Centralnic Share Discussion Threads

[drtn] 27/9/2022 16:29

Michael Riedl - Group FD - 30th Aug 2022

"We have ventured out and made explicit in the long-form interim report... that we are in advanced talks with a pool of banks and are confident that in the next month or so we will be able to announce more detailed terms of a refinancing arrangement where we would expect that despite the current market conditions and despite the rise in the base rate, we can still deliver lower interest rates than what we are currently paying so fully delivering on our promise here."

[diesel] 27/9/2022 10:51

I don’t know whether they did their bond refinancing slated for the summer, but favourable rates are going to be hard to find now.

[rivaldo] 26/9/2022 07:12

Good to see Kestrel buying again, with another £40,000 or so of shares at almost 117p taking their stake up to 21.85%:

[hydrus] 15/9/2022 11:56

I'm reasonably comfortable with the idea that they acted in an agent style role and took commission as explanation in the posts below. I guess if you work for just one company you don't really need much external facing comms on websites. I also note that for more significant acquisitions such as VGL and Team Internet they provided much more details. This is fairly small and a supplier hence perhaps a bit more brief as it won't hugely shift the dial.

[deanowls] 15/9/2022 10:56

Yup can’t beat a company website with no contact details. Well worth 20 million quid. Doesn’t seem right and lacks details.

[rivaldo] 15/9/2022 09:44

Edison have issued an update note following the acquisition and raised forecasts accordingly.

They now forecast:

this year : 17.3c EPS, i.e 15p EPS
next year : 18.9c EPS, i.e 16.4p EPS

That's a P/E of just 7.3 for the year starting soon for one of the officially anointed fastest growing companies in Europe.

[melody9999] 15/9/2022 09:36

Yeah looks like Aporia acting as an agent for CNIC. Paid a commission? From CNIC's perspective this cost of sale now disappears.

[doobz] 14/9/2022 14:54

averaged down finally with this lot this morn, had a re read through last reports and it seems well held back by overall market. It has managed to maintain its range over the last 6 months which in this environment is actually fairly decent. deserves to be a fair bit higher imo.

[sportboyslima] 14/9/2022 11:38

Hydrus I'm assuming CNIC has billing relationship with the ultimate clients and pays a % net of its take to the co it's acquiring. Helps in drive to get net margins higher.

[hydrus] 14/9/2022 10:23

I agree it would be good to understand why their only client is CNIC. That seems unusualto me. I can't quite get my head round why CNIC revenue would not increase as surely this is a supplier hence until now the revenue would sit with them? Perhapssomeone can explain. Maybe their revenue flows straight through to CNIC following traffic with a cut of that staying as a fee?I've looked at the founder's profile on LinkedIn and you can see posts and comments back to 2016 when it was founded. I don't think they have 9 employees but just 9 employees on LinkedIn. That said we know from Team Internet that makes $3.5m per employee that this is not a business area that needs large numbers of employees to make profits.

[deanowls] 14/9/2022 10:03

Couple of questions for me from this acquisition,

Why is the rns so light in detail
Why does anyone have a business that exclusively only supplies 1 client?
Their website (of which there is no link)says 50 customers but really doesn’t carry any information. I may have the wrong website?
Only 9 employees on LinkedIn? For a business turning over so much?
The owners listed are all in Tel Aviv again if I have the right company?
What are the earn outs?
Why no names?
Usually there is a comment from the owners.

If anyone knows where this company is listed so that I can look through the accounts.

Very poor RNS here I believe.

[rivaldo] 14/9/2022 09:45

Cheers davebowler. To clarify, Zeus have a 221p valuation, and have raised their forecasts as follows:

this year - 17.6c EPS, i.e 15.3p EPS and a P/E of 7.6
next year - 19.4c EPS, i.e 16.9p EPS and a P/E of 6.9

It's also worth noting that Zeus "plan to review our forecasts again after Q3 results and debt refinancing expected over the next month."

Crazy valuation imo, especially given the huge recurring revenues and terrific cash flows. Hopefully there won't be a cheeky bid at 160p or thereabouts.

