We note that this business model continues to enhance Kape’s ongoing revenue visibility and that Kape is growing market share. We make no change to our numbers as the Board expresses confidence in meeting stretching market growth estimates.
17 Sep 19
Strong user acquisition and retention
Kape returned a strong performance in the first half of 2019, with underlying Adjusted EBITDA growth of 21% to $5.8m, representing 41% of our full year target. Software subscription momentum continued, as reflected in 24% growth in users on subscription since December 2018 and 83% growth on the year. The results support our view that Kape remains well placed on its path to scale up and we leave our full year P&L forecasts unchanged. At 70p and 6.1x EV/EBITDA for FY2019F, the stock looks attractive on both a relative and historical basis. HOUSE STOCK.
17 Sep 19
Data Privacy driving strong top-line growth
Kape have delivered a strong set of H1’19 results as flagged in the July trading update. Revenues increased by 24% y/y, driving adjusted EBITDA up +21%. Cash flow from operations was broadly flat (+$0.2m) as the Group continues to invest in customer acquisition. Operational KPI’s are particularly strong; 147k net subscriptions were added in the core Data Privacy segment, whilst retention rates were an impressive 82% (H2’18: 74%). The Group’s transition to a complete SaaS model continues, with subscription revenue now accounting for 72% of total sales and recurring revenue up >300% to $21.2m. We are encouraged by strong operational performance which serves to increase our conviction in FY’19E forecasts. The current share price looks compelling, with our SOTP intrinsic valuation at 117p/share.
17 Sep 19
H1’19: Inline; a period of consolidation
Kape reported a bland if not confident update this morning, with figures broadly as per its trading statement on 30 July. The group has undergone a period of strategic consolidation in our view. While user count has clearly stagnated HoH at c.1.1m, retention improving to 82% has improved visibility on future revenue streams. Extrapolating this trend implies a 27% boost to the company’s future expectations to US$38m from recurring existing subscriptions. The group’s cash position was reported at US$36.4m. The shares have fallen 19% YTD and trade on 1.2x FY19E EV/sales. We reiterate our Buy rating on Kape as a strong proposition of balance sheet strength and robust organic growth, with the risks to H2 performance increasingly looking priced, in our view.
17 Sep 19
Cloudflare prices above range; Virtual wall maker new unicorn; High speed 5G gaming
Cloudflare, a California-based digital content delivery and Internet security company, raised its IPO price range this morning from a prior $10 to $12 interval to $12 to $14 per share. At its new prices, Cloudflare would be valued between $3.5 billion and $4.1 billion. Cloudflare's maximum IPO fund raise is now $563.5 million. Investors’ appetite for cloud offerings appears to remain robust. Ex- Oculus founder, Palmer Luckey’s new business, Anduril Industries, is building a virtual wall on the southern border of the US. His new venture is being valued at more than $1 billion in a new fundraising round, according to sources. Anduril describes itself as a company that "Invents and builds technology to secure America and its interests.". Virtual border controls feel like a natural evolution of physical barriers for a digital era. The Tokyo Game Show, Japan’s video gaming mega-conference, opened on Thursday with enthusiasts testing how ultra-high-speed 5G mobile data networks will impact the gaming experience ahead of the technology's commercial rollout in Japan in 2020. Game makers, related network developers, and esports promoters cite expect to benefit from nextgeneration wireless networks that are expected to allow players of increasingly popular online games to utilize faster downloads and smoother connections. 5G’s influence is only beginning to rise as coverage is rolled out.
KAPE CDM FDEV KWS SUMO TM17 AVST BIDS CNS DFX ECSC FLX GFIN IGP NCC OSI SOPH
12 Sep 19
Wirecard partners with SoftBank’s Brightstar, Viral Chinese face app sparks privacy concerns
Wirecard has signed a memorandum of understanding with SoftBank's Brightstar and anticipates "Significant transaction volume" out of the deal, the German fintech announced on Monday. Under the agreement, digital financial services via a Brightstar platform are expected to be handled by Wirecard as the preferred payment service provider, Wirecard said. In our view, Wirecard’s MoU with Brightstar demonstrates SoftBank’s plan to promote interaction between its expansive portfolio network is beginning in earnest. We believe the resources of the combined US$100bn worth of investments is formidable, and if SoftBank can drive cooperation, there is scope of substantial value creation – which may help to justify some of the stand-out premiums implied at its investment rounds. ZAO, a new Chinese app that lets users swap their faces with celebrities, sports stars or anyone else in a video clip - racked up millions of downloads on the weekend but swiftly drew fire over privacy issues. The app's surge in popularity and sudden backlash from some users highlights how artificial intelligence technologies bring about new concerns surrounding identity verification. Digital privacy, data protection - and now images and biometric data – is being captured and commercialised at a pace that legislation in most economies is struggling to keep pace with in our view. We believe data, analytics and privacy will become a key theme of decade as consumers, governments and MNCs become increasingly aware of assets that were not considered valuable or sensitive just a few years ago. This is a structural theme we will be watching very closely as a potential edge (or liability) to business models on a medium-term horizon.
