Centralnic Share Discussion Threads

[rivaldo] 07/9/2020 10:52

New 13 minute presentation with slides from the CEO is worth a watch:



"CentralNic Investor Presentation Sept 2020 – Building a better global digital economy

4th September 2020

CentralNic Group plc (LON:CNIC) Investor Presentation Sept 2020 presented by CEO Ben Crawford.

CentralNic Group is a London-based AIM-listed company which drives the growth of the global digital economy by developing and managing software platforms allowing businesses globally to buy subscriptions to domain names, used for their own websites and email, as well as for protecting their brands online. Its core growth strategy is identifying and acquiring cash-generative businesses in its industry with annuity revenue streams and exposure to growth markets and migrating them onto the CentralNic software and operating platforms."

[rivaldo] 06/9/2020 07:35

Transcript of an interview with DirectorsTalk worth reading for the very positive vibes:



"CentralNic Group Q&A: Record organic growth of 18% (LON:CNIC)

Article by: Amilia Stone 3rd September 2020

CentralNic Group plc (LON:CNIC) Chief Executive Officer Ben Crawford caught up with DirectorsTalk for an exclusive interview to discuss delivering record organic growth & how that was achieved, cash conversion at 138%, monetisation and new management.

Q1: Half year results published and you delivered more revenue this period than the whole of last year. Ben, you must be pleased with these results?

A1: Yes, absolutely. I can’t say they came as a surprise but on the other hand, I guess, there aren’t many companies that are able to say that in this kind of time, this economic difficulty and uncertainty so very happy.

Very good results as a result of two forces at work. We did make four acquisitions in the second half of last year so that obviously made a healthy contribution but we’ve also performed the exercise of doing the proforma numbers, looking at what it would’ve looked like if we’d owned all four of those companies for the first half year last year and comparing to this half. We found that the underlying organic growth rate of the company is 18% on the revenue line which is a much higher number than we’ve ever quoted to the market.

So, we’ve got record organic growth plus the four acquisitions has delivered very satisfying numbers this year.

etc"

[waterloo01] 04/9/2020 15:56

Making a bid for MMX?

[davebowler] 04/9/2020 15:53

Edison;
CentralNic’s H120 interims show revenue growth well ahead of our estimates (US$111.3m vs US$99.1m), with adjusted EBITDA marginally ahead (US$15.1m vs US$14.6m), driven by strong growth in the Indirect and Monetisation businesses, supported by the acquisitions completed in FY19. The group also delivered like-for-like organic growth of 18% in H120. The fall in gross margin from 40% to 32% reflects the change in business mix due to the strong performance of Indirect + Monetisation vs Direct (SME + Corporate), rather than margin pressure. Management reconfirmed its confidence in the full year results, noting a strong M&A pipeline and continuing organic growth. Accordingly, we have raised our FY20 revenue estimate by c 8% to US$218m from US$202m, while paring back gross margin expectations (new: 32.5%, old: 33.0%) and EBITDA margins (new: 14.1%, old: 15.1%). The valuation continues to look attractive.

[rivaldo] 04/9/2020 11:07

Good timing basem - imo the current hiatus is a buying opportunity.

Recurring revenues comprised 96% of H1 revenues. Customer stickiness is huge and renewal rates highly predictable. As a tech business with large and global growth potential there's not much more you could want in the current climate.

Nice summary here from a sector specialist reviewer:



"Ad revenue soars as CentralNic turns in strong first half
by Andrew Allemann — September 2, 2020

Domain monetization contributes to strong first half at CentralNic.

Are ad markets suppressed due to Covid-19?

Not at CentralNic (London AIM: CNIC), owner of domain name monetization companies ParkingCrew and Tonic.

The company reported revenue of $111.3 million for the first half of 2020, up 124% year-over-year. This was, in large part, due to the acquisition of Team Internet’s monetization services. The monetization segment contributed $48.5 million in revenue.

CentralNic says that revenue per thousand (RPM, the opposite of CPM) increased by 33%. This is a surprising result given that many ad platforms saw decreased bidding because of the pandemic.

The company also credits SSL monetization with part of the boost. By SSL monetization, the company is referring to how ParkingCrew enables SSL on domains that receive a lot of traffic.

