Centralnic Share Discussion Threads

[timmy11] 24/5/2022 13:25

all the selling being done are AT trades

[hsduk101] 24/5/2022 11:46

This is a long term investment, the recession incoming will hit AIM stocks the hardest and there will be more falls before any bounce back. This is nothing to do with the share, external factors at play

[jeanesy] 24/5/2022 11:11

poor reaction to results imo

[se81] 23/5/2022 18:26

Yes excellent stuff- the cashflow metrics for Q1 are hugely impressive (especially when compared with FY2021 as a whole) and they all but told us they’ve guided extremely cautiously for 2022

[robsy2] 23/5/2022 17:25

just attended. I cannot see any negatives at all, maybe that is a worry in itself...
remarkable growth, improving margins, debt falling and to be refinanced with expected savings of around 2.5m USD a year, on-line privacy future proofed, strong cash flow, no big risks around the business ie inflation , Ukraine, energy costs , tight labour market, supply chain issues , covid are not having an impact on the business and are not expected to. Add to that, their cost are relatively fixed so they are seeing real synergies from putting the acquired businesses onto a common platform. WE seem to be at a tipping point with profitability starting to really kick-in. Wonderful.

[se81] 23/5/2022 16:14

They're presenting the Q1 results via Investor Meet Company at 16:30 today

hxxps://www.investormeetcompany.com

[yf23_1] 23/5/2022 16:10

ST (of the IC) will update with his usual 'ride the earnings upgrade cycle' report and upgraded target I presume.

[rivaldo] 23/5/2022 12:28

Berenberg reiterate their Buy and 250p target (up from 180p over the last year):

[rivaldo] 23/5/2022 10:52

Zeus Capital today retain their "conservative" forecasts and 195p valuation based on DCF calculations.

But they note that with these Q1 results they:

"see room for significant earnings upside. If we simply annualise Q1 EBITDA and adjust for the VGL acquisition, we estimate EBITDA could reach $80m, 19% above our forecast of $67m"

Further extracts:

"The company’s strong Q1 performance makes full year earnings expectations appear conservative. By simply annualising Q1 EBITDA and adjusting for the VGL acquisition, we estimate EBITDA could reach $80m, 19% above our forecast of $67m. Even based on our conservative forecasts CentralNic trades at only 7.5x 2022 EBITDA, 10x P/E and 10% FCFF yield."

"Valuation: Even based on our conservative forecasts CentralNic’s strong growth and margins appear undervalued. Shares trades at only 7.5x 2022 EBITDA, 10x P/E and 10% FCFF yield despite delivering 53% organic growth and steady margin expansion."

[azaman] 23/5/2022 10:04

That's what I am talking about.

[robsy2] 23/5/2022 09:48

Absolutely. This is a very hot share to be holding.

[jeanesy] 23/5/2022 09:13

Fantastic results and positive outlook here :)

[rivaldo] 23/5/2022 07:29

Indeed. Those are great Q1 numbers - 4.51c EPS in Q1 alone! That's around 3.6p EPS, which even with no growth would annualise at 14.4p EPS and smash forecasts.

Net debt is quickly reducing due to the usual excellent cash flows and would be down to a negligible $19m or so at the year end at this rate. Adjusted operating cash conversion is at 128%....and EBITDA as a percentage of net revenue has increased from 36% in Q1 2021 to 46% in Q1 2022.

The outlook is bullish in terms of trading in line with the newly much upgraded expectations, and there's the likelihood of more acquisitions.

Terrific stuff.

[se81] 23/5/2022 07:13

FY22E consensus looks far too conservative off those Q1 numbers. If Q2 is anything like Q1 then the forecasted year end net debt position will be close at the half year stage?

[rivaldo] 20/5/2022 09:35

Correct Jeanesy. The ahead of expectations Q1 trading update has already been released:



It's the formal interim report for that three months which will be out on Monday.

[gswredland] 20/5/2022 08:40

Thanks Rivaldo

[jeanesy] 20/5/2022 08:08

The article has done nothing for the shareprice though so far. Am I right in that there is a Q1 update on Monday ? Perhaps they will be noticed then ?

[robsy2] 20/5/2022 07:05

Thanks Rivaldo. That is a pleasant way to start the day.

[rivaldo] 20/5/2022 06:49

Tipped overnight on Master Investor - the writer believes CNIC could treble from here:



"CentralNic

According to the recently released IAB Internet Advertising Revenue Report, digital advertising revenues in the US soared by 35% to $189bn in 2021. Taking advantage of this growth was AIM-listed CentralNic (CNIC) an online marketing-services company which is also growing quickly by acquisition.

The company was founded in 2004 as a specialist domain industry registry but today it is a developer and operator of software platforms which provide web-presence services to customers worldwide. Operating through the online presence and online marketing segments, it provides the tools required to create websites, use email and secure business online. Clients include domain-name resellers such as GoDaddy and corporate customers who have large portfolios of domain names, as well as small businesses which typically hold a few domains and use email and hosting services.

CentralNic listed on AIM in 2013 and has doubled in size in six out of the last seven years through a combination of organic growth, winning new clients, introducing new services and its acquisition strategy. The company’s market cap has gone from £32.5m at IPO to £381m today, with annual revenues up from around $4m to $410.5m over the last nine years. This is also a highly cash-generative and predictable business, with the company earning recurring revenue from the sale of internet domain names and hosting on an annual subscription basis, with cash paid upfront. In the last financial year only 1% of total sales came from non-recurring revenue products, providing great visibility of revenues.

