TIDMCNIC
RNS Number : 1099K
CentralNic Group PLC
31 August 2021
31 August 2021
CENTRALNIC GROUP PLC
("CentralNic" or "the Company" or "the Group")
UNAUDITED FINANCIAL RESULTS FOR THE SIX MONTHSED 30 JUNE
2021
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 +44 (0) 203 757 6880
Smurfit 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 30 June
2021 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
conversion(1) 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 Unaudited Unaudited
INCOME Six months Six months Audited
ended ended Year ended
30 Jun 2021 30 Jun 2020 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 Unaudited Unaudited
POSITION Six months Six months Audited
ended ended Year ended
30 Jun 2021 30 Jun 2020 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 Equity
CONSOLIDATED Share- Cash Foreign attributable
STATEMENTS OF Merger based flow exchange Retained to owners of
CHANGES IN Share Share relief payments hedging translation earnings/ the Parent Non-Controlling
EQUITY capital premium reserve reserve reserve reserve (losses) Company 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.
Unaudited Unaudited
Six months Six months Audited
CONSOLIDATED STATEMENT OF CASH ended ended Year ended
FLOWS 30 Jun 2021 30 Jun 2020 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 Direct Online Marketing Total
USD m USD m USD m 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 20.5
Depreciation of property, plant (1.7)
and equipment
Amortisation of intangibles assets (8.3)
Non-core operating expenses (5.1)
Foreign exchange gain 1.0
Share-based payment expenses (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 Direct Online Marketing Total
USD m USD m USD m 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 15.1
Depreciation of property, plant (1.0)
and equipment
Amortisation of intangibles assets (5.4)
Non-core operating expenses (2.8)
Foreign exchange loss (0.4)
Share-based payment expenses (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 Direct Online Marketing Total
USD m USD m USD m 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 30.6
Depreciation of property, plant (2.1)
and equipment
Amortisation of intangibles assets (12.5)
Non-core operating expenses (8.2)
Foreign exchange loss (2.1)
Share of associate income (0.2)
Share-based payment expenses (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 Unaudited Audited
Six months Six months Year ended
ended ended 31 December
30 June 2021 30 June 2020 2020
USD m USD m 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 Unaudited Audited
Six months Six months Year ended
ended ended 31 December
30 June 2021 30 June 2020 2020
USD m USD m 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 Unaudited Audited
Six months Six months Year ended
ended ended 31 December
30 June 2021 30 June 2020 2020
USD m USD m 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 Unaudited Audited
Six months Six months Year ended
ended ended 31 December
30 June 2021 30 June 2020 2020
USD m USD m 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 Unaudited Unaudited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
USD m USD m 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 5.0
Trade receivables 0.5
Other assets 2.3
-------
Total assets
Liabilities 7.8
Deferred tax (1.5)
Other provisions (0.6)
Other liabilities (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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END
IR URAKRABUWOAR
(END) Dow Jones Newswires
August 31, 2021 02:00 ET (06:00 GMT)
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