The report also states that the monetization segment has one customer that represented more than 92% of the segment’s revenue during the period, amounting to USD 45.0m. This is most likely Google, which provides the main advertising feed for ParkingCrew. The number is higher than I assumed and shows that traditional PPC parking — not Tonic’s zero-click network — drives almost all of the revenue."

[basem1] 03/9/2020 12:20

Back in this morning Rivaldo at 82.7 for 12500 after selling at 94.1 earlier in the week Multiple chart support and hopefully sellers exhausted for now

[rivaldo] 03/9/2020 08:11

New interview with the analyst at Zeus Capital, emphasising that their new forecasts for this year are "conservative":



They currently forecast 9.1c EPS this year, or around 6.84p EPS.

At 83.5p that's a current year P/E of only 12.2 - for the year ending in only four months, when the P/E will reduce even further.

[rivaldo] 02/9/2020 09:15

The H1 results led to Zeus Capital INCREASING their revenue forecasts by 7% for this year.

They've "conservatively" left their EBITDA forecasts unchanged.

They'll review their forecasts after future updates.

This is quite an illiquid stock. Volumes this morning are a mere £70k or so, and the MMs have taken maximum advantage of sellers.

Run your winners!

[tomv33] 02/9/2020 08:49

I'm out at 94p

[basem1] 02/9/2020 08:46

I meant underwhelming given what we already knew. Before I get shot down

[basem1] 02/9/2020 08:44

I would be interested again at 82/83

[basem1] 02/9/2020 08:43

The numbers were a little underwhelming and the company still has a lot of debt. I am a fan but there is better value elsewhere at present

[ali47fish] 02/9/2020 08:41

good interviews eveywhere and share price retraces back 10pc- what's going on

[rivaldo] 02/9/2020 08:36

Cheers - here's a direct link:



And a second interview here:



Both cover similar ground, with record 18% organic growth in H1. CNIC are being "appropriately cautious" at present, given the global economic climate, in not rushing out yet and saying they'll beat estimates for the year - despite the excellent H1 results and prospects.

The most interesting point for me was that CNIC have patented a solution for their domain monetisation technology for SSL-certificated web sites/domains, which apparently had been a barrier to the industry before CNIC acquired Team Internet last year.

Apparently this has "really taken off" - this reflects really well on CNIC and shows their innovation and resourcefulness.

[rivaldo] 01/9/2020 23:09

The share price is almost at 7-year highs. No doubt there were a few profit-takers on results - there usually are.

The investment roadshow this week should bring in additional interest. Especially as CNIC remain cheap on fundamentals.

The extract above from Zeus's new note doesn't show the info from the next page of the report.

This notes that CNIC are on a current year EV/EBITDA of 9.7.

Whereas GoDaddy Inc and Verisign are on ratios of 22.7 and 27.3.

Plenty of upside for a further re-rating.

[sailorsam1] 01/9/2020 19:12

Well the market wasnt that impressed. Suspect this will drift down until the next acquisition

[rivaldo] 01/9/2020 10:09

Very good review just out on the respected Techmarketview:



"Tuesday 01 September 2020

CentralNIC rides wave of digitisation

CentralNic Group, the London-based AIM-listed provider of internet domains, continues to reap the fruits of its acquisition strategy with strong growth in the first half of the year.

2020 half year results out today, have Group revenue growing 124% to $111.3m (H119 $49.7m). Profitability also saw a significant improvement with operating profit up 12% to $3.2m (H119 operating profit of $2.9m) and adjusted EBITDA up 64% to $15.1m (H119 $9.2m).

Much of this growth can be attributed to the Group’s shopping spree last year which saw four acquisitions added to the stable – (see here, here and here), as the company looks to build a global business and access growth markets. Results remain impressive even once the impact of the acquisitions are stripped out with organic revenue increasing by 18% to $111.5m (pro forma H119 $94.7m) and adjusted EBITDA increasing 16% to $14.9m (pro forma H119 $12.8m).

Given the state of the wider global economy, the organic growth looks particularly impressive and shows the underlying demand for the Group’s two largest service lines, Wholesale domains and the monetisation of services.

