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Organic growth momentum continues

CentralNic Group 31 August 2022 Update
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CentralNic Group

Organic growth momentum continues

H122 interim results

Software and comp services

31 August 2022

Price

124.5p

Market cap

£350m

£1.17/US$

Net debt (US$m) at 30 June 2022

63.6

Voting shares in issue

280.9m

Free float

73%

Code

CNIC

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

0.8

(2.7)

29.8

Rel (local)

2.4

1.1

32.2

52-week high/low

149.9p

97.5p

Business description

CentralNic Group provides the essential tools for businesses to go online, operating through two divisions: Online Presence (reseller, corporate and SME) and Online Marketing. Services include domain name reselling, hosting, website building, security certification and website monetisation.

Next events

Q322 trading update

19 October 2022

Q3 results

November 2022

Analysts

Richard Williamson

+44 (0)20 3077 5700

Dan Ridsdale

+44 (0)20 3077 5700

CentralNic Group is a research client of Edison Investment Research Limited

CentralNic reported 62% organic revenue growth in H122, with gross revenues rising 93% y-o-y to US$335m and net revenues rising 51% to US$82m. Adjusted EBITDA rose 97% to US$39m (H121: US$20m), with adjusted EBITDA/net revenue increasing to 47%. Organic growth has continued to strengthen (H121: 20%, FY21: 39%, H122: 62%) as advertisers are driven to privacy-safe marketing solutions, such as CentralNic’s TONIC. With this continued high growth, we have raised our FY22 revenue forecast by 12% to US$642m and EBITDA to US$74m. We recognise that these forecasts may prove conservative, but given global economic uncertainties, we feel a degree of caution is in order. Management also noted that the bond refinancing is ongoing. Based on our revised estimates, CentralNic trades on an FY22 P/E of 8.5x and on 6.4x FY22 EV/adjusted EBITDA.

Year end

Revenue (US$m)

Adjusted

EBITDA* (US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(c)

P/E
(x)

12/20

240.0

29.4

18.6

10.0

0.0

14.7

12/21

410.5

46.3

31.9

11.8

0.0

12.4

12/22e**

642.3

73.9

58.4

17.2

0.0

8.5

12/23e**

736.4

83.2

69.2

18.5

0.0

7.9

Note: *Excludes impact of share-based payments, share option expenses, foreign exchange charges and non-core operating costs. **FY22e and FY23e EPS figures reflect 280.9m voting shares in issue.

Growth led by TONIC’s contextual advertising

While 62% growth may prove difficult to sustain, especially as FY21 comparators get progressively more challenging, privacy-led growth is likely to be ongoing despite the impact of macroeconomic headwinds. CentralNic’s growth will be supported by the medium-term growth of the contextual advertising market, which is forecast to grow at a 13% CAGR to 2026 (according to Global Industry Analysts).

Estimates raised by 12%, but still conservative

As a result of the continued strong organic growth in H122, we have raised our FY22 revenue estimate by 12% to US$642m. This is still comfortably below the H122 annualised revenue figure (c US$669m), despite H2 typically being stronger than H1. Other assumptions remain unchanged. With our 11.5% EBITDA margin, this lifts our FY22 EBITDA estimate to US$74m. As a result of the higher year end run-rate, our FY23 revenue estimate lifts to US$736m, with EBITDA of US$83m. If organic growth continues at these levels, our forecasts will prove conservative.

Valuation: GARP, what’s not to like?

CentralNic offers a compelling proposition, with recurring revenue products contributing over 99% of total gross revenues and adjusted cash conversion of over 100%. Our upgraded estimates imply 56% y-o-y revenue growth for FY22, with the shares trading on an FY22 P/E of 8.5x and on 6.4x FY22 EV/adjusted EBITDA. The group has delivered a five-year revenue CAGR of 72%, putting it in the top 50 fastest growing technology companies in Europe (FT, 2022) and has now been included in the AIM 100 and AIM UK 50 indices.

