CentralNic - Tempus Column

Source: The Times, 9-December 2014

The Times

Journalist: Nic Fildes, Technology and Communications Editor

Revenue: £1.6million
Loss: £599,000

Tempus Column - The TimesThere has been a war waging within the URL bar over the past year. Traditionalists have hailed the power of the .com and the more parochial .co.uk suffix for routing us to the websites that we need.

However, there are radicals who firmly believe that we are entering an era in which a vibrant variety of domain names will emerge. In this new world, pubs can choose to switch their website address to a .bar domain, while news organisations can adopt a .news suffix. The hype around these new URLs hit fever pitch last year and coincided with the float of CentralNic on AIM at a price of 55p.

The company, which derives its odd name from “network information centre”, has 45 domain codes and has used the funds from the flotation to position itself as a retailer of domain names such as GoDaddy in the United States, as well as a core business in registering them. It owns the likes of .site, .tickets and .fans and is the second-biggest domain name register in the world, behind Donuts, and ahead of Verisign, which is listed on Nasdaq.

The stock has slumped to 35p over the course of the year, though, as the use of .com has proved stronger than expected. Few sites have switched, but CentralNic believes that revolution will be triggered by the imminent launch of .apple and .google, which it hopes will change consumer behaviour. It’s a risk but there is value here, with the shares trading at 8.7 times 2015 profit forecasts. This tech tiddler looks in decent nick.

My advice: Speculative buy

Why: A punt on an industry shift that could pay off