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03 Sep 19
Brevan Howard plans crypto fund, Google discovers 2-YR iPhone security flaws
Alan Howard’s push into crypto is a badly kept secret that appears to be crystallising into reality. In our view, the crypto space has undergone a very interesting transition from rampant retail speculation to, well, rampant retail speculation underpinned by a broad base of institutional interest. Google search volumes have fallen, transaction sizes appear to be escalating and the latest wave of equipment upgrades suggest consumer interest and potential to participate is now very low. Meanwhile, increased macro risk, currency controls and privacy concerns may be fuelling increased interest. We await further signs of whether we are at a turning point or whether this is (another) flash in the pan. Apple’s woes appear to be mounting as the group undergoes a difficult transition from a lifetime of focus on aesthetically pleasing hardware with a highly refined user experience, to a services focus. On one hand, the group’s key product the iPhone (which accounted for most revenues until very recently) is rapidly entering commoditised territory. Consumers have the option of a powerful and near fully-featured £160 generic Android handset or a cutting-edge iPhone for £1,000; for many, the choice is a simple one. The supply chain woes of having massive exposure to China in the context of the US-China trade war is also likely to weigh heavily on short term strategy. On the other hand, the group’s services are consumer focused and face strong competition from the likes of Amazon, Spotify, Microsoft and Netflix. If the thesis was to build the services on a firm foundation of the Apple hardware base, the cracks in security are worrying.
KAPE ARB AVST CNS DFX ECSC FLX IGP MMX NCC OSI SOPH TECH TEK
02 Sep 19
VMware spends $5bn on cloud security, Salesforce provides strong outlook, Amazon acquires Indian supermarket chain
VMware said on Thursday it bought two providers of cloud security and cloud developer services in separate deals valued at about $5 billion, as it expands offerings for corporate clients. VMware bought Pivotal Software Inc in a $2.7 billion deal. Separately, VMware said it would buy software maker Carbon Black Inc for about $2 billion in cash.
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27 Aug 19
Tencent drops after weak guidance, SoftBank makes energy investment, Security software leaks 1m fingerprints
Tencent shares slumped as much as 3.88% on Thursday after the Chinese technology giant missed analyst expectations, despite beating forecast on earnings. Revenue rose 21% year-on-year to 88.82 billion yuan. Profit attributable to shareholders beat analyst forecasts, rising 35% year-on-year to 24.14 billion yuan. The company's gaming division returned to growth, posting revenue of 27.3 billion yuan, up 8% year-on-year, with mobile games performing particularly well.
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15 Aug 19
BA resumes services after IT meltdown, AT&T employees took bribes to install malware, Nike announces AI acquisition
British Airways said its flights were returning to normal after passengers had to endure cancellations, delays and long queues at London airports as the airline suffered its third major computer failure in a little more than two years. More than 60 flights to and from Heathrow and Gatwick were cancelled and more than 100 were delayed, according to the departure boards at the two airports.
KAPE AVST CNS DFX ECSC FLX IGP NCC OSI SOPH SWG
08 Aug 19
Disney sets date for $13 streaming bundle, Apple to restrict FB’s messaging app features, Snap raises $1bn for AR
Walt Disney announced on Tuesday that it would offer a $13-per-month bundle of its three streaming services starting in November, a move to attract audiences who have embraced digital services such as Netflix. Disney's bundle includes family-friendly digital offering Disney+, sports service ESPN+, and Hulu, which will cater to adults, for a $5-per-month discount. Speculation in reputable trade publication The Information, mirrored in Reuters and 9to5Mac indicated the next iteration of Apple’s mobile operating system, iOS13, will move to limit apps’ access to data while running in the background. The press notes that this will have repercussions to Messenger and WhatsApp, both owned by Facebook Inc, given both depend on the specific features of iOS that allow internet calls – which may force them to redesign their apps. Snap on Tuesday said it will raise $1 billion in short-term debt and plans to invest in more media content, augmented reality features and may also buy other companies. The parent company of the popular disappearing messaging app Snapchat has revived its user growth and stock price after a rough 2018.
KAPE ZOO AMO EYE EVRH IMO VRE MIRA
07 Aug 19
Strong trading reflects drive and investment
Kape Technologies has enjoyed another strong half year of trading driven by growth in sales of its suite of digital privacy products. The update for the six months ended 30 June 2019 states that revenue is expected to be around $29.6 million for the first half with Adjusted EBITDA of around $5.8 million. EBITDA growth is running ahead of that of revenue and it is also ahead of our full year expected growth rate as the Group continues to benefit from its customer acquisition strategy and new product initiatives. The update notes Kape’s continuing commitment to investment in its people and products. Recent notable successes of Intego in exposing two Mac security threats have brought enhanced appreciation of the Group’s brand and capabilities. Kape recently updated the market on this and on ZenMate’s new products. We note the strong H1 performance and respective growth rates for revenue and EBITDA in relation to our exacting full year expectations. Assuming higher EBITDA margins, we leave Adjusted EBITDA estimates unchanged while reducing revenues by 7% and 6% for FY 2019E and FY 2020E respectively.
30 Jul 19
Privacy delivers strong first half
In a trading update for the first half of 2019, Kape today announces Adjusted EBITDA advanced by 40% to c. $5.8m, tracking slightly ahead of our full year forecast. Revenue grew by 24% to c. $29.6m driven by growth in sales of Kape’s digital privacy products. The update supports our view that Kape remains well placed on its path to scale up and we leave our full year profit forecasts unchanged. HOUSE STOCK.
30 Jul 19
Trading strong through H1
Kape Technologies trading update revealed strong H1 performance from continuing operations. Revenues rose 24% y/y to $29.6m, with adjusted EBITDA margins improving to 19.6% (+260bps y/y). Strong growth is being underpinned by gains in data privacy, a market seeing strong structural growth as a function of rising consumer digital privacy awareness. Trading is in line with management expectations, and we make no changes to our full year forecasts. An EV/ Dec-19E sales multiple of 1.6x looks attractive for a company delivering an increasing proportion of high-quality recurring revenues, and we see a re-rating towards 2.5x-3.0x as possible as cash-generation improves.
