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Summary
- Kape Technologies generated revenue of USD 59.0 million in H1 FY2020, which increased by 97 percent year on year.
- The growth in revenue was supported by a contribution from Private Internet Access (PIA), renewal of subscription and increase in the user base.
- Corero Network Security generated revenue of USD 6.2 million, which grew by 48 percent year on year in H1 FY2020.
- The order intake increased by 58 percent year on year in H1 FY2020 to USD 7.9 million.
Kape Technologies PLC (LON:KAPE) and Corero Network Security PLC (LON:CNS) are two FTSE AIM-listed technology stocks. Shares of KAPE and CNS are trading down by close to 19.19 percent and 16.10 percent from their 52-week high. Shares of KAPE were down by around 6.3 percent, whereas shares of CNS were up by close to 1.7 percent from their previous closing price (as on 15 September 2020, before the market close at 1:30 PM GMT+1).
Kape Technologies PLC (LON:KAPE) - Expects the demand for secure software solutions to grow
Kape Technologies PLC is a UK based company that provides security software solution. It operates on software as a service (Saas) model and helps in maintaining the privacy and protecting data. The Company has paid user base of 2.4 million and a workforce of 350 working from eight locations globally.
Timeline of Kape Technologies
(Source: Company website)
H1 FY2020 results (ended 30 June 2020) as reported on 15 September 2020
(Source: Company website)
Kape Technologies reported revenue of USD 59.0 million in H1 FY20, which increased by 97 percent year on year from USD 29.9 million in H1 FY19. Digital Privacy segment reported revenue of USD 42.2 million in H1 FY20, which increased from USD 12.2 million reported in H1 FY19. Digital Security segment revenue was USD 16.8 million, which fell by 5.4 percent year on year from USD 17.7 million in H1 FY19. The revenue was driven by the contribution of Private Internet Access (PIA), renewal of subscription and growth of user base. The adjusted EBITDA was USD 16.4 million in H1 FY20, which increased from USD 5.8 million reported in H1 FY19. The operating profit was USD 3.4 million, and profit after tax was USD 0.2 million. The adjusted cash flow from operations was USD 19.2 million, and the Company had a cash conversion of 117 percent in H1 FY20. As on 30 June 2020, Kape Technologies had cash of USD 17.0 million and net debt of USD 25.6 million. It had close to 2.38 million subscribers and maintained user retention of 80 percent during the reported period. The Company has revenue visibility of close to USD 106.6 million and 86 percent of it is on a subscription basis.
Revenue Analysis
(Source: Company website)
Share Price Performance Analysis
1-Year Chart as on September-15-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Kape Technologies PLC's shares were trading at GBX 185.06 and were down by close to 6.30 percent against the previous closing price (as on 15 September 2020, before the market close at 1:30 PM GMT+1). KAPE's 52-week High and Low were GBX 229.00 and GBX 68.06, respectively. Kape Technologies had a market capitalization of around £311.81 million.
Business Outlook
The Company expects that the demand for secure software solutions would grow. Thus it forecasts FY20 revenue between USD 120 million and USD 123 million, and the adjusted EBITDA to be in the range of USD 35 million to USD 38 million. The acquisition of PIA has contributed immensely, and it expects the cost synergy in the range of USD 3.5 million to 4.5 million through the integration of PIA. The Company would continue to evaluate acquisition opportunities and focus on increasing its user base and expand its solution portfolio.
Corero Network Security PLC (LON:CNS) - Order intake of USD 7.9 million in H1 FY2020
Corero Network Security PLC is a UK based technology company engaged in security improvement and development of DDoS (distributed denial-of-service) mitigation solution. The solutions are deployed on the premises and in the cloud. The Company provides its services to enterprises, service providers, hosting & co-location providers and edge providers.
Business Model of Corero Network Security
(Source: Company website)
H1 FY2020 results (ended 30 June 2020) as reported on 15 September 2020
In H1 FY20, Corero Network Security reported revenue of USD 6.2 million, which increased by 48 percent year on year from USD 4.2 million in H1 FY19. The order intake increased by 58 percent year on year in H1 FY20 to USD 7.9 million. The Company reported a loss before tax of USD 2.7 million in H1 FY20, which was lower than a loss of USD 3.9 million reported in H1 FY19. The loss after tax was USD 2.6 million in H1 FY20 as the Company received tax credits of USD 0.1 million. The loss per share was 0.5 USD cents, and the net cash outflow from the operating activities was USD 0.6 million. As on 30 June 2020, Corero Network Security had net cash of USD 3.3 million. In May 2020, the US subsidiary of Corero Network Security received USD 637,000 under the paycheck protection programme loan. The annualized recurring revenue (ARR), which is the measure of contract value for software subscription and DDoS protection as a service contract and gives visibility over future earnings increased by 54 percent year on year and stood at USD 8.8 million as on 1 July 2020. In H1 FY20, the Company added 18 new clients.
Performance by Revenue category and Region in H1 FY2020
In H1 FY20, Hardware and license division's revenue increased by 73.2 percent year on year to USD 2.4 million in H1 FY20 from USD 1.3 million in H1 FY19. DDoS protection as a service division revenue increased from USD 0.5 million in H1 19 to USD 1.1 million in H1 FY20. Maintenance & support services revenue increased to USD 2.6 million in H1 FY20 from USD 2.2 million in H1 FY19. Based on regional performance, the Americas generated sales of USD 4.6 million in H1 FY20, which improved from sales of USD 3.0 million in H1 FY19. EMEA and Rest of the World reported revenue of USD 1.4 million and USD 0.06 million, respectively in H1 FY20.
Strategic Plan for 2020
(Source: Company website)
Share Price Performance Analysis
1-Year Chart as on September-15-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Corero Network Security PLC's shares were trading at GBX 8.39 and were up by close to 1.70 percent against the previous closing price (as on 15 September 2020, before the market close at 1:30 PM GMT+1). CNS's 52-week High and Low were GBX 10.00 and GBX 2.35, respectively. Corero Network Security had a market capitalization of around £40.66 million.
Business Outlook
The Company witnessed robust trading activity in H1 FY20 supported by firm order intake. Corero Network Security is confident that its products are well placed in the current situation. The cyber threats and DDoS attacks are increasing with climbing usage of internet, and the Company's solution would help in overcoming these threats. Corero Network Security is mindful of the fact that the current market conditions are volatile, but it is hopeful over the long term outlook. The Company plans to focus on marketing and commercialization of its solutions.
