Published on: July 26, 2018

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.