Commenting on the results, Mike Turner, Chairman of CentralNic LON:CNIC, said: “2015 was a positive year for the Group, with progress made in terms of increasing the scale of the business. While the Instra Group acquisition was completed in early January 2016, much of the diligence had been completed during the second half of 2015, culminating in the fund raising and General Meeting that took place at the end of the year. I was delighted to see the Group execute this acquisition, with high levels of support from shareholders and other stakeholders. The Instra Group acquisition is transformational for the Group, providing access to new markets, additional products, a strong customer base, well established brands and an exciting white label offering.
“The opportunity in our market is considerable, with the continuing roll out of new Top-Level Domains and enduring demand for established generic and country code Top-Level Domains presenting the Group with retail and wholesale opportunities across the majority of the world’s markets. Indeed, while the world’s internet users are still less than half of the global population, the industry is set to continue growing, especially with increasing access to mobile data devices across emerging markets.
“There is still work to be done to transform our business but we have demonstrated positive steps with the acquisition and integration of Instra.
“Assuming continued progress in all areas of our business, at this stage of the year we remain confident in the outlook for 2016.”
CentralNic (AIM: CNIC), the internet platform that derives revenue from the worldwide sales of internet domain names, today gave DirectorsTalk its audited results for the year ended 31 December 2015.
The Company’s full Annual Report is also being published and sent to shareholders today, and the Company’s Annual General Meeting will be held on 28 June 2016 at the offices of DWF LLP, 20 Fenchurch Street, London, EC3M 3AG at 10.00am.
CentralNic continues to grow its Wholesale, Retail, and Enterprise Divisions through winning contracts to distribute high quality Top Level Domains (the new alternatives to .com and .co.uk), enhancing geographical coverage, licensing software to large companies, selling premium domain names, and pursuing acquisition opportunities.
Financial highlights
31 Dec 31 Dec Change Change
2015 2014
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GBP'000 GBP'000 GBP'000 %
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Revenue 10,393 6,067 4,326 +71.3%
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Gross profit 4,860 3,312 1,548 +46.7%
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Adjusted EBITDA* 3,254 1,724 1,530 +88.7%
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Adjusted Profit before
taxation** 2,954 1,385 1,569 +113.3%
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Profit before taxation 1,454 520 934 +179.6%
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Net cashflow from operating
activities 5,686 1,414 4,272 +302.1%
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* Excludes share based payments expense of GBP316,199 and acquisition costs and non-recurring fees of GBP828,705
** Excludes share based payments expense of GBP316,199, acquisition costs and non-recurring fees of GBP828,705 and acquired amortisation charges, in relation to the assets of Internet.BS, of GBP354,799
— Revenue increased by 71% to GBP10.39 million (2014: GBP6.07 million). All three divisions (Retail, Wholesale and
Enterprise) saw growth in revenue, while total billings (including our partners’ shares) increased 172% to GBP26.87m (2014: GBP9.89m) due to high levels of demand for new Top-Level domains.
— Adjusted EBITDA of GBP3.25 million (2014: GBP1.72 million) reflected the gross profit growth across each of CentralNic’s three divisions, with minimal increase in operating costs. The retail EBITDA contribution increased to GBP0.17 million (2014: loss GBP0.01 million) reflecting a full year effect and growth of Internet.BS (acquired in 2014). The wholesale EBITDA contribution increased by 12% to GBP1.40 million (2014: GBP1.26 million) reflecting the increase in volumes of new TLDs. The Enterprise division EBITDA contribution was GBP2.61 million (2014: GBP1.41 million) from premium domain name trading and software licensing. Central overheads were GBP0.93m (2014: GBP0.94m).
— Profit before taxation of GBP1.45 million (2014: GBP0.52 million) reflected GBP1.53 million growth in Adjusted EBITDA predominantly offset by acquisition costs and non-recurring fees, which totalled GBP0.83 million (2014: GBP0.47 million). The vast majority of the costs related to the Instra Group acquisition completed in January 2016, a complex transaction involving overseas jurisdictions and a broad scope of due diligence. Adjusted profit before taxation, excluding acquired amortisation charges, the acquisition deal fees and the share based payments expense was GBP2.95 million (2014: GBP1.39 million).
— Net cash-flow from operating activities increased significantly to GBP5.69 million (2014: GBP1.41 million). This reflected favourable working capital movements of GBP3.19 million during the year, relating to cash received in advance to satisfy demand for new gTLD’s.
— Net cash was GBP19.06 million at the end of the year (2014: GBP3.06 million). The cash balance at the year-end was
boosted by the equity raise of GBP9.40 million (after fees) during December 2015, with a view to completing the
acquisition of the Instra Group. The initial cash consideration of GBP14.56 million for the Instra Group was settled in January 2016, funded by the year-end cash balance and a GBP3.50 million debt facility which was drawn in January 2016.
Operational highlights
— A successful year proving the scalability of the group with revenues growing by 71% to GBP10.39 million
(2014: GBP6.07 million) and adjusted EBITDA growing by 89% to GBP3.25 million (2014: GBP1.72 million).
-- All three divisions experienced growth in both revenues and profits.
— First full year of trading from retailer Internet.BS contributed GBP3.33 million of revenue to the Retail
division, representing 21% revenue growth over the run rate pre-acquisition.
— Wholesale Division was ranked as the world’s Number One new TLD registry services provider by
volume, increasing market share from below 20% to above 23%, with five Top-Level Domains (“TLDs”) in
the top 20, and 14 TLD launches in 2015.
— Enterprise revenues included GBP3.22 million (2014: GBP1.61 million) of premium domain name sales along
with a registry licence sale to a major telecommunications operator, the first revenues post-launch from
Dot Brand clients and the first domain name management software sale under CentralNic’s ownership.
Post year end
— Acquisition of Instra Group completed on 14 January 2016 for a total consideration of GBP16.02 million (GBP14.56 million cash, GBP1.46 million equity) subject to adjustment for working capital. Instra Group generated unaudited revenue of GBP7.86 million and Adjusted EBITDA of GBP1.18 million in the year ended 30 June 2015.
— Cash consideration for the Instra Group acquisition was funded by the equity placing in December 2015 together
with the draw-down of a secured debt facility in January 2016 comprising a GBP3.50 million secured term loan
(amortising over a three year period) and from existing cash balances.
— New Top-Level Domains (TLDs) contracted but not launched during 2015: .contact, .forum, .pid, .realty; while
the .store TLD launched in April 2016.
— Unprecedented scaling of Wholesale business with 100% increase in volumes from two million to four million
between November 2015 and April 2016.
