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Minds + Machines to be debt-free by end of March; shares rise

The top-level domain name owner enjoyed a strong renewals cycle at the end of 2018 and billings are well up in the first couple of months of the new year, all of which has allowed it to pay off its US$2.3mln loan facility
top level domain name
MMX is developing a .luxe TLD, which it wants to be the standard for Bitcoin companies

By the end of this month, top-level domains (TLD) registry company Minds + Machines Group Limited (LON:MMX) will be debt-free, news which helped push its share price higher on Tuesday.

MMX, which owns TLDs such as .law and .london, enjoyed “strong trading” in the final few months of 2018 which is when a lot of its contracts come up for renewal.

As such, cash balances finished the year at US$10.4mln and have risen to US$11.9mln since.

READ: MMX’s earnings to be marginally ahead of expectations

“Coupled with the encouraging start to the year and a positive trading outlook, the entirety of the outstanding debt of US$2.3mln under the London & Capital facility will be repaid early in March 2019, leaving the company debt free,” read Tuesday’s trading update.

In the first couple of months of 2019, billings (i.e. sales) are more than double what they were this time last year.

That’s due to a combination of the first contribution from the recently-acquired ICM portfolio as well as a “significant increase” in billings from China.

Speaking of ICM, renewals rates were ahead of expectations during its first renewals cycle under the MMX umbrella, with 91% of customers renewing their contracts.

Bitcoin move progressing well

The AIM-quoted company is also pushing ahead with its .luxe project, which looks to provide a  standardised naming convention for blockchain addresses.

MMX is working with the lead developers of the Namecoin blockchain and XAYA platform to develop an easy-to-use naming solution that will integrate human readable .luxe addresses with bitcoin alphanumeric addresses.

It is expected the .luxe bitcoin naming service will go live in the second half of this year.

In the same trading update, MMX confirmed it has appointed Christa Taylor as its new chief marketing officer and Daniel Schindler, the co-founder of Donuts Inc, the world’s largest new TLD operator, as a special advisor.

Debt-free status offers ‘increased flexibility’

“The momentum we are generating in the industry is now being reflected not just in our numbers but by the calibre of individuals and partners now wishing to work with the group,” said chief executive Toby Hall.

“We very much look forward to the positive start to the year continuing throughout the full year and the increased flexibility that potentially provides as evidenced through the early retirement the London & Capital facility.”

In a note to clients, analysts at ‘house’ broker finnCap commented: “Overall, MMX continues to make excellent progress to highlight the excellent value in the current share price and a rerating is overdue.”

finnCap repeated a 17p target price for Minds + machines shares, which in late morning trading were 7.2% higher at 5.95p.

 -- Adds analyst comment, share price --

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