City round-up: Knights; Pebble Group; Kape Technologies
Law firm Knights has posted a strong rise in revenues after being boosted by a series of acquisitions.
Turnover at the company for the six months to the end of 2020 rose by 45% to £46.2m, despite a 15% impact from the COVID-19 pandemic. More than £19m of the revenue for the period came from recently acquired businesses such as Shulmans, Fraser Brown and OTB Eveling.
Profit before tax at Knights also rose – by 13% to £6m.
The firm, which has offices throughout the North West, recruited 18 fee earners during the period and says it will hire a further 12 expeted to join in the next six months.
David Beech, CEO of Knights, said: “We have delivered a robust first half performance of profitable, cash generative growth across an enlarged group, despite the macro economic environment.
“Activity levels have improved further since period end, providing confidence that we will return to double-digit organic growth for the second half.
“We continue to execute on our strategy of driving organic growth, supplemented by targeted acquisitions that build scale and provide entry into attractive regional markets.
“Our well invested business and strong culture is attracting senior fee earners, many of whom are joining from Top 50 law firms. Our prior investments have enabled us to successfully onboard new colleagues, win exciting new clients and rapidly integrate four acquisitions during a period of working remotely.”
He added: “Having broadened Knights’ geographic reach, our competitive position as a market leader in the regions has continued to strengthen through the period, and we anticipate that COVID-19 will accentuate the recruitment and acquisition opportunities for our resilient business in the highly fragmented market for legal services outside London.
“We remain confident in our strategy and the prospects for the group.”
::
Pebble
Stretford-based corporate promotions specialist, The Pebble Group, has maintained momentum from quarter three into its final quarter, it said today.
As a result, the board now expects that the results for the full year ended December 31, 2020, will be ahead of market expectations with Adjusted EBITDA not less than £9.5m.
Cash generation was strong in the fourth quarter, with net cash at December 31, 2020, of £7.1m, after outflow of £2.7m for the acquisition of software assets.
The group said concentration on its clients, culture and cash enabled it to navigate its way through an unprecedented and challenging 2020.
However, it added that it enters the new financial year with all major clients and partners intact, a strong balance sheet, a highly motivated team and having acquired some strategically important software assets, funded through group cash flows, which accelerates the ecommerce capabilities of Facilisgroup.
In 2021, The Pebble Group team is seeking to build on the fourth quarter 2020 sales recovery at Brand Addition and use the software acquisition in December 2020 to further strengthen the ecommerce platform capabilities at Facilisgroup.
The board believes the group is well placed for growth in 2021.
::
Ido Erlichman
Kape Technologies, the Isle of Man-based digital security and privacy software business, said it expects full year revenues to almost double, in a market update for the year to December 31, 2020, today.
AIM-listed Kape said it traded strongly, substantially growing its customer footprint and building its profile across the consumer privacy and security markets.
Revenue for the full year is expected to be approximately $122.2m, up 85% and at the upper end of management’s forecasted range, with recurring revenue representing about 89% of total group revenue.
Adjusted EBITDA is expected to be ahead of management’s expectations at approximately $39m, up 168%. In addition, the adjusted EBITDA margin is expected to increase significantly to 31.9%, compared with 22.0% in 2019.
The group has also seen significant operational progress, and said it is now well positioned to become a go-to multi-product consumer cybersecurity vendor serving the growing demand for digital privacy and security, which has accelerated as a result of remote working and growing concerns around the safety of consumers’ online presence.
During the year, Kape completed the seamless integration of Private Internet Access ahead of schedule, delivering a 31% saving in operating expenses and growing privacy segment revenues by 16%.
The company expects increased marketing activity in the fourth quarter of 2020 to yield accelerated organic growth in the current financial year.
Kape now supports approximately 2.5 million paying subscribers across its core markets of North America and Europe.
In October last year Kape completed its first equity fund raise since IPO, with an oversubscribed capital raise of $115.5m. This expanded the company’s investor base and provides greater flexibility for it to execute on future M&A opportunities, while at the same time supporting organic growth initiatives.
Chief executive, Ido Erlichman, said: “2020 was an extremely productive year for Kape, both in terms of operational progress and our financial performance. With COVID-19 causing widespread uncertainty globally, the need for high quality and secure internet software solutions has been markedly reinforced.
“In addition to delivering on our growth priorities in 2020, we were able to launch several significant products and technological initiatives which will drive our ongoing customer traction.
“With the successful integration of PIA completed, Kape will continue its organic and in-organic expansion through 2021 and beyond.”
