Centralnic Share Discussion Threads

[se81] 31/10/2022 13:57

Price action is improving too- held that gap up from the Q3 statement on 17/10 four times, longer term MAs starting to turn back up but still seems to be a load of supply around 130 area- what are the sellers thinking?! :)

[someuwin] 31/10/2022 11:07

Excellent news.

Michael Riedl, CFO of CentralNic, said : "The new senior facilities agreement reduces CentralNic's cost of capital and further augments the Company's capacity to continue to execute its roll-up strategy. It is a great vote of confidence by our financing partners and a testament to the resilience of our business model as well as our disciplined approach to capital allocation. We remain focused on executing our strategy and welcome the new syndicate of banks to working with the Group."

[ironman22] 31/10/2022 09:35

I'm not sure how you've arrived at that 'guess'. Centralnics shares have been trading in the 125 to 130 ish range since the release of their third quarter results on the 17th. Google results 4 days ago had absolutely zero effect on Centralnics share price when they were released. Googles revenue from advertising may have dropped slightly but they still spend approx $50bn on acquiring customers from third party providers such as Centralnic.

[podgyted] 29/10/2022 17:43

I guess CNIC is suffering contagion from Google, Meta etc... results this week.

[diesel] 27/10/2022 14:42

A bit early to be saying this but maybe we are seeing some consolidation after the last rise it’s about time we said goodbye to the 120’s, all too often it’s been dragged back.

[davebowler] 26/10/2022 09:19

Zeus-
Accretive acquisition
CentralNic announced the acquisition of Intellectual Property Management
Company Inc. (IPMC), in the highly valued Online Presence market. The
transaction is expected to be immediately earnings accretive and adds to the
company’s recurring revenue base. Given the small size of the acquisition, we
leave our forecasts unchanged at this time but expect to review them alongside
a trading update.
Intellectual Property Management Company
 CentralNic acquired IPMC, a provider of corporate domain management services to
leading brands, including Old Mutual, Steinway & Sons, Toro, Ocean Spray and Rogers
Corporation. IPMC registers, renews and manages corporate domain names in all
available countries, all available extensions and at appropriate times, to prevent
substantial reclaim costs. CentralNic is paying $7.6m in cash, representing c.2.8x 2021
revenue and c.7x Adjusted EBITDA. IPMC is a joint venture with the United Internet Group
of Companies.
 High value: Domain name managers generate reliable recurring revenues and high cash
conversion. Brand owners view domain names as a form of intellectual property, similar
to trademarks, and trust companies like IPMC to secure and protect their domain names.
As a result, churn is typically low. IPMC complements CentralNic’s existing domain name
management business, which manages over 154,000 domains for over 1,000 customers
and has over 93% annual renewal rate.
 Synergies: IPMC is based on the West Coast of the US, which complements CentralNic’s
existing corporate domain management service, based in Europe. The acquisition should
allow CentralNic to provide better domain name coverage in North America and realise
synergies from streamlining procurement and operations. CentralNic seeks to
consolidate providers of infrastructure for domain names.
 Forecasts: The transaction is expected to be immediately earnings accretive. However,
given the small size of the acquisition, we leave our forecasts unchanged at this time. We
expect to review our forecasts at or before the Q4 trading update in January.
 Value for growth: CentralNic trades at only 5.5x 2022 EBITDA and 7.1x PE, at the bottom
of its peer group range, despite having a FY22 FCFF yield of 15.1% and delivering strong
growth, earnings outperformance and accretive acquisitions

[someuwin] 26/10/2022 07:48

Another nice bolt-on.

[tole] 21/10/2022 17:48

https://masterinvestor.co.uk/equities/small-cap-round-up-bricks-time-rocks-and-a-peach/CentralNic Group (LON:CNIC) – 300p consensus Target PriceI noted a piece from Simply Wall Street issued on Tuesday evening stating that for the internet services group:"the consensus outlook for revenues in 2022 has improved.2022 revenue forecast increased from US$612.9m to US$698.4m.EPS estimate increased from US$0.04 to US$0.06 per share.Net income forecast to grow 311% next year vs 23% growth forecast for IT industry in the United Kingdom.Consensus price target of UK£3.00 unchanged from last update.Share price rose 11% to UK£1.32 over the past week."Gradually the market will realise just how undervalued the shares of this money-machine are currently, although the price will 'back and fill' the trajectory is still upwards.They closed last night at 130p.

