CentralNic Group Plc (AIM: CNIC), the global internet technology company that sells online presence and marketing services, announced its unaudited financial results for the nine months ended 30 September 2021. Both revenue and adjusted EBITDA have significantly increased year-on-year, driven by a combination of underlying organic growth and acquisitions.
Financial summary:
● Revenue increased by 67% to USD 282.0m (September 2020 YTD: USD 168.5m)
● Organic revenue grew 29% between September 2020 YTD and September 2021 YTD
● Net revenue (gross profit) increased by 60% to USD 85.5m (September 2020 YTD: USD 53.3m)
● Adjusted EBITDA* increased by 46% to USD 32.3m (September 2020 YTD: USD 22.1m)
● Operating profit of USD 8.9m (September 2020 YTD: USD 0.7m)
● Adjusted operating cash conversion of 113% (September 2020 YTD: 93%)
● Net debt** down to USD 78.6m (cash of USD 54.0m, gross interest-bearing debt of USD 132.6m) as compared to USD 85.0m on 31 December 2020 – despite two acquisitions for a combined USD 11.1m in the period, and the settlement of combined deferred consideration of USD 1.7m
● Adjusted EPS for the period increased by 5% to USD 7.73 cents (September 2020 YTD: USD 7.33 cents)
Financial highlights:
● Acceleration of organic growth from 9% in September 2020 YTD to 29% overall for September 2021 YTD
● Non-recurring revenue products contributed less than 1% of our total revenues
● Successful bond tap issue of EUR 15m at 104.5% of nominal value
● Acquisition of SafeBrands (Online Presence segment) in January 2021 and Wando Internet Solutions (Online Marketing segment) in February 2021
● Final and interim deferred consideration payments made for Team Internet (Online Marketing segment)
● Currency exposure on the EUR 105m bond has been hedged at a locked-in average EUR/USD rate of 1.1891
Operational highlights:
● Very strong traction for the Group’s privacy-safe online marketing technologies in context of privacy-conscious policies of Big Tech
● Significant investment in new management, staff and systems accelerated organic growth to record levels and positions the Group well for continued growth
● New Data and AI group established to improve customer service, optimise business operations and decision making, enhance marketing, reduce customer churn, and automate detection of non-compliant customer activity
● Appointment of Carsten Sjoerup in the new role of Chief Technology & Product Officer to lead the integration of technology and product teams across all brands, with a focus on technical expertise and new product launches
● Experienced non-executive directors added to the board
● New customer wins for the Registry business include JISC and Dot London
Post period-end highlights:
● Acquisition of publishing network of revenue generating websites for a consideration of USD 6.5m in cash and assumed working capital liabilities was completed on 15 November 2021 and is expected to generate at least USD 2.0m in annualised revenue and USD 1.5m in annualised EBITDA post-acquisition
Outlook:
● The Company expects to trade comfortably at the upper end of market expectations*** for the year for both revenue and adjusted EBITDA
● The accelerated organic growth seen during Q3 2021 YTD is expected to be sustained for the full year following 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 market
Ben Crawford, CEO of CentralNic Group, commented: “CentralNic has enjoyed a very strong first nine months of 2021, across both our online presence subscription products and our privacy enabled online marketing technologies – achieving record organic growth of 29% for the year to date. By virtue of our significant investment in human resources, restructuring and market-leading products and promotions, we expect full year revenue and profits to be at least at the upper end of market expectations.
A virtually pure play recurring revenue business with cash conversion of over 100%, CentralNic continues to improve its cash position, interest coverage and net debt to EBITDA ratio as it grows. As our investment levels plateau moving forward, we expect future periods to benefit from increasing operational leverage.
These robust results reflect CentralNic’s continued success in sourcing, completing and integrating transformative acquisitions and driving the organic growth of our businesses. The pipeline of future acquisition targets remains strong, and we are confident in continuing our trajectory towards joining the ranks of the global leaders in our industry.”
* 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
***) analyst expectations of revenue and adjusted EBITDA for the financial year ending 31 Dec 2021 currently range from USD 349.0m to USD 384.1m and USD 41.8m to USD 43.0m respectively.
These unaudited financial results have been prepared for the purpose of fulfilling the information undertaking requirements included in the bond terms for the Senior Secured Callable Bond Issue. To the best of our knowledge, these unaudited financial results have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Issuer and the Group taken as a whole. In addition, to the best of our knowledge, these unaudited financial results include a fair review of the development and performance of the business and the position of the Issuer and the Group taken as a whole. The principal risks and uncertainties that the business faces remain materially consistent with the risks and uncertainties described in the Risks section of the Group’s 2020 annual report.
