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Directors talk interviews.....on behalf of Riv!
What’s the website for the interview Rivaldo?
Https://www.***************************/centralnic-group-continues-to-perform-extremely-strongly,-ceo-michael-riedl-explains-why-loncnic/4121095222
Extract:
"One can see from our segmental reporting that our success is largely driven by the Online Marketing business. The growth is the result both of more consumers engaging with our websites, which increased from 1.8bn in the first 9 months of 2021 to 3.3bn in the first 9 months of this year, and us increasing the value per consumer engagement, from an average of USD 64.9 per thousand in the first 9 months 2021 to USD 104.1 per thousand engagements in the first 9 months this year. This is what actually drives the business."
Here's a link to that Regency Capital note on their stock tips for 2023:
Https://regencyresearch.co.uk/l/share-tips-of-the-year-2023/?source=FreeReports&identity=2023_share_tips_of_the_year_2
I've just received on email Regency Capital's five stock tips for 2023. CNIC are one of them - in fact, CNIC is the first such tip featured, so is the most prominent.
It was obviously written up a couple of weeks ago as it mentions Ben as CEO! However, the summary remains accurate:
"SUMMARY:
CentralNic is amassing a goldmine of data through its domain name platform, which it is now monetising through its fast-growing marketing division.
Both segments of CentralNic’s business (Online Presence and Online Marketing) dovetail beautifully – creating an overall model with high levels of recurring revenue, strong cashflow generation and plenty of scope for organic and acquisitive growth.
The shares offer investors value and growth – trading on a forward price to earnings growth (PEG) ratio of just 0.4 (where anything less than 1 is good)."
Good to se Kestrel continuing to buy at 143.5p - they now own 22.7% of CNIC:
Https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Directors-Dealings/89832784
Even though they've now raised their forecasts. Edison's are still well below those of Zeus Capital's which are:
this year : 19.1c EPS
next year : 20.4c EPS
Slight correction - Edison's figures actually show £2.9m net debt at the end of next year.
New research note from Edison just out - they've increased their forecasts, which are now:
- this year to 31/12/22: 17.9c EPS, i.e 14.8p EPS
- next year to 31/12/23: 19.3c EPS, i.e 15.95p EPS
They also see CNIC with $2.9m net cash at the end of next year - this just shows the nature of CNIC's cash-generating operations.
They say "the group still trades at a c 59% discount to peers on FY22 and FY23 EV/EBITDA multiples":
Https://www.edisongroup.com/publication/a-busy-end-to-a-momentous-year/31810/
CentralNic seemingly 'immune' to advertising recession
The company has continued to grow at pace despite issues in the wider market
nearly all-time high today ,maybe tomorrow
I await in anticipation the level of share buyback, should help the share price and I'm sure with results due 30th Jan there are many catalysts due in the short-term!
Looking good.
Zeus currently forecast 19.c EPS for the year about to end, rising to 20.4c EPS next year, which should rise somewhat following today's acquisition and were anyway previously described as "conservative" by Zeus.
Even after today's rise, at 144.25p that's still a P/E of only 8.6.
this deal was signed before Ben's departure.
As the RNS highlight, focus is now on profitability and the asset base.
STRONG BUY
"a portfolio of revenue generating niche websites" sounds a bit vague. Would it not be better for CNIC to stick to what they do best?
Terrific value acquisition and immediately earnings-enhancing - CNIC are paying just $5.2m cash for $1.4m EBITDA.
So quite a considerable addition to the bottom line for not very much consideration.
There's also a reiteration of the perhaps more City-friendly strategy of "a more balanced approach of returns to shareholders, deleverage and complementary bolt-on acquisitions":
https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Acquisition-Announcement/89804114
in fact... yesterday Kestrel (Max) has increased its stake in CNIC by another £450k.
the message could not be clearer.
was able to have direct chat with Michael.
Kestrel has been backing/instrumental in Michael's move. Kestrel = Ned = Max.
The chat that the broker gave me was bullsh*t. No blaming them though but clearly Ben has made the large shareholder based uneased with his inorganic strategy.
Narrative from my convo was that M&A will stop - the focus is on the asset base and profitability.
Strong Buy.
Guys, how have people concluded that the loss of confidence in Ben by the Board was due to Ben's fixation with the M&A strategy? The explanation given to Brokers about Ben wanting to spend time with family sounds like an attempt by Mgmt/the Board to reassure investors that CNIC's isnt a burning platform. That would be reasonable for a normal CEO transition, but not one where the CEO is replaced effective immediate effect.
Could it not be due to other factors? Board loss of confidence in a CEO is most likely due to hiding/concealing of information from the Board. Given the guidance and share buyback announcement at the same time as the CEO change, I'm guessing its not due to a hidden bomb on the balance sheet, or operational issue, but probably Ben having unauthorized conversations with some potentially interested acquirers of CNIC... He after all, would have the most to gain from a take private transaction.
The risk of a blow up in one of its subsidiaries/recent acquisitions would be more serious, but paraphs less likely
Good to see Kestrel buying another 325,000 shares at almost 137p per share:
Https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Directors-Dealings/89787512
They now own 65.4m shares, or 22.7% of CNIC.
why are sellers selling?
Would be nice to share any issues or discomfort here so we are all aware/can debate!
Cheers DaddyAIM, very useful info. The news certainly seems to have been well received.
Looking good chart-wise now too. Hopefully just the start given CNIC's huge undervaluation relative its sector comparators.
Spoke with some brokers, Ben is quitting because he has been doing this job from Dubai/Australia so the hour shift was tough and he wants to spend time with his family. On a side note, if the company was performing poorly and CEO would leave, you might think it's a sinking ship. That’s not the case with CNIC as operational momentum remains strong.
Michael is an ex PE guy and is the 'brain' behind the M&A for the Online Marketing segment. He also joined in 2009, at the same time as Ben thus knows the Online Presence segment/industry very well.
Buy Back: always positive but the new CEO wants to send a message to investors "shares are cheap". Brokers told me they target 1 to 1.5% shares outstanding so would result in a c. £4m outflow from Investing cash flows.
STRONG BUY
I would not underestimate the role of kestrel/max in this event. It highlights the important pivot of growth v value - and after 10 years and in the current market shareholder expectations are clearly focused on creating higher value returns than has been achieved in recent years. Take nothing away from ben though - outstanding achievement and he leaves with his head held high. SB
Well well.....looks like Ben's M&A-fixated approach lost support from the directors.
Now we have a transition to maximising shareholder value, with Ben making way as CEO to the current CFO, and the old FD becoming CFO.
Good to see it's relatively amicable, with Ben being thanked and commenting positively.
The prioritisation of debt reduction - and the start of share buybacks - could bring a sharp re-rating assuming that's what the markets have been waiting for.
Plus we're told today that trading is "at least" at the top of constantly upgraded expectations with continued strong trading.
Exciting times!