LONDON, Aug. 31, 2021 /PRNewswire/
-- CentralNic Group Plc (AIM: CNIC), the global internet
platform company that derives revenue from the sales of online
presence and marketing services, announces its unaudited financial
results for the six months ended 30 June
2021. Both revenue and adjusted EBITDA have significantly
increased year-on-year, driven by a combination of underlying
organic growth and acquisitions
Financial summary:
- Revenue increased by 57% to USD
174.7m (H1 2020: USD
111.3m)
- Organic revenue growth of 20% between H1 2020 and H1 2021, with
standout performance from the Online Marketing segment which grew
organically by 28%
- Net revenue (gross profit) increased by 57% to USD 55.2m (H1 2020: USD
35.2m)
- Adjusted EBITDA* increased by 36% to USD
20.5m (H1 2020: USD
15.1m)
- Operating profit of USD 4.7m (H1
2020: USD 2.8m)
- Adjusted operating cash conversion of 126% (H1 2020: 75%),
driven by EBITDA generation and working capital optimisation
- Net debt** down to USD 83.8m
(gross interest-bearing debt of USD
123.3m, cash of USD 39.5m) as
compared to USD 85.0m on 31 December 2020 (gross interest-bearing debt of
USD 113.6m, cash of USD 28.6m) despite two acquisitions for a
combined USD 11.1m in the period, and
the settlement of combined deferred consideration of USD 1.7m
Financial highlights:
- Acceleration of organic growth from 9% in 2020 to 16% in Q1
2021 to 25% in Q2 2021, resulting in 20% overall for H1 2021
- Non-recurring revenue products contributed less than 1% of our
total revenues
- Successful bond tap issue of EUR
15m at 104.5% of nominal value
- Acquisition of SafeBrands (Direct segment) in January 2021 and Wando Internet Solutions (Online
Marketing segment) in February
2021
- Final and interim deferred consideration payments made for Team
Internet (Online Marketing segment) and SafeBrands (Direct segment)
respectively
- Currency exposure on EUR 80m of
the total EUR 105m bond has been
hedged, locking in a EUR/USD rate of 1.1930
Operational
highlights:
- Very strong traction for the Group's privacy enabled online
marketing technologies in view of a high cadence of
privacy-conscious decisions of Big Tech
- Significant investment in new management, staff and systems
accelerated organic growth to record levels and positions the Group
well for continued growth
- New Data and AI group established in order to improve customer
service, optimise business operations and decision making, enhance
marketing, reduce customer churn and automate detection of
non-compliant customer activity
- Experienced non-executive directors added to the board
- New customer wins for the Registry business include JISC and
Dot London
Post period-end highlights:
- The EUR 25m balance of the
Group's EUR/USD exposure resulting from the EUR 105m bond has been hedged at a rate of
1.1765, taking the average rate on the total EUR 105m of currency exposure to 1.1891
Outlook:
- Management expects full year revenues and profits to be at
least at the upper end of market expectations
- The accelerated organic growth seen during H1 2021 is expected
to be sustained following the investment in new management, staff
and systems
- The Company's market consolidation strategy continues, with
opportunities being continually assessed in what is a large,
globally fragmented and growing market
Ben Crawford, CEO of
CentralNic, commented: "CentralNic has enjoyed a very
strong first half across both our online presence subscriptions
products and our privacy enabled online marketing technologies -
achieving record organic growth of 25% in the second quarter,
following 16% organic growth for the first quarter 2021 and 9% for
the full year 2020. By virtue of our significant investment in
resources, restructuring and market-leading products and
promotions, we expect full year revenue and profits to be at least
at the upper end of market expectations. As our investment levels
plateau, we expect future periods to benefit from increasing
operational leverage.
These robust results reflect CentralNic's continued success
in sourcing, completing and integrating transformative acquisitions
and driving the organic growth of all our businesses. Moreover, as
the business scales rapidly, the underlying qualities of our
recurring revenues and excellent cash generation become
increasingly meaningful. The pipeline of future acquisition targets
remains strong, while the net debt level remains comfortable and
easily serviced given the profitability and cash generation of the
existing CentralNic Group and the additional contribution from
recent acquisitions. We are confident in continuing our trajectory
towards joining the ranks of the global leaders in our
industry."
* Subsidiary and associate earnings before interest, tax,
depreciation, amortisation, non-cash charges and non-core operating
expenses
** Includes gross cash, debt and prepaid finance
costs
These unaudited financial results have been prepared for the
purpose of fulfilling the information undertaking requirements
included in the bond terms for the Senior Secured Callable Bond
Issue.
For further information:
CentralNic Group
Plc
|
|
Ben Crawford, Chief
Executive Officer
|
+44 (0) 203 388
0600
|
Don Baladasan, Group
Managing Director
|
|
Michael Riedl, Chief
Financial Officer
|
|
|
|
Zeus Capital Limited
– NOMAD and Joint Broker
|
|
Nick Cowles / Jamie
Peel (Corporate Finance)
|
+44 (0) 161 831
1512
|
John Goold / Rupert
Woolfenden (Institutional Sales)
|
+44 (0) 203 829
5000
|
|
|
Stifel – Joint
Broker
|
|
Fred Walsh / Alex Price
/ Richard Short
|
+44 (0) 20 7710
7600
|
|
|
SEC Newgate UK (for
Media)
|
|
Bob Huxford / Tom
Carnegie / Isabelle Smurfit
|
+44 (0) 203 757
6880 centralnic@secnewgate.co.uk
|
Forward-Looking Statements
This document includes
forward-looking statements. Whilst these forward-looking statements
are made in good faith, they are based upon the information
available to CentralNic at the date of this document and upon
current expectations, projections, market conditions and
assumptions about future events. These forward-looking statements
are subject to risks, uncertainties and assumptions about the Group
and should be treated with an appropriate degree of
caution.