30 Jul 19
H1’19 trading update: double-digit growth all round
Kape published a brief trading update for H1’19 results this morning (December year-end). Management confirmed that business performance has been inline with its expectations during the first half, with revenues and EBITDA up double-digits, reflecting a combination of strong organic growth from marketing and the performance of recent acquisitions, as per its recent integration update. While the topline run-rate is below the run-rate expected for our FY’19 as a whole, we note that seasonality typically favours a second half weighting as marketing investment ramps-up. We retain our estimates and reiterate our Buy rating on Kape as one of our top picks for this quarter.
30 Jul 19
Capital One confirms data breach, Qualcomm & Tencent partner for gaming phone, Microsoft acquires software start-up
Capital One announced on Monday that a data breach identified earlier this month exposed personal information of its customers, including social security details and bank account numbers. The Virginia-headquartered bank said in a news release that about 140,000 Social Security numbers of its credit card customers and around 80,000 linked bank account numbers were compromised. In total, Capital One said, "This event affected approximately 100 million individuals in the United States and approximately 6 million in Canada." Qualcomm and Tencent said on Monday they will cooperate on projects that could include making the Chinese company's videogames play better on devices with Qualcomm chips, and create a 5G version of a Tencent-backed gaming phone. Microsoft yesterday announced the acquisition of BlueTalon, a start-up whose software can prevent people from accessing certain high-value data that companies keep. Over time, the acquisition could help Microsoft's campaign to get companies feeling more comfortable with the idea of keeping sensitive data in its Azure public cloud, which competes with Amazon and other companies.
KAPE AVST CNS DFX ECSC FLX IGP NCC OSI SOPH BIDS CDM GFIN FDEV KWS SUMO TM17 SWG
30 Jul 19
Quarterly Research Outlook - Summer 2019
In January, we provided a list of 11 stocks for 2019 that we believed would perform strongly with attractive catalysts that could lead to material outperformance. In this Quarterly Research Outlook, we revisit these views, analysing what has happened and how the remaining six months of the year could play out.
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23 Jul 19
Microsoft surges after strong cloud sales, CrowdStrike beats expectations, Apple to move AirPods production to Vietnam
Microsoft yesterday beat analysts' estimates for fourth-quarter revenue and profit, driven by continued sales increases from its cloud business and sending its shares to all-time highs. Shares of CrowdStrike climbed as much as 7% on Thursday after the cybersecurity company reported earnings for the first time since its IPO. For the quarter, CrowdStrike's loss per share was in line with analysts' estimates and revenue was slightly better than expected. Apple will begin soon trial production of AirPods in Vietnam to circumvent tariff fees imposed on Chinese-produced goods by Trump Administration. By expanding production outside of China, Apple can reduce the expenses caused by tariffs put in place by the Trump Administration.
KAPE AMO IQE
19 Jul 19
Strong position in high-growth core market
Strong secular drivers are supporting rapid growth in Kape’s core Virtual Private Network (‘VPN’) market with rising user-data awareness underpinning high market growth forecasts. Kape’s paid VPN has strong brand reputation, a features set which screens well versus competition, and is forecast to deliver 19% group sales CAGR (underlying: 15%) and EPS CAGR of 46% to FY’21E. Near-term cash is expected to be reinvested into customer acquisition to grow the SaaS user base, but cash conversion should improve rapidly by FY’20E/FY’21E as renewals begin to outpace additions. Our SOTP generates an implicit value of 115p/share, although DCF and peer-based approaches imply 130p/share is achievable.
18 Jul 19
Facebook to use Libra to become utility, Slack not worried about Microsoft, Symantec ends talks with Broadcom
The Senate Banking Committee on Monday released the testimony of David Marcus, the head of Facebook's cryptocurrency projects ahead of his testimony Tuesday. In his prepared remarks, Marcus perfectly outlines the business model behind the social network’s upcoming Libra digital currency and its Calibra digital wallet. Microsoft might be the primary competitor for Slack, but the widespread adoption of Microsoft's software is not a major problem for Stewart Butterfield, co-founder and CEO of the messaging app. Last week, Microsoft said Teams had more daily active users than Slack. Cybersecurity company Symantec Corp has walked away from negotiations to sell itself to chipmaker Broadcom over price disagreements, people familiar with the matter said on Monday. Symantec's decision raises new questions over the future of the US antivirus software provider, which is looking for a new CEO and has been struggling to grow its business serving companies.
KAPE AVST CNS DFX ECSC FLX IGP NCC OSI SOPH SWG
16 Jul 19
Australian banks to digitize bank guarantees, US Gov reviewing license requests for Huawei, Broadcom to acquire Symantec
Australia's top three banks said on Thursday they have agreed to partner with IBM and shopping mall owner Scentre Group to test blockchain technology to digitize bank guarantees. The companies are exploring how to move away from paper-based bank guarantees to cut processing time and the risk of fraud, Australia and New Zealand Banking Group, Westpac Banking Corp and Commonwealth Bank of Australia said in a statement. The US government said on Wednesday it was reviewing licence requests from US companies seeking to export products to China's Huawei "Under the highest national security scrutiny" since the company is still blacklisted. In an email to Reuters, the Commerce Department said that as it reviewed applications, it was applying the "Presumption of denial" standard associated with Entity Listed companies, meaning applications are unlikely to be approved. Symantec shares surged more than 20% in extended trading on Tuesday after Bloomberg reported that Broadcom is in advanced talks to acquire the security software vendor. The deal is reported to be worth more than $16bn, implying an EV/Sales multiple of 3.40x (Bloomberg). Agreement on a deal was close but could be delayed until after the July 4 holiday, according to people briefed on the move.
