CentralNic Group doubles revenues in year of transition

Proactive Investors

Source: http://www.proactiveinvestors.co.uk/companies/news/79735/centralnic-group-doubles-revenues-in-year-of-transition-79735.html

Revenues doubled and profits were ahead of expectations in Internet platform businessCentralNic's (LON:CNIC) 2014 results.

The group, which made its name as a registry services provider (keeping a database of top level domains (TLDs) assigned by registrars - finished the year with three profitable operating divisions: registry services, registrar services and enterprise services.

In a year in which it launched eight new generic TLDs, or gTLDs, it ranked second by volume in the league table of new registry providers.

Billings shot up to £9.89mln in 2014 from £3.89mln in 2013, while revenue doubled to £6.07mln from £3.05mln.

All three divisions saw growth in net revenue, augmented by a half year of trading results in the registrar division from the acquisition of the retail trade of Internet.BS and the creation of the premium domains business in the enterprise division.

Adjusted underlying earnings (EBITDA) climbed to £1.72mln from £1.02mln the year before, while adjusted profit before tax was ahead of expectations of £1.36mln at £1.66mln, versus £1.01mln in 2013.

Reported profit before tax eased to £520,000 from £701,000, reflecting in part acquisition deal fees of £466,197.

Net cash-flow from operating activities increased to £1.41 million (2013: £1.13 million), and the group ended the year with net cash of £3.06mln, down from £4.93mln at the end of 2013.

"The group is strongly placed to benefit from the re-organisation of the Internet name space, with access to earnings from domains as both a wholesaler and retailer in the primary markets and as a broker in the secondary market," said John Swingewood, chairman of CentralNic.

"Furthermore, the group is exposed to both developed and emerging economies, being active in those markets either directly or via the group's extensive distribution channel. With the world's Internet users estimated at 3.1bn, there is still more than half of the global population who are yet to get online. As such, continuing sustained growth in the world's Internet users presents us with considerable opportunity," he added.

It remains the directors' intention to recommend payment of a dividend when appropriate and commercially prudent to do so, but the sector is still in land grab at present, so no final dividend has been proposed.

The company conceded that current demand for new TLDs is still at a very early stage as many potential customers are still unaware of the increased options available to them, but awareness should grow in 2015 with the expected launch and promotion of new TLDs by the so-called "super brands".