City round-up: Kape Technologies; Northcoders; Norcros; Pebble Group

Ido Erlichman

Kape Technologies, the AIM-listed Isle of Man-based digital security and privacy software business, said it has enjoyed a strong first half in a trading update for the six months ended June 30, 2022.

Revenues are expected to be around $301.6m compared with $95.5m in the first half a year ago, up 216%, or 19% on a Pro Forma basis, of which more than 88.6% were recurring revenues.

Pro Forma adjusted EBITDA is expected to be approximately $88.5m, against $28.7m a year ago, up 209%, or 17% on a Pro Forma basis, with Pro Forma adjusted EBITDA margin of 29.3% in the period, compared with 30.0% the previous year.

Kape experienced strong organic growth across the business, with demand for privacy and security products on the rise. Kape’s privacy segment revenues grew by 19% in the fist half of 2022 on a Pro Forma basis, and by 12% within the security segment.

The content division delivered significant organic growth of 25% in revenues on a Pro Forma basis, underpinned by expansion into new verticals.

The continued growth of the group’s recurring revenue base, which now supports around seven million paying subscribers with an 82% retention rate, together with the expansion of Kape’s go-to-market strategy and the successful integration of ExpressVPN, support the board’s confidence that the group will deliver revenues in the range of $610-624m and Pro Forma adjusted EBITDA of between $166-172m in the year ended December 31, 2022.

Chief executive, Ido Erlichman, said: “Kape has made a strong start to 2022, delivering on our organic growth ambitions and, more importantly, servicing c. seven million customers who choose to use our products.

“This has been our strongest H1 to-date, having delivered six consecutive years of growth and, with the integration of ExpressVPN progressing to plan, we are ideally placed to further capitalise on this rapidly growing market.

“Our teams continue to innovate to ensure Kape continues to redefine best in class in our category, with our cutting edge solutions fast becoming the final line of defence for an increasing number of individuals who are looking to both protect and secure their online presence.”

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Northcoders, the Manchester-based independent provider of training programmes for software coding, is trading in line with forecasts for revenues, and ahead of expectations regarding profits.

In a trading update for the six months to June 30, 2022, Northcoders said, with demand achieving record highs, revenue for the six months was £2.3m, compared with £1m a year ago. On June 30, revenue visibility for the financial year to December 2022 was £5.4m, being 83% of the market expectations for the year.

The strong performance of the group in the year to date gives the board confidence to invest additional funds in the second half of the year to support the anticipated growth in fiscal year 2023, which is expected to result in the overall profitability for financial year 2022 being in line with market expectations.

During the period, the group secured multiple new contracts in its corporate solutions division, with Rolls Royce and EMAC, among others, and the group received confirmation that its NHS Digital academy programme will commence in September 2022.

Well known companies such as On the Beach, Evri, HESA and Sky Bet have also now started their digital training programmes with Northcoders during the first half of 2022. The group grew its graduate hiring network by a further 10% by engaging with 32 new companies for the first time this year.

Northcoders now has a network of almost 350 hiring partner companies to sustain its graduate hiring from coding bootcamps. The group has also continued to see an increase in demand from individuals wanting to enrol on its core coding bootcamps and apprenticeships. Application numbers for the first six months of the current year stood at 3,494, which compares favourably with the 3,662 applications in the 12 months to December 2021.

In the reporting period, Northcoders’ corporate solutions division successfully launched ‘Developer Incubator’, a fully managed ‘Teams-as-a-Service’ model for businesses to hire teams of junior developers, managed by Northcoders’ internal consultancy team.

Following on from its first hire, train and deploy consultancy contract with theidol.com, a subsidiary of Legal & General, Northcoders Solutions division has signed Developer Incubator contracts with R2 Data Labs, Rolls-Royce’s Data Science division, and the customer service software provider, EMaC.

Staff utilisation rates are expected to remain constantly high as all consultants can be used either to teach on the Northcoders’ bootcamp or work on internal development projects when not utilised on a client contract.