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, subscription based, growing organically and has the majority of its revenue recurring (79% of .com domain names renew each year - 95%+ for older ones)."

[davebowler] 01/9/2020 09:06

Zeus-
Monetisation momentum
CentralNic's organic growth accelerated sharply in H1 as new products drove market share gains in the monetisation market. EBITDA also grew strongly despite increased investments in growth. We are increasingly confident in the company's growth prospects, but we conservatively leave our EBITDA forecasts unchanged at this time. Accelerating growth and rising earnings reliability make CentralNic's low earnings multiples even more attractive.

Strong organic growth: Group revenue increased 18% on a pro forma basis to USD 111.5m, in line with the trading update (at least $110m). Strong growth was driven by the Monetisation division. The company has introduced new software that has taken advantage of modern browser technologies and security standards better than competitors. As a result, the company extracts more value out of the traffic it receives, resulting in average yields growing 33% in H1, driving pro forma revenue growth of 38%.

The Indirect division grew 9% on a pro forma basis as the company successfully focused on growing revenues from its key accounts. Equally important, the company delivered significant acquisition synergies by insourcing third party supply contracts. These cost savings will only be fully recognised in H2.

The Direct division is seeing a temporary flattening of growth as some larger customers held back expenditure, rationalising domain name assets and limiting new registrations during H1. The division is expected to return to growth in H2 as the company has developed a healthy sales pipeline.

EBITDA in line, after investment in growth: Adjusted EBITDA increased by 16% on a pro forma basis to USD 14.9m, in line with our estimate and the trading update ($15m). The company achieved this strong result whilst investing in growth. In the half, the company made new hires including Chief People Officer and Head of Reseller Division roles and made new internal appointments to Head of Shared Services, Head of Brand Services, Head of Registry Solutions and Head of Product. On an adjusted basis, the company was able to convert 138% of EBITDA to cash flow in Q2, a return to high cash conversion after one off outflows in Q1.

Revenue upgrade: We raise our revenue forecast by 7% from $203m to $218m. We assume 6% pro forma growth in H2. Monetisation faces a tougher H2 comparison since Team Internet’s Monetisation products were introduced in August 2019. H1 is also the stronger half since the Direct and Indirect divisions have seasonally slower second halves due to the timing of TLD renewals being biased towards H1. We leave our EBITDA estimates unchanged since we raise expense forecasts to account for greater investment in growth. Revenue upgrades and improving earnings growth prospects further highlight CentralNic's low valuation against peers (see overleaf). We may review our long-term growth forecasts after future updates from the company.

[cheshire man] 01/9/2020 07:37

Pleased with these results :-)

[rivaldo] 01/9/2020 07:29

Excellent H1 results, with revenues up 124% and EBITDA up 64%. The organic growth numbers are also good. Cash conversion is very good, up to 138% in Q2.

With 4.4c EPS in the bag in H1 there's confidence that full year forecasts of 8.7c EPS per Zeus Capital will be achieved.

This is very good news considering that H1 at least has been a period of big investment in growth and the full integration of Team Internet. H2 will see the bigger benefit of cost savings and synergies etc.

The huge recurring revenues are the big attraction here, along with the successful track record of acquisitions.

It's encouraging to see that CNIC are still suggesting that more acquisitions are on the cards.

CNIC remain at a huge discount to its sector comparators, which trade at ratings more than double CNIC's. Some will focus on the large adjusting non-cash items, i.e amortisation, share-based payments, but the core profitability and prospects here remain very attractive.

[boadicea] 28/8/2020 18:27

I have also added twice in the past month (having a tranche of cash available from the maturity of BBYB) for the reasons which Rivaldo has stated.

This sector generally has done me well during the covid crisis - DOTD, ECK etc - and I also think D4T4 shows promise. But the surprise has been CER which now looks toppy to me, or am I missing something?

Changes in revenue recognition rules and the steady transition to SaaS seems to be throwing up some opportunities due to the temporary effect on statutory profits.

[gerihatrick] 28/8/2020 13:45

I agree Rivalddo and I bought more after the H1 results and interviews.

[rivaldo] 28/8/2020 12:48

Nicely up now, with buying at rising prices and now at the full 88p offer auguring well before next week's investment roadshow.