KAPE AVST CNS DFX ECSC FLX IGP NCC OSI SOPH TECH AMO IQE SWG
04 Jul 19
Hardware warnings; Buy sales visibility (CALL, KAPE, VNET)
We highlight this morning’s profit warnings from IQE (no coverage) and Nanoco (no coverage) as further support of: (1) our Year Ahead 2019 thesis to avoid hardware exposure as the most likely source of downgrades, and gain exposure to high-visibility recurring revenues and stronger balance sheets; and (2) the apparent end of the smartphone supercycle. We reiterate our Buy ratings on CloudCall* (CALL LN, PT 270p), Vianet (VNET LN, PT 142p) and Kape (KAPE LN, PT 120p) as our preferred names to exploit our key themes for 2019.
KAPE CALL VNET
21 Jun 19
ZenMate acquisition update: $1.7m synergies
Kape published an update to the market following the integration of recent acquisition, ZenMate. The group has realised US$1.7m of annualised cost savings related to ZenMate, and launched two products (see details below). We believe the synergies and management execution on deals will be very well perceived in early trade this morning, given the sheer magnitude of the savings (ie 13% of FY19E Group EBITDA – and effectively quadrupling the profits of ZenMate from acquisition in 12 months). We up our FY20E EPS (+7%) and raise our PT to 120p. We reiterate our Buy rating on Kape as one of few companies offering robust organic growth potential, a large net cash position and M&A optionality at a discount to the AIM Tech average.
20 Jun 19
Small Cap Feast
Alumasc Group plc, the prem ium building products, system s and solutions group, has announced its intention to m ove from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019 Argentex a UK-based forex service provider founded in 2011 by its current management team which operates as a Riskless Principal for nonspeculative and forward foreign exchange as structured financial derivatives is looking to join AIM. Offer TBC, expected 25 June
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20 Jun 19
Strategic position and cash underappreciated
We reiterate our Buy rating on Kape, noting the 10% share price decline year to date. In our view, the market continues to underappreciate a strong combination of accelerating organic growth into FY19E (+32% vs. 5% FY18A), a large cash position exiting FY18A (US$40m – or 27% of market cap) in the context of a volatile market/geopolitical uncertainties and future M&A optionality.
17 Jun 19
Kape Technologies - Cyber Crusader, Initiating with Buy rating
We believe Kape’s portfolio of personal data protection tools, route to market and M&A ambitions uniquely position the group to exploit mounting consumer concerns over personal data in the wake of high-profile intrusions such as Facebook/Cambridge Analytica. The group’s transformation is now in its final phase, as focus shifts to accelerating organic growth. In our view, the share price does not capture falling execution risk nor further M&A potential. We initiate coverage with a Buy rating and price target of 110p.
05 Jun 19
AGM Statement, Strong start to FY2019 in line with expectations, Full year forecasts unchanged
The consumer security software business will be holding its AGM at 12.00pm today. The Company reports that it has made a “strong start” to the financial year with trading in-line with expectations. Kape has seen significant progress across the business, with customer subscriber number growth exceeding management expectations. Ongoing progress continues to be made in further developing Kape’s SaaS revenue base, which now services 945,000 subscribers, up 14% since December 2018, with visibility over revenues of approximately $33.5m across future periods (versus $30m at YE FY2018). Per the statement: “As we close the first quarter of 2019, we have experienced substantial growth across our VPN subscriber base, with both Zenmate and CyberGhost generating over 65% growth in mobile subscribers. This excellent performance highlights the continued strengthening of our global brand, the impact of our targeted customer acquisition initiatives as well as the growth in the wider privacy-first market. The real need for users to both protect and control access to their private data is now becoming a primary concern for many.” Post the integration of both Zenmate and Intego, both are said to be benefitting from access to Kape’s internal business intelligence systems and digital marketing engine, enabling new user growth and expanding their market reach. Kape continues to trade in line with management expectations and remains committed to delivering strong levels of organic growth alongside executing on strategic acquisitions. We believe our unchanged full year 2019 forecasts are supported by the robust first quarter trading. At 90p and c.9x FY2019F EV/EBITDA, Kape trades at a material discount to 12-month EV/EBITDA highs and offers exposure to a business enjoying vigorous growth in a global target market. HOUSE STOCK
07 May 19
Positive AGM statement, trading in line
Kape has issued a brief but positive AGM statement indicating a strong start to the financial year with trading in line with expectations. Q1 highlights include strong growth in subscriber numbers, 65% growth in mobile VPN subscribers and visibility of $33.5m of future revenue. We continue to believe the investment case for Kape is compelling given underlying market trends, a growing portfolio of solutions, a strengthening brand and powerful user acquisition capabilities. We expect these to drive premium growth and a considerable re-rating as significant levels of investment convert into strong returns.