About CentralNic Group Plc
CentralNic (AIM: CNIC) is a
London-based AIM-listed company which drives the growth of the
global digital economy by developing and managing software
platforms allowing businesses globally to buy subscriptions to
domain names, used for their own websites and email, as well as for
protecting their brands online. These platforms can also be
used for distributing domain name related software and services, an
opportunity that contributes significantly to CentralNic's organic
growth. The Company's inorganic growth strategy is identifying and
acquiring cash-generative businesses in its industry with annuity
revenue streams and exposure to growth markets and migrating them
onto the CentralNic software and operating
platforms. CentralNic operates globally with customers in
almost every country in the world. It earns recurring revenues
from the worldwide sales of internet domain names and other
services on an annual subscription basis. For more information
please visit: www.centralnicgroup.com
MANAGEMENT COMMENTARY ON PERFORMANCE
Introduction
CentralNic's organic growth, combined
with its 2021 and 2020 acquisitions, substantially increased the
scale and capabilities of the Company. The effect of this is
demonstrated in our unaudited H1 2021 results which show a
transformational increase in revenue and adjusted EBITDA, both of
which have grown by 57% and 36% respectively compared to H1
2020.
Performance Overview
The Company has performed
strongly during the quarter with the key financial metrics listed
below:
|
30
June
2021
|
30
June
2020
|
Change
|
|
USD m
|
USD m
|
%
|
Revenue
|
174.7
|
111.3
|
57%
|
Net revenue (gross
profit)
|
55.2
|
35.2
|
57%
|
Adjusted
EBITDA
|
20.5
|
15.1
|
36%
|
Operating
profit
|
4.7
|
2.8
|
68%
|
Adjusted operating
cash conversion1
|
126%
|
75%
|
+51%
|
Loss after
tax
|
(1.5)
|
(3.1)
|
52%
|
EPS - Basic
(cents)
|
(0.68)
|
(1.68)
|
60%
|
EPS - Adjusted
earnings - Basic (cents)2
|
5.74
|
4.45
|
29%
|
1 Please refer to note 8
2 Please refer to note 7
Segmental analysis
In our Direct and Indirect segments
, which provide the essential tools for businesses to go online,
growth in domain name sales has accelerated notably. More
importantly, our efforts to deliver value-added services through
our direct and indirect channels are paying off, with the sales of
associated services outpacing domain names sales. The Company
intends to combine the Direct and Indirect segment into a single
Online Presence segment as of the next reporting date.
Organic growth rates quoted below are calculated on a pro forma
basis including all the Group's constituents as of the last balance
sheet dates and adjusted for non-recurring or non-cash revenues and
constant currency basis.
Indirect segment
Significant scale was achieved in
the Indirect segment, with revenues increasing by USD 10.1m in the six months ended 30 June, or
25%, from USD 41.2m to USD 51.3m. The growth has been carried by the
Group's key Wholesale brands and traction was particularly strong
in the North American markets. Organic growth of the segment was
12% over the period.
Direct segment
Revenue in the Direct segment increased
by USD 5.4m, or 25%, from
USD 21.6m to USD 27.0m. On an organic basis, revenue grew by
10%. Management is particularly pleased with this development as
both the Retail business and the Enterprise business have continued
their return to growth and successfully onboarded the SafeBrands
acquisition.
Online Marketing segment
After the recent acquisitions
of Zeropark, Voluum and Wando, which have substantially expanded
the service offering beyond monetising traffic to a full suite of
online customer acquisition solutions, including data analytics,
management resolved to rename the segment more fittingly as "Online
Marketing". The Online Marketing segment was the fastest growing
one, with revenues increasing by USD
47.9m, or 99%, from USD 48.5m
to USD 96.4m. Revenue continued to
grow organically at a high rate of 28%, largely driven by Team
Internet's PubTONIC, with the remainder being contributed by the
acquisitions of Zeropark, Voluum and Wando.
CentralNic is a leader in online privacy, as none of our
marketing platforms make use of third-party cookies or collect
personal data on our customers. We therefore expect that
restrictions placed on those practices (e.g. the ban of
third-party cookies in Google Chrome or App Tracking Transparency
in Apple's iOS 14.5) will benefit CentralNic, as we provide an
alternative to online marketers that is proven to be highly
effective whilst respecting the privacy of internet users, putting
us at the forefront of companies offering solutions for a more
privacy conscious world.