Northcoders’ cash flow has benefited from the Department for Education-funded scholarships being made available to those who previously utilised the company’s finance provider, which had absorbed working capital.

Therefore, the company has used this as an opportunity to accelerate investment plans in its learn-to-code platform, which will automate learner enrolment in its courses and lead to a substantial saving in staff costs in the learner admissions team. Even while the learn-to-code platform is in its infancy, the company is already yielding staff saving benefits.

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Nick Kelsall

Wilmslow-based bathroom and kitchen supplies group, Norcros, said its overall trading for the first quarter was “robust”, with the board’s expectations for the full year remaining unchanged.

In a trading update covering the 13 week period to July 3, 2022, ahead of today’s annual general meeting, Norcros revealed group revenues were 6.1% higher on a reported basis compared with the same period last year.

On a like for like constant currency basis, revenue was 1.6% higher compared with the strong prior year comparator and significantly ahead of the pre-pandemic comparator of the quarter ending June 2019 by 23.8%.

In the UK business, like for like revenue for the 13 week period was 2.2% lower than the previous year, albeit 20.2% higher than in 2019, reflecting growth across all businesses. The performance in the trade sector remains resilient, offset by some customer destocking in the larger retail accounts.

The South African business has continued to grow, with revenue for the 13 week period 9.3% higher than prior year on a reported basis and 8.9% higher on a constant currency basis. Against 2019, revenue was 30.2% higher on a constant currency basis with the business continuing to benefit from market share gains.

As previously announced, the acquisition of Grant Westfield completed on May 31, 2022. The reported revenue above includes June’s revenue from Grant Westfield.

Chief executive, Nick Kelsall, said: “We have delivered a resilient first quarter performance against a backdrop of an uncertain economic and political environment. The Grant Westfield business is being integrated and continues to trade strongly.

“The board remains confident that the group’s proven business model, leading brands, excellent service proposition and its commitment to new product introductions will continue to offer strong differentiation and deliver further progress and share gains, in line with its expectations, for the year to 31 March 2023.”

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Pebble

The Pebble Group, the Stretford-based corporate promotions specialist, issued a trading update for the six months to June 30, 2022, today, which revealed that the first half has been strong.

It said the financial results of its Facilisgroup are anticipated to be in line with the board’s expectations in its home currency of US Dollarx and are ahead of expectations in GB Pounds, as the group benefits from a favourable exchange rate.

Brand Addition has traded strongly, with half year 2022 performance well ahead of the same period in 2021 and the group anticipates that its results for the year ending December 31, 2022 (FY 22) will exceed market expectations.

Despite current inflationary pressures, the group is pleased to report that EBITDA margin has been maintained.

While being conscious of the uncertainty surrounding the global economy, the strong HY 22 performance leads the board to expect that the group’s FY 22 results will exceed current market expectations.

Facilisgroup provides a digital commerce platform for promotional products businesses in North America. Partners, for the current Syncore offering, implemented or contracted and awaiting implementation at July 18, 2022, totalled 216, compared with 206 at December 31, 2021.

In the six months to HY 22, gross merchandise value (GMV) and spend through preferred suppliers was ahead of the same period in the prior year by 38% and 54%, respectively. While maintaining this momentum, the group’s goal is to enter 2023 with an increasing customer base, driven by the new ecommerce solution, Commercio, launched in early June 2022.

Brand Addition provides promotional products and related services under contract to many of the world’s most recognisable brands

At Brand Addition, the excellent revenue growth over the prior year has been generated from new business wins in both 2020 and 2021, plus the continued growth in demand from existing clients.

Working closely with its supply chain, Pebble Group teams across Europe, Asia and North America have improved gross margins compared with the prior year. The group said it remains focused on sustaining this improvement through FY 22.

Looking ahead, the group said, with a strong HY 22 performance, the board expects FY 22 to be ahead of expectations.

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