[earwacks] 21/10/2022 10:37

Lol. I think we all were thinking this time… there were some pretty impressive purchases recently , a double 35,000 take. May have been some bigger I missed. This has been quite news driven like most stocks at the moment. Probably a wee while before next news so plenty of time to drift. Bit of a cat and mouse game. It can fall on quite low volumes because most investors will be looking for opportunities to buy rather than trade. The pool of impatient investors will diminish I hope. Has been a pattern of slight drop and recovery at end of trading. Hope it continues

[diesel] 21/10/2022 09:43

Doobz, I was thinking that but didn’t dare post it, seem to be some powerful forces wanting to drag it down, after the performance over the last year and constant upgrades, the share price has barely reflects it..

[doobz] 20/10/2022 15:43

The fact that this hasn't given up its initial gains now is definitely a better sign. Should break soon

[tole] 19/10/2022 18:21

https://masterinvestor.co.uk/equities/small-cap-round-up-internet-broking-sites-and-drilling/CentralNic Group (LON:CNIC) – totally undervalued at six times earningsI just love this stock. It is a total money-machine and its shares are totally wrong-priced.When I look around the market, I am so often amazed at the gross valuations that some companies achieve.But when I see businesses of real value that are not appreciated it makes me so frustrated at the market's ignorance.CentralNic is one such company.This global internet platform company that derives recurring revenues selling online presence and marketing services, reported that in its third quarter of the year it had seen accelerating organic growth.The group's globe-trotting CEO Ben Crawford stated that:"CentralNic continues to build momentum in the third quarter against typical seasonal trends, with year-on-year organic growth now reaching a record 66%, a further acceleration over the 62% reported for the twelve-month period ending 30 June 2022."This continued reliable financial performance has allowed us to refinance at a notably improved interest rate, with a pool of quality lending banks which have the means to provide ongoing support to CentralNic's growth strategy. We look forward to the future with even greater confidence."The group drives the growth of the global digital economy by developing and managing online marketplaces allowing businesses globally to buy subscriptions to domain names for websites and email, to monetise their websites, and to acquire customers online.It supplements its organic growth by identifying and acquiring cash-generative businesses in its industry with annuity revenue streams and exposure to growth markets and then migrating them onto the CentralNic software and operating platforms. And what I really like to see is the fact that CentralNic is a virtually pure play recurring revenue business with high inherent cash conversion consistently above 100%. That is absolute magic for any plc financial director – just imagine how easy it is for arranging fresh lines of funding, should it be necessary. Totally confidence inspiring for any banker.For the current year analyst Bob Liao at Zeus Capital has upgraded his estimates to $709.6m revenues ($410.5m) and adjusted pre-tax profits of $68.7m ($31.9m), generating earnings of 20.9c (11.8c) per share.He goes for a conservative $752.2m sales for next year, with $74.7m profits and 22.0c per share in earnings.The group will be announcing its Q3 results on Monday 22 November, at which time I would expect a bullish statement to engender more interest in the company's shares.At the current 132.5p they trade on a mere 7 times this year's earnings and 5.9 times those for next year – at this level it is an almost guaranteed winner for investors who are prepared to be patient while the market gradually begins to realise its real value.

[diesel] 18/10/2022 10:08

At some stage this must break out of this channel, investors could have made good returns this year by selling following the spikes of trading updates and results releases. Maybe that’s going to be repeated again this time, and no one can blame traders following a trend.

[doobz] 17/10/2022 20:09

Really well timed for a possible bullish turn on Overall market. Might finally be time to break 150, let's hope tmrw continues on up

[kalai1] 17/10/2022 14:46

CentralNIC issued an impressive trading update for the 9 months ending 30 September 2022 this morning. The positive trading momentum previously announced has continued, and the Company's organic growth has further accelerated during the period. The Company expects to report revenue of approximately $525m, net revenue of at least $127m and adjusted EBITDA of at least $61m for the nine months ending 30 September 2022, an increase of 86%, 49% and 89% respectively. Management now also have confidence that the Group will materially exceed the current market expectations for the full year, currently for EPS of 15.7c. Valuation is very attractive with forward PE ratio at 7.8x and PS ratio at 0.68x both in in the top quintile for the Software & IT services sector. The balance sheet is solid and improving, net debt down to $63m. Share price has been consolidating last year’s gains through 2022 so far and lacks some positive near-term momentum. Otherwise the investment case remains very solid, CNIC is a medium to longer-run BUY...

