Kape Technologies plc (AIM: KAPE), a global cybersecurity and malware protection SaaS business, announces its unaudited results for the six months ended 30 June 2019.
Financial highlights
· Another strong period marked by international expansion and organic growth driving a rise in profitability:
o Revenues1 increased 24.2% to $29.9 million (H1 2018: $24.1 million)
o Strong growth in recurring revenues to $21.2 million, an increase of 301.5% (H1 2018: $5.3 million)
o Adjusted EBITDA2 up 21.3% to $5.8 million (H1 2018: $4.7 million)
o Robust balance sheet with cash of $36.4 million as at 30 June 2019 and no debt
o Increase of 14.9% in Adjusted Earnings Per Share3 to 2.5 cents (H1 2018: 2.2 cents)
o Deferred income increased to $10.9 million (December 2018: $9.5 million)
· On track to meet full-year expectations
Operational highlights
· Strong progress in transitioning to a SaaS revenue model:
o Significant improvement in customer retention ratio to 82% (December 2018: 74%)
o Over one million subscribers, up 24% on prior year, supported by continued investment in direct sales and marketing
o Expect to deliver $38 million in revenues from existing customers in future financial years, up 27% (December 2018: $30 million)
· Strategic acquisitions enhancing global capabilities:
o Intego materially strengthened the Company’s position in the North American market and expands Kape’s internet security software capability
o ZenMate is highly complementary to CyberGhost, Kape’s existing VPN solution, and has strengthened the Company’s presence in the German market
o $1.7 million in annualised cost savings identified relating to ZenMate
· Both acquisitions are performing in line with expectations
Outlook
· Significant long-term growth opportunities across target markets
· Clear delivery plans for organic growth
· Successful integration of acquisitions has accelerated implementation of the Group’s strategy
· The board remains confident in delivering year on year growth for the current financial year, in line with market expectations
Ido Erlichman, Chief Executive Officer of Kape, commented:
“We are pleased to report another period of earnings growth. This performance, coupled with the continued expansion of both our user base and SaaS-based model, provides Kape with a strong foundation from which to drive forward. Our results demonstrate the power of our business model as we head into the second half of the year having generated strong momentum.
“We have significant ambitions for Kape and having now reached over one million subscribers and increased our retention rate to 82% – one of the highest in the consumer SaaS space, we firmly believe much more is possible.
“In the near-term, we plan to further drive sustainable growth and profitability through ongoing investment in R&D, ensuring we remain at the forefront of the digital privacy arena and address consumers’ ever-increasing concerns. The progress that Kape has demonstrated in the first six months of 2019 has been key in underpinning its ongoing investment proposition.” kape-technologies