Minds + Machines Group Limited (LON:MMX) is expecting a stronger second half as the recovery from the pandemic-related impacts continue.
The website domain company, in its interim results statement, noted that its business is traditionally second-half weighted and it is expecting both revenues and earnings (operating EBITDA) to be ahead of the first half.
How much the results will exceed the first half will depend upon the performance of marketing campaigns for key domain registrar partners and the timing of AdultBlock which was previously delayed amidst COVID-19.
In the first half gross revenue amounted to US$8.4mln, down 5%, reflecting a switch to channel rather than brokered revenue. Net of partner payments, revenue was said to be steady at US$7.4mln.
Underlying profits (operating EBITDA) of US$2.3mln were reported and profit after tax was stated at US$1.2mln, while cash generation increased by 19% to US$2.5mln. The company ended June with US$7.3mln.
"As a group our core business is profitable, cash generative, and debt-free, with the majority of our revenue being recurring,” said chief executive Toby Hall. “Our ongoing focus on improving cash generation and revenue mix has resulted in uplifts in both cash generation and channel revenue in the period.
“As expected, the replacement of one-off brokered revenue with recurring channel revenue that is waterfalled over the life of the registration, has resulted in revenue after partner payments effectively remaining flat at US$7.4m, with total revenues down 5%, in spite of the 7% uplift in underlying H1 billings.”
Hall added: “Given the highly predictable cash generative nature of our core channel business, we are pleased to announce that a tender offer of £3m will take place in November. This will be supplemented by an ongoing buyback and an intention to target further distributions of approximately 50% of free cashflow from operations each subsequent financial year."