Centralnic Share Discussion Threads

[rivaldo] 25/11/2022 11:39

Here's a link to Edison's new note.

They forecast 17.2c EPS this year, rising to 19c for the year about to start. So still a ridiculously low multiple and a huge almost 70% discount to CNIC's peers - and they "note the potential for upside if CNIC is able to maintain current run rates":

[azaman] 25/11/2022 11:22

That's what I am talking about.

[diesel] 25/11/2022 11:02

Looks like we’ve gone from overhang to shortage of stock in 2 days at this rate we’ll have tested both ends of the trading channel!

[buying] 25/11/2022 11:01

Any thoughts why the company never mention the possibility of paying a dividend

[davebowler] 25/11/2022 09:54

Master Investor-
CentralNic Group (LON:CNIC) – A DCF of 210p Against Current 123.5p
The third quarter results to end September showed record revenues and EBITDA figures and slightly better than expected.

Did you know that this £354m group has upgraded revenue expectations six times since the beginning of last year.

What is more it has also upgraded EBITDA expectations four times in the same period of time.

Broker Zeus Capital states that:

“We believe CentralNic is well positioned to strongly grow earnings through organic growth, operating leverage and acquisitions. Its unique cookie-less marketing platforms are taking market share, the company’s scalable business model is converting high growth to strong margin expansion and its recently negotiated debt facility and strong cash conversion support further earnings accretive acquisitions.”

The broker considers that the group’s DCF valuation is 210p, well above the current share price of 123.5p.

You must know by now just how much I like this company and its potential – so I will not repeat myself, apart from saying that at just 8 times earnings its shares are massively undervalued for such a money machine.

[rivaldo] 25/11/2022 07:34

Coverage on the respected Techmarketview:



"Platform model delivers the profits at CentralNic

CentralNic, the fast-growing acquisitive internet domain name and web services provider, continues to progress with strong revenue and profit growth for the first nine months of the year. CentralNic increased revenue by 88% to $526.7m for the first nine months (Sep-2021 YTD $280.6m). Profitability did even better, with adjusted EBITDA up 101% to $62m (Sept 2021 YTD $30.9m) and operating profit up a whopping 440% to $35.1m (Sept 2021 YTD $6.5m).

Improvements in profitability are underpinned by several years of building an online marketing and presence platform that can scale growth faster than its cost base. Acquisitions have formed a key part of the mix allowing CentralNic to build capability in two main areas. Firstly, ‘online presence’ which includes the basic tools to get an organisation online – so things like web addresses, websites, hosting, email etc., all paid for via annual subscriptions. Secondly, it provides ‘online marketing’ services which both help attract customers to a site and generate revenues paid for via rolling open-ended revenue share contracts.

The business remains hungry for acquisitions with recent purchases including social media and advertising suppliers M.A Aporia, for an initial consideration of $11.2m (read here) and US-based domain name management business Intellectual Property Management Company just a few weeks ago for £7.3m."

[jeanesy] 24/11/2022 17:35

Been out so nice to see some sort of sense return here. Well done those that bought more around 114p

[robsy2] 24/11/2022 17:27

The debt is often mentioned as a kind of red flag. I think CNIC have shown how deft they are at using it to invest well thus improving earnings to ord shareholders like us.
Galling to see their reward and ours is a relatively miserly rating, for the time being at least.
I am very happy to see them keep the debt levels up,as they are doing and hope they press-on building out their offering and further accelerating growth and profitability.

[azaman] 24/11/2022 17:25

You know what they say, you can't hold down a good stock. Right!

[davebowler] 24/11/2022 17:15

Edison -
Forecasts indicate significant upside potential
In 9M22, revenues were up 88% y-o-y to $526.7m and adjusted EBITDA by 101%
y-o-y to $62m. In Q3, revenue and EBITDA were up 8% q-o-q and 16% q-o-q
respectively to $192m and $23.4m. Online Marketing was the primary catalyst, with
100% ytd organic growth mainly driven by CNIC’s TONIC media buying platform
and overall performance benefiting from the group’s accelerated acquisition
strategy. Despite positive market tailwinds, we have left our headline forecasts
materially unchanged due to an uncertain macro environment. However, we believe
there is significant upside potential given momentum in the group’s performance ytd
and its track record of delivering growth in challenging conditions.
Well capitalised to deliver growth
The group’s growing profitability alongside a consistently high operating cash
conversion strengthened CNIC’s balance sheet over 2022, with net debt/pro forma
EBITDA falling from 2.2x at end FY22 to 1.2x at end Q322. Given the trend in profit
growth, we believe CNIC is in a strong position to rapidly reduce the size of its net
debt over the coming years and may be able to use its free cash flow for future
acquisitions, rather than relying on its revolving credit facility. As highlighted in our
previous note, its new debt facilities will see a significant reduction in borrowing
costs: our FY23 forecasts indicate an interest coverage ratio of 10.6x.
Valuation: Trading at a discount despite consistency
Relative to its online marketing peers, CNIC has been able to achieve superior
revenue and profit growth using lower leverage over FY22. Despite this, the group
trades at a 69% discount to peers on FY22 and FY23 EV/EBITDA multiples.

[boadicea] 24/11/2022 15:16

Was that our last Black Friday (Wednesday) top-up option or is it to become a regular event? It would be comforting to know who was selling and why.
We can only speculate on the cause. My favourite is a stalker shorting it (or perhaps selling a position) to make an impending opportunistic offer look generous. However, any offer under 300p would look mean in my book.

[rivaldo] 24/11/2022 10:18

Thanks for the new Master Investor tip Tole.

Zeus Capital's new note has a DCF valuation of 210p per share.