Ben Crawford
Chief
Executive Officer
CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
|
|
|
Unaudited
Six months
ended
30 Jun
2021
|
Unaudited
Six months
ended
30 Jun
2020
|
Audited
Year
ended
31 Dec
2020
|
Note
|
|
USD m
|
USD m
|
USD m
|
|
|
|
|
|
|
|
|
|
Revenue
|
4
|
|
174.7
|
|
111.3
|
|
241.2
|
|
Cost of
sales
|
|
|
(119.5)
|
|
(76.1)
|
|
(164.9)
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
55.2
|
|
35.2
|
|
76.3
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
|
(48.8)
|
|
(29.7)
|
|
(70.8)
|
|
Share-based payment
expenses
|
|
|
(1.7)
|
|
(2.7)
|
|
(5.1)
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
4.7
|
|
2.8
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(a)
|
|
|
20.5
|
|
15.1
|
|
30.6
|
|
Depreciation of
property, plant and equipment
|
|
|
(1.7)
|
|
(1.0)
|
|
(2.1)
|
|
Amortisation of
intangible assets
|
|
|
(8.3)
|
|
(5.4)
|
|
(12.5)
|
|
Non-core operating
expenses(b)
|
5
|
|
(5.1)
|
|
(2.8)
|
|
(8.2)
|
|
Foreign exchange
gain/(loss)
|
|
|
1.0
|
|
(0.4)
|
|
(2.1)
|
|
Share of associate
EBITDA
|
|
|
-
|
|
-
|
|
(0.2)
|
|
Share-based payment
expenses
|
|
|
(1.7)
|
|
(2.7)
|
|
(5.1)
|
|
Operating
profit
|
|
|
4.7
|
|
2.8
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
Finance
costs
|
6
|
|
(5.3)
|
|
(4.6)
|
|
(10.0)
|
|
Foreign exchange gain
on borrowings
|
6
|
|
-
|
|
-
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
Net finance
costs
|
|
|
(5.3)
|
|
(4.6)
|
|
(9.9)
|
|
Share of associate
income
|
|
|
-
|
|
-
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit before
taxation
|
|
|
(0.6)
|
|
(1.8)
|
|
(9.4)
|
|
Income tax
(expense)/income
|
|
|
(0.9)
|
|
(1.3)
|
|
1.0
|
|
Loss after
taxation
|
|
|
(1.5)
|
|
(3.1)
|
|
(8.4)
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit and loss
|
|
|
|
|
|
|
|
|
Exchange difference on
translation of foreign operation
|
|
|
2.4
|
|
(3.1)
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
income/(loss) for the period
|
|
|
0.9
|
|
(6.2)
|
|
(5.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss is attributable
to:
Owners of CentralNic
Plc
|
|
|
(1.5)
|
|
(3.1)
|
|
(8.4)
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
income/(loss) is attributable to:
Owners of CentralNic
Plc
|
|
|
0.9
|
|
(6.2)
|
|
(5.2)
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
(cents)
|
|
|
(0.68)
|
|
(1.68)
|
|
(4.28)
|
|
Diluted
(cents)
|
|
|
(0.68)
|
|
(1.68)
|
|
(4.28)
|
|
Adjusted earnings –
Basic (cents)
|
|
|
5.74
|
|
4.45
|
|
10.57
|
|
Adjusted earnings –
Diluted (cents)
|
|
|
5.50
|
|
4.30
|
|
10.16
|
|
All amounts relate to continuing activities.
(a) Subsidiary and associate earnings
before interest, tax, depreciation, amortisation, non-cash charges
and non-core operating expenses.
(b) Non-core operating expenses include items
related primarily to acquisition, integration and other related
costs, which are not incurred as part of the
underlying trading performance of the Group, and which are
therefore adjusted for, in line with Group policy.
CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
|
|
|
Unaudited
Six months
ended
30 Jun
2021
|
|
Unaudited
Six months
ended
30 Jun
2020
|
|
Audited
Year
ended
31 Dec
2020
|
|
|
USD m
|
|
USD m
|
|
USD m
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
2.1
|
|
1.6
|
|
2.2
|
Right-of-use
assets
|
|
|
6.5
|
|
4.1
|
|
6.5
|
Intangible
assets
|
|
|
262.7
|
|
199.1
|
|
257.0
|
Deferred
receivables
|
|
|
0.5
|
|
0.6
|
|
0.7
|
Investments
|
|
|
0.1
|
|
1.5
|
|
0.1
|
Deferred tax
assets
|
|
|
5.7
|
|
2.9
|
|
5.3
|
|
|
|
|
|
|
|
|
|
|
|
277.6
|
|
209.8
|
|
271.8
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
Trade and other
receivables
|
|
|
68.0
|
|
38.6
|
|
47.9
|
Inventory
|
|
|
0.9
|
|
0.5
|
|
1.0
|
Cash and bank
balances
|
|
|
39.5
|
|
27.6
|
|
28.7
|
|
|
|
|
|
|
|
|
|
|
|
108.4
|
|
66.7
|
|
77.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
386.0
|
|
276.5
|
|
349.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
Share
capital
|
|
|
0.3
|
|
0.2
|
|
0.3
|
Share
premium
|
|
|
39.8
|
|
74.8
|
|
39.8
|
Merger relief
reserve
|
|
|
5.3
|
|
5.3
|
|
5.3
|
Share-based payments
reserve
|
|
|
11.6
|
|
8.0
|
|
11.0
|
Cash flow hedging
reserve
|
|
|
(0.8)
|
|
-
|
|
-
|
Foreign exchange
translation reserve
|
|
|
3.8
|
|
(4.9)
|
|
1.4
|
Retained
earnings/(losses)
|
|
|
58.9
|
|
(10.2)
|
|
59.3
|
|
|
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
118.9
|
|
73.2
|
|
117.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
Other
payables
|
|
|
3.5
|
|
5.2
|
|
2.9
|
Lease
liabilities
|
|
|
4.8
|
|
3.2
|
|
5.2
|
Deferred tax
liabilities
|
|
|
22.1
|
|
21.6
|
|
22.0
|
Derivative financial
instruments
|
|
|
0.8
|
|
-
|
|
-
|
Borrowings
|
