Minds + Machines Group Limited (LON:MMX) said it has made its interim chief executive appointment permanent while also reporting that its revenues for its 2020 financial year have been “largely in line” with those from 2019.
The internet domain name specialist said Tony Farrow, who re-joined the company at the end of October as interim CEO has been appointed to the position formally and will join the board following the completion of due diligence.
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Meanwhile, in an update on its trading, the company said renewal revenues have remained consistent in 2020 at 68%, while new standard registration revenue increased to 24% with reduced dependency on premium domains.
The company also reported a 3% decline in billings year-on-year which it said reflected increases in most top-level domains (TLDs) but a significant drop in AdultBlock billings in 2020 following the launch in 2019. Meanwhile, Minds + Machines said 98% of billings were delivered through the registrar channel in 2020, eliminating its historical reliance on one-off brokered sales.
Elsewhere, domains under management (DUMs) were down 19% in 2020 with no loss in contribution, which the company said reflected its intentional shift to “more profitable transactions” adding that its sales efforts towards higher-margin TLDs will be the principal focus on 2021.
In addition to the departure of its CEO and chief financial officer, Minds + Machines said it has also reduced its workforce by 20% which is expected to reduce costs in 2021, adding that the new executive team is also reviewing the contribution received from each of its TLDs and the growth prospects for each from new sales initiatives to ensure the carrying values associated with each TLD is “appropriate going forward”.
Cash flow from operations was US$6.4mln in 2020 compared to US$0.5mln in 2019, while cash at year-end stood at US$8.9mln, up from US$6.6mln in the prior year.
"It is great to be back working with the MMX team. Our FY 2021 plan will focus on AdultBlock sales, extensive release of inventory to the market, quality registrations with the view of future renewal revenue and standardized promotions for our channel partners. It is a straightforward business where focus must remain on the quality of our domain registrations and promotions with our channel partners”, Farrow said in a statement.
“We lost some of the momentum after the initial launch of AdultBlock in FY 2019. However, FY 2021 was always the target year for the full rollout of this new product, and I am encouraged by the dialogue with our channel partners to really move AdultBlock in FY 2021. I look forward to sharing more insight and information when we release our FY 2020 results in the Spring", he added.
Settlement agreement
In a separate announcement, Minds + Machines said it has entered a settlement agreement with the vendors of ICM Registry, including its former majority shareholder Stuart Lawley, under recent alleged warranty claims over an acquisition agreement entered into between Minds + Machines and ICM on May 3, 2018.
Under the terms of the agreement, the company said it has agreed to pay the settlement parties US$1mln in full and final settlement of all claims relating to the acquisition of ICM by MMX.
“Whilst the directors believe that the alleged claims of the settlement parties are without merit, they believe the swift settlement is in the best interests of the company and allows it to focus on restoring shareholder value without the distraction of potentially expensive and time-consuming litigation. The settlement agreement will allow for a more positive relationship between the parties, including in particular Mr Lawley, for the benefit of all MMX shareholders”, the company said.
Minds + Machines shares were up 0.8% at 4.8p in early trading on Monday.