CentralNic analyst Zeus raise 2022 revenue forecast by 8% to $617m

CentralNic Group plc (LON:CNIC) LTM pro forma revenue growth accelerated again to 62% in Q2 2022, resulting in revenue of $335m and Adjusted EBITDA of $38m in H1. The company upgraded guidance, which appears very conservative. Even in the unlikely case of a sharp downturn leading to 16% sequential decline in Adjusted EBITDA in H2, the company would still meet revised guidance. We raise our 2022 revenue forecast by 8% to $617m and our Adjusted EBITDA by 4% to $70m and see the potential for strong earnings outperformance. Even based on our conservative forecasts, shares appear attractively valued at 6x 2022 EBITDA, 8x P/E and 12.5% FCFF yield. With increased estimates our valuation for CentralNic is lifted to 221p from 195p.

H1 trading update
¨ Long track record of accelerating growth: LTM pro forma revenue growth was an impressive 62% in Q2 and extends CentralNic’s long track record of accelerating growth from 53% in Q1, 37% in 2021 and 20% in 2020. There appears to be no signs of the potential weakness in CentralNic’s Online Marketing market that may be factored into the share price.

¨ Strong profits and cash generation: Adjusted EBITDA is expected to be $38m, resulting in margin of c.11.3% and in line with margins in 2021. Net debt including foreign exchange hedge liabilities is expected to be $65m, which is down by only $5.7m from $70.7m at the end of Q1. The relatively small decline in net debt is due to a sizable increase in hedging liabilities to $16.6m from $9.4m at the end of Q1. Excluding FX hedging liabilities, net debt would have fallen by $12.9m, which is c.66% of Q2 Adjusted EBITDA (c.$19.5m). The company estimated that adjusted operating cash conversion was over 100% in H1 2022.

¨ Guidance factors in extraordinary downturn: Given the strong H1 results, the company is now confident that full year 2022 results will be at least at the high end of the current market expectations ($603m revenue and $70m Adjusted EBITDA). This revised guidance factors in an extraordinary downturn in H2 2022, equivalent to sequential revenue decline of 20% and Adjusted EBITDA decline of 16%.

¨ Conservative forecast upgrade: We conservatively forecast $617m of revenue in 2022, 2% above the top end of current consensus, and Adjusted EBITDA of $70m, in line with the top end of current consensus. We estimate 37% pro forma growth in 2022, well below 62% pro forma growth already achieved in H1. (See charts overleaf for details.)

¨ Value for growth: Based on our conservative estimates, shares trade at only 6x 2022 EBITDA, 8x P/E and 12.5% FCFF yield. We raise of our DCF valuation from 195p to 221p, which is about 2x the current share price. Note that CentralNic Group shares were included in the AIM 100 and AIM UK 50 indices on 20 June 2022.

Summary financials

Market Cap£327.6m
Shares in issue289m
12m Trading Range86p – 154p
Free float73%
Next EventQ2 results – 30 August

Financial forecasts

Yr end Dec ($’m)2021A2022E2023E2024E
YoY growth (%)7150.366
Gross profit118.5170.8180.5190.9
Adj. EBITDA46.37075.779.7
YoY growth (%)57.351.38.15.3
EBITDA margin (%)11.311.311.611.5
EBITDA margin394141.941.8
(Net revenue) (%)
EPS (c) basic adj.11.817.418.820.2
DPS (p)0.81.8
Net cash (debt)+-81.4-51.2-11.534.6
EV/EBITDA (x)8.365.24.4
P/E (x)
FCFF yield (%)9.112.513.217.4
Source: Audited Accounts and Zeus estimates
Click to view all articles for the EPIC: ,
Or click to view the full company profile:
Share on facebook
Share on twitter
Share on linkedin

More articles like this


Watch out for domain name scams

Domain name scams on the internet have become quite common over the past few years. With the proliferation of digital technologies these domain name scams are utilized by scamsters to cause at times severe harm to the unsuspecting


Subdomains: What they are and how they work

What is a Subdomain? A subdomain is a second-level domain added to an existing domain. You can use this option for a variety of reasons, including the following. Separating different parts of your website Creating multiple websites with


Are domain names important for SEO?

