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Two more RNS this morning that LSE haven't picked up yet:
General Meeting on 28 September
https://www.londonstockexchange.com/news-article/TIG/notice-of-general-meeting/16108554
Special Resolutions:
1. THAT, the Company's name be changed from 'CentralNic Group Plc' to 'Team Internet Group Plc' with immediate effect.
2. THAT, the Company's share premium account of USD 98,529,000 be cancelled and is hereby cancelled.
And confirmation of the ticker change in place today:
https://www.londonstockexchange.com/news-article/TIG/update-on-ticker-change/16109492
Thanks, not sure how I missed that. Also on their new TIG page as well:
https://www.londonstockexchange.com/news-article/TIG/centralnic-group-rebrands-as-team-internet-group/16108453
It was RNS'd at 7am this morning. Check the News & Prices > News > Regulatory News section on the London Stock Exchange website
Looks like CentralNic bought Team Internet in 2019 and is now rebranding to that name.
CentralNic corporate website is now down/pages offline as well so can't find anything else up to date.
Https://www.londonstockexchange.com/stock/TIG/centralnic-group-plc/company-page
There should have been an RNS for this, looks like someone jumped the gun...
Missed that thanks,
Https://www.proactiveinvestors.co.uk/companies/news/1025338/centralnic-group-rebrands-as-team-internet-group-1025338.html
Will re-start on these pages on this site soon:
https://www.lse.co.uk/SharePrice.html?shareprice=TIG&share=Centralnic
London Stock Exchange hasn’t got any info either!
So whats happening here then??
Presumably they will be a bunch of presentations coming Monday that Management will be delivering to instos and analysts. Should provide incremental colour about the business. Liquidity in the stock is atrocious which will prevent many instos buying in. No simple solution there. Management just needs to keep executing on their strategy to grow their large market leading businesses and diversify their exposure to the market leading online social media and search platforms. Maybe they could also accalerate the share buyback if the shareprice continues to be unresponsive
Rolled over like I said. Back to 110p. Frustrating
I did the right thing in selling these and putting it into PPH that’s for sure 😀
They're only reporting net losses because of the significant amount of amortisation (associated with prior M&A). Back that out and they're highly cash generative.
EBITDA to CF is ballpark 100%.
Net loss making, results flakey, Director’s selling big chunks.
One for the watch list - It doesn’t deliver what it writes on its tin lid (so far). I’ve lost patience bc and sold out, invested it all in PPH hotels.
Good job the company are buying there own shares as it seems very few others are buying!
@Morbox I think it's a reference to cost of debt being 7% while adj FCF yield is in the region of 12-14%.
So the calculation that they're using isn't factoring in any future growth in that FCF number (could argue that buybacks at < 7% yield could still be accretive if there's sufficient growth in the business).
As follows:
this year : 21.29c EPS (from 20.31c)
next year : 25.00c EPS (from 22.68c) - P/E of 6.6
Here's the summary and an interesting extract or two:
"CentralNic’s H123 results showed continuing revenue growth and margin expansion, with growth now being driven more organically and across both operating segments. Partnerships could be key to unlocking growth from underutilised brands, with management winning several notable deals during the period. Our operational forecasts remain unchanged, with increases in EPS and net debt reflecting the recent £30m uplift to the share buyback programme. We believe that the current rating does not reflect the company’s cash generative mode and diverse growth prospects."
"Clear strategy for sustainable long-term growth
Currently only a concentrated portion of CentralNic’s brand portfolio drives growth. Management sees partnerships as crucial to unlocking organic growth from its underutilised assets, and it secured key partnerships with notable names such
Sovrn, Klarna, Booking.com and Shopify in the period. In Online Presence, it has
partnered with Crown Commercial Services to support the UK government’s domain infrastructure.
Management believes its Online Marketing business can capitalise on the growing social commerce market, which it forecasts will reach $80bn in sales by 2025, as social media and e-commerce giants vertically integrate into this space. Additionally, the company is aiming to better integrate operations to reduce consumer friction, potentially improving margins through operating leverage.
Valuation: Upside potential remains
On a EV/EBITDA basis, CentralNic trades at an average discount to peers of 22%
across FY1e and FY2e. We believe the current rating does not reflect the growth
prospects of the business, its increasingly diverse business mix and cash generative model. In addition, the share price does not yet fully factor in the impact of its share buyback programme."
"Over the long term, management has identified several market trends that should support continued top-line growth and margin expansion.
The first is the growing trend towards social e-commerce, illustrated by social media giants like Meta and TikTok expanding into commerce and Amazon attempting to move to social media. The company’s current marketing capabilities in social media makes it well placed to capture this trend, where management believes the market could reach sales of US$80bn by 2025.
