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viewCentralnic Group PLC

CentralNic doubles sales again and looks for more in 2020

Snapshot

  • CentralNic provides registry services for internet domains
  • Distributes portfolio to a network of 1,500 registrars such as GoDaddy
  • Revenues rose 95% in 2019
  • Primed for further acquisitions
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Quick facts: Centralnic Group PLC

Price: 89 GBX

LSE:CNIC
Market: LSE
Market Cap: £168.07 m
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What CentralNic does

CentralNic Group PLC (LON:CNIC) is a provider of registry services for internet domains, a string of characters (e.g. ‘.com’, ‘.net’, or ‘.gov’) used to identify administrative authority or control of different websites online.

CentralNic is headquartered in London but also has offices in New York, Dubai and Los Angeles with account executives in Hong Kong, Abu Dhabi and Melbourne.

 

What it owns

CentralNic operates its own proprietary registry engine that uses in-house IT systems to distribute its portfolio of domains across a network of 1,500 registrars such as domain retailer GoDaddy.

The firm also owns domain name technology firm KeyDrive, which it acquired last year in a reverse takeover for an initial sum of US£35.8mln.

KeyDrive develops and operates software platforms used for selling subscription-based tools for businesses to operate online, including domain names, hosting, email, domain portfolio management and online advertising services.

Four acquisitions were made recently: KeyDrive, Hexonet, TPP Worldwide and Team Internet.

 

How it's doing

Revenues and earnings both surged ahead by 95% in 2019.

The turnover rise was in line with market forecasts but underlying earnings were slightly better than predicted, the internet domain name specialist said in a trading update.

Turnover climbed to US$109mln from US$56mln reflecting both organic growth and the benefit of the acquisitions.

Underlying earnings (adjusted EBITDA) rose to US$18mln from US$9.1mln, with US$5mln made in the final quarter of the year.

CentalNic has now almost doubled sales in five of the past six years.

 

Inflexion points

  • The company recently reshuffled its leadership with a number of new appointments and director changes
  • In March, the group hailed a turnaround of its Team Internet business, which it acquired at the end of 2019, which recorded revenue of US$74.0mln and adjusted underlying earnings (EBITDA) of US$12.3mln between 1 January 2019 through to 24 December 2019 compared to revenue of US$66.7mln and EBITDA of US$10.6mln in the 12 months to 30 June 2019
  • Acquisitions have been flowing and more seem likely
  • KeyDrive had led to a “significant improvement” in the quality of company earnings

 

Blue Sky

Going forward, chief executive Ben Crawford said that the company was “well-positioned for the next stage of developing a global company that drives the growth of the digital economy, giving shareholders exposure to the fastest-growing customers, products and markets in our sector, worldwide”.

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