Centralnic Share Discussion Threads

[esther1975] 18/5/2020 10:34

Sorry rivaldo I meant to type ?

[esther1975] 18/5/2020 10:33

Hi RonaldoTrying to do some research on this share. Do you know what the forecast pre tax profits are for 2021 and 2022 please. Where can I find them. I have used digital look before but not always the most reliable. I understand Zeus capital are the approved brokers.

[nfs] 14/5/2020 10:14

Thanks Rivaldo

[rivaldo] 14/5/2020 09:42

Thanks to Sharesoc for the presentation.

Here's the IC's Buy tip from Friday at 89.5p:

"CentralNic (CNIC) sells, registers and trades internet domain names and more recently has moved into providing advertising services for owners of premium domain names. Given online addresses serve as a backbone for digital infrastructure, demand has remained resilient during the recent market turmoil, with more activity than ever being conducted online as a consequence of lockdown. What’s more, by diversifying its business CentralNic is improving its growth prospects and while forecast earnings are relatively small for now, it has found a place in our Ideas Farm broker up

In 2019 acquisitions increased its exposure to domain-related software and services. Of particular note was the $48m (£39m) purchase of Team Internet at the end of 2019, which takes CentralNic into the business of optimising revenue for premium “direct navigation” domain investors.

It’s $30bn addressable market has many small independent players, which means there is significant scope for CentralNic to grow through acquisitions. This underpins its strategy to become a leading global domain name and web services provider, growing revenues on a relatively fixed cost base. In total, CentralNic acquired four businesses over the course of 2019, expanding its customer base by 45 per cent. And it is keeping an eye out for potential takeover opportunities thrown up by wider market turmoil. This has meant that its maiden dividend has been deferred in order to preserve capital for deals.

One of the reasons the company has so far seen little disruption to its business from coronavirus is that 92 per cent of revenue is recurring, with around four-fifths of sales accounted for by annual fees. Its customer base is relatively diverse, with its top customer accounting for less than a tenth of overall sales, which should also help reduce risk.

Its reseller business, which involves selling third-party registered domains, is the largest division by revenue and grew by 122 per cent in 2019. It is number two in the world by volume. The division operates platforms for resellers, hosting companies and telecom companies under the brands Key-Systems, Hexonet, PartnerGate, TPP Wholesale and Toweb – and now has started to sell services such as Microsoft’s (US:MSFT) Office 365 and Amazon's (US:AMZN) cloud hosting services.

The group did concede that new wins are slowing due to the tough economic environment. But it is worth noting that wins are typically few and far between in the industry, given the time-consuming nature of switching domain providers. That said, client wins last year included .blog, the ccTLD .bh, MarkMonitor, ZDNS, and Automattic. Organic growth also benefited from increased business from its existing customers.

IC View

CentralNic does not expect to be severely affected by coronavirus and is well positioned to utilise the market sell-off to pick up smaller companies, complementing its growth strategy. Trading in the first quarter was strong despite pandemic restrictions, and with many of its services considered business critical there is the prospect of growth despite the looming threat of a recession. Buy at 89.5p."

[sharesoc] 10/5/2020 16:09

The CentralNic recording and Stockopedia report from our recent webinar can be found in our members area here:

To access the presentation, you'll need to be a full member of ShareSoc, which is a not-for-profit organisation that supports individual shareholders and campaigns for shareholder rights. If you're not already a member you can join here: hxxps://www.sharesoc.org/membership/

Once you've joined, you'll receive an invitation to register for our "members network" private social network, from where you'll be able to access the presentation (and presentations on 100s of other meetings). If you're already a member and have any difficulty accessing the report, please do not hesitate to contact us here: hxxps://www.sharesoc.org/contact-us/

[hotaimstocks] 10/5/2020 15:40

MMX set to rise next week .... STRONG BUY

[rivaldo] 06/5/2020 22:28

Nice - CNIC are one of the IC's Tips of the Week for tomorrow's edition:



"Tips of the Week 6 hours ago

Log on to CentralNic"

[rivaldo] 06/5/2020 10:19

I watched it - the CEO was impressive as he always is these days. IMO he comes across as someone who knows the business inside out and has a strategy to maximise value which works well.

