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UK tech investors: forget Darktrace and stick to the trusts

A strong trading update has not been enough to convince this writer that Darktrace isn’t simply another over-hyped British tech disappointment
UK tech investors: forget Darktrace and stick to the trusts
  • Darktrace listed in April and its share price has risen more than 70 per cent  
  • The company has upgraded its pre-IPO expectations after a better than expected June

For UK investors starved for many years of quality tech companies, the Darktrace (DARK) IPO has been a chance to satiate their cravings. Here is a company which claims “a large total addressable market, a predictable, subscription-based model and a strong balance sheet” - and has the numbers to back that up. Revenues have more than doubled in the last three years at an average gross margin of over 90 per cent – reflective of a software company whose ongoing sales require little expenditure. Losses are narrowing and in 2019, the company generated its first cash from operations.

And investors have feasted: in the three months since the company joined the stock market, its share price has risen 75 per cent. 

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