LONDON (Alliance News) - CentralNic Group PLC Tuesday posted a fall in pretax profit in 2014 as continued investment in its business and acquisitions offset a rise in revenue, but it expressed confidence in meeting its commercial targets for 2015.
The internet domain name firm posted a pretax profit of GBP520,000, reduced from GBP701,000 a year before, as a rise in revenue to GBP6.1 million from GBP3.1 million was offset by a jump in administrative expenses, acquisition costs and share-based payments.
CentralNic shares rose 11% on the news, trading at 34.00 pence near midday Tuesday.
CentralNic said it continued to invest in its in-house registrar business and further strengthened its board and management team during the year.
Revenue growth was driven by growth from its domain name registry business, boosted by acquisitions it made during the year, continued growth from its portfolio of second-level domain extensions such as .uk.com, and its foray into selling premium domain names on the after market.
A premium name refers to a domain name that trades at a premium to normal rates, and last December CentralNic sold a portfolio of these premium domains for USD2.5 million.
CentralNic said that whilst the roll-out of new top-level domains had seen a "slow start" in 2014, it had performed well, with its clients accounting for one in five of all new top-level domains registered.
A top level domain name is the suffix of an internet address such as .com or .net which are designated to approved organisations by the Internet Corporation for Assigned Names and Numbers. ICANN has only allowed a relatively small number of domains until now, such as .com, .org and .gov, but following a change of rules governing domain names it is now allowing a plethora of new domains.
Despite the slower take-off of the new domains, which CentralNic attributed to a small number of retailers getting accredited to sell the new domains and a lack of public awareness, it expressed confidence this would pick up in 2015.
It said it expects awareness to grow in the coming year as big brands launch their new top-level domains. Since the end of 2014 it has started to launch four new top-level domains including .design and .college, and it has a further twenty-two set to launch. It expects the majority of these domains to start earning revenues in 2015.
"The board is excited by the considerable opportunities for CentralNic and is confident that the group will achieve its commercial targets for 2015," said Chairman John Swingewood in a statement.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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