Centralnic Share Discussion Threads

[boadicea] 26/7/2021 08:22

Excellent progress.
The share price seems to assume that it is a highly competitive business and that the company will have a problem maintaing a reasonable margin of profitability. On any other assumption it is a screaming buy with multibag potential imho.

[cheshire man] 26/7/2021 08:15

Market likes it :-)

[diesel] 26/7/2021 07:22

Not much to complain about there!

[rivaldo] 26/7/2021 07:21

A very encouraging H1 trading statement today.

Revenues are way ahead of Zeus' and Edison's expectations, and profits are expected to be "comfortably" in line for the year as a whole, which I interpret as CNIC saying that at this stage they're being conservative, but the year end could see them slightly ahead or more despite all the investment for growth which is being made at present.

Cash flows are excellent as ever, with net debt reducing slightly despite the acquisitions etc and operating cash conversion "again well in excess of 100%":

[rivaldo] 22/7/2021 12:05

Great stuff - thanks Simon.

The upside here is ridiculous - not just over 100% to Berenberg's 180p target price, but also "a price target multiple times higher than the current share price of CentralNic” given its sector comparators' ratings.

Here's a link for the record:

[simon gordon] 22/7/2021 11:07

Pro active Investors - 21/7/21:

CentralNic Group should be a doubler, Berenberg is convinced

Some of the pushback from investors has been about why the shares are therefore so cheap, for which the answer is the company is “not well understood”

The bank hosted a ‘fireside chat’ with the company to address pushbacks and queries from investors after a previous note that identified CentralNic as one of the top three shares to buy in the networking and communications subsector.

“We remain convinced about our thesis and we think the stock can materially re-rate once the online marketing segment prints high-teens growth for a few more quarters,” said a note from Berenberg analysts Bharath Nagara and colleagues.

Setting out their thesis, the analysts said virtually 100% of CentralNic’s revenue is software-as-a-service-based recurring revenue, with its legacy business of selling domain names growing organically at circa 6% annually.

“To this, we add what the market is completely missing: 1) the potential to cross-sell more value-added services, which can effectively double the top-line growth for the domain businesses; and 2) the new online monetisation business, which has the potential to grow at 20% annually and add c35% upside to our base-case 2023 EPS.”

Some of the pushback from investors has been about why the shares are therefore so cheap, for which the answer is the company is “not well understood”, being made up of a number of smaller businesses that are themselves difficult to understand.

As the company’s origins were in selling exotic, non-dotcom, domain names, investors had been sceptical about its long-term success, but the analysts said the entry into long-term contracts with fixed price increases and pass-through agreements means CentralNic’s wholesale business “today sells virtually every domain name in the world”, while the retail business can breach higher margins through selling certain sought-after names.

Answering other pushback related to the ad business, the analysts first explained that 75% of the online marketing business provides software that allows advertisers to acquire specific customers online for a target budget, with the remaining quarter coming from software that monetises websites of expired companies – known as parked domains – with ads.

“Overall, this business makes the ad market more efficient by connecting buyers and sellers of ads (especially in niche categories) and CentralNic takes a circa US$0.15 revenue share for this service,” Nagaraj wrote, with the industry-leading software using machine learning to match advertisers with high-conversion users, helping them meet their revenue target, with 24/7 recurring revenues for the AIM-listed company.

As for the valuation, applying peer multiples of leading domain businesses of around 25 times underlying earnings (on a ratio of enterprise value to EBITDA) and adtech firms around 40 times EBITDA, “investors could easily justify a price target multiple times higher than the current share price of CentralNic”, which has trades at around nine times EBITDA.

Therefore, despite the recent rise in share price to 89p, there is still circa 100% upside to the broker’s 180p target price.

[boadicea] 21/7/2021 13:11

Ian - I am somewhat occasional in expressing my views - see 1488 - and I hold to that position. It may move sluggishly, if at all, until more widely discovered. Tole's "money making machine" link in 1502 might have helped but was probably not widely read by the right people. I hope and expect that this vehicle is building up a head of steam under the bonnet and will duly explode upwards in due time.
Meanwhile we have an extended opportunity to build a position.
I would estimate that it should be able to produce a significant increase in its price to sales ratio, last reported at a very modest 0.91 (according to advfn - so check that carefully!).

[iandippie] 21/7/2021 10:53

Can someone check this share for a pulse?

[rivaldo] 13/7/2021 10:05

Cheers gerihatrick.

The share price has been steadily moving upwards, no doubt helped by the overnight tip on Master investor. 110p isn't a bad initial target price to aim for, but given the multiples which CNIC's American comparators are trading on I believe we may see a lot more over time than MWM's 125p-150p.

[gerihatrick] 13/7/2021 08:27

The main point for me was the statement that Blackrock have been selling their holding and that has now completed. 35 Funds hold the company and management hold over 30%. Also relevant to me was the presentation by a Fund Manager called Philip Rodrigs who holds it in his portfolio and he was positive on its prospects as well. He also impressed me in his wider perspective.

[dunns_river_falls] 13/7/2021 08:19

Nice to be back in the 90's. Decent momentum for a run at the £1 hurdle.

[deanowls] 13/7/2021 04:48

Any word back on last nights presentation?

[tole] 12/7/2021 21:25

https://masterinvestor.co.uk/equities/centralnic-group-is-a-virtual-money-machine/

[robsy2] 09/7/2021 18:27

Home or Rome,Football is going somwhere.it would be great if England could pull it off though.
R

[rivaldo] 09/7/2021 18:06

Exactly the opposite - I meant hungover :o))

But I agree, Italy look very, very good. If Sterling & Saka get a run at the two OAP centre-backs though.....

[robsy2] 09/7/2021 14:54

What too depressed??i would be delighted and surprised if england beat italy but it looks like a long shot.

[rivaldo] 09/7/2021 14:14

Great news davidosh, thanks. All sounds very positive as you say - though I may be in no state to concentrate after the footie :o))

[davidosh] 09/7/2021 13:09

We sent an email out to our database about the event on Monday and as you will see Centralnic are the first company to present. We nearly always have some of the investors taking a look at the companies and buying ahead of the show after researching them....


Monday 12th July 2021, 5.30pm – 9.30pm
Programme for the evening

5.30pm Welcome and news
5.35pm Company presentation by CentralNic plc
6.15pm Interview with Philip Rodrigs, Raynar Portfoilio Management
6.55pm Company presentation by Tharisa plc
7.25pm Alan Charlton interviews Jim Shears, CEO of Tandem plc
8.00pm Company presentation by Immotion plc
8.40pm The Mello BASH – Richard Crow, Kevin Taylor and Jack Brumby



Over 500 have signed up for this show and the fund manager that is being interviewed apparently has Centralnic in his portfolio so should be a very positive show and raised profile for them.

Tickets are still available and if you would like one at half price then enter the code MMTADVFN50.

[cheshire man] 09/7/2021 13:03

Excellent end to the week if it holds :-)

[iandippie] 09/7/2021 12:36

Nice move to 3 month high. Of course the real test is pushing through 100 plus...

[robsy2] 09/7/2021 12:08

Good sign. They know the company very well.

[rivaldo] 09/7/2021 11:56

Excellent move up at 87.2p-90p now, with the last buy coming in at the full 90p offer.

[rivaldo] 08/7/2021 23:00

RNS - Kestrel have bought another 10k shares....