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Global Internet Platform Co.'s Strong 45% YoY Revenue Growth Going Largely Unrewarded
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Edison Investment Research Ltd. commented in a research report that it is raising its revenue and adjusted EPS targets for CentralNic Group Plc. for FY/21 thru FY/23. Edison noted that shares of the global internet domain and platform provider, which derives revenue from sales of online presence and marketing services, trades at a valuation far below its peers with much lower growth rates.

Analysts Richard Williamson and Russell Pointon of Edison Investment Research Ltd. commented in a September 1 research note that global internet platform company CentralNic Group PLC (CNIC:AIM), which generates revenue from online presence sales and marketing services, has delivered strong growth that has largely gone unrewarded.

The Analysts' report indicated that CentralNic Group posted very strong results in H1/21 and that the firm's management expects that revenue and profits for the rest of FY/21 will come in at upper range of market expectations or perhaps even higher.

Edison Investment Research advised that the firm achieved 20% y-o-y organic revenue growth in H1/21. As a result, Edison stated it is raising its FY/21 revenue target to US$350 million, its FY/22 estimate to US$379 million and its FY/23 forecasts to US$409 million.

The report noted that CentralNic's shares are trading at 10-times estimated FY/21 EBITDA with a P/E of 12.9.

Edison pointed out that these indicators are well below those of other competitors in the web services and online marketing space, especially when taking into consideration CentralNic's anticipated 45% growth rate during FY/21.

The Analysts stated that in H1/21 CentralNic increased gross revenues by 57% y-o-y to US$174.7 million, versus $111.3 million in H1/20 and that net revenues in the same period grew 57% y-o-y to US$55.2 million, up from US$35.2 million in H1/20.

The report additionally listed that adjusted earnings per share (EPS) rose to US$0.0574, compared to adjusted EPS of US$0.0445 in H1/20.

Edison noted that CentralNic has decided to combine its Direct and Indirect segments (domain name sales and value-added services). The two areas will be merged into a new Online Presence segment, which the company intends to post results along with the Online Marketing segment in future reporting periods.

The company reported that in H1/21, the Direct segment which includes both Retail and the Enterprise businesses grew 10% organically with gross revenues up 25% over H1/20. The firm's Indirect segment also showed gains in organic growth of 12% in H1/21 with a 25% increase in y-o-y revenues.

Due to several acquisitions by the company, its Online Marketing segment showed the highest growth as the company enjoyed a 28% organic revenue growth which led to a 99% increase in H1/21 y-o-y revenues to US$96.4 million, compared to US$48.5 million in H1/20.

The Analysts commented that since CentralNic's marketing platforms do not collect a user's personal data or rely on third-party cookies, the firm's Online Marketing division expects it will continue to benefit from growing concerns over privacy.

CentralNic is a London-based global domain name services provider. The firm develops and manages secure software platforms for global businesses seeking to buy subscriptions to domain names for used for their own company websites, brands and email.

CentralNic Group Plc.'s shares trade on the Alternative Investment Market (AIM) sub-market of the London Stock Exchange (LSE) under the symbol "CNIC" and last closed for trading at GBP 101.50 per share on September 2, 2021.


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Disclosures from Edison, CentralNic Group, Sept. 1, 2021

This report has been commissioned by CentralNic Group and prepared and issued by Edison, in consideration of a fee payable by CentralNic Group. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.
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