11th Mar 2021. 8.58am
Regency View:
Update
Regency View:
Update
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Kape Tech surge 28% following Webselenese acquisition
Virtual Private Network (VPN) specialist Kape Technologies (KAPE) announced the acquisition of fellow VPN leader Webselenese $149.1m on a net cash basis.
CEO Ido Erlichman commented:
“The acquisition of Webselenese is highly strategic for Kape, providing us with one of the most respected and far-reaching consumer privacy and security content businesses globally. By combining this deep level of consumer knowhow with our fast-growing product footprint, we believe the acquisition will be a force multiplier for Kape in our product development and customer reach…
“This significantly earnings accretive acquisition accelerates our strategic objective of becoming the go-to brand for consumer privacy and security globally.”
Webselenese operates a digital platform that provides independent and highly valued consumer privacy and security content to millions of users globally via market-leading review sites.
Kape said the acquisition will provide a 65% boost to adjusted earnings per share and this prompted a share revaluation from the market.
With the shares surging higher, we will not look to chase the shares higher in order to snap up a second tranche. However, if we see price action stabilise with a retracement down into the broken resistance are at 230p, we will likely add more.
KAPE Daily Candle Chart
Tracsis win ‘strategically important’ US contracts
Expanding into the US is a key objective for Tracsis (TRCS), and in last week they announced they’d won two new contracts in the region.
The deals, to supply remote conditioning monitoring (RCM) hardware and software for over 200 switch machines to an unnamed North American transit agency represents a “strategically important milestone” for the group and more are set to follow.
CEO Chris Barnes commented:
“MPEC Technology has a very strong market position in the UK rail industry as a leading supplier of RCM software and hardware. A key strategic objective of the Tracsis Group is to expand this business into North America and these new contract wins with a major transit agency are an important further step in building momentum towards this goal.”
The shares broke through resistance at 658p on the back of the news, and prices look to be building momentum.
TRCS Daily Candle Chart
MTI’s Full-Year profit jumps 19%
MTI Wireless Edge (MWE) released their Full-Year 2020 results last week and they made for pleasant reading…
Highlights included a 19% increase in profit before tax to US$4.1m (2019: US$3.5m), a 17% jump in earnings per share to 3.83 US cents (2019: 3.27 US cents) and a 25% hike in their final dividend to 2.5 US cents per share (2019: 2.0 US cents).
The rise in profitability was due to the increasing scale of the Group and lower expenditure associated with reduced travel and marketing costs.
CEO Moni Borovitz commented:
“Looking ahead, the business continues to be in a strong financial position with net cash of US$9.4m as at the year end. The Group’s three divisions are well established, with experienced, autonomous leadership teams all utilizing the Group’s core expertise in radio frequency communications and are all focused on taking advantage of attractive market trends within their respective sectors, namely: the roll-out of 5G cellular connectivity; tackling the growing global issue of water scarcity; and the increasing size of the international defence market. The first two months of 2021 have started well and we look forward to delivering another year of solid growth.”
MWE Daily Candle Chart
Craneware trading in-line with expectations
Craneware (CRW) released a solid set of interim numbers at the start of the month…
The US Healthcare-focused software provider said trading was in-line with expectations as revenue increased by 6% to $38m (H1 2020: $35.9m).
Earnings and profits also made single digit gains and the group’s cash position strengthened to $50.7m (H1 2020: $45.0m).
Encouragingly, New Sales were more than 30% ahead of the strong comparable period in the prior year, with solid demand across the product base, from both new and existing customers.
The market has responded well to the numbers, with Craneware’s share price forming a new swing low following the update.
We are now looking to see whether the shares can build enough momentum to break through the 2,447p resistance area.
CRW Daily Candle Chart
Next Fifteen repay £1.4m of furlough money
Media and marketing group Next Fifteen Communications (NFC) announced that they would be repaying the support previously received from the UK Government furlough scheme.
The £1.4m received in the year to 31 January 2021 will be accounted for as an ‘exceptional item’ in the Group’s reported results for that year, whilst the £1.4m repayment will also be accounted for as an ‘exceptional item’ in the results for the year to 31 January 2022.
Even after taking all of the above into account, the NFC expects to report results in-line with current market expectations for the year to 31 January 2021. The Group’s net cash as at the 31 January 2021 was higher than expectations at approximately £14m.
Next Fifteen will announce its Preliminary Results for the year ended 31 January 2021 on Tuesday, 13 April 2021.
NFC Daily Candle Chart
GB Group rallies on strong FY 2021 outlook
Cyber-security firm GB Group (GBG) released a typically strong trading update at the end of February.
In a short and snappy statement, GBG said:
“Trading has been stronger than anticipated since the Company’s interim results were reported last December. In particular, the Company’s Identity division benefitted materially through January and early February from increased transaction volumes driven by the well-publicised spike in bitcoin market activity and retail share trading in the US and Europe. It also saw a positive impact from the financial stimulus packages in the US.”
As a results of the strong trading, GBG now believes the financial results for the full year will be ahead of consensus expectations with forecast revenues to be at least £213m and operating profit above £53m.
GBG Daily Candle Chart
Midwich profits halved but revenue remains resilient
Midwich (MIDW) released their unaudited Full-Year results on Tuesday and they underlined just how tough the last twelve months have been on the audio-visual specialist.
Operating profit plunged 70% to £7.1m due to the pandemic-induced squeeze on margins.
Revenues have shown signs of recovery and have improved consistently from April, such that the Group’s organic revenue decline of 22% in the first half of the year reduced to a 7% decline in the second half of the year.
CEO Stephen Fenby struck and upbeat tone when commenting on the numbers:
“We announced our entry into the US, the world’s largest AV market, in February 2020 and post period end, entered the Middle East, giving us true global scale. Whilst we have experienced a slowdown in some of our sectors, we have also witnessed improved performances in others and our results in the second half of the year exceeded the Board’s expectations…
“We are well placed through our diversified geographical and multi-sector footprint, combined with long-term vendor relationships, to continue to deliver growth and take advantage of market opportunities, both organically and through acquisition.”
MIDW Daily Candle Chart
Somero ups special dividend as performance improves in second half
Somero (SOM) released a strong set of Final Results on Wednesday which saw them double their special dividend to $0.181, up from $0.077.
The concrete levelling company said they closed the year with “the strongest cash position in company history” and they are “well positioned to make investments that will drive long-term growth in new and existing markets by expanding our product offering”.
However, Somero are not immune from the impact of the pandemic and annual profits dropped 9% as some construction projects were delayed.
CEO Jack Cooney commented:
“We were able to strike the right balance of managing short-term requirements brought on by the crisis while advancing our long-term strategy…
I believe Somero is emerging as a stronger company having made lasting improvements in the efficiency and effectiveness of our operations and communications during this time.”
SOM Daily Candle Chart
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