H122 interim results

Strong top-line growth, operating leverage showing through

CentralNic’s momentum continued in H122, delivering last 12 months (LTM) organic revenue growth to 30 June 2022 of 62%, as CentralNic’s privacy-safe Online Marketing solutions benefited from an online advertising market squeezed by tightening privacy measures and regulatory concerns.

H122 gross revenues increased 93% y-o-y to US$335m (H121: US$174m), with net revenues rising 51% to US$82m (H121: US$54m), a gross margin of 24.5%, down from 31.2% in H121. Adjusted EBITDA rose 97% to US$39m (H121: US$20m), with a slight up-tick in margins to 11.5% (H121: 11.3%), although Q222 margins were 11.3%. Margins have been on a weakening trend as Online Marketing has substantially outgrown Online Presence. Adjusted EBITDA/net revenue increased to 47% in H122 (H121: 36%), with CentralNic benefiting from improving operating leverage (Exhibit 2).

Exhibit 1: Key quarterly comparator figures

US$m

Q121

Q221

H121

H221

FY21

Q122

Q222

H122

Gross revenue

84.4

89.4

173.8

236.7

410.5

156.6

178.0

334.6

Net revenue

27.9

26.4

54.3

64.2

118.5

39.9

42.2

82.1

Margin

33.0%

29.6%

31.2%

27.1%

28.9%

25.5%

23.7%

24.5%

Adjusted EBITDA

10.1

9.5

19.60

26.7

46.3

18.5

20.1

38.6

Margin

12.0%

10.6%

11.3%

11.3%

11.3%

11.8%

11.3%

11.5%

Adjusted EBITDA/net revenue

36%

36%

36%

42%

39%

46%

48%

47%

Net debt

79.0

83.8

83.8

81.4

81.4

61.3

63.6

63.6

Source: CentralNic, Edison Investment Research

Reconciling H122 adjusted EBITDA (US$39m) and operating income (US$22m), the principal elements were: US$15m of amortisation and depreciation (H121: US$11m); US$3m of non-core operating expenses (H121: US$5m), primarily M&A and integration related costs; a US$4m foreign exchange gain (H121: US$1m); and US$3m of share-based payment expenses (H121: US$2m) related to acquisitions. This resulted in CentralNic reporting H122 PBT of US$16m (H121: a loss of US$2m) and PAT of US$7m (H121: a loss of US$3m). H122 adjusted EPS rose 59% to 8.5 cents (H121: 5.3 cents).

Exhibit 2: Improving operating leverage

Exhibit 3: Q4 typically the strongest quarter

Source: CentralNic, Edison Investment Research

Source: CentralNic, Edison Investment Research

Exhibit 2: Improving operating leverage

Source: CentralNic, Edison Investment Research

Exhibit 3: Q4 typically the strongest quarter

Source: CentralNic, Edison Investment Research

CentralNic’s cash generation was particularly strong in H122, with US$38m of cash generated from operations (H121: US$17m), not far short of the cash from operations for the entirety of FY21 (US$43m). Adjusted operating cash conversion was 110%, with cash rising to US$95m at 30 June 20022 from US$56m at 31 December 2021, despite the acquisition VGL. As a result of the strong cash generation, net debt (including mark-to-market on the bond hedging) fell 22% to US$64m at 30 June 2022, from US$81m as at 31 December 2021 (30 June 2021: US$84m). Excluding mark-to-market on the bond hedging (the cash flow hedging reserve stood US$17m at 30 June 2022), net debt at period end fell to US$47m.

Given the group’s strong cash generation, its relatively modest gearing (net debt/FY22 adjusted EBITDA below 1x and interest cover above 5x), together with the ongoing bond refinancing, which management anticipates will deliver better terms for the group, we would expect further acquisitions later this year. Management has noted a full M&A pipeline as well as an intention to maintain its historical pricing discipline.

