TIDMCNIC
RNS Number : 6774Y
CentralNic Group PLC
07 March 2017
Press Release 7 March, 2017
CentralNic Group plc
("CentralNic" or the "Company" or the "Group")
Trading and Strategic Update
CentralNic Group plc (AIM: CNIC), the internet platform business
which derives revenues from the global sale of domain names and
associated services, provides the following Trading and Strategic
Update. The 2016 trading performance in this statement is based on
unaudited initial management estimates.
2016 Trading Update
In 2016 the Company continued to grow while increasing recurring
revenues:
-- Group Revenue increased by more than 110% to GBP22.1 million (2015: GBP10.4 million)
-- Recurring/subscription revenues(1) increased to circa 80% of overall revenues (2015: 67%)
-- Adjusted EBITDA(2) increased by over 65% to GBP5.5 million (2015: GBP3.3 million)
-- Net Cash at the end of the year was GBP7.3 million
(1) Recurring / subscription revenues include revenues from
domain registration, domain renewals and other recurring
revenues.
(2) Earnings before interest, tax, depreciation, amortisation,
acquisition and non-recurring fees and non-cash charges.
2017 Current Trading
The Board is confident in meeting market expectations for the
2017 year:
-- Trading at this early stage of the year is in line with plan,
and business development initiatives are advancing
-- The Group has good exposure to the new TLDs - the
fastest-growing category of domain names. The total number of
domains using new TLDs rose from 11 million at the beginning of
2016 to over 27 million by the beginning of 2017. CentralNic is the
number one new TLD service provider with market share by volume
currently around 32% (2015: 20%)
-- Increased renewal revenues from new TLDs are expected in
2017, as the base of domains due to renew or expire has increased
to almost 10 million domains in the wholesale business (2016: 3.3
million) and circa 1.3 million in the retail business (2016: 0.7
million)
-- The Chinese market accounts for circa 60% of all new
Top-Level Domain sales globally. CentralNic is the leading
non-domestic wholesale provider of new TLDs into China, and China's
Ministry for Industry and Information Technology recently
accredited .xyz, .site, .ink and .design, all wholesaled
exclusively by CentralNic. The accreditation permits use of domains
with these endings for websites and email addresses in China.
-- New TLD launches in 2017 include .fun, .realty, .observer,
and .art. In addition to the .fun and .art contract wins last year,
there is a further pipeline of new TLDs in the process of
contracting to migrate to the CentralNic platform
-- Initial renewal rates for .xyz and other new TLDs launched
over the last 2 years are encouraging
-- The Company has appointed the former Commercial Operations
Director and former Marketing Director of Group NBT (Netnames) to
lead revenue growth initiatives.
Strategy
CentralNic has proven its ability to grow both revenues and
Adjusted EBITDA from GBP3.1m and GBP1.0m respectively in 2013 to
GBP22.1m and GBP5.5m in 2016, achieving circa 80% recurring /
subscription revenues in 2016. CentralNic's strategy has focussed
on increasing its scale and scope of operations and on
acquisitions, which along with premium domain sales have
underpinned its growth in total revenues, Adjusted EBITDA and
recurring revenues. The strategy includes:
- Developing and operating scalable software platforms to serve
global markets with domain names and related services
- Identifying and exploiting relatively high growth areas of the
domain industry, including taking a leading role in new Top-Level
Domains, servicing country code domains and focussing on growth
markets such as China
- Winning and retaining well-resourced partners with complementary objectives
- Executing acquisition transactions that meet clear strategic
criteria including being earnings accretive in the short term with
a strong recurring revenues base.
Vision
-- CentralNic's objective is join the ranks of world leaders in
its industry (which include a number of multi-billion-dollar
companies) as the new TLDs it distributes expand to challenge the
incumbent domain name endings, and China and other emerging markets
grow to rival the size of the North American and European
markets.
-- CentralNic strives to achieve this goal through continuing to
disrupt existing markets and by identifying and exploiting growth
markets around the world.
Moreover there is consolidation in the domain services industry
which present step-change acquisition opportunities for CentralNic
to enter new markets and broaden its service offerings.
CentralNic CEO Ben Crawford said:
"Following the rapid scaling up of our operations in 2016, we
have made a pleasing start to 2017. We have additional sales
resources, new licences to help grow our business in China, new
TLDs launching and opportunities to sell software licenses and
enterprise services.
With support from our investors, we look forward to continuing
the evolution of our business in 2017, scaling up to meet the
demand for domain name services as it grows globally."
- Ends -
For further information:
CentralNic Group plc
Ben Crawford, Chief Executive
Officer
Andy Churley, Group Marketing
Director +44 (0) 203 388 0600
Zeus Capital - Nomad and
Joint Broker
Nick Cowles / Jamie Peel +44 (0) 161 831 1512
John Goold / Alex Davies +44 (0) 207 533 7716
Peel Hunt LLP - Joint Broker
Richard Kauffer / Euan Brown +44 (0) 207 418 8900
Alastair Rae
Abchurch
Julian Bosdet / Tim Thompson
/ Rebecca Clube +44 (0) 207 398 7719
centralnic@abchurch-group.com www.abchurch-group.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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