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CentralNic Group

LN: CNIC

£164.8m market cap

87.25p last close

CentralNic Group is a leading global domain name registry services provider, operating through three divisions: Reseller (number two globally); Corporate; and SME. Services include domain name reselling, hosting, registration, website building, security certification and website monetisation.

Investment summary

CentralNic’s capital markets day (CMD) on 24 June 2020 introduced the divisional management team and provided insight on each of the three key segments as they will report in FY20: Indirect (Wholesale, Registry); Monetisation (Team Internet); and Direct (Retail, Corporate). We have picked out what we believe are the four key themes from the CMD: FY20 performance, COVID-19 and seasonality; organic growth; M&A; and, pulling it all together, the benefit of scale. CentralNic continues to trade on an FY20 EV/EBITDA of 9.1x and a P/E of 15.8x, a material discount to its peer group, with our DCF indicating further share price upside. M&A could bring CentralNic’s multiples down further.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2018A 42.7 7.0 5.6 0.06 1817.0 20.9
2019A 109.2 17.9 8.9 5.94 18.4 11.7
2020E 202.5 30.7 18.9 6.88 15.8 9.7
2021E 214.4 32.0 23.4 9.05 12.0 9.4
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (US$m) 70
Forecast gearing ratio (%) 86
Price performance
%
1m
3m
12m
Actual 1.8 5.8 39.6
Relative* 1.5 (8.1) 66.8
52-week high/low 95.0p/40.0p
*% relative to local index
Key management
Iain McDonald Chairman
Ben Crawford CEO
Michael Riedl FD
Don Baladasan Group managing director