CentralNic Announces its Interim Results for the Six Months Ended June 30,2014

CentralNic,one of the world’s pioneering registry service providers , announced today its interim results for the first six months of the year, ending June 30,2014.

Key Points Include :

·   CentralNic has seen steady growth in its wholesale (“Registry”) business, against a background of delays in new Top-Level Domains (TLDs) and early demand levels across the industry falling short of industry expectations.

·   CentralNic has continued investment in the development of new retail and enterprise business lines, as outlined in the 2013 Annual Report.

·   Group revenue £1.64 million for H1 2014 (2013: £1.74 million, benefitting from £0.39 million of non-recurring licence and consultancy revenue) and a break-even adjusted EBITDA* (2013: £0.76 million) reflecting the planned re-investment of registry profits into developing the business.  Basic and Diluted Loss per 1.01 pence (2013: Basic and Diluted Earnings per Share, pro-forma basis, 0.93 pence).

·   Cash and cash equivalents of £2.97 million at the end of the half (2013: £0.82 million) reflecting IPO funds received in September 2013 and then invested in 2014.

·   CentralNic’s wholesale business has continued to grow, with an increase in billings of 25% (2013: 23%), revenues of 16% (2013: -10%) and adjusted EBITDA of 28% (2013: 20%) for that business measured on a like-for-like basis versus H1 2013.  This reflected strong performance from the existing domain portfolio, as well as early contribution from new Top-Level Domains (“TLDs”).

·   CentralNic is now one of the world’s leading wholesalers for the new TLDs, with promising early results from the five TLDs it launched in the first half.  Additional launches have taken place since 30 June 2014, with at least 25 further launches planned.  The business recently entered into a significant new contract for .TICKETS.

·   Fulfilling the Company’s strategic plan announced on listing on AIM on 2 September, 2013, CentralNic made substantial capital investments of £1.91 million of cash and operating expenditure investments of £0.80 million in H1 2014 to deliver a rapid increase in the scale and scope of its operations within the domain name industry.   This included the acquisition of the trade and assets of domain retailer (“Registrar”) Internet.BS and launch of retail websites for .LONDON, .MENU, .LUXURY and .BUILD.

·   CentralNic closed H1 with a more diversified business within the domain name industry, with three core revenue-earning divisions: Wholesale (“Registry Services”), Retail (“Registrar Services”) and Enterprise.

Commenting on the results, John Swingewood, Chairman, said:

“I am pleased that our Registry business has achieved record billings, revenues and profits in the first half of 2014, against a background of delays in new Top-Level Domains (“TLDs”) that have impacted across the industry.  To date, demand levels have fallen short of industry expectations, however CentralNic has performed strongly relative to the market with the new TLDs it has launched to date and is well positioned to take advantage of the growth in demand when it comes through.

“CentralNic has now made the planned investments in operating and capital expenditure as expected in the first half of the year, transforming the business to enable it to profit not only from wholesale distribution fees, but also from retail sales and new high-yield enterprise contracts.  The Board is satisfied with the Company’s execution of its plan and believes the business is strongly positioned to take advantage of future opportunities in the industry.”

Chief Executive Officer’s Statement

Performance overview

The Directors are pleased to announce CentralNic’s first full set of interim results as a Public Company as well as the advancement of the business over the first half of 2014 marking significant transformations from the company that listed on AIM in September 2013.

Operational highlights include sustained growth of the traditional domain name wholesaling (“Registry”) business, a leading position in new Top-Level Domains and significant investment in developing the business – creating a company with multiple revenue lines within the domain name industry (wholesale, retail and enterprise) and exposure to multiple growth opportunities. 

The interim financial results reflect two major themes, namely:

1.   Growth in the registry business by way of Billings, Revenues and Adjusted EBITDA, both in the existing TLD registry portfolio and with the launch of the first five new generic Top-Level Domains (“gTLDs”) towards the end of H1 2014.

2.   Cash Investment of £2.71 million drawing on both the profits generated by the registry and the capital raised from the IPO to accelerate the development of the business across Registrar Services and Enterprise Channels as well as expanding our corporate leadership capabilities and advisory support.

The increased registry profits were offset by the planned expenditure on new business development, resulting in a break-even result at the Adjusted EBITDA level for H1 2014, with residual cash on hand of £2.97 million as at 30 June 2014.  The outlook for H2 2014 and for the future is positive, further developing our three business lines, launching more new gTLDs and investing in other growth opportunities within the domain industry.

You can see the entire report here.