Centralnic Share Discussion Threads

[d024912] 04/11/2020 16:21

Rivaldo,
Do you think that CNIC will make a net profit in 2021? Reading the Zeus analysis it's not clear to me. Yes, good acquisitions, Revenue booms, Gross profit and EBITDA is great but by time it trickles down to the bottom line its not clear. For example, Investor Chronicle last article focused on the net profit. hxtps://www.investorschronicle.co.uk/shares/2020/09/01/centralnic-pre-tax-losses-widen/

I like CNIC, I like the business, the CEO and its ambition, it wants to be a global player. Do you have a view?

[rivaldo] 04/11/2020 11:37

Very positive interview with the CEO about the new acquisition:



- confirmation that it's 20% earnings-enhancing
- Codewise have been in the FT's top 1000 fastest growing European companies for each of the last 3 years
- the equity raise was "way oversubscribed", with BlackRock and Lombard Odier coming on board
- there's $1m of integration benefits, from cross-selling and cost savings, with much of this in the coming months
- Codewise use completely different tech and sxupply chains, so this adds to CNIC's robustness and resilience with more customer choice
- CNIC now own both the number one and two providers in the global monetisation business. Which strikes me as a recipe for making money....

[rivaldo] 03/11/2020 09:29

Cheers davebowler. It's also worth reiterating Zeus's EPS forecasts at $1.29 to the £:

this year (2020) : 8.9c EPS, i.e 6.9p EPS
next year (2021) : 11c EPS, i.e 8.5p EPS

That's a P/E at 74.5p of 10.8, falling to just 8.8 in two months' time.

[davebowler] 02/11/2020 09:03

Zeus-
CentralNic announced the closing of the Codewise acquisition and that the company continues to trade in line with market expectations. We make no changes to our forecasts, which remain at the top end of consensus range. We formally publish our previously estimated consolidated forecasts, where we show over 20% earnings accretion in 2021E and 2022E. We expect ongoing investments to enhance growth opportunities for the group.

§ Completion of Codewise acquisition: CentralNic closed the transaction on 31 October as planned. We continue to believe Codewise adds scale to CentralNic’s high-growth Monetisation division, eliminates a key competitor, provides about $1m of synergy opportunities and diversifies its customer base and product portfolio. We forecast over 20% earnings accretion in 2021E and 2022E. Codewise grew revenue 21%, gross profit 13% and Adjusted EBITDA 37% CAGR 2018-LTM to June 2020.

§ Acquisitions continue to perform strongly: CentralNic is making an earnout payment due to the strong performance of Keydrive in 2019. (Keydrive was acquired in August 2018.) The $2.2m earnout is payable in cash ($0.3m) and shares (1.7m). We have already factored the impact of this earnout in our forecasts. A final potential earnout payment of up to $1.4m remains outstanding.

§ Q3 results date: CentralNic plans to release full Q3 results on 30 November 2020.

§ Overall view: CentralNic is consolidating the market at attractive valuations, delivering synergies and improving target company operations. We expect increasing investment to enhance long-term growth opportunities for the group overall. As highlighted in H1 2020 results, the company has been investing in growth. 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 Corporate Communications, Head of Registry Solutions and Head of Product.

[rivaldo] 02/11/2020 07:11

Two pieces of good news today - CNIC look even better value now:

- the Codewise acquisition has successfully completed, and will be earnings-enhancing to the tune of 20%...

- confirmation that CNIC are still trading in line with expectations, and the Q3 results will be out on 30th November

[rivaldo] 30/10/2020 08:53

I suspect a decent part of the decline since April may be to do with Gresham House dripping out the remainder of their holding declared in their 30th April holding RNS.

Over recent days the markets in general have of course been very weak. CNIC has always been somewhat volatile and moves sharply - up or down - on relatively small volumes.

I prefer to take my cue here from:

- Kestrel continuously increasing their holding. They're now over 24% and are likely to continue adding imo given their usual modus operandi. They would have a deep understanding of the business and would certainly know more about it than most

- the September placing was "significantly oversubscribed". So perhaps at some point - hopefully soon! - those institutional investors will look to add to top up their allocations.

CNIC look very cheap to me and worth adding again at these levels given especially those temptingly huge recurring revenues and excellent annual subscription in advance cash flows.

[d024912] 29/10/2020 22:16

boadicea, like you, I've also been very puzzled by the price drop today, on no news. Researching, I suspect it is connected to CentralNic's placing of 40m shares at 75p each in order to fund its acquisitions of Zeropark and Voluum.

On reading the September 11 RNS - Confirmation of successful fundraising

near the top it says ... " The Placing Shares were placed at a price of 75 pence per Placing Share, representing a discount of c.6.0% to the last closing price of CNIC, and the Placing was significantly oversubscribed."

later in the document it states...

"Admission

Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM at 8.00 a.m. on 30 September 2020, following satisfaction (or where applicable, waiver) of the Conditions in relation to Completion of the Acquisition as set out in the Launch Announcement."

That's my guess as to why CNIC shares tanked 3.8% today, on half the average volume, but then again what do I know. I'm only a retail investor.