07 May 19
Good growth in subscriber numbers
Continuing the momentum seen in the FY 2018 results, Kape’s AGM statement confirms that the Group has enjoyed a strong start to the current financial year with trading in-line with expectations. Subscriber numbers are up 14% since December 2018. Both acquisitions made last year are enjoying the benefits of Kape’s digital marketing expertise which are being realised in new user growth and expanded market reach. The statement also notes the continued strengthening of the Group’s global brand and the growing demand from consumers to protect and control access to their private data. We note the positive trend in user growth which the company expects to translate into profitability in the following periods.
07 May 19
Strong progress in FY 2018
Kape has reported FY 2018 results in line with its January trading update with strong EBITDA growth to $10.4 million. The numbers are reported on a continuing business basis following disposals which leave the Group’s App Distribution segment as its sole focus. Kape has now completed its transformation into a privacy-led cybersecurity software provider. The acquisitions of Intego and ZenMate were concluded during the year; both are now integrated into the Group and expected to contribute to revenue growth and profitability in the coming year. The number of subscription users rose by 219% to around 830,000 while the customer retention rate improved to 74%. The numbers of paying users and subscriptions show the growth the customer base and the associated retention rate provides an indication of how well Kape is maintaining its quality of service and products. With Adjusted EBITDA in FY 2018 in line within expectations, we leave our estimates for FY 2019E all but unchanged and introduce estimates for FY 2020E which reflect assumptions of further strong user acquisition and an increase in recurring revenue.
19 Mar 19
Strong full year results reflect strategic execution, 1M+ users and counting
Kape has delivered strong subscriber growth in FY2018 while completing its transition to privacy-led cybersecurity and continuing to invest in sustainable, long-term growth. The H2 FY2018 acquisitions of Intego and ZenMate, which are now fully integrated and earnings enhancing in Q1 2019, further underpin growth prospects. The Group remains inherently cash generative with net cash of $40.4m at year-end FY2018 and is well-funded for continued execution and growth. With its transition to privacy-led cybersecurity now completed, Kape offers investors exposure to a business enjoying rigorous growth in a global target market, and to one of the key themes in IT currently. HOUSE STOCK.
19 Mar 19
Positive trading update for FY 2018E
Kape has issued a trading update which confirms a strong finish to 2018, with Adjusted EBITDA likely to be slightly above consensus at U$10.4 million – up around 25% on the prior year. Revenues were U$56.4 million, down as expected on the prior year after the sale of the Media business. The Group ended the year with cash of U$40.3 million. We adjust our FY 2018E estimates to reflect these numbers which means that our revenue estimate reduces by 8% while Adjusted EBITDA increases by 2%. For FY 2019E, we leave estimates unchanged given the momentum in the business and await further detail in the March final results announcement. The proportion of subscription revenue has increased again, as the Group continues to transition customers while customer retention has improved further. Over the year, the Group’s subscriber base increased by 219% to c. 830,000 users. In line with November’s update on Intego and ZenMate, the integration of both acquired businesses is progressing ahead of management expectations and management continues to expect the benefits of the implementation of Kape’s user acquisition capabilities to be realised in 2019. In all, this is a very encouraging update with progress on user acquisition particularly of note.
16 Jan 19
Small Cap Feast
Circassia Pharma (CIR.L) - specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb. Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD. Expected late January 2019.
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15 Jan 19
Kape Technologies - Integration update
Kape provided a brief update on progress integrating its recent acquisitions, Intego and ZenMate. While no numbers were given, integration is tracking ahead of plan and the company reports ‘early signs of strong traction’ promoting CyberGhost’s VPN into Intego’s customer base. This is obviously encouraging, reinforcing our view about Kape’s ability to make value-accretive deals leveraging its distribution network. At this early stage we make no change to our forecasts.
28 Nov 18
Acquisition of ZenMate
The acquisition of ZenMate for €4.8 million increases Kape’s share of the VPN (virtual private network) market, extends its footprint in Europe and brings the prospect of revenue and cost synergies. Based in Berlin, ZenMate is a multi-platform security software business with a focus on the provision of VPN solutions; highly complementary to Kape’s existing CyberGhost business. A more tactical acquisition compared to previous deals, the purchase presents opportunities to reap the benefits of significant restructuring (relative to a previously loss-making position). The group has the potential to realise synergy benefits through additional sales, a lower cost structure and the application of Kape’s skill in efficient online marketing. The Group aims to return ZenMate to profitability in the next quarter and expects the acquisition to be earnings accretive in the first full year of ownership. The deal is funded from Kape’s existing cash resources. We are increasing our estimate for FY 2019E Adjusted EBITDA by 3% to reflect our initial view of the impact of ZenMate.
17 Oct 18
Kape Technologies - Acquisition further strengthens VPN position
Kape has announced the acquisition of ZenMate, a digital privacy company based in Germany focusing on virtual private network (VPN) provision. With 50,000 software-as-a-service (SaaS) customers, the move strengthens Kape’s position in VPN, a standout growth area for the company currently. By utilising its digital marketing experience, Kape is confident it can accelerate ZenMate’s growth. We raise our FY19e EBITDA forecasts by $0.5m and adjusted EPS by 4%.
