CentralNic LON:CNIC, the global software platform company supporting subscription web services including domain names, has this morning given DirectorsTalk its half year results for the six months ended 30 June 2017, which show strong underlying organic growth across the business.
Highlights:
-- Adjusted EBITDA*, excluding forex gains and losses, of GBP1.4m (H1 2016: GBP0.9m) - up 50% -- Gross profit GBP3.0m (H1 2016: GBP2.3m) - up 29.5% -- Revenue of GBP10.6m (H1 2016: GBP8.9m) - up 19%. -- Net cash of GBP7.73m (2016: GBP6.04m).
* Adjusted EBITDA: Earnings before interest, tax, depreciation and amortisation, acquisition costs, exceptional items and non-cash charges.
Operational highlights:
— Recurring revenues continue to increase, reflecting the strong focus on growing the proportion of the Group’s revenues being of a recurring nature, as exemplified post period-end by the acquisition of SK-NIC in August 2017 and the renegotiated .xyz contract.
— Retail division focus on optimising marketing performance having completed integration and consolidation of Instra Group.
— Wholesale business maintained its lead in global market share by volume, being the only company which supports six of the Top 20 new Top-Level Domains.
— New client wins as a registry service provider included .rugby .observer, .storage, as well as multiple contracts with country code Top-Level Domains.
Post half year end highlights:
-- Acquisition of SK-NIC:
– As announced on the 25th August 2017, the Group has agreed to acquire the business and assets of SK-NIC, the manager of the exclusive country code top-level domain for Slovakia, .sk.
– The Board believes that this represents a major, earnings enhancing acquisition, further increasing the proportion of the Group’s revenues that are recurring and diversifying the Group’s businesses.
– A term loan of GBP18m and overdraft facility of GBP3m are being provided by the Group’s bankers, Silicon Valley Bank (“SVB”), to fund the initial consideration.
Contract with .XYZ renegotiated: term extended to 2032, with CentralNic receiving a fixed fee based on the volume of .xyz registrations and subscriptions managed.
Commenting on the results, Mike Turner, Chairman of CentralNic, said: “Our underlying first half results have been most encouraging as CentralNic continues to deliver organic growth alongside significant earnings enhancing acquisitions.
“Both our organic growth and roll-up strategy are underpinned by a drive to increase the size and scale of the business by focussing on activities which will deliver recurring revenues and high visibility of earnings. This concentrates our efforts on the higher margin and higher growth segments of the market.
“In keeping with the consistently heavy second-half weighting of results in recent years, the Board is confident that the Company is on track to meet market expectations for the full year to 31 December 2017, as we continue to diversify through the acquisition of businesses with high-levels of recurring revenue, organically grow our existing recurring revenue businesses, and take advantage of opportunities to trade in valuable premium domain names.”