|
|
121.8
|
|
98.4
|
|
107.8
|
|
|
|
153.0
|
|
128.4
|
|
137.9
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
Trade and other
payables and accruals
|
|
|
110.8
|
|
68.3
|
|
87.3
|
Lease
liabilities
|
|
|
1.8
|
|
0.9
|
|
1.3
|
Borrowings
|
|
|
1.5
|
|
5.7
|
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
114.1
|
|
74.9
|
|
94.4
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
267.1
|
|
203.3
|
|
232.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY AND
LIABILITIES
|
|
|
386.0
|
|
276.5
|
|
349.4
|
CENTRALNIC GROUP
PLC
CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
|
Share
capital
|
Share
premium
|
Merger
relief
reserve
|
Share-
based
payments
reserve
|
Cash flow hedging
reserve
|
Foreign
exchange
translation
reserve
|
Retained
earnings/
(losses)
|
Equity attributable
to owners of the Parent Company
|
Non-Controlling
Interest
|
Total
|
|
USD m
|
USD m
|
USD m
|
USD m
|
USD m
|
USD m
|
USD m
|
USD m
|
USD m
|
USD m
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 1
January 2020
|
0.2
|
74.8
|
5.3
|
6.1
|
-
|
(1.8)
|
(7.5)
|
77.1
|
(0.1)
|
77.0
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the
period
|
-
|
-
|
-
|
-
|
-
|
-
|
(3.1)
|
(3.1)
|
-
|
(3.1)
|
Adjustment to
non-controlling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0.1
|
0.1
|
Translation of foreign
operation
|
-
|
-
|
-
|
-
|
-
|
(3.1)
|
-
|
(3.1)
|
-
|
(3.1)
|
Total comprehensive
income for the period
|
-
|
-
|
-
|
-
|
-
|
(3.1)
|
(3.1)
|
(6.2)
|
0.1
|
(6.1)
|
Share-based
payments
|
-
|
-
|
-
|
2.4
|
-
|
-
|
-
|
2.4
|
-
|
2.4
|
Share-based payments –
deferred tax asset
|
-
|
-
|
-
|
(0.1)
|
-
|
-
|
-
|
(0.1)
|
-
|
(0.1)
|
Share-based payments –
exercised and lapsed
|
-
|
-
|
-
|
(0.4)
|
-
|
-
|
0.4
|
-
|
-
|
-
|
Balance as at 30
June 2020
|
0.2
|
74.8
|
5.3
|
8.0
|
-
|
(4.9)
|
(10.2)
|
73.2
|
-
|
73.2
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the
period
|
-
|
-
|
-
|
-
|
-
|
-
|
(5.4)
|
(5.4)
|
-
|
(5.4)
|
Translation of foreign
operation
|
-
|
-
|
-
|
-
|
-
|
6.3
|
-
|
6.3
|
-
|
6.3
|
Total comprehensive
income for the period
|
-
|
-
|
-
|
-
|
-
|
6.3
|
(5.4)
|
0.9
|
-
|
0.9
|
Issue of new
shares
|
0.1
|
43.7
|
-
|
-
|
-
|
-
|
-
|
43.8
|
-
|
43.8
|
Share issue
costs
|
-
|
(3.9)
|
-
|
-
|
-
|
-
|
-
|
(3.9)
|
-
|
(3.9)
|
Capital
reduction
|
-
|
(74.8)
|
-
|
-
|
-
|
-
|
74.8
|
-
|
-
|
-
|
Share-based
payments
|
-
|
-
|
-
|
2.8
|
-
|
-
|
-
|
2.8
|
-
|
2.8
|
Share-based payments –
deferred tax asset
|
-
|
-
|
-
|
0.3
|
-
|
-
|
-
|
0.3
|
-
|
0.3
|
Share-based payments –
exercised and lapsed
|
-
|
-
|
-
|
(0.1)
|
-
|
-
|
0.1
|
-
|
-
|
-
|
Balance as at 31
December 2020
|
0.3
|
39.8
|
5.3
|
11.0
|
-
|
1.4
|
59.3
|
117.1
|
-
|
117.1
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the
period
|
-
|
-
|
-
|
-
|
-
|
-
|
(1.5)
|
(1.5)
|
-
|
(1.5)
|
Translation of foreign
operation
|
-
|
-
|
-
|
-
|
-
|
2.4
|
-
|
2.4
|
-
|
2.4
|
Total comprehensive
income for the period
|
-
|
-
|
-
|
-
|
-
|
2.4
|
(1.5)
|
0.9
|
-
|
0.9
|
Loss arising on
changes
in fair value of
hedging
instruments
|
-
|
-
|
-
|
-
|
(0.8)
|
-
|
-
|
(0.8)
|
-
|
(0.8)
|
Share-based
payments
|
-
|
-
|
-
|
1.7
|
-
|
-
|
-
|
1.7
|
-
|
1.7
|
Share-based payments –
exercised and lapsed
|
-
|
-
|
-
|
(1.1)
|
-
|
-
|
1.1
|
-
|
-
|
-
|
Balance as at 30
June 2021
|
0.3
|
39.8
|
5.3
|
11.6
|
(0.8)
|
3.8
|
58.9
|
118.9
|
-
|
118.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Share capital represents the nominal value of the company's
cumulative issued share capital.
- Share premium represents the cumulative excess of the fair
value of consideration received for the issue of shares in excess
of their nominal value less attributable share issue costs and
other permitted reductions.
- Merger relief reserve represents the cumulative excess of the
fair value of consideration received for the issue of shares in
excess of their nominal value less attributable shares issue costs
and other permitted reductions.
- Share-based payments reserve represents the cumulative value of
share-based payments recognised through equity.
- Cash flow hedging reserve represents the effective portion of
changes in the fair value of derivatives.
- Foreign exchange translation reserve represents the cumulative
exchange differences arising on Group consolidation.
- Retained earnings represent the cumulative value of the profits
not distributed to shareholders but retained to finance the future
capital requirements of the CentralNic Group.
- The non-controlling interests comprise the portion of equity of
subsidiaries that are not owned, directly or indirectly, by the
Group. These non-controlling interests are individually not
material for the Group.
