CentralNic PLC (AIM: CNIC) reported its financial results for 2015 recording pretax profit of GBP 1.5 million for 2015, nearly tripled from the GBP 520,000 it posted in 2014.
Revenue rose 70% to GBP 10.4 million from GBP 6.1 million.
CentralNic is the backend provider for many new gTLD extensions including .xyz which has the most registrations of all new gTLD’s, provides registrations on third level ccTLD’s domain names, owns the domain name registrars Internet BS and INSTRA and is a part owner of the .tickets new gTLD extension.
Revenue increased by 71% to £10.39 million (2014: £6.07 million).
Shares are up over 3% at 47 pence up 1.5 in trading today.
Here are the highlights
· Adjusted EBITDA of £3.25 million (2014: £1.72 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 £0.17 million (2014: loss £0.01 million) reflecting a full year effect and growth of Internet.BS (acquired in 2014). The wholesale EBITDA contribution increased by 12% to £1.40 million (2014: £1.26 million) reflecting the increase in volumes of new TLDs. The Enterprise division EBITDA contribution was £2.61 million (2014: £1.41 million) from premium domain name trading and software licensing. Central overheads were £0.93m (2014: £0.94m).
· Profit before taxation of £1.45 million (2014: £0.52 million) reflected £1.53 million growth in Adjusted EBITDA predominantly offset by acquisition costs and non-recurring fees, which totalled £0.83 million (2014: £0.47 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 £2.95 million (2014: £1.39 million).
· Net cash-flow from operating activities increased significantly to £5.69 million (2014: £1.41 million). This reflected favourable working capital movements of £3.19 million during the year, relating to cash received in advance to satisfy demand for new gTLD’s.
· Net cash was £19.06 million at the end of the year (2014: £3.06 million). The cash balance at the year-end was
boosted by the equity raise of £9.40 million (after fees) during December 2015, with a view to completing the
acquisition of the Instra Group. The initial cash consideration of £14.56 million for the Instra Group was settled in January 2016, funded by the year-end cash balance and a £3.50 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 £10.39 million
(2014: £6.07 million) and adjusted EBITDA growing by 89% to £3.25 million (2014: £1.72 million).
· All three divisions experienced growth in both revenues and profits.
· First full year of trading from retailer Internet.BS contributed £3.33 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 £3.22 million (2014: £1.61 million) of premium domain name sales along
with a registry license 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 £16.02 million (£14.56 million cash, £1.46 million equity) subject to adjustment for working capital. Instra Group generated unaudited revenue of £7.86 million and Adjusted EBITDA of £1.18 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 £3.50 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.