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CentralNic Group

LN: CNIC

Market Cap£206.7m

Last Close 82.3p

CentralNic is a leading provider of global domain name services, operating through three divisions: Indirect, Direct and Monetisation. Services include domain name reselling, hosting, website building, security certification and website monetisation.

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Investment summary

CentralNic delivered 16% Q121 LTM pro forma revenue growth, with all its businesses contributing. Management indicated that growth in domain name sales had accelerated notably, benefiting the Direct and Indirect segments, with both Retail and Corporate returning to growth. Monetisation has been rebranded Online Marketing, with revenues increasing 76% to US$45.3m (54% of Q121 group sales), making it the fastest-growing segment. As expected, with the growth of Online Marketing, adjusted EBITDA margins softened from 14.4% in Q120 to 12.0% in Q121. CentralNic made two acquisitions in the period: SafeBrands (online brand protection) for a total consideration of US$4.4m and Wando Internet Solutions (online marketing) for US$6.5m upfront plus a further up to US$6.5m, funded by a €15m bond placing. CentralNic is trading in line with management’s expectations and the pipeline of future deals remains strong. The shares trade on an FY21e EV/adjusted EBITDA of 9.1x and P/E of 12.3x, which does not reflect the growth prospects for the group.

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 12.6 N/A
2020A 241.2 30.6 19.8 10.57 11.0 N/A
2021E 323.4 39.5 26.7 9.93 11.7 N/A
2022E 350.0 43.7 30.1 10.94 10.6 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 website monetisation. 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 21/06/2021
Content on CentralNic Group
CentralNic – executive interview
TMT | Edison TV | 7 June 2021
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Share price graph
Balance sheet
Forecast net debt (US$m) 78.9
Forecast gearing ratio (%) 63
Price performance
%
1m
3m
12m
Actual (0.7) (3.2) (5.4)
Relative* (1.3) (8.0) (18.1)
52-week high/low 101.0p/73.0p
*% relative to local index
Key management
Iain McDonald Chairman
Ben Crawford CEO
Michael Riedl FD
Don Baladasan Group managing director