CONSOLIDATED
STATEMENT OF CASH FLOWS
|
|
|
Unaudited
Six months
ended
30 Jun
2021
|
|
Unaudited
Six months
ended
30 Jun
2020
|
|
Audited
Year
ended
31 Dec
2020
|
|
|
|
USD m
|
|
USD m
|
|
USD m
|
Cash flow from
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit before
taxation
|
|
|
(0.6)
|
|
(1.8)
|
|
(9.4)
|
|
|
|
|
|
|
|
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
|
1.7
|
|
1.0
|
|
2.1
|
Amortisation of
intangible assets
|
|
|
8.3
|
|
5.4
|
|
12.5
|
Share of associate
EBITDA
|
|
|
-
|
|
-
|
|
(0.2)
|
Gain on sale of
associate
|
|
|
-
|
|
-
|
|
(0.3)
|
Finance cost
(net)
|
|
|
5.3
|
|
4.6
|
|
9.9
|
Share-based
payments
|
|
|
1.7
|
|
2.7
|
|
5.1
|
(Increase)/decrease in
trade and other receivables
|
|
|
(20.1)
|
|
2.3
|
|
(9.3)
|
Increase/(decrease) in
trade and other payables
|
|
|
20.3
|
|
(8.7)
|
|
12.3
|
Cash flow generated
from operations
|
|
|
16.6
|
|
5.5
|
|
22.7
|
|
|
|
|
|
|
|
|
Income tax
paid
|
|
|
(0.9)
|
|
0.6
|
|
(2.0)
|
|
|
|
|
|
|
|
|
Net cash flow
generated from operating activities
|
|
|
15.7
|
|
6.1
|
|
20.7
|
|
|
|
|
|
|
|
|
Cash flow used in
investing activities
|
|
|
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
|
(0.4)
|
|
(0.2)
|
|
(1.2)
|
Purchase of intangible
assets
|
|
|
(1.1)
|
|
-
|
|
(3.0)
|
Payment of deferred
consideration
|
|
|
(1.7)
|
|
(3.0)
|
|
(5.5)
|
Proceeds from disposal
of investment in associate
|
|
|
-
|
|
-
|
|
1.8
|
Acquisition of
subsidiaries
|
|
|
(11.1)
|
|
(1.0)
|
|
(37.1)
|
|
|
|
|
|
|
|
|
Net cash flow used
in investing activities
|
|
|
(14.3)
|
|
(4.2)
|
|
(45.0)
|
|
|
|
|
|
|
|
|
Cash flow used in
financing activities
|
|
|
|
|
|
|
|
Proceeds/(repayments)
from borrowings
|
|
|
13.8
|
|
2.6
|
|
2.2
|
Bond arrangement
fees
|
|
|
(0.4)
|
|
-
|
|
(0.6)
|
Proceeds from issuance
of ordinary shares (net)
|
|
|
-
|
|
-
|
|
34.7
|
Payment of lease
liability
|
|
|
(0.9)
|
|
(0.5)
|
|
(1.1)
|
Interest
paid
|
|
|
(2.3)
|
|
(3.6)
|
|
(9.5)
|
Net cash flow
generated/(used in) from financing activities
|
|
|
10.2
|
|
(1.5)
|
|
25.7
|
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents
|
|
|
11.6
|
|
0.4
|
|
1.4
|
Cash and cash
equivalents at beginning of the period/year
|
|
|
28.7
|
|
26.2
|
|
26.2
|
Exchange (losses)/gains
on cash and cash equivalents
|
|
|
(0.8)
|
|
1.0
|
|
1.1
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at end of the period/year
|
|
|
39.5
|
|
27.6
|
|
28.7
|
|
|
|
|
|
|
|
|
NOTES TO THE UNAUDITED FINANCIAL RESULTS
1. General information
CentralNic Group Plc is the UK holding company of a group of
companies which are engaged in the provision of global domain name
services. The Company is registered in England and Wales. Its registered office and principal
place of business is 4th Floor, Saddlers House, 44 Gutter Lane,
London EC2V 6BR.
The CentralNic Group is a global internet platform that derives
revenue from the worldwide sales of internet domain names and
related web services.
2. Basis of preparation
The financial results for the six months ended 30 June 2021 are unaudited and have been prepared
on the basis of the accounting policies set out in the Group's 2020
statutory accounts for the purpose of fulfilling the information
undertaking requirements included in the bond terms for the Senior
Secured Callable Bond Issue and, for all periods presented, in line
with the principal disclosure requirements of IAS 34: Interim
Financial Reporting.
The unaudited financial results are condensed and do not
represent statutory accounts within the meaning of section 435 of
the Companies Act 2016. The statutory accounts for the year ended
31 December 2020, upon which the
auditors issued an unqualified opinion, are available on the
Group's website and did not contain statements under section 498(2)
or (3) of the Companies Act 2006.
As a profitable provider of online subscription services with
high cash conversion and solid organic growth, de-centrally
organised and catering to solid customers distributed over the
entire globe, CentralNic has not been, and is not expected to be,
severely affected by COVID-19. The Directors have taken the
necessary precautions to preserve the Group's cash and review the
acquisition pipeline and financing plans to ensure stability and
optimisation of the business strategies in the current global
climate.
3. Segment analysis
CentralNic is an independent global service provider
distributing domain names and associated digital subscription
products through Indirect and Direct channels, as well as providing
Online Marketing services. Operating segments are organised around
the products and services of the business and are prepared in a
manner consistent with the internal reporting used by the chief
operating decision maker to determine allocation of resources to
segments and to assess segmental performance. The Directors do not
rely on analyses of segment assets and liabilities, nor on
segmental cash flows arising from the operating, investing and
financing activities for each reportable segment, for their
decision making and therefore have not included them.