Great host

It’s been a great year for the company so far, including the main highlight of completing its largest acquisition to date. In March, CentralNic finalised the purchase of German online marketing business VGL Verlagsgesellschaft for an initial €67m in cash. This was financed by £45m of new equity and a €21m bond issue. VGL (for short) is used by the world’s leading German e-commerce companies to acquire customers via high-quality content websites and for using media-buying technology. It made revenues of $55.3m in 2021 and the deal is expected to be double-digit earnings enhancing in 2022 even before any synergies are realised. Despite the size of the deal, the market-consolidation strategy continues, with acquisition opportunities continually evaluated in what is a large, global and fragmented market.

CentralNic further impressed the markets in late April when it said it expects to report revenues of around $156m and adjusted EBITDA of around $18m for the three months to March 2022. This came on the back of organic growth of about 51%, driven by increased demand for privacy-safe, online customer-acquisition services. On the balance sheet, cash increased to $86.9m at the quarter’s end with net debt down by $10m over three months to $65m. At the same time, cash conversion continued at over 100% of profits. This performance meant that management expected to materially exceed market expectations at the time.

Growth and value

Shares in CentralNic currently trade at 130p, up by 136% on the company’s IPO price of 55p but off all-time highs of 150p seen in November last year. Analysts at research house Edison are looking for revenues to grow by 40% for the full 2022 financial year to $573.5m, with normalised pre-tax profits expected to be up by 60% at $51.1m. On Edison’s earnings forecasts for the year the shares currently trade on a multiple of just over 10 times, a figure which looks very cheap for a business with such a strong track record. The more relevant price-to-earnings growth multiple is very low at 0.33 times, with a figure of one often considered to be fair value for a growth company. On that basis the shares could treble."

[se81] 18/5/2022 10:12

The growth here at CNIC looks even more appealing if you have a read through those FUTR numbers this morning....

FUTR also another good example of a huge rerate in share price in the absence of statutory profits ;)

[rivaldo] 15/5/2022 08:00

Further to the debate about profit measures, I was invested for a long time in Ideagen (IDEA), which was a multibagger for me.

Last year they made a headline profit before tax of just £0.8m. The year before they made a headline loss before tax of £0.1m.

They've now being bid for in a bid battle. Guess how much for? Around £1.1 BILLION.

This is because the bid is based on their ADJUSTED profits. Furthermore, they've for a long time traded on a P/E of anywhere from 20 to 30, based on those adjusted profits, as investors could see the core profitability and discarded concerns about annual one-off adjustments for amortisation, restructuring etc.

Additional similarities to CNIC? Huge recurring income, excellent cash flows, net debt, capable management.....

I sold IDEA eventually as the rating got too rich for me, but missed out over time as the company continued to grow.

CNIC has done very well for me to date, but on a P/E of only 10 I consider it to be just at the start of its re-rating, whilst the markets warms to its transition to more profitable and higher growth areas and as its results prompt more investor interest.

[earwacks] 14/5/2022 11:45

From market watch: Centralnic Group PLC on Monday posted a swing to pretax profit in 2021, benefiting from a strong performance across both its subscription products and privacy-safe marketing solutions.
The internet-platform company reported a pretax profit of $1.6 million for 2021 compared with a loss of $11.8 million the year before.
The company said 2022 started exceptionally strong and that revenue growth is materially ahead of analyst consensus expectations for the full year.
Revenue rose to $410.5 million from $240.0 million.
Ok so its spitting hairs a bit about profit, but none the less heading in the right direction. Revenue almost doubled. Ben has overseen something like 3o acquisitions. At the very least the expansion has been rapid particularly in the last two years, where it has become more obvious that the company is reaching some kind if inflexion point where profits could now accelerate dramatically depending what other morsels are in the pipeline. If Ben sees a good opportunity he is not going to hold back. At the same time he has been careful to show that their borrowing is now far from excessive with an impressive cash pile which currently exceeds debt.

Its still an early stage company. The involvement of Kestrel Partners is also significant in that they tend to help and advise special situation tech companies build to sell off. In that regard I would think CNIC is in that classic mould.Max Royde, a Kestrel founder /director has a significant personal stake taking another 6 million shares for himself in the recent placing.

No matter how successful a company is, they all face the same economic and geopolitical trauma the world is currently facing. However specific risk factors such as supply shortages. currency, sanctions, recession etc apply less to some companies than others. It is inconceivable that CNIC can completely escape. The evidence so far has been that their revenue acceleration is continuing for now. In normal times I would have expected a company like this to have a PE somewhere in the 20s at the very least. There is absolutely no need for them to sell out cheap. I don't know if they have a price they are aiming for. Whether it takes another 2 or 3 years I would be surprised if they would accept anything less than £3-£4 per share which obviously requires considerable further work. The work is there for the taking. When Ben speculates on the size of their market and the tiny percentage they currently have of it (1%) that could be well short of their personal target. I' m more than happy to be in their very capable hands and consider this, as one of the fastest growing companies in Europe, to be a better place than any other stock I can think of at this time

[sumday] 14/5/2022 11:18

Gets a very small mention in Shares magazine in an article entitled, “Private Equity is now casting its eyes over a sold off UK tech sector.” Basically it says private equity could take advantage of the massive sell off and mentions CNIC as one of the targets. I’m not sure CNIC has been subjected to any massive sell off though.

[azaman] 13/5/2022 18:32

Guys, I have another confusion. According to market analysts, the market always prices in the future, and the future of CNIC is orange ( remember the advert ) or very bright. However, the market seems not to be following its own principle for CNIC.

[ironman22] 13/5/2022 18:13

LOL Rivaldo defender of Centralnic!! Steady on there don't get so worked up now.
Not someone by the way, the market as a whole decides. Not everyone has a biased view like yourself and some investors prefer to invest in companies that are actually making a real profit. Dress it up with fancy words however you wish for your own confirmation bias but the reality for those of us who prefer to live in the real world is that Centralnic did not make a Net profit last year.