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CentralNic Group

LN: CNIC

Market Cap£286m

Last Close 114p

CentralNic is a leading provider of global domain name services, operating through two divisions: Online Presence, which provides businesses with services including domain names, hosting, websites, email, security certification and brand protection; and Online Marketing, which helps domain name owners monetise online traffic using an anonymised, privacy protected marketing platform.

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Investment summary

After a strong H121, management expects CentralNic to deliver revenue and profits for the year ‘at least at the upper end of market expectations’. Following its FY20 investment programme, the company delivered 20% y-o-y organic growth in H121 – 16% in Q121 and 25% in Q221, with all business lines contributing. Reflecting continuing strong growth, we have raised our FY21 and FY22 revenue targets to US$350m and US$379m, respectively, while adjusted EBITDA rises slightly to US$41.1m and US$45.2m. On our revised estimates, CentralNic’s shares trade on an undemanding FY21e EV/adjusted EBITDA of 10.0x and P/E of 12.9x, well below its web services and online marketing peers, despite its FY15–20 revenue CAGR of 78% and our estimate for current year growth of 45%.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2019A 109.2 17.9 16.1 9.24 17.0 N/A
2020A 241.2 30.6 19.8 10.57 14.9 N/A
2021E 350.1 41.1 27.8 11.01 14.3 N/A
2022E 378.8 45.2 30.9 11.40 13.8 N/A
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 22/09/2021
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Share price graph
Balance sheet
Forecast net debt (US$m) 80
Forecast gearing ratio (%) 66
Price performance
%
1m
3m
12m
Actual 18.8 38.5 32.6
Relative* 20.3 38.5 6.6
52-week high/low 117.0p/73.0p
*% relative to local index
Key management
Iain McDonald Chairman
Ben Crawford CEO
Michael Riedl CFO
Don Baladasan Group managing director