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CentralNic Group

LN: CNIC

£217.4m market cap

93p 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, website building, security certification and website monetisation.

Investment summary

In September, CentralNic announced the US$36m acquisition of Codewise, a Poland-based competitor to Team Internet. The deal, which is now unconditional and will close on 31 October 2020, valued Codewise at 0.6x historical sales (US$60.3m) and 4.9x adjusted EBITDA (US$7.4m). It was funded by way of a share placing, with CentralNic raising gross proceeds of £30m, placing 40m shares (21% of the equity) at 75p per share (a 6% discount to the closing price). We estimate that the acquisition will be materially (c 18%) EPS enhancing in FY21.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2018A 56.0 9.1 7.4 5.83 20.9 N/A
2019A 109.2 17.9 12.8 8.16 15.0 N/A
2020E 217.8 30.7 17.4 5.60 21.8 N/A
2021E 295.3 40.3 27.7 8.74 14.0 N/A
Industry outlook

CentralNic supplies the tools needed for businesses to develop their online presence, providing domain names, hosting, websites, email, website security, brand protection and monetisation services. It delivers services to c 40m domains, with cross-selling and upselling important drivers of future growth. Organic growth (estimated by management to be c 6%) is supported by M&A.

Last updated on 26/11/2020
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Sector
TMT
Share price graph
Balance sheet
Forecast net debt (US$m) 76.1
Forecast gearing ratio (%) 52
Price performance
%
1m
3m
12m
Actual 17.4 7.5 54.4
Relative* 7.0 1.2 76.0
52-week high/low 95.0p/58.5p
*% relative to local index
Key management
Iain McDonald Chairman
Ben Crawford CEO
Michael Riedl FD
Don Baladasan Group managing director