[davebowler] 14/9/2022 09:16

Zeus-
CentralNic announced a vertically integrating acquisition at an attractive valuation this morning. The acquisition of M.A. Aporia, an online marketing solutions company, provides CentralNic’s Online Marketing division with more direct access to high quality traffic to monetise. The transaction is expected to be immediately earnings accretive. We raise Adjusted EPS by 3% in 2023. As flagged at Q2 results, we plan to review our forecasts again after Q3 results and debt refinancing expected over the next month. CentralNic also announced a high value appointment of a Non-Executive Director this morning.  Attractive valuation: CentralNic is paying only 5.6x 2021 EBITDA for the acquisition of M.A. Aporia. The initial consideration is $11.2m in cash and M.A. Aporia generated $35m of revenue, $3.5m of gross profit and $2m of EBITDA in 2021. An earnout of $7.8m may be payable depending on performance metrics up to 2024. If the earnout is paid, M.A. Aporia’s financial performance will likely be well ahead of our forecasts.  Vertically integrating, low-risk transaction: The transaction secures additional traffic for CentralNic’s rapidly growing Online Marketing division. M.A. Aporia is a social media and native advertising technology company that is already an exclusive supplier to CentralNic. Therefore, transaction risks are expected to be very low. Financially, the transaction will only increase CentralNic’s gross margin and EBITDA margin while having no immediate impact on revenue.  Forecast upgrades: We raise our EBITDA by $2.8m in 2023 and $3.0m in 2024, assuming the acquisition grows substantially in 2022 and in line with CentralNic’s Online Marketing division (7% pa) in 2023 and 2024. We increase net debt by $11.2m and raise Adjusted EPS by 3.3% in 2023 and 3.5% in 2024. We plan to review our forecasts again after the Company’s Q3 trading update on 17 October and the refinancing of its debt expected ahead of then.  New high-value NED: Claire MacLellan, former Chief Growth Officer & President of Future US at Future plc, was appointed to the Board. Future plc is a direct peer and FTSE 250 media company that publishes and monetises over 250 media brands. Claire helped build and execute Future plc’s fast-growth, diversification strategy and played a central role in Future plc’s M&A strategy. Claire replaces Tom Pridmore, who has been a Non-Executive Director since CentralNic’s IPO in 2013.  Value for growth: Despite delivering strong growth, earnings outperformance and accretive acquisitions, CentralNic trades at only 6x 2022 EBITDA and 8x PE, at the bottom of its peer group range. Our DCF based valuation is 221p, implying significant potential upside to the current share price.

[cornishman33] 14/9/2022 07:29

CNIC have appointed Clair MacLellan the former Chief Growth Officer & President of FUTR US as a non-executive director. FUTR was an exceptional buy for me a few years ago, it would be nice if CNIC could perform similarly.h

[rivaldo] 14/9/2022 07:16

Looks like a great acquisition for $11.2m (plus deferred depending on performance).

It's immediately earnings-enhancing, CNIC know exactly what they're buying as Aporia is an exclusive supplier to CentralNic, and Aporia is already achieving $2m historic EBITDA:

[rivaldo] 12/9/2022 10:06

Techinvest's new issue is now out, so it should be OK to copy their Buy commentary from August's issue FYI:

"CentralNic 126.75p (CNIC; AIM)

CentralNic has announced that positive trading momentum has continued and organic growth has further accelerated during the second quarter of 2022. For the first half, the company now expects to report revenue of US$335.0m, an increase of 92% from a year earlier, with organic growth of 62%. Adjusted EBITDA is expected to be 85% higher at US$38.0m. At June 30, net debt was down 20% to US$65.0m. Management expressed confidence that the group will meet at least the upper end of current market expectations for full year ending December 31. Interim results are scheduled for release on August 30.

CentralNic’s strong performance in the first half resulted mainly from the growth of its Online Marketing Segment, driven by increased demand for privacy-safe online customer acquisition services. Organic growth of 60% was a further improvement over the 53% reported for the twelve-month period ended March 31. Consensus broker forecast for the current year is for earnings per share of 12.6p, rising to 14.2p for fiscal 2023. On a prospective P/E of 8.9 for next year the shares continue to look excellent value. Buy"

[lomax99] 11/9/2022 07:44

Well it will be good to finally see a material increase in the statutory bottom line, rather than a fair chunk being swallowed up in post-EBITDA adjustments.

[ironman22] 10/9/2022 14:24

It is very impressive indeed. I know alot of folks are puzzled by the drop and PI's are scratching their heads due to the share price decline but make no mistake this market is bonkers right now due to the macro economic environment. If you watched the recent presentation Ben commented on the share price stating that some funds were basically having to reduce their exposure and even though Centralnic is absolutely smashing it and doing extremely well its still a minnow compared to some of the other shares funds hold and unfortunately in the current market aim shares are the ones that get sold down when needs must and the drop is absolutely not because there is anything wrong with the company. Fortunately for us PI's this set of circumstances presents us with a fantastic opportunity to top up which i have most certainly taken advantage of. Centralnic is still on track to make a $40m net profit this year up from a -$3m loss last year. This is the year Centralnic becomes seriously profitable.

[hydrus] 09/9/2022 12:33

I've just been reading the annual report. They talk about expecting CNIC to be a multi billion dollar business I notice.This caught my eye 'Team internet a highly automated and machine learning based business model that achieves c USD 3.5m annual revenue per employee'.That's seriously impressive.

[johndoe23] 07/9/2022 16:20

Initiated yesterday, let's see what happens!! Been on my radar a while.

[basem1] 07/9/2022 12:25

Feels safer to be in now 2 x 10000 trades for me today

[diesel] 07/9/2022 10:51

That volume of shares could have taken a couple of weeks to clear, no inst seems to have bought any so may explain the raft of small AT trades. If that is the case the share price may well recover without the overhang….

[sportboyslima] 06/9/2022 21:33

Even if you are management of a great company if you are prudent you don't want everything tied up in it. Before over reacting investors should ask "would I go 100% into one share however good i thought it was".