Minds + Machines Group Limited (LON:MMX) said the momentum it experienced at the end of 2019 has continued into the first quarter of 2020, and, as a result, it plans to press ahead with its share buyback programme even during this current coronavirus crisis.
The internet top-level domain provider said in late January that revenue for 2019 would be “significantly ahead” of 2018 and so it proved, with Tuesday's full-year results statement revealing that revenue was up 25% to US$17.3mln from US$12.4mln in 2018.
Automated sales through the registrar channel (e.g. domain name sellers such as GoDaddy) were up 40% to US$17.3mln from 2018’s US$12.4mln, and now represent 91% of total revenues (2018: 82%).
MMX said the first quarter saw no signs of automated sales through the registrar channel being negatively affected by coronavirus to date in any region, including China.
New registrations revenue was up 84% to US$5.6mln from US$3.0mln the year before while renewal revenues rose 25% to U$11.7mln from US$9.4mln in 2018, and represent 62% of total revenue, unchanged year-on-year.
Profit before tax was £4.9mln, compared to a loss the year before of £12.7mln.
The group’s cash flow improved significantly to US$6.2mln, up from US$2.3mln the year before, helped by receipts of US$1.6mln from private auctions of top-level domains.
Cash at the year-end stood at US$6.6mln, down from US$10.4mln after a re-payment of its working capital facility of US$3.0mln, final partner and onerous contract related payments of US$6.7mln, and US$0.4mln of share buy-backs.
A number of companies have announced a moratorium on share repurchase schemes in recent days but MMX is pressing ahead with the already authorised programme of share buybacks up to the current limit of £1.0mln.
The group is, however, delaying any decision on the dividend indicated in its January trading update until September as at that point the board will have much better visibility on the impact of the coronavirus (COVID-19) on current trading.
“Healthy trading through the online channel has been experienced across all regions Q1 to date, with no initial signs of online channel sales that accounted for 91% of 2019 revenues being negatively impacted in any area, notably China, by COVID-19,” said Toby Hall, the chief executive officer of MMX.
“That said, working practices have had to be significantly adjusted due to both local and international travel restrictions which may in turn impact our one-off brokered sales, which currently account for less than 10% of total revenue in 2019, as well as certain aspects of business development,” he cautioned.
“Longer term, the extent to which the wider environment may impact us is an unknown; however, the high levels of our recurring revenues and online nature of the majority of our sales should, in theory, shield us from the worst of the immediate storm,” Hall said.