The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
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.
Domainnamewire have just published their most recent figures for new registrations (for March). Good to see CNIC continuing to gain over 100,000 per month - and interesting to see them with 3.64m and 9th in the world in total, not far behind the likes of Alibaba!
Https://domainnamewire.com/2023/07/07/top-com-registrars-ranked/
Kestrel ie Mr Royde ie CNIC board member continues to buy. Best buy signal !
Interesting take from Numis:
US listed peer System1 yesterday afternoon released its Q123 results for the quarter to March (shares -6%). Advertising & Partner revenue was down by 37% y/y and down by 13.5% sequentially. By comparison, CentralNic Online Marketing revenues of $150m in Q1 were up 15% y/y and down by 7.6% sequentially, continuing its relative outperformance. Overall Q1 revenues for System1 were $168m, down 10% sequentially. System1 guidance for Q2 is for overall revenue of $146-149m, down 12% q/q at the midpoint, somewhat at odds with the outlook statement that "we exited Q1 with regained momentum in our advertising business". We think the best comparators for CentralNic are Google's Advertising revenues and Traffic Acquisition costs, both of which consensus forecasts to be up 5% sequentially in Q223. We model Q223 CentralNic Online Marketing growth of +3% sequentially.
Cheers - great write-up. Just such good value:
"The Berenberg Price Objective Is 250p A Share.
However, very much more bullish views come from analyst Bob Liao, at the group’s NOMAD and joint broker Zeus Capital, he has estimates out for $825.5m revenues in 2023, EBITDA of $91.8m and earnings of 20.8c per share.
For 2024 his figures suggest $868.9m revenues, EBITDA of $97.3m and earnings of 22.4c per share.
Looking further forward to the 2025 year, he goes for $921.2m revenues, EBITDA $104.5m and earnings of 24.3c per share.
At Edison Research, analysts Max Hayes and Katherine Thompson, are looking for $833.7m revenues this year, $94.4m EBITDA and 20.1c of earnings.
For 2024 they see $909.6m sales, $103.0m EBITDA and 22.5c of earnings.
Latest analyst forecasts are within a range of $771.8m and $833.7m for FY23 revenue and $90.9m and $97.8m for FY23 EBITDA
Of the three brokers analysts that follow the group the Highest Target Price was 350p, the Lowest Target Price was 180p, with the consensus average being 265p per share.
My View – Break To 130p And Then 150p+
This £327m capitalised business is ‘a real money machine’, it is highly cash generative.
CentralNic’s expense base is stable, which should allow continued revenue growth to expand margins.
It is worthy of a significantly higher market rating than it has currently.
The group had an outstanding start to the year, achieving its best-ever first quarter, so I look forward to a positive Interim statement within the next fortnight.
I remain 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.
Looking forward to the forthcoming statement I am hoping that it will bring about some upward regrading of estimates by brokers and the market generally.
As I have stated before – ‘Value will out’ and that will happen with CentralNic, these shares, which touched 121p after the big buy-back news earlier this week, are definitely for buying at around the current 115p.
At that level they are only trading on just 7.25 times price-to-earnings – which is exceptionally cheap for such a fund generator, and just half of the UK market average rating.
Once the shares have bounced back up through the 130p level, I see them returning to trade in the 150p – 160p range which was peaked last December."
Https://masterinvestor.co.uk/equities/centralnic-group-heading-from-115p-to-130p-and-beyond/
Downtrend channel broken to upside. Was in place from 160p. Didn't quite reach the 100p I noted last time but did come down to around 108p. I am expecting a move now to late 120s which would play out a double bottom. At 130p we will hit the under side of the major multi year uptrend channel we broke down from. Let's see what happens then. Exasperated shareholder. This is my largest holding
Not posted in a while and my my what a story this is becoming. For those who didn't listen to the interview with Michael recently on the domain wire website...you must. I've always thought he was rather a poor communicator vs. Ben and hadn't seen him perform in a way which instilled me with confidence. Well how that changed on that interview...what a stellar presentation of the company and all its exciting growth opportunities going forward. And great to be talking about the domain name part of the business again and how it gives them a market advantage in its online marketing i.e. other online marketers don't have 20mm domains under their belt to monetise. This point always gets lost on people...but probably the big story here. Michael came across confident, clear and composed.