17 Oct 18
Small Cap Feast
Kropz PLC—an emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa, a phosphate project in the Republic of Congo and exploration assets in Ghana. Looking to join AIM, offer TBC, market cap TBC. Due Late October. Azalea Energy—oil and gas production and development company based in Louisiana, United States. Net production of 13 MMcfe/D (2,200 boepd) and total 1P proved reserves of 91 Bcfe (15.1 mmboe), 2P reserves of 111 Bcfe (18.5 mmboe) raising up to $38m, expected mkt cap over $100m. Due 29 Oct Summerway Capital investing company established to acquire companies or businesses which the directors of the Company believe have the potential for strategic, operational and performance improvement so as to create shareholder value. Offer TBC, market cap TBC expected 19 October Admission is being sought as a result of the proposed RTO of Cambian Group plc following completion of the acquisition by CareTech a leading provider of specialist social care services, supporting adults and children with a wide range of complex needs. No raise, market cap TBC expected 19 October. Path Investments— First acquisition of a 50 per cent. participating interest in the producing Alfeld-Elze II gas field located 22 kilometres south of Hannover in Germany. Seeking £10m raise. Due late Oct Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is exploring its options in relation to a potential move to the AIM market of the London Stock Exchange which, if it were to proceed, would likely take place over the next few months.
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16 Oct 18
Well on track
Kape has delivered on a very strong H1 period – revenues from core ongoing operations up 14%, with Adjusted EBITDA tracking well towards our full-year estimates. We make no changes to profit forecasts, but take comfort from the strength of the H1 delivery. More strategically, the recent Intego deal has added malware protection to the expanding technology suite, offering a steadily-more-holistic solution to users’ technology security needs.
24 Sep 18
Kape Technologies - Strong H1 performance
With Kape’s transition to a consumer cybersecurity business essentially complete, investors can focus on the trends in its core business. The interim results highlighted big improvements in both margins and visibility. A doubling of subscribers helped drive a 178% y-o-y rise in underlying EBITDA. We leave our estimates unchanged but with Intego adding $3m in subscription revenue in H2, the mix and margins should improve further. Stripping out $52m of cash, Kape trades at 19x FY19e EPS.
24 Sep 18
TMT UPDATE - 30.07.18 (GFIN.L, BOOM.L, MWE.L, KAPE.L, NET.L)
Gfinity plc* (GFIN.L, 13.5p/£38.7m) Elite Series: Domino's secured as presenting partner (25.07.18) | Audioboom plc* (BOOM.L, 2.1p/£24.4m) Deferred placing completed (26.07.18) | MTI Wireless Edge plc* (MWE.L, 23.5p/£12.6m) Further progress on proposed merger (26.07.18) | Kape Technologies plc (KAPE.L, 129p/£183.1m) H1 trading update, disposal and acquisition: Building the recurring revenue base (26.07.18) | Netcall plc (NET.L, 71.5p/£101.2m) FY pre-close: Matsoft gaining traction (24.07.18)
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30 Jul 18
Kape Technologies - Improved trading, strategic transition complete
Kape’s trading update confirms good progress. Driven by the core App distribution business, EBITDA has increased by 48% to $4.3m. The disposal of the non-core Media division, following hot on the heels of the Intego acquisition essentially completes Kape’s transition into a wholly focused consumer cybersecurity business. We leave our underlying profit forecasts broadly unchanged (34% EBITDA growth between FY18e and FY19e). While the disposal trims 7% from our FY19 EPS forecasts, we believe that the group’s performance and rating should benefit from the being 100% focused on consumer cybersecurity.
27 Jul 18
Honing the focus on cybersecurity and SaaS
Following the announcement of its acquisition of Intego earlier this week, Kape has issued a positive trading update for the first half of its current financial year (FY 2018E). EBITDA has shown a good increase over the same period in 2017 on the back of the expected reduction revenues. The latter reflects lower revenues from the Media division – the disposal of which Kape also announces – and the discontinued activity of the web apps business. This leaves Kape neatly focused on its core App Distribution segment with a stronger outlook for margin improvement and with a consistent approach to being a SaaS-enabled consumer cybersecurity business. We note the strong start to FY 2018E which incorporates good recurring revenue (40% of new Reimage sales were subscription based). Looking at H1 2018E revenues and the Media disposal, we reduce revenue estimates for FY2018E by 18% and 13% for FY 2019E. Adjusted EBITDA estimates reduce by 2% and 4% respectively.
26 Jul 18
Acquisition in malware protection market
Kape has announced the acquisition of Intego, a malware protection and cybersecurity SaaS solution, for U$16 million in cash. Intego is focused on the provision of malware protection, firewall, anti-spam, backup, data protection and parental controls software for Mac. The deal fits directly into Kape’s acquisition strategy of accelerating its growth in the cybersecurity market. It provides the Group with the opportunity to realise synergy benefits through additional sales, a lower cost structure and the application of Kape’s skill in efficient online user acquisition to Intego’s products. In paying 11.4x historical profit before tax, Kape gains ‘significant’ levels of recurring revenues from subscribers through Intego’s strong position in the malware protection market. Management expects the acquisition to be earnings enhancing in the current financial year. Our estimate changes also reflect that as we add U$0.3 million and U$1.1 million to EBITDA for FY 2018E and FY2019E respectively. We leave revenues unchanged ahead of the anticipated H1 trading update.
25 Jul 18
Kape Technologies - Intego deal adds Mac and anti-malware capability
Kape’s acquisition of Intego for $16m looks a good fit. It broadens Kape’s portfolio by adding anti-malware software and significantly strengthening its Mac offering. We see good scope for sales synergies through cross-selling and leveraging Kape’s customer acquisition platform. The deal boosts our FY18 and FY19 EPS by 2% and 9% respectively, while synergies should strengthen beyond our forecast period.
