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CentralNic Expanding and Consolidating

CentralNic logoDomain name company, CentralNic, provider of registry and registrar services around the world, released its first half 2017 results this week showing impressive results and expansion.

Recurring revenues continue to increase, reflecting the strong focus on growing the proportion of CentralNic’s revenues being of a recurring nature, as exemplified post period-end by the acquisition of SK-NIC in August 2017 and the renegotiated .xyz contract.

For the first half of 2017 CentralNic’s adjusted EBITDA, excluding forex gains and losses, was £1.4m (H1 2016: £0.9m), up 50%, while gross profit for the six months was £3.0m (H1 2016: £2.3m), up 29.5%, revenue of £10.6m (H1 2016: £8.9m),up 19% and net cash of £7.73m (2016: £6.04m).

CentralNic, which boasts of customers in 200 countries throughout its divisions has also made a couple of significant announcements recently. Thursday they announced the .xyz added 10 years to their contract to provide registry services to 2032 and that they’ve moved to a monthly fee based on the volume of .xyz registrations and subscriptions managed.

In late August CentralNic also announced they had acquired the business and assets of SK-NIC, the manager of the exclusive country code top-level domain for Slovakia, .sk. The acquisition involves the purchase of the business, including all the property, rights and assets, of SK-NIC. There is optimism for significant growth in .sk. Slovakia’s economy is growing strongly but a low penetration rate for .sk domain names. It has an estimated penetration of 63 domains per 1000 head of capita as at 31 December 2016, compared to the neighbouring Czech Republic at 121 domains per 1000 head of capita and to the UK with 162 domains per 1000 head of capita – indicating significant growth potential with competitive pricing and service levels.

CentralNic’s retail division focus on optimising marketing performance is paying dividends having completed integration and consolidation of Instra Group. Its wholesale business maintained its lead in global market share by volume, being the only company which supports 6 of the Top 20 new Top-Level Domains. There has also been new client wins as a registry service provider with .rugby .observer and .storage added to the company’s portfolio as well as multiple contracts with country code Top-Level Domains.

“Our underlying first half results have been most encouraging as CentralNic continues to deliver organic growth alongside significant earnings enhancing acquisitions,” said Mike Turner, Chairman of CentralNic.

“Both our organic growth and roll-up strategy are underpinned by a drive to increase the size and scale of the business by focussing on activities which will deliver recurring revenues and high visibility of earnings. This concentrates our efforts on the higher margin and higher growth segments of the market.

“In keeping with the consistently heavy second-half weighting of results in recent years, the Board is confident that the Company is on track to meet market expectations for the full year to 31 December 2017, as we continue to diversify through the acquisition of businesses with high-levels of recurring revenue, organically grow our existing recurring revenue businesses, and take advantage of opportunities to trade in valuable premium domain names.”