Segmental analysis: Online Marketing, Online Presence

CentralNic breaks its revenues into two segments, Online Marketing (the dominant division, representing 77% of gross revenue and 67% of net revenue) and Online Presence.

Online Marketing: none of CentralNic’s marketing platforms use third-party cookies or collect personal data. Increasing restrictions on the use of third-party cookies in Google Chrome and App Tracking Transparency in Apple’s iOS 14.5 have therefore benefited CentralNic, driving the group’s high rates of organic growth over the past 12–18 months (Q121: 16%, H121: 20%, 9M21: 29%, FY21: 39%, Q122: 53%, H122: 62%). Growth in H122 benefited from contributions from the Wando and White & Case acquisitions for the full period, as well as partial period contributions from VGL (acquired in March 2022) and Fireball (acquired in February 2022). Gross revenues increased by 167% to US$258m (H121: US$96m), with organic revenue growth of 98%, predominantly driven by CentralNic’s TONIC media buying business (contextual advertising – see section below, What is driving Online Marketing’s growth?). The number of visitor sessions increased by 82% to 2.0bn in H122 (H121: 1.1bn) and revenue per thousand sessions (RPM) by 87% from US$57 to US$106.

Exhibit 4: H122 gross revenue breakdown

Exhibit 5: H122 net revenue breakdown

Source: CentralNic, Edison Investment Research

Source: CentralNic, Edison Investment Research

Exhibit 4: H122 gross revenue breakdown

Source: CentralNic, Edison Investment Research

Exhibit 5: H122 net revenue breakdown

Source: CentralNic, Edison Investment Research

Online Presence: despite organic revenue growth of 5%, the segment was affected by adverse FX rates due to the strength of the dollar, CentralNic’s reporting currency. As a result, revenue fell by 1% to US$77m (H121: US$77m). Management chose not to discount rates to drive sales, preferring to improve the quality of revenue. The average revenue per domain year increased by 8% to US$9.60, but domain registrations fell to 6.0m in H122 (H121: 6.5m). The proportion of value-added service revenue remained stable at 7.9% of revenues.

FY22 estimate revisions

FY22 revenues raised 12%, scope for further upgrades

Management reports that Online Marketing has so far proven immune to a slowdown in advertising spending. Accordingly, management is confident that CentralNic is comfortably trading towards the high end of recently upgraded consensus (disclosed as FY22 revenues of US$642m and EBITDA of US$64m).

Pro forma LTM organic revenue growth was 62% to 30 June 2022 (53% to 31 March 2022), driven by Online Marketing. Although we recognise that these growth rates may slow at some stage, it remains hard to identify an immediate trigger for a slowdown in growth, with the division facing a US$100bn+ opportunity and having already taken significant adverse economic factors in its stride and continued to perform. However, in the current economic climate, we remain cautious.

Based on its H122 figures, CentralNic is on course to deliver annualised gross revenues of US$669m, net revenues of US$164m and adjusted EBITDA of US$77m, with Q4 typically the strongest quarter for advertising revenues (Exhibit 3). As such, we feel very comfortable upgrading our FY22 revenue forecasts by 12% to the top end of consensus (US$642m), and, assuming no sudden slowdown in Online Marketing, and with CentralNic benefiting from improving operating leverage, we would expect the company to exceed these numbers. Based on unchanged FY22 margin assumptions, FY22 adjusted EBITDA also rises 12% to US$73.9m.