24 Jul 18
Small Cap Breakfast
Monreal PLC—AIM cash shell moving to NEX by taking advantage of opportunities to invest in the technology, media, and telecom (TMT) sector. Due 03 July Ananda Developments— Company has been established to invest in the developing market for medicinal or therapeutic Cannabis derivatives, or related products. Raising £750k at 0.45p with market cap of £1.3m. Due 04 July
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28 Jun 18
Kape Technologies - Unveiling Kape
Kape has made solid progress in refining its product set and is now fully focused on the consumer cyber security segment. By leveraging its marketing platform to scale new products while also transitioning to a subscription model, we expect to see strong revenue growth and margin expansion translating to our forecast 16% three year CAGR in EPS. With $69.5m net cash, acquisitions should enhance this further. We believe the shares should be on a growth rating yet despite the recent performance, the 21.8x FY18 P/E is below peers. We see upside towards 157p.
19 Jun 18
Small Cap Brunch
Codemasters Group— video game developer and publisher, specialising in high quality racing games. Offer TBA. Seeking £15m in primary. Due 1 June. Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine ("South Crofty"), a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June. Maestrano Group, a software company with operations in Australia (main country of operation), the UK, US and the UAE, is looking to join AIM. Offer TBC, expected late May. Yew Grove REIT—newly formed Company will pursue its investment objective by investing in a diversified portfolio of Irish commercial property. Offer TBA. Due Late May Team17 Group -video games label and creative partner for independent developers. Since 2014, delivered a revenue CAGR of 69% (31 December 2015 to 31 December 2017), with revenues of £29.6m and Adjusted EBITDA of £12.9m. Offer TBA Serinus Energy -international upstream oil and gas exploration and production company. Its principal assets are located in Romania (development phase) and Tunisia (production phase). Raising c.£10m at 15p. Due 18 May. Mkt cap £32.6m
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17 May 18
Small Cap Breakfast
City law firm Rosenblatt reported in the press to be considering a London listing. The commercial firm had a reported revenue of £16m in 2017 VR Education Holdings—a virtual reality software and technology company. Raising £6m at 10p, mkt cap £19.3. Due 12 March SimplyBiz, a Financial Services Firm, reported to be considering an IPO targeting a market capitalisation of between £140m and £155m in a listing that would raise £30m of new money. Bacanora Lithium—Readmission. No new money. Mkt cap £140m. Due 21 March. the new holding company for Bacanora Minerals Ltd Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area. Vendor placing and new funds to a total of €225m, Target gross proceeds €207m. Expected Mid March Polarean - Medical drug-device combination company operating in the high resolution medical imaging market. Offer TBC. Due Early March Block Energy—a NEX Listed UK based oil exploration and production company whose main country of operation is the Republic of Georgia, looks to join AIM end of February 2018. Offer TBC
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07 Mar 18
Still More to Come
Crossrider Plc (LON:CROS) is a B2C software business focussed on security/privacy and performance solutions. The company operates three core brands: Reimage. Patented software delivering repairs for PC and Mac. DriverAgent. Searches and updates for outdated drivers on computers, tablets and mobiles. CyberGhost. Leading cyber security provider with a focus on Virtual Private Networks. The acquisition of CyberGhost, announced March 2017, has extended Crossrider’s presence in high growth end markets, and reinforces the company’s strategy of moving towards a Software-as-a-Service (SaaS) business model. A core intellectual asset underpinning all of three is the company’s proprietary distribution platform, which maximizes market reach and drives strong returns on customer acquisition spend.
22 Feb 18
A strong H2 in line with expectations
Crossrider’s trading update for year to the end of December 2017 includes revenue and Adjusted EBITDA expectations in line with our estimates. In particular, CyberGhost has continued to perform strongly. The increased level of deferred income reflects Crossrider’s ongoing transition towards a SaaS model - and its repositioning as a consumer security software business. Despite making further acquisition payments of U$7.7 million during the year, the Group ended 2017 with cash of U$69.4 million – the strategy includes making further acquisitions. Growth in Adjusted EBITDA of over 150% from core activities (excluding the discontinued Web Apps and License business) reflects good organic growth across an increasingly geographically-diverse customer base for Crossrider’s core software solutions. We reflect the updates on revenue and the cash position in our FY 2017E estimates and adjust amortisation upwards noting further acquisition costs in H2. The Board says that it is confident of delivering growth in 2018 in line with market expectations.
16 Jan 18
TMT UPDATE - 13.11.17 (MWE.L, NWT.L, CCT.L, EYE.L, CROS.L)
MTI Wireless Edge Ltd (MWE.L, 31p/£16.0m) Contract win and Q3 results: Further military contract (13.09.17 & 09.11.17) | Newmark Security Plc (NWT.L, 0.175p/£4.1m) Grosvenor tie up with WorkForce Software: Route to market (13.11.17) | The Character Group plc (CCT.L, 398p/£84.2m) Products feature in influential Xmas guides (08.11.17) | Eagle Eye plc (EYE.L,222.5p/£56.6m) Trading update: performance against 'win, transact, deepen' strategy (09.11.17) | Crossrider plc (CROS.L,75p/£106.4m) CMD: Ongoing transition to software subscriptions (10.11.17)
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13 Nov 17
The Quoted Companies Alliance has set out its proposals for taxation ahead of next month’s Budget. The smaller company pressure group believes that the UK needs to build a post-EU tax regime that supports and incentivises smaller companies. One of the key aspects of the proposals is a levelling of the playing field between debt and equity. At the moment, a company can claim tax relief for costs incurred in raising debt but not the costs of a share issue. The QCA believes that the government should encourage long-term equity finance.
