CentralNic Group Plc (LON:CNIC), the global internet platform company that derives revenue from the sales of online presence and marketing services, today announced its unaudited financial results for the six months ended 30 June 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 57% to USD 174.7m (H1 2020: USD 111.3m)
● Organic revenue growth of 20% between H1 2020 and H1 2021, with standout performance from the Online Marketing segment which grew organically by 28%
● Net revenue (gross profit) increased by 57% to USD 55.2m (H1 2020: USD 35.2m)
● Adjusted EBITDA* increased by 36% to USD 20.5m (H1 2020: USD 15.1m)
● Operating profit of USD 4.7m (H1 2020: USD 2.8m)
● Adjusted operating cash conversion of 126% (H1 2020: 75%), driven by EBITDA generation and working capital optimisation
● Net debt** down to USD 83.8m (gross interest-bearing debt of USD 123.3m, cash of USD 39.5m) as compared to USD 85.0m on 31 December 2020 (gross interest-bearing debt of USD 113.6m, cash of USD 28.6m) despite two acquisitions for a combined USD 11.1m in the period, and the settlement of combined deferred consideration of USD 1.7m
Financial highlights:
● Acceleration of organic growth from 9% in 2020 to 16% in Q1 2021 to 25% in Q2 2021, resulting in 20% overall for H1 2021
● 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 (Direct 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) and SafeBrands (Direct segment) respectively
● Currency exposure on EUR 80m of the total EUR 105m bond has been hedged, locking in a EUR/USD rate of 1.1930
Operational highlights:
● Very strong traction for the Group’s privacy enabled online marketing technologies in view of a high cadence of privacy-conscious decisions 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 in order to improve customer service, optimise business operations and decision making, enhance marketing, reduce customer churn and automate detection of non-compliant customer activity
● Experienced non-executive directors added to the board
● New customer wins for the Registry business include JISC and Dot London
Post period-end highlights:
● The EUR 25m balance of the Group’s EUR/USD exposure resulting from the EUR 105m bond has been hedged at a rate of 1.1765, taking the average rate on the total EUR 105m of currency exposure to 1.1891
Outlook:
● Management expects full year revenues and profits to be at least at the upper end of market expectations
● The accelerated organic growth seen during H1 2021 is expected to be sustained 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 and growing market
Ben Crawford, CEO of CentralNic Group, commented: “CentralNic has enjoyed a very strong first half across both our online presence subscriptions products and our privacy enabled online marketing technologies – achieving record organic growth of 25% in the second quarter, following 16% organic growth for the first quarter 2021 and 9% for the full year 2020. By virtue of our significant investment in 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. As our investment levels plateau, 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 all our businesses. Moreover, as the business scales rapidly, the underlying qualities of our recurring revenues and excellent cash generation become increasingly meaningful. The pipeline of future acquisition targets remains strong, while the net debt level remains comfortable and easily serviced given the profitability and cash generation of the existing CentralNic Group and the additional contribution from recent acquisitions. 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