They now forecast 19.1c EPS this year, rising to 20.4c EPS next year, i.e 15.9p EPS rising to 17p EPS - a P/E of just 6.7.

They've reduced EPS this year purely because of higher tax rates in Germany resulting from the Online Marketing growth there (not a bad problem to have), though CNIC are planning to mitigate this.

But these new forecasts are very conservative:

"We see potential upside to earnings estimates due to conservative forecasts. Our Q4 forecasts ($183m revenue, $21m adjusted EBITDA) are conservatively below Q3 ($192m revenue, $22m adjusted EBITDA) despite continued solid trading and typical Q4 seasonality."

In summary:

"Record revenue and EBITDA

9M 2022 results demonstrate CentralNic’s ability to accelerate organic growth
in an increasingly tough macroeconomic environment. The Online marketing division doubled revenue organically in the LTM to September and accelerated group organic growth to 66% from 62% in the LTM to June 2022. We believe CentralNic is well positioned to strongly grow earnings through organic growth, operating leverage and acquisitions: Its unique cookie-less marketing platforms are taking market share, the company’s scalable business model is converting high growth to strong margin expansion and its recently negotiated debt facility and strong cash conversion support further earnings accretive acquisitions."

"Value for growth: CentralNic trades at only 5.4x 2022 EBITDA and 8.1x PE, at the bottom of its peer group range, despite having a FY22 FCFF yield of 16.3% and delivering strong growth, earnings outperformance and accretive acquisitions."

[johndoe23] 24/11/2022 08:41

Tempting to add at this level

[zipstuck] 24/11/2022 08:25

Worth noting that the translation loss will reduce significantly if EUR USD improve.

[someuwin] 23/11/2022 21:11

Video of the investor presentation...

[jeanesy] 23/11/2022 19:43

why o why when so many many people and brokers are saying these are massively undervalued do the shares keep falling. Something seems very wrong here . I wish i knew what though !!

[tole] 23/11/2022 19:33

https://masterinvestor.co.uk/equities/small-cap-catch-up-sys-zinc-nic-and-more/CentralNic Group (LON:CNIC) – A DCF of 210p Against Current 123.5pThe third quarter results to end September showed record revenues and EBITDA figures and slightly better than expected.Did you know that this £354m group has upgraded revenue expectations six times since the beginning of last year.What is more it has also upgraded EBITDA expectations four times in the same period of time.Broker Zeus Capital states that:"We believe CentralNic is well positioned to strongly grow earnings through organic growth, operating leverage and acquisitions. Its unique cookie-less marketing platforms are taking market share, the company's scalable business model is converting high growth to strong margin expansion and its recently negotiated debt facility and strong cash conversion support further earnings accretive acquisitions."The broker considers that the group's DCF valuation is 210p, well above the current share price of 123.5p.You must know by now just how much I like this company and its potential – so I will not repeat myself, apart from saying that at just 8 times earnings its shares are massively undervalued for such a money machine.

[earwacks] 23/11/2022 17:59

Paul is more of a retail man and likes companies like Boo and Saga which has about 700!million in debt, which he claims is not debt. Each to their own. Cnic has rapidly falling debt of about 60 million? just 640 million less. True it’s not asset backed but they could pay it off in no time if they wanted to. They renegotiated finance to a very reasonable terms ( 60 percent less than what they were paying even in this climate)and without penalties. Looks to me like a bunch of city cowboys manipulating the stock to get a better price. Kestrel have a lot of skin in the company owning about a half between the founder , directors and staff. Max took 6 million shares in the placing at £1.20!topped up again recently at £1.28. Too bad if Mr Scot doesn’t understand the business Should have watched the presentation.it̵7;s only fallen 6 or 7 per cent for F S! Shares go up and down. Hopefully not as much as Boo and Saga! The ex stockopedia man Jack Brumby was very hot on Cnic and invested. He did understand the stock. It is different and it isn’t that obvious. 100 per cent organic growth is however exactltly what it is. The other point Ben made was in its 9 years it has grown at a rate of 78 percent a year. That is by acquisition but it is also accelerating growth which should continue to rapidly multiply. It’s called scaling up!

[rik shaw] 23/11/2022 17:55

You could try yesterday's IMV presentation if you're interested. A whole section on how they make money (free registration for the site)

[podgyted] 23/11/2022 17:44

Threw in the towel in total frustration yesterday, which seems lucky at the moment, however, is normally a precursor to the share price starting to rise.

I do think this a good business, but is misunderstood.

Rather than continually stressing the growth potential of the company (which I accept and believe is true), I wonder if a (few) video presentation(s) on what they do might be a better way to sort out the problem. Just a thought.

[azaman] 23/11/2022 17:39

TECHINVEST is recommending to buy this stock.

[sevenccc] 23/11/2022 17:14

Are there other influencers/analysts like Paul Scott at Stocko who are negative or not impressed by this business? Part of his comment yesterday was to say he doesn't understand the business, there are too many acquisitions and "Balance sheet looks awful, highly geared under new facilities, and dominated by intangible assets, big negative NTAV."

I work with a couple of individuals running their own businesses who are getting all of their business through the internet or via shopping mall/hobbyist sites like Not on the High Street and Etsy. They'd love to generate the business directly but the competition out there is fierce. The numbers from CNIC seem fantastical but I can't see how they can't be true - in which case value has to out in the end.

Is it that they don't explain the business in a way that most investors can pick it up? Or does it just look too good to be true? Or is there no real value underneath all the growth as Paul Scott seems to suggest?

[davebowler] 23/11/2022 16:36

Nice to have an unexpected opportunity to buy more!