CNIC is benefiting nicely from the pandemic, even if not to a "material" extent, and the business is trading well with Q1 ahead of forecasts and April numbers continuing in the same vein.

There's no reason why the business and share price shouldn't continue to progress nicely imo.

In particular, CNIC are on a very large discount to (larger) peers like GoDaddy and Tucows. If the discount doesn't close, perhaps these companies wii consider bidding for CNIC.

[nfs] 06/5/2020 10:07

CEO just did 60 mins on sharesoc. Hence the buying just after 9am I think

[rivaldo] 05/5/2020 13:41

New interview with the CEO from yesterday, confirming that Q1 numbers are "slightly ahead", with no deviation since then. This resilience is due to:

- products like domain names are key tools for the internet
- ability to fulfil is very strong
- entire supply chain is online, so unaffected
- strong recurring revenues, at 92% last year, via subscriptions or rolling contracts
- the current climate is useful for assessing further acquisitions

[sharesoc] 02/5/2020 17:03

We are hosting a webinar with CentralNic on Wednesday which may be of interest. See:

[rivaldo] 30/4/2020 09:13

Cheers - what a great interview! The figures quoted in the interview for Q1 aren't in the RNS'd trading update, but ARE excellent....

- Q1 revenues of $66m are 32% of the forecast $203.9m for the year
- Q1 EBITDA of over $8m is at least 25.4% of the forecast $31.5m for the year

"Q2: Moving to Q1 2020 update, CentralNic Group traded in line with market expectations, what type of growth has the company experienced over the quarter?

A2: It’s roughly 100% growth so in the first quarter, we did $66 million in revenues and if you compared that to the $109 million, we did in the full year last year, you can see that we’re already more than halfway to hitting that number again. Similarly, our EBITDA number was a little over $8 million and considering we did $18 million full year last year, you can see that we are absolutely on that trajectory of continuing to double in growth."

And importantly re COVID-19 having had no impact on CNIC:

"We monitor this very closely and I’m happy to say that not only was not the case in Q1 but each week subsequent to then"

[rivaldo] 29/4/2020 10:35

It's worth reiterating that Cenkos have "conservatively" retained their forecast of 9.9c EPS this year.

That's 8p EPS, which even at these highs is still a P/E of only 11.9.

They conclude:

"Attractive valuation: We believe that as CentralNic increase in size and builds a track record of earnings outperformance and successful acquisition integration, its multiples will rise to approach its peers. Shares trade at only 9x EV/ 2020 EBITDA, a sharp discount to peers, GoDaddy and Tucows, which trade at 18x and 13x EV/ 2020 EBITDA, respectively."

[rivaldo] 28/4/2020 15:15

Kestrel are very keen - they continue to buy and have bought another 2.7m shares. They now own 32.9m shares, or 17.44%:

[gerihatrick] 28/4/2020 12:09

also on Directors Talk which I have yet to watch/listen. This I probably similar to what he did with TMVs. Good to watch the GAN presentation prior to US flotation...

[rivaldo] 28/4/2020 11:56

Breaking upwards now - new highs.

Cheers astonedt, will listen later.

[rivaldo] 27/4/2020 11:49

The respected Techmarketview are bullish:



"Monday 27 April 2020
CentralNic looks resilient

CentralNic Group, the London-based AIM-listed provider of internet domains, is reaping the fruits of its acquisition strategy with annual results out this morning showing the company doubled revenue last year.

CentralNic made four acquisitions in 2019 (see here, here and here) and increased revenue by 95% to $109.2m (2018: $56m) of which 92% are recurring (2018: 90%). If you strip out the effect of the 2019 acquisitions the business still grew by 61% year-on-year. Adjusted EBITDA was also up a whopping 96% to $17.9m (2018: $9.1m).