The debate about whether a site’s domain name affects its ranking position sometimes arises among webmasters. A B2B SEO company can categorically testify that a correctly chosen domain can help to promote the site to the top positions. Others cite


CentralNic Group: A busy end to a momentous year

CentralNic (CNIC) announced on 19 December that it is acquiring a portfolio of niche websites as part of its vertical integration strategy for its Online Marketing segment. The portfolio provides the company with exclusive special internet traffic to


CentralNic buys a bunch of web sites for $5.2 million

CentralNic has splashed out $5.2 million on what it calls “a portfolio of revenue generating niche websites”. The announcement doesn’t specify any of the “multiple” sellers or the nature of the sites, other that to say it will


CentralNic goes vertical with another acquisition of traffic sources

CentralNic, a rollup of domain name and online advertising businesses, announced a small acquisition today. The company is paying $5.2 million for a collection of “revenue generating niche websites” from multiple sellers. It did not name the sites. CentralNic said


Michael Riedl named CEO at CentralNic

A new week begins with some some familiar industry names in the news. Today CentralNic announced Michael Riedl has become their new CEO, replacing Ben Crawford who has overseen a tremendous growth spurt at the company since first


CentralNic Group appoints Michael Riedl as its new CEO

CentralNic Group Plc (LON:CNIC), the global internet software company that derives recurring revenue from marketplaces for Online Presence and Online Marketing services, has announced the appointment of Michael Riedl, currently Group CFO, as Group CEO with immediate effect.  Michael succeeds


CentralNic: Deleveraged and delivering growth

CentralNic (CNIC) delivered high double-digit organic revenue growth in the nine months to 30 September (9M22), supplemented by five acquisitions year to date. Revenues in Online Marketing, now the group’s largest business segment (78% of 9M22 revenues), were


CentralNic Group Directors’ dealings

CentralNic Group plc (LON:CNIC) has today stated that it received notification on the 25 October 2022 from Kestrel Partners LLP that on the 22, 23 24 and 25 November 2022 it purchased, on behalf of its discretionary client accounts, an aggregate of


CentralNic revenue increases by 88% to USD 526.7m

CentralNic Group Plc (LON:CNIC), the global internet software company that derives recurring revenue from marketplaces for online presence and online marketing services, has announced its unaudited financial results for the nine months ended 30 September 2022. The Company has achieved


CentralNic record revenue for the first half of 2022

CentralNic Group announced its unaudited financial results for the six months ended 30 June 2022: record revenue and Adjusted EBITDA achieved, driven by continued organic growth, supplemented with acquisitions. Financial summary H1 2022: Revenue increased by 93% to


CentralNic acquires corporate domain manager

CentralNic (London: CNIC) has acquired Intellectual Property Management Company, Inc. (IPM), a corporate domain manager. According to IPM’s website, it is a joint venture with the United Internet Group of Companies. That’s the company that owns IONOS, InterNetX, and


CentralNic Group to publish interim results on 22 November 2022

CentralNic Group Plc (LON:CNIC), the global internet platform that derives recurring revenue from marketplaces for online presence and online marketing services, will publish its unaudited interim report for the nine months ending 30 September 2022 on Tuesday, 22


CentralNic expects to blow past revenue estimates

CentralNic has updated its financial projections for the year, saying it expects to “materially exceed” the current analysts’ estimates. The London-listed company expects to next month report revenue for the nine months to September 30 up 86% at


CentralNic to acquire Intellectual Property Management Company, Inc.

CentralNic Group Plc (LON:CNIC), the global internet platform that derives recurring revenue from marketplaces for online presence and online marketing services, has announced that it has entered into an agreement to acquire Intellectual Property Management Company, Inc. (“IPMC”), a California-based

No more posts to show