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CentralNic Group

LN: CNIC

Market Cap£356.7m

Last Close 144p

Leading global domain name services provider CentralNic operates via two divisions: Online Presence provides domain names, hosting, websites, email, security certification and brand protection; and Online Marketing helps domain name owners monetise online traffic using an anonymised, privacy protected marketing platform.

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Investment summary

CentralNic provides domain name services and online marketing, focused on consolidating a highly fragmented global market. It offers a broad range of internet services, including reseller services, to corporates and SMEs (Online Presence), as well as monetisation services (Online Marketing) to domain investors. The group strategy is to benefit from structural market growth, building its two segments and diversifying the group’s revenues through cross-selling and upselling services. CentralNic has achieved a five-year revenue CAGR to FY20 of 78%. The company is valued on an FY21 EV/EBITDA multiple of 12.6x and a P/E of 17.4x, a material discount to its peer group, with our DCF underlining the discount to fair value. We would expect future M&A to bring CentralNic’s multiples down further.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2019A 109.2 17.9 16.1 8.97 21.4 N/A
2020A 241.2 30.6 19.8 10.16 18.9 N/A
2021E 384.1 43.0 29.7 10.53 18.2 51736.4
2022E 420.2 48.0 33.6 11.16 17.2 31231.9
Industry outlook

CentralNic supplies the tools needed for businesses to develop their online presence, providing domain names, hosting, websites, email, security certification, brand protection and marketing. It delivers services to c 40m domains, with cross-selling and upselling important drivers of future growth – organic growth is supported by M&A.

Last updated on 01/12/2021
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Share price graph
Balance sheet
Forecast net debt (US$m) 0
Forecast gearing ratio (%) 0
Price performance
%
1m
3m
12m
Actual 1.4 39.9 59.6
Relative* 3.5 42.3 43.4
52-week high/low 150.0p/81.0p
*% relative to local index
Key management
Iain McDonald Chairman
Ben Crawford CEO
Michael Riedl CFO
Don Baladasan Group managing director