CentralNic (AIM: CNIC), today announces its interim results for the six months ended 30 June 2014.
· CentralNic has seen steady growth in its wholesale (“Registry”) business, against a background of delays in new Top-Level Domains (TLDs) and early demand levels across the industry falling short of industry expectations.
· CentralNic has continued investment in the development of new retail and enterprise business lines, as outlined in the 2013 Annual Report.
· Group revenue £1.64 million for H1 2014 (2013: £1.74 million, benefitting from £0.39 million of non-recurring license and consultancy revenue) and a break-even adjusted EBITDA* (2013: £0.76 million) reflecting the planned re-investment of registry profits into developing the business. Basic and Diluted Loss per Share 1.01 pence (2013: Basic and Diluted Earnings per Share, pro-forma basis, 0.93 pence).
· Cash and cash equivalents of £2.97 million at the end of the half (2013: £0.82 million) reflecting IPO funds received in September 2013 and then invested in 2014.
· CentralNic’s wholesale business has continued to grow, with an increase in billings of 25% (2013: 23%), revenues of 16% (2013: -10%) and adjusted EBITDA of 28% (2013: 20%) for that business measured on a like-for-like basis versus H1 2013. This reflected strong performance from the existing domain portfolio, as well as early contribution from new Top-Level Domains (“TLDs”).
· CentralNic is now one of the world’s leading wholesalers for the new TLDs, with promising early results from the five TLDs it launched in the first half. Additional launches have taken place since 30 June 2014, with at least 25 further launches planned. The business recently entered into a significant new contract for .TICKETS.
· Fulfilling the Company’s strategic plan announced on listing on AIM on 2 September, 2013, CentralNic made substantial capital investments of £1.91 million of cash and operating expenditure investments of £0.80 million in H1 2014 to deliver a rapid increase in the scale and scope of its operations within the domain name industry. This included the acquisition of the trade and assets of domain retailer (“Registrar”) Internet.BS and launch of retail websites for .LONDON, .MENU, .LUXURY and .BUILD.
· CentralNic closed H1 with a more diversified business within the domain name industry, with three core revenue-earning divisions: Wholesale (“Registry Services”), Retail (“Registrar Services”) and Enterprise.
Post period end:
· CentralNic invested US$1.62 million in Accent Media Ltd (“Accent Media”) to acquire the new Top-Level Domain “.TICKETS”. Accent Media has awarded the Registry Service contract for .TICKETS to CentralNic, a contract that will provide CentralNic with on-going revenues and will take the number of uncontested TLDs in CentralNic’s portfolio to 30.
· Expansion of CentralNic’s online retail business with the launch of the additional flagship stores for .BAR and .REST.
Commenting on the results, John Swingewood, Chairman, said:
“I am pleased that our Registry business has achieved record billings, revenues and profits in the first half of 2014, against a background of delays in new Top-Level Domains (“TLDs”) that have impacted across the industry. To date, demand levels have fallen short of industry expectations, however CentralNic has performed strongly relative to the market with the new TLDs it has launched to date and is well positioned to take advantage of the growth in demand when it comes through.
“CentralNic has now made the planned investments in operating and capital expenditure as expected in the first half of the year, transforming the business to enable it to profit not only from wholesale distribution fees, but also from retail sales and new high-yield enterprise contracts. The Board is satisfied with the Company’s execution of its plan and believes the business is strongly positioned to take advantage of future opportunities in the industry.”