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Centralnic Group PLC: DEEP DIVE

CentralNic “well positioned” for next stage of development

In a February trading update, the firm said it had delivered a “strong” performance in 2018 with revenues for the year expected to be around £42.5mln compared to £24.3mln the year before
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OVERVIEW: CNIC The Big Picture
CentralNic operates its own proprietary internet domain registry engine

• Provider of registry services for internet domains

• Distributes portfolio to network of 1,500 registrars such as GoDaddy

• Revenues jumped to £42.5mln from £24.3mln in latest fiscal year

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.

Inflexion points

• In a February trading update, the firm said it had delivered a “strong” performance in 2018 with revenues for the year ended 31 December expected to be around £42.5mln compared to £24.3mln the year before

• In September, the company acquired the business assets of GlobeHosting Inc, a Romania and Brazil-focused registrar and domain hosting provider based in Delaware, for €2.56mln (£2.2mln)

• Chief executive Ben Crawford said the acquisition of KeyDrive had led to a “significant improvement” in the quality of company earnings

Blue Sky

Going forward, 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”.

In the near-term the firm is progressing with the integration of KeyDrive’s systems into its own structure.

As a result of migrating its largest retail and reseller businesses onto the KeyDrive platform as well migrating most of KeyDrive’s registry clients onto its own software platform, CentralNic said it expected to generate £1mln in cost synergies during the 2019 fiscal year.

The company has also managed to cut its net debt to £2.4mln from £7.2mln in 2017 back of strong cash conversion in the second half of 2018, which if it continued could give it more financial firepower to further expand its market share through acquisitions.

With shares trading at 49.5p as of 15 February 2019, CentralNic has a market cap of around £85mln.

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