CentralNic has moved to quarterly reporting following on from last year’s €50m bond issue. Here, and despite Q1 overlapping with the outbreak of COVID-19, trading remains in-line with expectations with revenue of $56.4m and adjusted EBITDA of $8.1m. Indeed, CentralNic remains very well placed to see out the current coronavirus crisis with a profitable business model well suited to serve an increasing proportion of businesses relying on electronic communications and webservices. Financially, the business is cash generative, growing organically and has the majority of its revenue recurring.

Ben Crawford, CEO of CentralNic, commented “As a profitable provider of online subscription services with high cash-conversion and solid organic growth, we do not expect CentralNic to be severely affected by COVID-19, but we will continuously review our acquisition and financing strategy to ensure that we maintain stability and optimise our business strategies in the new global climate.”

[rivaldo] 27/4/2020 11:22

The real dealing spread per the trades seems to be 91.5p-95.75p, which is a lot better - ignore the published spread on your portfolio.

[tomv33] 27/4/2020 09:59

Spreads a bit wide

[rivaldo] 27/4/2020 09:20

Big 1.31m trade just reported at 90p - I wonder if this is the clearance of an overhang. Especially as the price has quickly been marked up afterwards (rather than simply being a large buy first thing today).

[saucepan] 27/4/2020 08:59

Thanks for that, davebowler.

[davebowler] 27/4/2020 08:54

Zeus;
Centred on performance
2019 results demonstrated consistent organic growth, strong delivery on acquisitions and high cash conversion. We believe there is upside to 2020 expectations since our forecasts are below Q1 run rates, historic growth trends and acquisition synergy targets. In addition, CentralNic appears well positioned to complete more earnings accretive acquisitions. The company is developing a track record of successful execution while the current environment makes more acquisition opportunities available.

2019 results and resilient outlook: CentralNic stated that all divisions showed organic growth through both new client wins and increased business from existing customers. Results were in line with our estimates ($109m revenue, $18m EBITDA, 104% cash conversion, $75m Net debt). CentralNic is well supported by 92% recurring revenues (2019), low customer concentration (top customer is less than 10% of revenue) and high visibility (c.80% of revenues derived from recurring annual fees that were agreed in prior years).

Upside to 2020 estimates: CentralNic released a Q1 update, where annualised revenue and Adjusted EBITDA are respectively 10% and 3% above our 2020 forecasts. Second, our forecasts factor in only 4% revenue growth versus 6% historic organic growth. Third, we do not factor in further acquisition synergies and model no EBITDA margin improvement on a pro forma basis. In contrast, the company has already achieved $1m in synergies from 2018 acquisitions and expects to realise synergies from 2019 acquisitions during the remainder of 2020. We conservatively maintain our 2020 and 2021 Revenue and Adjusted EBITDA estimates.

Acquisition track record: CentralNic is developing a strong track record of identifying attractive acquisitions, integrating them and realising synergies. We calculate that the company has already realised synergies in 2019 equal to 15% of the EBITDA of the acquired companies pre-acquisition. At the same time, we believe more acquisition opportunities may open to CentraNic’s proven acquisition approach, as small independent peers struggle in the current crisis. As a result, the company has chosen to defer a maiden dividend to preserve capital for acquisitions.

Attractive valuation: We believe that as CentralNic increase in size and builds a track record of earnings outperformance and successful acquisition integration, its multiples will rise to approach its peers. Shares trade at only 9x EV/ 2020 EBITDA, a sharp discount to peers, GoDaddy and Tucows, which trade at 18x and 13x EV/ 2020 EBITDA, respectively.

[rivaldo] 27/4/2020 08:19

The costs are indeed one-off, as outlined fully in the RNS :o)) Yes, they do include $6.7m of acquisition/integration expenses which will not recur, and amortisation etc. And no, they don't include tax.

Personally I'm not bothered, but can understand if others might be although imo it's the underlying business which counts.