Thursday , August 11 2022

CentralNic Q1 2021 report: Revenue increased by 48%

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CentralNic Group Plc (AIM: CNIC) announced its unaudited financial results for the three months ended 31 March 2021. Both revenue and adjusted EBITDA have increased quarter-on-quarter, driven by a combination of acquisitions and underlying organic growth.

Financial summary:

●       Revenue increased by 48% to USD 84.4m (Q1 2020: USD 56.9m)

●       Organic revenue growth Q1 2021 compared to Q1 2020 is 16%

●       Net revenue/ gross profit increased by 58% to USD 27.9m (Q1 2020: USD 17.7m)

●       Adjusted EBITDA* increased by 23% to USD 10.1m (Q1 2020: USD 8.2m)

●       Operating profit of USD 1.4m (Q1 2020: USD 2.9m)

●       Adjusted operating cash conversion of 163% (Q1 2020: 46%), primarily due to optimisation of working capital

●       Net debt** down to USD 79.0m (gross interest-bearing debt of USD 122.1m, cash of USD 43.1m) as compared to USD 85.0m on 31 December 2020 (gross interest-bearing debt of USD 113.6m, cash of USD 28.6m)

Operational highlights:          

●      Significant investment in new management, staff and systems accelerated organic growth to record levels and positions the Group well for continued growth

●      All segments have achieved organic growth compared to the prior year period

●      Investment in new products resulting in improved sales of value-added services in Direct and Indirect segments

●      Financial and operational performance demonstrate the resilience of all businesses in the face of potential business interruption related to the COVID-19 pandemic

Financial highlights:

●      Completion of acquisition of SafeBrands, an Enterprise Domain Management and Online Brand Protection provider, strengthening our Enterprise division within the Direct Segment, for USD 3.7m plus a deferred consideration of USD 0.7m

●      Successful, oversubscribed placement of EUR 15m (approximately USD 18.2m) of senior secured callable bonds at 104.5% of par value, implying a yield to maturity of 5.0%

●      Completion of the acquisition of online marketing business Wando Internet Solutions for USD 6.5m plus an additional performance-based earnout of up to USD 6.5m

Post period-end highlights:

●      Final EUR 0.8m of deferred consideration for the Team Internet acquisition settled in April 2021

●      EUR 0.6m of deferred contingent consideration for the SafeBrands acquisition settled in May 2021

Outlook:

●      The accelerated organic growth is testament to the success of the investment in new management, staff and systems

●      The Company’s market consolidation strategy continues, with opportunities being continually assessed in what is a large, globally fragmented and growing market

●      Management expects the full year results to be in line with market expectations

 

Ben Crawford, CEO of CentralNic, commented: “In Q1 2021, CentralNic generated more revenue and EBITDA than in the whole of FY 2018. In our Direct and Indirect segments, which provide the essential tools for business large and small to go online, growth in domain name sales has notably accelerated. More importantly, our efforts to deliver value-added services through our direct and indirect channels are paying off, with the sales of associated services outpacing domain names sales.

Subsequent to the recent acquisitions of Zeropark, Voluum and Wando, which have substantially expanded the service offering past monetising traffic on dormant domain names to a full suite of online marketing and monetisation solutions, including data analytics, management resolved to rename the segment more fittingly as “Online Marketing”. CentralNic is a leader in online privacy, as none of our marketing platforms make use of third-party cookies or collect personal data on our customers. We therefore expect that restrictions placed on those practices, e.g. the ban of third-party cookies in Google Chrome or App Tracking Transparency in Apple’s iOS 14.5, will benefit CentralNic, as we provide an alternative to online marketers that is proven to be highly effective whilst respecting the privacy of internet users, putting us at the forefront of companies offering solutions for a more privacy conscious world.” 

* Subsidiary and associate earnings before interest, tax, depreciation, amortisation, non-cash charges and non-core operating expenses

** Includes gross cash, debt and prepaid finance costs


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