CentralNic Formally Announces September IPO
Today CentralNic, formally announced its plans for a September IPO on the AIM Market (“AIM”) of the London Stock Exchange.
“CentralNic is a registry service provider which supports top level domains (“TLDs” such as .la) and second level domains (“SLDs” such as .uk.com), distributing and powering domain names that end with those TLDs and SLDs, such as www.artweek.la and www.avon.uk.com
“CentralNic uses its in-house developed IT platform to provide the domain name system (“DNS”) infrastructure and distribute its own portfolio of domain names and for third party owners of TLDs and SLDs (also known as “registry operators”)
“CentralNic distributes to a global network or “registrars” (retailers such as GoDaddy and Network Solutions), which sell these to end users
“The Company owns a portfolio of 24 premium domain names including .uk.com and .us.com, which enables it to market subdomains such as avon.uk.com and activia.us.com to customers through its distribution network CentralNic currently has contracts to provide distribution services for seven other domains including two country codes, .LA and .PW”
“CentralNic has also been awarded the exclusive distribution contracts for 60 new TLDs, 25 of which are already confirmed to launch through CentralNic , including: .wiki, the TLD for one of the world’s best known website types; .college, for education institutions globally; .rest, the global TLD for restaurants; .contact, the TLD for contact forms and applications; .reit, for real estate investment trusts; .xyz, the most generic TLD, suitable for any use .bar, the TLD for bars Market Opportunity Following recent industry developments and regulatory changes”
“CentralNic expects, by virtue of its contracts and existing technical and distribution infrastructure, to benefit from a major expansion in the number of generic top level domains (“gTLDs”) such as .wiki and .college, which are expected to start operating from the end of 2013.
“The Directors believe that the funds raised for the Group by the placing of shares will allow the Group to enhance its global distribution network, acquire interests in new gTLDs, expand its own retail business and obtain contracts from governments to operate their country code TLDs (“ccTLDs”), especially in developing markets.
“The existing business has already proven to be profitable and cash-generative, as its characteristics include:
Revenues are received in advance, often for multiple years;
Most of the top 50 registrars (by domains under management) maintain a credit balance with CentralNic, which is automatically topped up;
The actual domain name inventory is created automatically at the time of purchase, so there are no cost of sales or inventory holding costs; and
To retain their domain names, website owners are required to pay periodic renewal fees, creating an annuity income for CentralNic. Strategy The Company has a four pronged expansion strategy:
(i) Increasing volumes through provision of core registry services;
(ii) Investment in new gTLDs;
(iii) Investment in Registrar business; and
(iv) Developing Markets
CentralNic has also identified opportunities to add to its domain portfolio by winning government contracts to operate country codes for developing nations. These ccTLDs can be distributed globally via CentralNic’s retail network, as well as serving the populations of the domestic emerging markets where internet penetration is just starting to explode.
Commenting on the Company’s proposed admission to AIM, Ben Crawford, CEO of CentralNic, said:
“With five billion people forecast to use the internet within the next decade these are exciting times for CentralNic.
“We are profitable, debt free, asset backed and about to capitalize on the major changes being made to the internet with the influx of new TLDs. We already have in place the required IT infrastructure and global retailer network. We have also been awarded a significant number of new TLD contracts so the Company is confident of expanding rapidly.
“We now look to a stock market listing to enable us to raise the necessary funds to take advantage of additional opportunities to win new contracts, innovate, provide excellent levels of service and profit from new and developing marketplaces as the internet evolves.”