London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Today's news of a partnership with WHMCS looks useful, particularly as regards the blurb at the end about WHMCS:
Https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Partnership-Announcement/90094229
"About WHMCS
WHMCS, a WebPros company, is the industry's leading automation and orchestration platform for web hosting and domain resellers"
I was just commenting generally after the extended Zeus post before mine. Both....investor and general observer of many similar forecasts elsewhere.
I tend to agree about broker targets in general because they never really give a timescale for their targets. Fair to assume they are either 6 months or a year . Zeus target of £2.16 is pretty conservative given the accelerating growth is continuing and the lowly PE rating. Almost doubled their cash pile to over 90 million having paid down some debt too. berenberg who are renowned for being a little optimistic have a target of £2. 50. Compared to the bigger house brokers like Goldman sucks and jp morgan who are always trying to talk up vodaphone I would say cnic valuation is not overly unrealistic. Strange share to pick on about broker targets compared to most of the dross out there. Is that a comment as an observer or investor PJ?
Without detractcting from CNIC's performance, I don't know why any of the in-house brokers give an SP valuation as they're usually only telling their paymasters what they want to hear - and it hardly ever reaches their forecast SP.
Here's Zeus Capital's new summary research issued today (since it's already been posted elsewhere):
"Strong, resilient growth
CentralNic issued another positive trading update, leading us to upgrade Adjusted EBITDA again, this time by 4% in both 2022 and 2023. The company continues to grow rapidly (60% organic revenue growth) and margins continue to expand, demonstrating resilience to a slowing economy and online marketing sector. We conservatively raise our 2023 forecasts due solely to base effects, leaving revenue growth at only 6%. As a result, we see the potential for CentralNic’s upgrade cycle to continue into 2023. The company’s low earnings multiples (5.7x EV/ 2023 EBITDA) do not reflect the company’s strong growth, expanding margins and cash generation.
2022 trading update
¨ CentralNic traded ahead of expectations in Q4 2022. Revenue for the full year is expected to be about $728m, ~3% ahead of our estimate of $710m. Adjusted EBITDA is expected to be at least $85m, over 4% ahead of our estimate of $82m. Net debt is expected to be about $57m, in line with our forecast of $51m after including the acquisition of a publishing network announced 19 December for $5.2m. Adjusted operating cash conversion was over 100%, implying continued strong cash conversion in Q4 2022. Adjusted operating cash conversion was 105% in the first three quarters of 2022.
¨ Continued high growth and margin expansion: The company grew by about 60% organically in 2022, compared to 66% in the twelve months to the end of September and 62% in the LTM to June 2022. Growth continued to be led by the Online Marketing division, which doubled in the twelve months to September. We estimate Adjusted EBITDA/Net revenue margin was over 48% in 2022, implying 49% margin in H2 2022, up from 47% in H1 2022 and 39% in 2021.
¨ Forecast upgrades: We conservatively raise our 2023 and 2024 forecasts solely due to base effects. Our revised forecasts leave considerable room for outperformance. We forecast 6% revenue growth in 2023 and 2024, down from c. 60% organic growth in 2022. Similarly, we forecast margins are broadly steady at 11.9% in both years. Our preferred measure of profitability, Adjusted EBITDA/ Net Revenue, rose to 47% in the first nine months of 2022 from 39% in 2021. We see the opportunity for multiple upgrades in 2023, continuing the trend of five EBITDA upgrades since the beginning of 2021.
¨ Underrated: CentralNic trades at only 5.7x 2023 EBITDA and 8.3x PE, at the bottom of its peer group range, despite having a FY22 FCFF yield of 13.0% and delivering strong growth and earnings outperformance."
Zeus have "conservatively" raised their forecasts as follows:
- last year : 19.9c EPS, or 16.1p EPS
- this year : 21.3c EPS, or 17.2p EPS
And they also note there's "the opportunity for multiple upgrades in 2023, continuing the trend of five EBITDA upgrades since the beginning of 2021".
Zeus's DCF valuation for CNIC is 216p per share against the current 147p. CNIC are now on a P/E at 147p of just 8.5.