The Indirect segment is a global distributor of domain names
through a network of channel partners. The Direct segment sells
domain names and ancillary services to end users, monitoring
services to protect brands online, technical and consultancy
services to corporate clients, and licenses the Group's in-house
developed registry management platform, also on a global basis. The
Online Marketing segment provides advertising placement services to
match those who have traffic, e.g. domain name owners and content
website operators, with those who want traffic, e.g. ecommerce
website operators and affiliates on a global basis, including AI
based data analytics and automation tools.
Management reviews the activities of the CentralNic Group in the
segments disclosed below:
|
Six months ended 30
June 2021
|
|
Indirect
USD m
|
Direct
USD m
|
Online
Marketing
USD m
|
Total
USD m
|
Revenue
|
51.3
|
27.0
|
96.4
|
174.7
|
Gross profit
|
16.3
|
12.8
|
26.1
|
55.2
|
Total administrative
expenses
|
|
|
|
(48.8)
|
Share-based payment
expenses
|
|
|
|
(1.7)
|
Operating
profit
|
|
|
|
4.7
|
|
|
|
|
|
Adjusted
EBITDA
Depreciation of
property, plant and equipment
Amortisation of
intangibles assets
Non-core operating
expenses
Foreign exchange
gain
Share-based payment
expenses
|
|
|
|
20.5
(1.7)
(8.3)
(5.1)
1.0
(1.7)
|
Operating
profit
|
|
|
|
4.7
|
Net finance
cost
|
|
|
|
(5.3)
|
Loss before
taxation
|
|
|
|
(0.6)
|
Income tax
expense
|
|
|
|
(0.9)
|
Loss after
taxation
|
|
|
|
(1.5)
|
3.
Segment analysis (continued)
|
|
|
Six months ended 30
June 2020
|
|
Indirect
USD m
|
Direct
USD m
|
Online
Marketing
USD m
|
Total
USD m
|
Revenue
|
41.2
|
21.6
|
48.5
|
111.3
|
Gross profit
|
11.9
|
10.4
|
12.9
|
35.2
|
Total administrative
expenses
|
|
|
|
(29.7)
|
Share-based payment
expenses
|
|
|
|
(2.7)
|
Operating
profit
|
|
|
|
2.8
|
|
|
|
|
|
Adjusted
EBITDA
Depreciation of
property, plant and equipment
Amortisation of
intangibles assets
Non-core operating
expenses
Foreign exchange
loss
Share-based payment
expenses
|
|
|
|
15.1
(1.0)
(5.4)
(2.8)
(0.4)
(2.7)
|
Operating
profit
|
|
|
|
2.8
|
Net finance
cost
|
|
|
|
(4.6)
|
Loss before
taxation
|
|
|
|
(1.8)
|
Income tax
expense
|
|
|
|
(1.3)
|
Loss after
taxation
|
|
|
|
(3.1)
|
|
Year ended 31
December 2020
|
|
Indirect
USD m
|
Direct
USD m
|
Online
Marketing
USD m
|
Total
USD m
|
Revenue
|
85.8
|
43.3
|
112.1
|
241.2
|
Gross profit
|
25.8
|
20.5
|
30.0
|
76.3
|
Total administrative
expenses
|
|
|
|
(70.8)
|
Share-based payment
expenses
|
|
|
|
(5.1)
|
Operating
profit
|
|
|
|
0.4
|
|
|
|
|
|
Adjusted
EBITDA
Depreciation of
property, plant and equipment
Amortisation of
intangibles assets
Non-core operating
expenses
Foreign exchange
loss
Share of associate
income
Share-based payment
expenses
|
|
|
|
30.6
(2.1)
(12.5)
(8.2)
(2.1)
(0.2)
(5.1)
|
Operating
profit
|
|
|
|
0.4
|
Net finance
cost
|
|
|
|
(9.9)
|
Share of associate
income
|
|
|
|
0.1
|
Loss before
taxation
|
|
|
|
(9.4)
|
Income tax
expense
|
|
|
|
1.0
|
Loss after
taxation
|
|
|
|
(8.4)
|
4. Revenue
The Group's revenue is generated from the following geographical
areas:
|
|
Unaudited
Six months
ended
30 June
2021
USD m
|
|
Unaudited
Six months
ended
30 June
2020
USD m
|
|
Audited
Year
ended
31 December
2020
USD m
|
Indirect
services
|
|
|
|
|
|
|
UK
|
|
0.5
|
|
0.5
|
|
1.0
|
North
America
|
|
15.8
|
|
10.8
|
|
22.5
|
Europe
|
|
25.5
|
|
21.4
|
|
45.8
|
ROW
|
|
9.5
|
|
8.5
|
|
16.5
|
|
|
51.3
|
|
41.2
|
|
85.8
|
Direct
services
|
|
|
|
|
|
|
UK
|
|
1.2
|
|
1.4
|
|
2.4
|
North
America
|
|
6.9
|
|
6.8
|
|
13.4
|
Europe
|
|
12.3
|
|
8.8
|
|
18.3
|
ROW
|
|
6.6
|
|
4.6
|
|
9.2
|
|
|
27.0
|
|
21.6
|
|
43.3
|
Online
Marketing
|
|
|
|
|
|
|
UK
|
|
1.5
|
|
0.2
|
|
0.6
|
North
America
|
|
9.6
|
|
1.8
|
|
6.2
|
Europe
|
|
74.2
|
|
45.2
|
|
100.1
|
ROW
|
|
11.1
|
|
1.3
|
|
5.2
|
|
|
96.4
|
|
48.5
|
|
112.1
|
|
|
|
|
|
|
|
Total
revenue
|
|
174.7
|
|
111.3
|
|
241.2
|
5. Non-core operating
expenses
|
|
|
|
Unaudited
Six months
ended
30 June
2021
USD m
|
|
Unaudited
Six months
ended
30 June
2020
USD m
|
Audited
Year
ended
31 December
2020
USD m
|
|
|
|
|
|
|
Acquisition related
costs
|
1.8
|
|
0.2
|
|
1.4
|
Integration and
streamlining costs
|
2.1
|
|
2.1
|
|
3.6
|
Other
costs(1)
|
1.2
|
|
0.5
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
5.1
|
|
2.8
|
|
8.2
|
(1) Other costs include items related primarily
to business reviews and restructuring expenses.