Secondly, the company is aiming to better combine its business units to provide fewer steps and less friction for consumers. This optimisation may also lead to improved operating leverage, which could support further margin expansion.
CentralNic is also investing in its AI capabilities, which have already led to higher conversion rates and sales efficiency, according to management. These include creating an innovation hub and an internal AI Academy, supporting further technological
The IC tip featured earlier is subscription-only, so....
"CentralNic defies advertising gloom
Can AI be the secret to growing profits against a darkening macro backdrop?
August 14, 2023
By Jennifer Johnson
Aim-listed internet services group CentralNic (CNIC) has evidently made shareholder returns a priority in the past few quarters. Its inaugural final dividend of 1p was paid out in mid-June and the company announced a second share buyback programme just a few weeks later.
This largesse has ostensibly come at a cost – with leverage growing to 1.0 times pro-forma cash profits, up from 0.9 times previously. Meanwhile, net debt increased by almost $12mn (£9.5mn) to a $68.2mn in the six months to the end of June 2023. Management does not appear to be concerned, however, particularly given the company’s growing emphasis on using artificial intelligence (AI) across its operations.
CentralNic’s online marketing business, which accounted for over 90 per cent of its first-half sales, creates AI-generated “online consumer journeys”. In practice, this means it aims to convert ad campaigns on search engines into actual ecommerce transactions. The group notes enthusiastically that this market is estimated to be worth $80bn in the US alone by 2025.
In its interim results, the company’s directors said they expect it to trade “at least in line” with current market expectations for the full year. This might be difficult for some investors to believe, given advertising budgets famously get slashed during most economic downturns. But the group is showing no real signs of a sales slowdown at present.
Adjusted operating cash conversion did fall to 94 per cent in the first half (from 100 per cent last year) – although this is hardly an overly worrisome development. With the shares trading on just 7.8 times predicted full-year earnings, there isn’t much to lose here. Buy."
Per Mark Watson-Williams on Master Investor:
Https://masterinvestor.co.uk/equities/centralnic-group-the-money-machine-continues-apace/?mc_cid=edf7cd53c4&mc_eid=db9f9bbaf2
Conclusion:
"My View – A Totally Under-Rated Money Machine
As I have said so many times before, this group really is a veritable money machine.
The growth in its annual recurring revenue, running at 99%, is magnificent and must not be ignored – in fact, I believe that it is what will underwrite its substantial organic growth in the years to come.
In due course, following completion of the current share buyback programme, I would expect to see the group steadily increase its dividend payments, its maiden payment of 1p a share was made in June.
The group will be holding a Capital Markets Day to celebrate its tenth anniversary since its 2013 IPO, on Monday 4th September.
The next Corporate event after that will be the Q3 results due in October.
Price-to-earnings of 7 times is ridiculously low for such an advanced technology group that is generating so much cash, literally 24 hours a day, 365 days a year.
I repeat that I now see the groups shares, now 131.20p, rising gradually back above the 160p level before slowly scaling over 200p within the next year or so."
Seeing CNIC showing strenght today +2.8%, back above the 200MA, when most stock in the UK, US and EU are deeply red brings confidence in my view that this year will see a strong rerating.
We are probably due for some pause, above the 200 MA as the classic technical analysis metrics cool down (RSI, MACD, Stochastic).
I thought the presentation accompanying the results was more positive than I was anticipating. They clearly have a range of products and contracts which are either implemented and not producing material revenue yet, or in the pipeline to be implemented. This gives me confidence around organic growth over the next one to three years
Despite Michael's somewhat stilted presentation style, they are getting better at explaining what CentralNIC is and does in a way that the investor community can more easily understand. This is being helped through their focus on their larger market leading businesses in their portfolio. They still have a couple of meaty discontinuity and tail risks to navigate but I was quietly re-assured. Michael should get a coach to help him with the communication side of things.
Still rated as a buy in IC
https://www.investorschronicle.co.uk/news/2023/08/14/centralnic-defies-advertising-gloom/
He was comparing the saving per year of each dollar of debt bought back versus each dollar of equity bought back. He was just making the point that its far more accretive to buy back shares then retire debt based on the effective annual servicing costs of CNIC's debt versus its equity
One comment on this subject, it was said in the Q and A, something like “cost of the debt was around 7% but we decided to buy back and take the 12% gamble. I need to listen to to it again. Any body else picked that line up?
No it’s really not, Really. Debt has not been taken on to buy back shares. These are being bought from cash generated. Clearly you don’t like debt, and repayment of that would be your priority. Fine, but there’s nothing wrong with debt provided it is at a comfortable level. Returns to shareholders overall are enhanced more by buyback than debt repayment, which is the priority for me.