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CentralNic Group

LN: CNIC

£158m market cap

82.25p 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

In its trading update, management indicated that it expects H120 revenues in excess of US$110m, with adjusted EBITDA of at least US$15m. Cash increased to US$27.6m at 30 June 2020, while net debt fell marginally to US$76.4m. This would indicate relatively strong Q2 revenues of US$53.6m (Q1: US$56.4m), but a fall in Q2 adjusted EBITDA to US$6.9m (Q1: US$8.1m), meaning lower Q2 margins of 12.9% (Q1: 14.4%). On this basis, revenues would be c 11% ahead of our H120 estimates (US$99.1m), but EBITDA only c 2.7% ahead (US$14.6m) with H120 margins of 13.6% vs our estimate of 14.7%. At this stage, with limited visibility on the performance of the underlying businesses and with no forward guidance, we intend to leave our forecasts unchanged, pending review after the interim results on 1 September 2020.

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 1760.9 20.3
2019A 109.2 17.9 8.9 5.94 17.8 11.3
2020E 202.5 30.7 18.9 6.88 15.4 9.4
2021E 214.4 32.0 23.4 9.05 11.7 9.1
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 online domain 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 12/08/2020
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (US$m) 70
Forecast gearing ratio (%) 86
Price performance
%
1m
3m
12m
Actual (2.7) (7.1) 44.3
Relative* (5.9) (12.4) 63.0
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