Exhibit 6: Edison’s revised estimates

Year end 31 December

US$000

Actual
2021

Old
2022e

New
2022e

Change (%)

Y-o-y growth

Old
2023e

New
2023e

Change (%)

Y-o-y growth

Gross revenue

410,540

573,473

642,289

12%

56%

672,446

736,403

10%

15%

Net revenue

118,499

157,022

175,865

12%

48%

176,712

193,520

10%

10%

Adjusted EBITDA

46,251

65,949

73,863

12%

60%

75,986

83,214

10%

13%

Profit before tax (norm)

31,939

51,140

58,408

14%

83%

62,514

69,195

11%

18%

Profit before tax (reported)

1,555

15,147

22,376

28,590

35,196

Net income (normalised)

26,842

40,912

46,727

14%

74%

46,886

51,896

11%

11%

Average shares outstanding (m)

227

263

271

3%

271

281

EPS – basic normalised (c)

11.80

15.54

17.23

11%

46%

17.29

18.47

7%

7%

EPS* – diluted normalised (c)

10.69

14.46

16.06

11%

50%

16.12

17.26

7%

7%

Revenue growth (%)

71.0

39.7

56.4

17.3

14.7

Gross margin (%)

28.9

27.4

27.4

26.3

26.3

Adjusted EBITDA margin (%)

11.3

11.5

11.5

11.3

11.3

Adjusted EBITDA/net revenue (%)

39.0

42.0

42.0

43.0

43.0

Capex

(3,555)

(6,478)

(7,256)

12%

104%

(7,596)

(8,319)

10%

15%

Closing net debt/(cash)

81,394

59,724

54,886

(8)%

(33)%

21,909

12,821

(41)%

(77)%

Source: CentralNic accounts, Edison Investment Research. Note: *Edison assumes a total of 290.9m fully diluted shares, including employee benefit trust shares in the fully diluted EPS calculation.

CentralNic is also in advanced discussions to refinance its bonds and expects to announce the outcome of the refinancing, ahead of the group’s Q322 trading update in October.

What is driving Online Marketing’s growth?

Online Marketing will struggle to sustain the level of growth seen in FY21 and H122 indefinitely, as the FY21 comparators get progressively more challenging, together with the impact of broader macroeconomic headwinds. As a result, CentralNic is likely to see a natural moderation in organic growth for Online Marketing, and therefore for the group, over the next 12 months.

As we have noted before (51% organic revenue growth in Q122), both Apple and Google have introduced policies to phase out support for third-party cookies, which facilitate personalised targeting by profiling users for targeted advertising. Similarly, Apple’s privacy controls (first introduced in April 2021) restrict use of Apple’s identifier for advertisers (IDFA), which allows advertisers to track user behaviour within mobile apps and websites. Instead, app owners now need to seek explicit permission from users before being able to track third-party usage.

CentralNic benefiting from tightening regulation

As the regulation of personal data tightens, management expects other performance marketers to suffer falling advertising rates before CentralNic, driving down the price of traffic and allowing CentralNic to achieve better margins through its current monetisation channels. Management believes that this has been a critical factor behind the strong performance of Online Marketing over the past 12–18 months.

As a result of the constriction of personalised targeting, advertisers are increasingly turning to privacy-safe contextual advertising as an alternative solution. CentralNic’s contextual marketing proposition does not rely on first-party data, but uses the multiplicity of non-personal third-party data that is still openly available.

Search referral model explained

CentralNic has carved itself out a niche in the contextual advertising space, taking traffic from numerous smaller sites (with a surplus of under-monetised traffic) to then be monetised by search engine operators, which attract a surfeit of corporate advertising budgets but have a deficit of monetisable traffic.

According to management, the traffic that CentralNic delivers fully corresponds to specific searches and achieves demonstrably the same return on investment, prices and conversion rates as organic search traffic. Importantly, no element of the value chain sees a diminution of value, with customers converting at comparable rates and advertisers achieving comparable conversion rates.

CentralNic is one of only a few companies that perform this specific activity, others being: System1 (SST:NYSE), which is the largest operator, generating about twice the revenues of CentralNic; and Sedo (owned by United Internet), which management estimates generates about half the revenues of CentralNic. System1 takes more of a ‘walled garden’ approach, preferring its in-house technology solutions, whereas CentralNic has an open ecosystem, using external as well as internal solutions. CentralNic’s approach has been delivering far higher revenue growth rates than System1’s, helping CentralNic to capture market share from System1.