[saucepan] 29/10/2020 18:39

Something never seems to sit quite right with CNIC. Ben Crawford not being a significant shareholder has always puzzled me.

I did buy back into CNIC quite recently, but a tight stoploss was soon taken out. Arguably, the chart tells its own story. The market is not convinced, and who am I to argue with that?

That said, it is something of a rangebound share, and it may be a good trade at current levels. Not for me, however; better fish to fry, I think.

[boadicea] 29/10/2020 17:38

Can anyone suggest a fundamental reason for the sagging share price these last few days. Some of the other 'internet' stocks have been comparatively resilient against the market trend (e.g. DOTD, ECK, NCC, CCC) but this (and also D4T4) not so. I was hoping it could just be a few forced sellers in an illiquid share causing exaggerated movement. However a bid for 45.3k @ 76p on the book going into the close was quickly filled and that's not looking like a small time punter. Is there more to come?

Given its historic underlying profitability and cash flow I would like to see this as an opportunity to add unless...
... unless (as so often) someone knows more than we do.

[slogsweep] 19/10/2020 12:07

down 5 p on light trading, what ever the merits of this stock liquidity is not one of them still major holders are still in and it should prove a worthwhile investment when it finally pays a div.

[rivaldo] 09/10/2020 14:04

Indeed. Which just highlights the trustworthiness and probity of CNIC.

I've never understood how MMX has attracted such attention from PIs when it's always seemed blatantly inferior to CNIC in every way, in terms of valuation, recurring revenues, and the (ahem) quality of a proportion of MMX's revenues.

Whereas CNIC gets on with its business quietly and effectively. The share price has begun to reflect the progress made, but imo there's still a long way to go. Perhaps at some point it will even start to attract a few more PIs (probably at the expense of a lovely, quiet thread!).

[transhoneyqueens] 09/10/2020 07:39

MMX accounts scandal RNS

[rivaldo] 06/10/2020 15:37

Kestrel continue to buy. They now have 24.38% (56.6m shares), so have bought another 1.5m shares just in the last few days....

[rivaldo] 05/10/2020 22:58

Nice - finished at 90.25p mid-price, up 3.5p, and on good volumes of 1.6m shares.

Hopefully readying for an assault on new highs.

[rivaldo] 02/10/2020 12:48

Wow - Kestrel have bought around another 13m shares per this latest disclosure...

They now have 55.05m shares, or 23.72% (up from 41.86m in June - presumably they took a load of the latest acquisition fundraising):

[rivaldo] 01/10/2020 14:57

Techinvest in their recent issue three weeks ago said Buy, and that was at 90.75p:

"CentralNic
90.75p (CNIC:AIM)

In a brief update, CentralNic reported that it has been trading comfortably in line with market expectations for the six months ended June 30. Revenues for the period is expected to be in excess of US$110m and adjusted EBITDA in excess of US$15m. This compares to US$49.7m and US$9.2m respectively in the same period last year. Cash increased to US$27.6m from US$24.1m three months earlier, whilst net debt debt decreased to US$76.4m from US$76.8m over the same period.

CentralNic has recorded more revenue in the first half of 2020 than in the full financial year 2019. This has been achieved through a combination of earnings accretive acquisitions and steady underlying growth across its businesses. With ample potential for further acquisition-led growth in a sector where opportunities for consolidation abound, we feel that the medium-term outlook for the company remains strong. Continue to buy."

[rivaldo] 30/9/2020 12:45

Big volumes today with 6.26m shares traded - and the share price is actually up 0.5p at 87.25p mid-price (ADVFN's header chart is incorrect).

[rivaldo] 29/9/2020 08:01

Good to see confirmation of the new acquisitions being unconditional to be completed on October 31st.

This sentence sounds promising for CNIC:

"The Company is pleased to announce that the Acquisition Conditions have been satisfied or waived and substituted with adequate or better completion deliverables"

[jackson83] 27/9/2020 02:11

have a look at MMX its about to double on expected excellent results next week.

[rivaldo] 25/9/2020 10:39

The price has been creeping up almost every day this week. There's presumably decent buying interest out there - buying now coming in at the full 90p offer price.

[rivaldo] 23/9/2020 10:25

For the record, here's a transcript of the interview in post 1214 above which reads well:

[capitalist] 19/9/2020 11:04

According to the concensus view screen on MarketScreener.com, the analyists place a value of 201p on CNIC shares. Having said that, neither analyst appears to have a view on whether the shares should be bought or not. Generally with other shares, I find the consensus view quite useful as it indicates what analysts think a company is worth, thereby helping one to decide whether to keep holding or not. This is not investment advice of course.

[rivaldo] 18/9/2020 12:17

Up a nice 2.5p so far today - sells being absorbed nicely, whilst institutional buying (AT trades) is pushing the price higher. Promising.

[rivaldo] 15/9/2020 09:48

Cheers - here's a direct link:



There's a significant and unrecognised benefit from the Codewise acquisition. In Zeus Capital's note, they confirm that the acquisition is structured as an asset purchase, where related amortisation is significant and tax-deductible over the next 5 years - so CNIC may not incur any tax over that period on Codewise's earnings.