And then today....some incredibly savvy capital allocation while the SP is down at these ridiculous levels. Amazing and hats off to the team...the fact you can still buy this at current prices is just insane, it really is.
Fair point Bandit, it's just me being old school and not keen on debt whatever it's costing. Nevertheless I applaud the management in taking decisions to enhance shareholders returns.
No need to worry about debt. Our CEO explained that they refinanced the debt last year for a few years hence at lower interest rates than we see today and with strong free cash flow we can use the cash to ramp up share buybacks as well as selected acquisitions. I don’t blame them for buying shares back at these prices if the market is asleep. Let’s face it most of the UK is in a coma atm and companies like CNIC with strong cash flows can take advantage of it. When we get out of this economic rut and inflation falls and interest rates turn down, cash from pension funds which is earning 5% on deposit or in bonds will return to equities again ( it always does). Smart investors will be waiting for this and will position themselves to take advantage.
I would rather have no debt.
Yes - This is meaningful and should now get the SP moving higher as these get purchased by Zeus. As you say Rivaldo it shows confidence in their future cash flow. I would rather have much higher dividends but this is still a very good positive to break out of this lowly trading range bound situation we seem to have been in now for a long time.
A massive increase in the buyback programme - it's now £34m, i.e around 10% of the shares in issue (increased from £4m as originally announced for this programme).
Great to see - this should put the cat amongst the pigeons.
This shows a great deal of confidence going forward, likely confirmed by the note in the RNS that CNIC "confirms that it currently has no unpublished price sensitive information", i.e trading must be proceeding well at present without anything adverse to report given we're now at the half year stage.
Not showing up here yet “ Material Expansion of Share Buyback Programme”
https://www.londonstockexchange.com/news-article/CNIC/material-expansion-of-share-buyback-programme/16023409
Ex-div date was 4-5-23, a 1p per share div was paid out on 16-6-23 so put another year on those dates for2024.
Nice rise today for once, hope it keeps going next week
Does anyone know what the next div is,he said will be ex next week?
Many thanks for sharing. This was a terrific interview and helped me understand the domain name market much better and the strategic drivers for success. It seems that we have a very capable CEO who has the ability to take this company much further. The market will eventually catchup so a little patience is necessary here along with most UK listed companies atm but I look forward to future financial updates and how the new deal with Microsoft BING will positively impact on revenue and bottom line. Lots to be optimistic about.
Return on capital employed (ROCE) is 44% +. That is some performance.
So much good sound bites in this podcast!
the change in strategy, focusing on reported profitability ,away from M&A.
telling you again, we have an insider buying heavily, a new CEO, a new capital allocation strategy, maiden reported profitability... this year will see the rerating! STRONG BUY
Thanks.
Https://domainnamewire.com/2023/06/26/the-centralnic-story-dnw-podcast-442/
As a reminder Mr Max Royde is sitting at CNIC BoD... can't make it a better insider!
he also has a strong investing record into UK tech.
https://kestrelpartners.com/team/max-royde/
KEstrel's mandate is not to take over companies.
As per their website "We build large minority equity stakes in smaller quoted companies".
Just have to make sure that their holding doesn't get too big, as it gives them too much control. Or they could just take over. I'm still not happy with how KAPE ended up going.
Kestrel knows what's going on from the inside.
KEstrel knows this year will be the turnaround with reported profitability.
Strong buy.
Kestrel continue to consistently buy more - another 50,000 shares yesterday, and they're now up to 23.51%.
With Max Royde's Board involvement one would hope they'd be pretty au fait with CNIC's prospects!
Https://uk.advfn.com/stock-market/london/centralnic-CNIC/share-news/CentralNic-Group-PLC-Directors-Dealing/91397048
I think its has made a base between 118 and 110 over the last 7 weeks. I think the probability of it rising towards results is high. It is encouraging to think that if it rose 30% we still would not be back at the high. Keep calm and wait it out a bit longer, or ideally add.