Management believes that CentralNic’s approach is robust and resilient to a downturn, as search advertising is the preferred format and most other ad formats are incremental and therefore more prone to reduction in demand. Accordingly, pricing on the demand side is expected to be more robust than on the supply side, allowing for an increasing arbitrage opportunity.

As CentralNic has demonstrated over the last 12–18 months, growth remained strong during the COVID-19 pandemic, accelerated afterwards and has continued to accelerate even after the impact of the invasion of Ukraine and despite growing inflationary and geopolitical issues.

VGL offers a parallel model to the search referral approach

The acquisition of VGL (acquired for €60m in March 2022) delivered a portfolio of content-rich websites to CentralNic, whereas the domain-name investors whose sites CentralNic manages, deliver a portfolio of largely content-free websites. VGL’s reviews tend to identify five key categories for any given product set: the best; the worst; the cheapest; the best price/quality; and the best seller. Management sees this as a parallel business model to its core search referral approach, with traffic from VGL carrying a specific purchase intention (enriched with search traffic) then delivered to e-commerce partners for monetisation and fulfilment.

In this respect, VGL’s model aggregates traffic before redirecting it to CentralNic's e-commerce partners for monetisation, whereas contextual advertising aggregates traffic for monetisation via search. VGL delivers a CPM more than 50% higher than search referrals because of the more focused purchase intent and fewer intermediaries. These high CPMs allow CentralNic to cost-effectively acquire traffic at premium rates from third-party websites, which can then be blended with search traffic and monetised at attractive rates through CentralNic's e-commerce partners.

Online Presence, a source of monetisable traffic

Online presence delivers CentralNic a network of websites owned by domain investors. For this network of sites, CentralNic has developed website building software that can auto-generate a very basic website dynamically. Traffic from this network of third-party sites is monetised by showing search ads on these auto-generated pages, contributing to the strong organic growth seen over the past 18 months.

Valuation: Discount to peers despite superior growth

CentralNic continues to trade at a material discount to its online marketing and web services peers.

Given a lack of comparators in Europe, the online marketing peer group is focused on North America (Exhibit 7). Peer valuations have eased considerably despite average current year sales growth averaging 25%, compared to 56% for CentralNic. Average EV/EBITDA multiples are now 20x and 16x for FY22 and FY23, respectively, with P/E multiples of 32x for FY22 and 27x for FY23. Despite a 72% five-year revenue CAGR and its superior current year growth trajectory, CentralNic trades at a c 65–75% discount to these multiples.

We have also looked at a web services peer group. Disregarding Verisign, which we include for completeness, the web services peer group trades at an average EV/sales multiple of 2x for FY22 and FY23 and EV/EBITDA multiples of 7x for FY22 and FY23. In terms of P/E multiples, the web services peer group trades at 17x for FY22 and 14x for FY23.

Exhibit 7: Peer group table

Year end

Share price

Quoted ccy

EV (US$m)

Sales Growth FY1 (%)

EBITDA margin FY1 (%)

EBIT margin FY1 (%)

EV/ sales FY1(x)

EV/ sales FY2 (x)

EV/ EBITDA FY1 (x)

EV/ EBITDA FY2 (x)

P/E 1FY (x)

P/E 2FY (x)