6. Finance costs
|
|
|
|
Unaudited
Six months
ended
30 June
2021
USD m
|
|
Unaudited
Six months
ended
30 June
2020
USD m
|
Audited
Year
ended
31 December
2020
USD m
|
|
|
|
|
|
|
Impact of unwinding of
discount on net present value of deferred consideration
|
(0.1)
|
|
-
|
|
(0.2)
|
Reappraisal of deferred
consideration
|
0.1
|
|
-
|
|
(0.9)
|
Foreign exchange
(gain)/loss on revaluation of revolving credit facility
|
-
|
|
(0.3)
|
|
0.1
|
Arrangement fees on
borrowings
|
(0.7)
|
|
(0.5)
|
|
(1.1)
|
Interest expense on
current borrowings
|
(0.2)
|
|
(0.1)
|
|
(0.3)
|
Interest expense on
non-current borrowings
|
(4.3)
|
|
(3.6)
|
|
(7.3)
|
Interest expense on
leases
|
(0.1)
|
|
(0.1)
|
|
(0.2)
|
|
|
|
|
|
|
|
Net finance
costs
|
|
|
(5.3)
|
|
(4.6)
|
|
(9.9)
|
7. Earnings per share
Earnings per share has been calculated by dividing the
consolidated loss after taxation attributable to ordinary
shareholders by the weighted average number of ordinary shares in
issue during the period.
Diluted earnings per share have been calculated on the same
basis as above, except that the weighted average number of ordinary
shares that would be issued on the conversion of all the dilutive
potential ordinary shares (arising from the Group's share option
scheme and warrants) into ordinary shares has been added to the
denominator. There are no changes to the profit (numerator) because
of the dilutive calculation. Due to the loss made in the year ended
31 December 2020, the impact of the
potential shares to be issued on exercise of share options and
warrants would be anti-dilutive and therefore diluted earnings per
share is reported on the same basis on earnings per share.
|
|
|
|
Unaudited
Six months
ended
30 June
2021
USD m
|
|
Unaudited
Six months
ended
30 June
2020
USD m
|
Audited
Year
ended
31 December
2020
USD m
|
|
|
|
|
|
|
Loss after tax
attributable to owners
|
(1.5)
|
|
(3.1)
|
|
(8.4)
|
Operating
profit
|
4.7
|
|
2.8
|
|
0.4
|
Depreciation of
property, plant and equipment
|
1.7
|
|
1.0
|
|
2.1
|
Amortisation of
intangible assets
|
8.3
|
|
5.4
|
|
12.5
|
Non-core operating
expenses
|
5.1
|
|
2.8
|
|
8.2
|
Foreign exchange
(gain)/loss
|
(1.0)
|
|
0.4
|
|
2.1
|
Share of associate
income
|
-
|
|
-
|
|
0.2
|
Share-based payment
expenses
|
1.7
|
|
2.7
|
|
5.1
|
Adjusted
EBITDA
|
20.5
|
|
15.1
|
|
30.6
|
Depreciation
|
(1.7)
|
|
(1.0)
|
|
(2.1)
|
Finance costs
(excluding deferred consideration related amounts – note
6)
|
(5.3)
|
|
(4.6)
|
|
(8.7)
|
Taxation
|
|
(0.9)
|
|
(1.3)
|
|
1.0
|
Adjusted
earnings
|
|
12.6
|
|
8.2
|
|
20.8
|
Weighted average
number of shares:
|
|
|
|
|
|
|
Basic
|
|
|
219,559,661
|
|
184,434,668
|
|
196,680,310
|
Effect of dilutive
potential ordinary shares
|
|
9,536,719
|
|
6,371,718
|
|
8,019,971
|
Diluted average number
of shares
|
|
229,096,380
|
|
190,806,386
|
|
204,700,281
|
Earnings per
share:
|
|
|
|
|
|
|
Basic
(cents)
|
|
(0.68)
|
|
(1.68)
|
|
(4.28)
|
Diluted
(cents)
|
|
(0.68)
|
|
(1.68)
|
|
(4.28)
|
Adjusted earnings –
Basic (cents)
|
|
5.74
|
|
4.45
|
|
10.57
|
Adjusted earnings –
Diluted (cents)
|
|
5.50
|
|
4.30
|
|
10.16
|
Basic and diluted earnings per share of (0.68) cents (H1 2020: (1.68) cents) has been impacted by interest, tax,
depreciation, amortisation, non-cash charges and non-core operating
expenses. Tax on adjusted earnings is the same figure as that shown
in the consolidated statement of comprehensive income given that
most of the adjusting items in the earnings per share calculation
above are also adjusted for when calculating the Group's tax
expense.
8. Financial instruments
The CentralNic Group is exposed to market risk, credit risk and
liquidity risk arising from financial instruments. The Group's
overall financial risk management policy focusses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the Group's financial performance. The
Group does not trade in financial instruments.
