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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Centralnic Group Plc | CNIC | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 123.20 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 123.20 | 123.20 |
| Top Posts |
|---|
Posted at 04/9/2023 08:35 by adamb1978 I'm not a massive fan of rebrandings however CNIC/TIG is now a completely different company to before so makes sense in a way to draw a line under the past and move on |
Posted at 01/9/2023 09:12 by adamb1978 Hi DeanWell, the $400k difference between gross profit and EBITDA suggests minimal people so sounds right! The RNS mentions that the and CNIC have operated closely together before so I'm guessing that they must be a supplier/partner of some description and relatively low value add...hence the multiple, the CEO doing something part-time etc. There's probably also some two-way dependency, meaning CNIC were able to dictate terms Lots of companies have the chance to enhance earnings by buying partners or people up/down the supply chain. They're generally cheap, unexciting deals but earnings enhancing and low risk By some rough maths this might increase EPS by 0.1p, so its general house-keeping rather than anything else! Adam |
Posted at 23/8/2023 13:43 by adamb1978 I think it will cyberbub. Once the cash which CNIC throws off is seen more clearly, investors will buy it on that basis. Sometimes investors over-think things.I could see the buyback taking the price up closer to 200p and then the company switching in favour of an increased divi |
Posted at 16/8/2023 21:47 by ggrantsu Its a very good point Adam - pretty spot on. Honestly, I think its something that sounds scarier than reality...it was just interesting speaking to someone a lot more versed than me on the tech world and I guess thinking about why we have such strong performance but absolutely no multiple re-rating. And I think this is our answer. I'm hoping even if we just a 2-3x notch up and then we are at 160ish...and we keep posting these strong numbers. I think we could be a similar play to Plus500...which is absolutely fine and I'm more than happy seeing a good management team create value that way. Just a slightly different upside vs. what I imagined before the frank conversation and understanding TONIC upside/downside more...think what this little company has achieved vs. all the other shambles out there. Should be much applauded.One other thing from conversation which was interesting was really what I think would be best upside here is takeover possibilities. His view was that PE wouldn't touch this because of the client concentration (I tend to agree having come from PE)...but there is definately scope for a trade buyer here, which of course would be better for us as will be willing to pay a higher premium than stock market investor / PE buyer. I'm going to try and speak to more people in techy world to try and gauge how people might view CNIC...but the investor I spoke to definately thought that might be a high possibility. Anyway, I'm sorry to be a bit damp vs. usual self on CNIC, but worth us all thinking about these issues. |
Posted at 16/8/2023 20:06 by ggrantsu Hello all...not posted here since results but as you know long time bull here.Still am bullish but have revisited case somewhat and had a very interesting conversation with very successful tech investor had weekend who knew cnic well and was invested when it was domain names before selling up. I think their performance this year has been really incredible...honestl Having said that...there are real risks here that I somewhat had overlooked, partly because I have such a huge position and have become pretty emotionally invested. Not company's fault...but they don't disclose online marketing split and I hadn't totally realised how TONIC is 70% of that segment. My concern all stems from TONIC...which is riding the zeitgeist currently but as a whole, is an incredibly weak business model from a barriers to entry point of view/customer concentration risk/margin standpoint...it is a business which Google could basically take away from us overnight and we have no bargaining power so ultimately the prospect of higher margins is minimal and they will likely erode. It's a cash machine for now....but ultimately (and this was the tech investors view)...we are totally constrained multiple wise because TONIC is 50% of the business, online presence is very mature, and the other parts e.g. VGL (which is a great business) etc have yet to grow out (there is clearly a pathway for them to - but we shouldn't kid ourselves...as much as CNIC boast about VGL and new partnerships in other segments, they are all de minimis right now). I think to be brutally honest, most investors will just not risk the tail risks associated with the Google reliance. It's tough...litte bit like Plus500 atm in terms of prospective multiples. However, the news right now is very good for CNIC and its caught the zeitgeist, and I'm very impressed by the team running it and they must have good confidence re google. I'm just trying to point out that just because we are performing very well, there are underlying risks which totally constrain a much higher multiple. Be interested for others thoughts... It would be ideal if they could get a long-term contract with google setup and signed...but sure they have been trying. |