CentralNic Group

Dec-22

124.5

GBp

474.2

56.4

11.5

10.6

0.74

0.64

6.4

5.7

8.5

7.9

Online marketing peers

Trade Desk

Dec-22

62.5

US$

29,313

32.7

39.5

36.6

18.5

14.8

46.8

38.0

62.7

54.4

Applovin

Dec-22

24.9

US$

11,522

6.6

38.8

8.3

3.9

3.2

10.0

7.9

NM

24.9

Stroeer SE & Co

Dec-22

42.4

4,086

11.1

31.1

14.1

2.3

2.1

7.3

6.7

13.2

11.7

Ironsource

Dec-22

4.1

US$

3,768

38.3

30.7

28.0

4.9

3.9

16.0

12.1

19.2

17.2

DoubleVerify Holdings

Dec-22

25.9

US$

4,022

35.0

30.8

11.9

9.0

7.2

29.1

22.9

NM

NM

Integral Ad Science

Dec-22

8.3

US$

1,445

23.8

30.6

6.1

3.6

3.0

11.8

9.7

NM

NM

Mean

25

34

18

7

6

20

16

32

27

Median

28

31

13

4

4

14

11

19

21

Online Presence (web services) peers

Verisign

Dec-22

184.1

US$

20,539

7.4

65.1

65.9

14.4

13.3

22.1

18.2

31.1

26.3

GoDaddy

Dec-22

76.5

US$

15,092

7.9

24.4

12.3

3.7

3.4

15.0

13.7

33.9

27.1

Criteo

Dec-22

27.3

US$

1,113

5.8

30.8

21.3

1.1

1.0

3.7

3.3

9.1

8.0

Catena Media

Dec-22

31.7

SEK

285

3.6

41.8

31.2

2.0

1.9

4.8

4.2

8.7

6.9

iomart group

Mar-23

183.0

GBp

284

6.8

35.7

16.6

2.2

2.1

6.2

6.1

14.6

15.1

Mean

6

40

29

5

4

10

9

19

17

Mean (ex Verisign)

6

33

20

2

2

7

7

17

14

Median

7

36

21

2

2

6

6

15

15

Source: Refinitiv data as at 30 August 2022; CentralNic estimates from Edison Investment Research

Exhibit 8: Financial summary

Year end 31 December

US$’000

2019

2020

2021

2022e

2023e

INCOME STATEMENT

IFRS

IFRS

IFRS

IFRS

IFRS

Gross revenue

 

 

109,194

240,012

410,540

642,289

736,403

Cost of Sales

(66,419)

(164,894)

(292,041)

(466,424)

(542,883)

Net revenue

42,775

75,118

118,499

175,865

193,520

Adj. EBITDA

 

 

17,921

29,394

46,251

73,863

83,214

Normalised operating profit

 

 

16,615

27,310

42,737

68,366

76,910

Amortisation of acquired intangibles

(8,299)

(13,747)

(18,291)

(23,076)

(23,493)

Exceptionals

(8,259)

(10,529)

(7,087)

(4,000)

-

Share-based payments

(2,878)

(5,113)

(5,006)

(5,006)

(5,006)

Reported operating profit

(2,821)

(2,079)

12,353

36,284

48,411

Net Interest

(471)

(8,693)

(10,798)

(9,957)

(7,716)

Joint ventures & associates (post tax)

74

79

-

-

-

Exceptionals

-

-

-

(3,950)

(5,500)

Profit Before Tax (norm)

 

 

16,144

18,617

31,939

58,408

69,195

Profit Before Tax (reported)

 

 

(6,616)

(11,834)

1,555

22,376

35,196

Reported tax

39

975

(5,097)

(8,161)

(12,616)

Profit After Tax (norm)

16,119

19,592

26,842

46,727

51,896

Profit After Tax (reported)

(6,577)

(10,859)

(3,542)

14,215

22,580

Minority interests

64

-

-

-

-

Net income (normalised)

16,183

19,592

26,842

46,727

51,896

Net income (reported)

(6,513)

(10,859)

(3,542)

14,215

22,580

Basic average number of shares outstanding (m)

175

197

227

271

281

EPS - basic normalised (c)

 

 

9.24

9.96

11.80

17.23

18.47

EPS - diluted normalised (c)

 

 

8.97

9.57

10.69

16.06

17.26

EPS - basic reported (c)

 

 

(3.72)

(5.52)

5.24

8.04

8.04

Dividend (c)