Cash conversion for the six-month period ended 30 June 2021 was as follows:
|
Unaudited
Six months ended 30
June 2021
USD m
|
|
Unaudited
Six months ended 30
June 2020
USD m
|
|
Unaudited
Year
ended
31 December
2020
USD m
|
|
Cash
conversion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from
operations
|
16.6
|
|
5.5
|
|
22.7
|
|
Exceptional costs
incurred and paid during the year
|
7.1
|
|
2.8
|
|
7.5
|
|
Settlement of one-off
working capital items from the prior year
|
2.1
|
|
3.0
|
|
5.1
|
|
|
|
|
|
|
|
|
Adjusted cash flow
from operations
|
25.8
|
|
11.3
|
|
35.3
|
|
Adjusted
EBITDA
|
20.5
|
|
15.1
|
|
30.6
|
|
Conversion %
|
126%
|
|
75%
|
|
115%
|
|
|
|
|
|
|
|
|
Half yearly cash
conversion may diverge notably from the long-term trend and should
be expected to converge towards annual averages as demonstrated
historically.
Net debt as at 30 June
2021, 30 June 2020 and 31 December 2020 is shown in the table
below.
|
|
|
|
|
Bond
|
Bank
debt
|
Cash
|
Net
debt
|
|
|
USD m
|
USD m
|
USD m
|
USD m
|
|
|
|
|
|
|
|
At 1 January
2020
|
(97.7)
|
(3.5)
|
26.2
|
(75.0)
|
|
(Drawdown)/
repayment
|
-
|
(2.6)
|
2.6
|
-
|
|
Amortisation of
costs
|
0.5
|
-
|
-
|
0.5
|
|
Other cash
movements
|
-
|
-
|
(1.0)
|
(1.0)
|
|
Net cash flows before
foreign exchange
|
0.5
|
(2.6)
|
1.6
|
(0.5)
|
|
Foreign exchange
differences
|
(1.2)
|
0.4
|
(0.2)
|
(1.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June
2020
|
(98.4)
|
(5.7)
|
27.6
|
(76.5)
|
|
|
|
|
|
|
|
(Drawdown)/
repayment
|
-
|
0.4
|
(0.4)
|
-
|
|
Amortisation of
costs
|
0.5
|
0.1
|
-
|
0.6
|
|
Other cash
movements
|
-
|
-
|
0.2
|
0.2
|
|
Net cash flows before
foreign exchange
|
0.5
|
0.5
|
(0.2)
|
0.8
|
|
Foreign exchange
differences
|
(9.4)
|
(1.2)
|
1.3
|
(9.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December
2020
|
(107.3)
|
(6.4)
|
28.7
|
(85.0)
|
|
|
|
|
|
|
|
(Drawdown)/
repayment
|
-
|
4.4
|
(4.4)
|
-
|
|
Amortisation of
costs
|
0.4
|
-
|
-
|
0.4
|
|
Placing proceeds (net
of costs)
|
(18.2)
|
-
|
18.2
|
-
|
|
Other cash
movements
|
-
|
-
|
(2.2)
|
(2.2)
|
|
Net cash flows before
foreign exchange
|
(17.8)
|
4.4
|
11.6
|
(1.8)
|
|
Foreign exchange
differences
|
2.9
|
0.9
|
(0.8)
|
3.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June
2021
|
(122.2)
|
(1.1)
|
39.5
|
(83.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9. Business combinations
Acquisition of Wando Internet Solutions
On 22 February 2021, CentralNic
acquired Wando Internet Solutions, a Berlin-based technology company specialising
in social marketing, search engine marketing (SEM) advertising and
display advertising that enables augmentation of the quality and
volume of internet traffic on domain names and websites in order to
generate superior returns. In FY2020, Wando generated unaudited
revenue of EUR 4.9m (c. USD 5.6m) and unaudited EBITDA of EUR 1.2m (c. USD
1.4m). The acquisition is a vertical integration and more
than half of Wando's historical revenue generation has come from
CentralNic; it has been integrated into CentralNic's Online
Marketing segment. The initial consideration for the acquisition is
EUR 5.4m (c. USD 6.6m) and the sellers of Wando may earn up to
another EUR 5.4m (c. USD 6.6m) payable in Q3 2022 subject to stretched
performance targets being met. The following table summarises the
consideration paid for Wando Internet Solutions and the fair values
of the assets and liabilities at the acquisition date, in line with
Group policies.
|
USD m
|
Initial cash
consideration
|
6.6
|
Purchase price
adjustment
|
1.4
|
Deferred contingent
consideration
|
1.9
|
Total
consideration
|
9.9
|
|
|
Fair values
recognised on acquisition
Assets
Developed
technologies
Trade
receivables
Other assets
|
5.0
0.5
2.3
|
Total
assets
Liabilities
|
7.8
|
Deferred tax
Other
provisions
Other
liabilities
|
(1.5)
(0.6)
(0.7)
|
Total
liabilities
|
(2.8)
|
Total identifiable
estimated net assets at fair value
|
5.0
|
Goodwill arising on
acquisition
|
4.9
|
Purchase
consideration
|
9.9
|
For further details regarding the acquisition of SafeBrands on
9 January 2021, please refer to note
9 of the unaudited financial results for the three months ended
31 March 2021 as published and
released on 1 June 2021.
10. Events occurring after the quarter end
Detailed below are the significant events that happened after
the Group's half year end date of 30 June
2021 and before the signing of these Unaudited Financial
Results on 31 August 2021.
- The EUR/USD exposure resulting from the EUR 105m bond has been hedged for a portion of
another EUR 25m at 1.1765, taking the
average rate to 1.1891, excluding forward spreads
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