Still got people like stockopedia’s Paul Scott saying he doesn’t understand, but couldn’t find anything untoward in the last set of figures. Doesn’t hold out much hope for the hooray Henries in the city. Then there is the bizarre situation with inse that has never had any problem with its business seeing shares collapse by over 70 percent even though its being increasing its divi and beating targets. Unlike Cnic the directors have not been stuffing their trouser legs with shares. Either these companies will get bought on the cheap or the market will suddenly wake up
I believe this is just the surface of a new CEO's efforts to streamline operations. Quote: 'We will continue to exhibit discipline and efficiency.'
Show me a company reporting results anywhere near this level of standard and in terms of beating already upgraded upgrades....and we are lagging at like 2-3% up for the day. Just ridiculous.
Only negative IMO was Group MD stepping down
back to 160p for now , nice
Nothing not to like in this update……..
Fingers crossed for positive market movement
The year end update shows CNIC trading way ahead of even the recently upgraded forecasts yet AGAIN.
Revenues are almost $20m ahead of expectations, gross profit (I think "net revenue" is a type is $4.5m ahead, and EBITDA is $85m compared to $82m forecast.
Zeus's EPS for last year is now likely to be above 20c (previously 19.7c), i.e at least 16.5p EPS.
Net debt reduced by an excellent 30% and is now pretty low at arpund $57m with terrific operating cash conversion. And the outlook for this year remains extremely positive.
There's still huge potential upside here on a single-digit P/E:
Https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Trading-Update-Board-Changes/90082448
I'd say can't wait till Monday and our likely knockout results....but learnt to expect with this stock that no matter how much they ever beat upgraded expectations...results day is usually very underwhelming. Maybe given its a full fiscal year we might have more of a logical reaction?
Kestrel continue to buy prior to Monday's trading update - another 26k at almost 143p, and they're now up to 23.01%:
Https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Directors-Dealings/90052832
Great report. You can sense his excitement for this share. Monday's update should confirm all is good.
Extensive summary of CNIC, with the target price raised to 200p (still some way short of Berenberg's 250p target) - here's Mark Watson Mitchell's conclusion:
Https://masterinvestor.co.uk/equities/centralnic-looking-ahead-to-q4-results/?mc_cid=33f82f963a&mc_eid=db9f9bbaf2
"The Berenberg Price Objective Is 250p A Share.
Analyst Bob Liao at Zeus Capital, the group’s NOMAD and joint broker, has views out for $709.6m revenues in 2022, EBITDA of $82.0m and earnings of 20.9c per share.
The current year sees him going for $752.2m sales, $88.6m EBITDA and 22.0c earnings.
For 2024 his figures suggest $797.6m revenues, EBITDA of $93.9m and earnings of 23.6c per share.
My View – Setting A New Target Price Of 200p
This group is worthy of a significantly higher market rating than it has currently.
I am a great fan of its annual recurring revenues and its massive global cash generation.
It has a proven business model and is totally scalable as it grows strongly.
Continually researching the mass of UK-quoted smaller companies, as I do, I witness a vast array of overvalued, overhyped rubbish rated on ridiculous ratios.
So, when I identify companies, such as CentralNic Group, I find it difficult to understand why others trade on such gross premiums to value.
The shares, ahead of next Monday’s Q4 Trading Update, are currently only 144p – which in my view is totally out of kilter with the market.
I would hope that next week’s statement will bring about some upward regrading of estimates by brokers and the market generally.
Is it possible that another ‘share buyback’ programme could be announced shortly?
I have absolutely no doubt that this group’s shares are heading higher, with my new Target Price now being fixed at 200p, which could be easily achieved within the next few months.
‘Value will out’ and that will happen with CentralNic. These shares are definitely for buying at around the current levels."
Yes, they have 35.6 million left, and can come back
after 90 days, to sell more.
This could seriously affect upward share price movement.
So the seller is a NED, selling 10% of their company's holding after a big rise to fund another investment, which is fine.
But I wonder how much co-ordination there was with the share buy-back scheme keeping the price inflated for a major shareholder (12%) while they sold-out a big chunk...? The timing is certainly convenient.
so its all played out seller is cleared at 140 guess SP now starts to recover
Good to see Kestrel continuing to buy - they now own over 23%:
Https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Directors-Dealings/90021913
The year end trading update is out on 30th January, so not long to wait. We already know that we can "expect a full year outcome at least in line with the upper end of market expectations".
I suspect that this will be the very minimum at worst and likely substantially better given CNIC's track record!
And also a big big buyer... namely, Mr Royde and Kestrel Partners.
dont disagree but they could go down before they go up
Still plenty to look forward too.