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11 Oct 17
Solid interims reflect strategic delivery
Crossrider’s interim results contain revenue and Adjusted EBITDA in line with guidance given in July’s trading update. They also reflect Crossrider’s ongoing transition towards a SaaS model and its repositioning as a B2C security software and online distribution platform. The results include three months’ contribution from CyberGhost and build on the performance in the last financial year with the App Distribution business performing strongly and the group as a whole demonstrating good underlying cash conversion again. We note the revenue and margin metrics of the Company and make small reductions in our revenue and cost estimates while leaving Adjusted EBITDA unchanged, noting that there will be a full six months’ contribution from CyberGhost in H2. The outlook remains positive as the Company continues to focus on its growth strategy, and CyberGhost’s user acquisition gains momentum.
11 Sep 17
A solid, in-line first half
Crossrider’s update for the first half of FY 2017E says that trading has been in line with management expectations and strikes an upbeat tone on future performance. The first half reflects continued delivery on Crossrider’s expansion strategy and the period includes three months’ contribution from CyberGhost. Crossrider expects to report revenues of around U$29.7 million for the period – equivalent to 43% of our current full year estimate of U$68.6 million. It also anticipates adjusted EBITDA for the six months of around U$3 million which compares to our full year estimate of U$8.3 million. Building on the performance in the last financial year, the App Distribution business has performed strongly and the group as a whole has demonstrated good cash conversion again. We note that there will be a full six months contribution from CyberGhost in H2 and make no changes to numbers at present. We shall address estimates when more detail of the first half performance is available with the interim results announcement in September.
24 Jul 17
Small Cap Brunch
Xpediator Plc—Sch 1 from the holding Company for an integrated freight management business operating in the supply chain logistics and fulfilment sector across the UK and Europe with a strong presence in Central and Eastern Europe. Offer details TBC, expected Admission early August 2017. GetBusy PLC—Sch1 from the holding Company of its subsidiary undertakings, which operates as a document management software business, headquartered in Cambridge, UK and operating across the UK, USA, Australia and New Zealand. Capital to be raised via a rights issues of £3m at 28.3p with anticipated market cap of £13.7m, Admission 4 August. Quiz—Sch 1 from the omni-channel and international own brand in the women's value fast fashion sector. Offer raising £102.7m at 161p, expected market cap £200m. Expected 28 July. Last year Quiz posted sales of £87.4m while pre-tax profits grew by 17pc to £5.7m. Arena Events Group -provider of temporary physical structures, seating, ice rinks, furniture and interiors. Raising £60m. Mkt cap £63m. Expected on the Chef’s birthday, 25th July. Altus Strategies—African focused natural resource Company. Offer TBC. Expected Early August. Harvey Nash Group— Provider of professional recruitment and offshore solutions moving to AIM from Main, 8am 28 July 2017. No capital to be raised. Mkt Cap c. £57.8m. Greencoat Renewables - Schedule 1. Targeting a portfolio of operating renewable electricity generation assets, initially investing in wind generation assets in Ireland. Offer raising €270m at €1 with expected market cap of €270m. Due 25 July 2017. I3 Energy –Schedule 1 Update. Independent oil and gas Company with assets and operations in the UK. Issue price of 55p with anticipated market cap of £14.3m, 25 July Admission. Verditek— Sch 1 update. The Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission late June. There has been no official update here for a while. Hipgnosis Songs Fund investment Company offering pure-play exposure to Songs and associated musical intellectual property rights. Offer raising £200m at 100p. The Company has decided to extend the closing date for the Placing, Offer for Subscription and Intermediaries Offer to 1 August 2017. The Company may bring forward this closing date at any time. Admission 4 August 2017
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24 Jul 17
Results confirm solid foundation for growth
Today’s results are in line with January’s trading update in terms of revenue (reduced, as flagged, after the cessation of investment in the web apps platform) and adjusted EBITDA. The App Distribution segment has performed well and the group as a whole has demonstrated good cash conversion once again. Crossrider has also benefited from action taken to improve efficiency. In October 2016, Crossrider purchased DriverAgent for U$1 million – a product already successfully promoted on Crossrider’s app distribution platform – which is now fully-integrated. This has been followed by today’s acquisition of CyberGhost, a Cyber Security SaaS solution business on a multiple of 6x to 9x historical EBITDA depending on an earn out payment. This represents a continuation of Crossrider’s clearly-defined, well-articulated strategy. We make adjustments to our underlying revenue and margin estimates which, in combination with the CyberGhost deal leave revenue expectations little changed but add 14% and 20% to our respective EBITDA estimates for FY 2017E and FY 2018E.
14 Mar 17
Strategy credible; delivery ahead of track
We initiate coverage on Crossrider following a period of significant change for the Group which has brought new management and a new strategy. The Group remains well-funded with cash of U$70.2 million as at the end of June 2016. We suggest that investors take time to view the considerable changes at Crossrider and its focused strategy for organic and acquisitive growth. Recently, Crossrider announced the purchase of DriverAgent for U$1 million – a product already successfully promoted on Crossrider’s app distribution platform. This bolt-on acquisition is the first under the new management team with more such deals likely. Crossrider’s management have suggested that any subsequent large acquisitions will be of businesses which are generating profits. This, along with the recent H1 results, points the way to a clearly-defined, wellarticulated strategy that is already being delivered at a rapid pace.
18 Nov 16