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

155.9

119.8

71.0

56.4

14.7

Gross Margin (%)

39.2

31.3

28.9

27.4

26.3

Adj. EBITDA Margin (%)

16.4

12.2

11.3

11.5

11.3

Adj. EBITDA / Net Revenue (%)

41.9

39.1

39.0

42.0

43.0

Normalised Operating Margin

15.2

11.4

10.4

10.6

10.4

BALANCE SHEET

Fixed Assets

 

 

217,544

270,578

271,830

329,462

313,097

Intangible Assets

206,055

255,716

254,169

314,087

299,755

Tangible and Right-of-use Assets

6,427

8,677

8,601

6,315

4,722

Investments & other

5,062

6,185

9,060

9,060

8,621

Current Assets

 

 

67,433

77,606

128,391

172,000

215,564

Stocks

491

1,011

895

895

2,393

Debtors

40,760

47,941

71,363

71,363

71,363

Cash & cash equivalents

26,182

28,654

56,133

99,742

141,807

Other

-

-

-

-

-

Current Liabilities

 

 

(78,767)

(96,421)

(137,129)

(130,710)

(131,190)

Creditors

(75,683)

(89,256)

(117,016)

(117,016)

(117,016)

Short term borrowings

(3,084)

(7,165)

(13,694)

(13,694)

(14,174)

Other

-

-

(6,419)

-

-

Long Term Liabilities

 

 

(129,206)

(137,867)

(149,110)

(172,630)

(172,630)

Long term borrowings

(102,799)

(113,024)

(124,356)

(147,876)

(147,876)

Other long term liabilities

(26,407)

(24,843)

(24,754)

(24,754)

(24,754)

Net Assets

 

 

77,004

113,896

113,982

198,122

224,841

Minority interests

69

-

-

-

-

Shareholders' equity

 

 

77,073

113,896

113,982

198,122

224,841

CASH FLOW

PBT

(6,616)

(11,834)

1,555

22,376

35,196

Depreciation and amortisation

9,605

15,831

21,805

28,574

29,796

Share-based payments

2,878

5,113

5,006

5,006

5,006

Working capital

8,963

4,129

1,503

-

(1,498)

Exceptional & other

3,795

9,413

10,798

9,957

7,716

Tax

(2,309)

(1,957)

(2,230)

(8,161)

(12,616)

Net operating cash flow

 

 

16,316

20,695

38,437

57,752

63,600

Capex

(15,497)

(4,259)

(3,555)

(7,256)

(8,319)

Acquisitions/disposals

(63,840)

(40,718)

(26,482)

(78,950)

(5,500)

Net interest

(1,970)

(9,512)

(8,647)

(9,957)

(7,716)

Equity financing

2,133

34,667

-

58,500

-

Dividends

-

-

-

-

-

Net Cash Flow

(62,858)

873

(247)

20,089

42,065

Opening net debt/(cash)

 

 

2,115

74,998

84,985

81,394

54,886

FX

(6,730)

1,117

(2,718)

-

-

Other non-cash movements

(3,295)

(11,977)

6,556

6,419

-

Closing net debt/(cash)

 

 

74,998

84,985

81,394

54,886

12,821

Source: Company accounts, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by CentralNic Group and prepared and issued by Edison, in consideration of a fee payable by CentralNic Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for ‘wholesale clients’ within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are ‘wholesale clients’ for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a ‘personalised service’ and, to the extent that it contains any financial advice, is intended only as a ‘class service’ provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the ‘FPO’) (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the ‘publishers' exclusion’ from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by CentralNic Group and prepared and issued by Edison, in consideration of a fee payable by CentralNic Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for ‘wholesale clients’ within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are ‘wholesale clients’ for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a ‘personalised service’ and, to the extent that it contains any financial advice, is intended only as a ‘class service’ provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the ‘FPO’) (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the ‘publishers' exclusion’ from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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