Posted at 16/8/2023 14:03 by rivaldo The IC tip featured earlier is subscription-only, so...."CentralNic defies advertising gloom Can AI be the secret to growing profits against a darkening macro backdrop? August 14, 2023 By Jennifer Johnson Aim-listed internet services group CentralNic (CNIC) has evidently made shareholder returns a priority in the past few quarters. Its inaugural final dividend of 1p was paid out in mid-June and the company announced a second share buyback programme just a few weeks later. This largesse has ostensibly come at a cost – with leverage growing to 1.0 times pro-forma cash profits, up from 0.9 times previously. Meanwhile, net debt increased by almost $12mn (£9.5mn) to a $68.2mn in the six months to the end of June 2023. Management does not appear to be concerned, however, particularly given the company’s growing emphasis on using artificial intelligence (AI) across its operations. CentralNic’s online marketing business, which accounted for over 90 per cent of its first-half sales, creates AI-generated “online consumer journeys”. In practice, this means it aims to convert ad campaigns on search engines into actual ecommerce transactions. The group notes enthusiastically that this market is estimated to be worth $80bn in the US alone by 2025. In its interim results, the company’s directors said they expect it to trade “at least in line” with current market expectations for the full year. This might be difficult for some investors to believe, given advertising budgets famously get slashed during most economic downturns. But the group is showing no real signs of a sales slowdown at present. Adjusted operating cash conversion did fall to 94 per cent in the first half (from 100 per cent last year) – although this is hardly an overly worrisome development. With the shares trading on just 7.8 times predicted full-year earnings, there isn’t much to lose here. Buy." |
Posted at 16/8/2023 10:45 by rivaldo This post elsewhere from DaddyAim has some interesting snippets from the H1 presentation:"Q&A: • CEO revealed that CNIC is in a tender process with the UK government for “big contracts” and that RNS should follow when done -> narrative gave me confidence CNIC is in a top position to win • CEO said that he expects the “first notable impact in Q4” from the Microsoft contract • Regarding margins, CEO said product mix is expected to consolidate so GP margin should not erode much further RNS: pretty positive, not much surprise following 1H udpate • Positive outlook: "at least in line with current market expectations for the full year." Consensus: FY23 Revenue: $ 783 - 834m ; Adj EBITDA: $ 91 - 98m • "Online Marketing and Online Presence segments, gaining market share" • Online marketing (c. 77% group revenue) - 1H23 Revenue: +18% yoy ; KPIs were positive: The number of visitor sessions increased by 49% from 3.5 billion for TTM 2022 to 5.3 billion for TTM 2023 and the RPM remained stable at USD 100. • Online Presence (c. 23%) - 1H23 Revenue +20% yoy ; KPIs were positive: The number of processed domain registration years increased by 7% from 12.0m for TTM 2022 to 12.9m for TTM 2023 and the average revenue per domain year increased by 6% from USD 9.83 to USD 10.46. The share of Value-Added Service revenue TTM 2023 was 7% • New prime clients despite the current macro backdrop: • Zeropark, CentralNic's commerce media business, has announced three strategic partnerships: 1) becoming a Tier 1 Demand Partner of Sovrn, a leading publisher technology platform. 2) a significant deal with booking.com, the global online travel agency. 3) Klarna, the Buy Now Pay Later platform has become a direct publisher on the Zeropark network ; • Voluum, CentralNic's flagship ad tracker, has announced the launch of a new integration with popular e-commerce platform Shopify, allowing customers to directly feed conversion data from their Shopify stores into Voluum, bolstering their ad, product, and page performance Remains a strong buy" |
Posted at 14/8/2023 08:58 by davebowler Zeus-H1: Returning value to shareholders The company grew EBITDA strongly and expanded Adjusted EBITDA/ Gross profit margin through operating leverage. Cash generation was solid and is expected to improve in H2 2023. The company is using its rising cash balance to buy back shares and return cash to shareholders. We forecast average adjusted share count falls by 9% and Adjusted EPS rises by 18% in 2024. This strong performance is not factored into the shares’ forward metrics of 5x EV/ Adj EBITDA, 7x Adj PE and 15% FCFF yield in 2024, in our view. H1 results: The company delivered 16% yoy growth in Adjusted EBITDA to $44.6m, driven by high operating leverage. Whilst gross revenue grew 18% yoy in H1 2023 (pro forma: 14%), Adjusted expenses reduced through the period from $24.5m in Q1 2023 to $22.1m in Q2 2023 due to vendor rationalisation and efficiency initiatives. As a result, Adjusted EBITDA/ Gross profit margin rose to 48.9% in H1 2023 from 47.0% in H1 2022. We expect expense management and the benefit of operating leverage to continue throughout H2 2023. Net debt rose to $68.2m from $56.6m at the end of 2022, resulting in Net debt/ Adj EBITDA rising to 1.0x from 0.9x at the end of 2022. Net debt would have fallen by $20.8m if we exclude the impact of share buybacks ($13.6m), dividends ($3.6m) and deferred consideration payments ($15.2m). Cash generation was lower in H1 2023 due to increased investment in growth and bonus accruals. Adjusted operating cash conversion was 94%, down from 110% in 2022. The company expects cash conversion to normalise to nearly 100% for the remainder of the year. Outlook and estimates: The company expects to trade at least in line with current market expectations for the full year. We conservatively keep our 2023 estimates unchanged and forecast 7% Adj EBITDA growth in 2023. Our forecasts assume H2 revenue grows 8% over H1 2023, whilst H2 on H1 revenue growth was 14% in 2022. We expect the company to continue benefiting from operating leverage with Adjusted expenses down modestly in H2 from H1. We forecast 6% sequential growth in Adjusted EBITDA in H2. Importantly, CentralNic is aggressively buying back shares and accelerating Adjusted EPS growth, whilst introducing a dividend. In H1 2023, the company bought back 5.7m shares and the EBT purchased about 4m shares at a total cost of $13.6m (£10.7m). The company’s repurchased shares have not yet been cancelled and remain part of CentralNic’s share count. Furthermore, the company expanded its second share buyback programme by £30m to £34m on 3 July 2023 and CentralNic had remaining authority for £27m of buybacks at the end of H1 2023. Assuming a repurchase price of 131p, the remaining authority represents 20.6m shares or 7.4% of current share count. We expect the full impact of this year’s share buybacks to show through in 2024, where we forecast Adjusted weighted average share count falls by 9% and Adjusted EPS rises by 18% (to 21.3p) and net debt to EBITDA falls to 0.2x from 0.8x at the end of 2023. Valuation: We believe CentralNic’s strong Adjusted EBITDA growth, high cash conversion and strategies to return value to shareholders are not reflected in current valuation multiples. Shares trade at only 5x EV/ EBITDA, 7x PE and 15% FCFF yield 2024, whilst the company has delivered a strong H1 and potentially higher future returns. |
Posted at 14/8/2023 07:33 by rivaldo Very strong H1 results this morning.With 11.37c adjusted EPS in H1, CNIC are well on track to beat Zeus's forecast of 21.3c EPS this year, which Zeus themselves say is conservative. Cash flows remain terrific, if not quite as high as previously, and are expected to normalise higher again in H2 - CNIC would have reduced net debt by almost $21m without the buybacks, divi and deferred consideration. CNIC themselves state they're trading "at least" in line with expectations, setting up a beat for the year. I note an increase in the mentions of AI in the statement....... CNIC remain exceptionally cheap imho given the cash flows, low rating, digital expansion potential etc. |
Posted at 25/2/2023 07:05 by earwacks Adamant. It’s a bit of a double edged sword. Generally young companies in their early growth years concentrate on using any profits to build the company to multiply earnings. Once a more established footing has been reached they may consider returning profits to shareholders with as a one off dividend or a smaller regular payment. Cnic currently have told us they current have about 1 percent of market share in their sector. So their is still lots to play for. They have stated that acquisitions although not out of the question are unlikely to happen at the rate they have been buying in previous years. Another method of enhancing shareholder value is to buy shares in their own company as they have been doing recently. This obviously spiked the share price considerably at the beginning of this year but also enabled many investors to take advantage of selling into the strengthening share price. Dividend payments are money that disappears from the company where as buybacks keep the value in the company. The big question is how sustainable the current rate of growth is. Should they continue to expand or sit back and reap the benefits of what has been achieved so far, or can they manage both. Some tech companies are finding that after paying dividends for a while they actually need that surplus money to get them through these difficult time and can see great opportunities ahead. It’s not an easy call. Cnic are doing phenomenally well. I’m sure they will have an eye on paying a dividend but also won’t wNt to miss an opportunity to bolt on another earning enhancing acquisition that could propel us further into the big league and eventually a multi bagging market cap. I am happy to view this this in the same way as a scrip dividend which is payment in shares. If they can grow at the rate that’s for a few more yeArs, I would prefer that to some paltry dividend just for the sake of it. |
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