CentralNic Group PLC - Final Results

CentralNic Group plc

("CentralNic" or "the Company" or "the Group")

Final results for the year ended 31 December 2013


CentralNic (AIM: CNIC), the owner and manager of an internet distribution platform which derives a revenue share from sales of internet domain names into markets across the world, today announces its audited results for the year ended 31 December 2013.

The Company expects to publish the Annual Report on 19 May 2014, and the Company's Annual General Meeting will be held on 11 June 2014.

Operational highlights


Financial highlights

31 Dec 2013 31 Dec 2012
£'000 £'000
Billings 3,891 3,380
Revenue 3,051 2,933
Gross profit 2,338 2,152
Adjusted EBITDA* 1,015 1,134
PBT 701 835
Net cashflow from operating activities 1,134 982

* - Earnings before interest, tax, depreciation, amortisation and non-cash charges; excludes share based payments expense of £66,447


Post year end


Commenting on the results, John Swingewood, Chairman of CentralNic, said:

"The Directors are extremely pleased with CentralNic's strategic progress in 2013. The Company is achieving sustained growth resulting from the continued demand for our domain names, establishing new retail channels and securing new inventory. The Board is particularly pleased that these results are yet to include revenues from sales of our pipeline of new Top-Level Domains or of our new retail websites, all of which are starting their launch activities in mid-2014.

"Our objectives when we listed on AIM last year were to accelerate our growth through securing new retail channels, including our own proprietary channels, and obtaining new inventory through commercial and government contracts, including making strategic investments in new TLD applicants. I am delighted that we made progress in each of those areas in 2013. The Board is excited by the considerable opportunities for CentralNic and is confident that the Company will achieve its commercial targets for 2014."

For further information, please contact:

CentralNic Group plc

Ben Crawford (CEO)

+44 (0) 203 388 0600

Zeus Capital

Ross Andrews / Nick Cowles ( Corporate Finance)

+44 (0) 161 831 1512

John Goold (Institutional Sales)

+44 (0) 207 533 7716

Abchurch Communications

Jamie Hooper / Julian Bosdet

Jamie.hooper@abchurch-group.com

+44 (0) 20 7398 7719

About CentralNic Group plc


All Group information and news can be found at http://www.centralnic.com

Chief Executive Officer's Report

CentralNic is a profitable, high-margin business with strong cash-flows, already set on a high growth strategy via a portfolio of new Top-Level Domains that I consider second to none.

Performance overview

CentralNic has made significant progress in 2013. The Company listed on the AIM market of the London Stock Exchange, guided its clients' applications for new Top-Level Domains through the evaluation and approvals process, and commenced an aggressive business development strategy aimed at securing recurring revenues for years to come. In addition, the Company achieved its financial performance targets.

Billings were £3.89 million, representing a 15% increase on 2012, and producing net revenues of £3.05 million, an increase of 4% over 2012. Net cash-flow from operating activities was £1.13 million, a 15% improvement over the previous year. This growth in revenues is the result of strong deferred revenues from prior periods, continued growth in annuity billings for existing inventory, the successful launch of new domain extensions and consulting revenues relating to new TLDs.

In September 2013, CentralNic successfully raised £5 million (£4.2 million after costs of placing) through its listing on AIM, and immediately commenced investing the funds raised in its future growth strategies, with £0.20 million of operating expenditure invested in the fourth quarter of 2013. Despite this additional spend and new expenses due to our AIM listing, the Group achieved an adjusted EBITDA of £1.02 million in 2013, representing a strong 33.3% margin on net revenues.

At the year end the Group had cash balances of £4.93 million (2012 £0.16 million).

New Top-Level Domains

The internet is going through what our industry regulator ICANN called "the biggest change since its inception," with the introduction of the new gTLD programme, allowing new entrants to join the ranks of .com, .org, .net, etc - and another 20 or so TLDs which have achieved sales of over 1 million domains.

CentralNic was selected as the exclusive registry provider for 60 gTLD applications, under revenue-share and fee-for-service contracts. At the close of 2013, industry regulator ICANN had completed the Initial Evaluations of these new TLD Applications:

CentralNic continues to support its clients in navigating the ICANN contracting and contention resolution processes, and assisting them in developing their launch marketing and operational strategies. TLD-related consulting fees that CentralNic received in 2013 will be supplanted with revenues from the sale of domains from the second half of 2014.

Business Development

CentralNic listed on the AIM market with four clearly stated objectives to accelerate our growth. During 2013 CentralNic made considerable progress in realising those objectives:

1. Increasing our global retail market coverage

CentralNic continued to expand its global retailer network in 2013 by signing contracts with 114 new registrars and resellers from 32 countries, including the world's largest domain name retailer, GoDaddy, which has 12 million customers and 57 million domains under management.

2. Engaging with developing markets

CentralNic has expanded its team, and we now have multilingual executives around the world focussed on developing markets. We have already made significant progress accessing what is now the world's largest market of internet users, China, by signing contracts with three leading Chinese registrars.

3. Adding new domains to our inventory

When CentralNic listed in September 2013, its expectations were to obtain distribution contracts for an additional five domain extensions over the ensuing two years. This objective was actually met by April 2014. CentralNic has already won the distribution contracts for .website, .press, .host, .space and .co.com.

4. Entering the retail marketplace ourselves

Extensive planning and development work on CentralNic's retail strategy was undertaken in 2013 and Q1 2014. By May 2014 TLD RS had launched "flagship store" retail websites for .menu, .build, .luxury and .london.

Domain Management Software Acquisition

In December 2013, CentralNic acquired DomiNIC, a domain portfolio management and sales software product, currently used by some of the largest corporations in the German-speaking markets.

CentralNic is using this software to integrate its domain distribution platform with the in-house systems used by major corporations.

Outlook

At the end of 2013 the estimated number of people with access to the internet was growing rapidly towards three billion, with smart phone sales now surpassing one billion per year and initiatives like internet.org focused on getting the remaining five billion people online, using the resources of Facebook, Samsung, Nokia, and Ericsson, amongst others.

CentralNic intends to supply this growing demand with domain names and other tools to empower these new internet users to get their own websites. We are already active in 75 geographic markets, making us well-equipped to continue growing globally and supporting consumers and businesses in developing markets seeking to enjoy the benefits of internet adoption.

Taking into account the continuing investment in 2014 and the revenues from new TLD operations commencing in the second half, the Company is well positioned to meet market expectations for 2014.

Ben Crawford

Chief Executive Officer

7 May 2014

More detailed information about Final Results can be found here: https://www.centralnic.com/investors/regulatory