...from WealthOracle

hxxps://wealthoracle.co.uk/detailed-result-full/CNIC/586

[babbler] 17/10/2022 09:36

lowered than it would have been rise rate perhaps. But still higher overall in time?

[babbler] 17/10/2022 09:34

but aren't they lowering their interest rates as per today's rns?

[slogsweep] 17/10/2022 09:07

I'd rather PE 6.6 than 30+ those shares are going to get hammered as interest rates rise. At a market cap of <400 CNIC is too small for the big boys and PI's are frightened and looking to raise cash from anything that goes up. CNIC will produce big shareholder returns one day but the current market conditions will hold back the share price the biggest danger I see is that the company is snapped up by a foreign buyer for far less than it's worth due to the low £.

I have resisted the urge to sell as I am massively overweight due to an unexpectedly high allocation in the open offer. What is needed is patience and hope that value will be realised before armageddon or a cheap TO

[yf23_1] 17/10/2022 08:26

6.6 P/E, that's nuts

[se81] 17/10/2022 08:23

Zeus this morning

The company grew revenue 66% organically in the LTM to the end of Q3 2022, leading us to upgrade our 2022 revenue by 15% and Adj. EBITDA by 16%, which may still prove to be conservative. The Online Marketing segment continues to win market share due to high demand for privacy-safe online customer acquisition services. The company sees no signs of slowdown nor change in competition in its markets.

 9M 2022: CentralNic is on track to strongly outperform our original forecasts. The company expects to report 9M 2022 revenue of at least $525m and adj. EBITDA of at least $61m. When annualising the 9M 2022 performance, this represents an outperformance of more than 13% and 15% of our original FY22 revenue and Adj. EBITDA forecasts, respectively. Organic growth in the LTM to 30 September accelerated again to c. 66% from 62% in H1 2022 and 53% in 2021. Net Revenue was at least $127m, implying EBITDA/ Net Revenue margin of 48%, up from 47% in H1 2022 and demonstrating continued scale benefits (2021: 39%). Net debt including FX hedge liabilities decreased to c. $63m from $64m at the end of H1 2022, despite the acquisition of Aporia for $11.2m just before quarter end. Adjusted operating cash conversion was c. 100%.

 Debt refinancing: The Group has secured $250m of new debt facilities from a syndicate of six banks, which includes a $150m term loan and a $100m RCF. CentralNic intends to use the term loan to refinance the existing €126m of senior secured bonds by the end of October, currently incurring interest at 7% above three-month EURIBOR (c. 1.4%). The term loan will be at a significantly lower rate, initially incurring interest at 2.75% above SOFR (c. 3% currently but expected to rise) and varying with the Group’s net leverage, up to a maximum margin of 3.55% if net debt/EBITDA exceeds 2.5x. The RCF serves as a liquidity reserve to support the Company’s strong pipeline of accretive acquisitions over the next 12 months.

 Forecasts: We raise our revenue forecast 15% to $710m from $617m and our Adj. EBITDA 16% to $82m from $71m. Our implied Q4 forecasts ($185m revenue, $21m adjusted EBITDA) are conservatively below Q3 (c. $190m revenue, c. $22m adjusted EBITDA) despite the company continuing to see solid trading and Q4 often being the strongest quarter due to seasonality. Also, despite organic growth of 66% in the twelve months to 30 September, we are only assuming revenue growth of 6% in FY23 and FY24 and adjusted EBITDA growth of 8% and 6% in FY23 and FY24, respectively. Therefore, our FY23 and FY24 forecasts remain conservative. We account for the cash inflow of the term loan, less the repayment of senior secured bonds, and adjust forecast net interest costs for higher interest rate expectations, in spite of today’s refinance. FY22 forecast net debt (including FX hedges) reduces from $62.5m to $47.6m.

 Value for growth: Despite delivering strong growth, earnings outperformance and accretive acquisitions, CentralNic trades at only 5.1x 2022 EBITDA and 6.6x PE, at the bottom of its peer group range, despite having a FY22 FCFF yield of 16.1%. See KPI charts, summary investment case and forecasts overleaf.

[johndoe23] 17/10/2022 08:09

Level 2 looks good. Someone wants a load at 125p

[doobz] 17/10/2022 08:07

Incredible, still wouldn't be surprised to see this red today. Hopefully I'm wrong