LONDON (Alliance News) - Minds + Machines Group Ltd on Friday swung a profit for 2017 and said that it has signed a deal to buy the entire membership interests of the US company ICM Registry LLC.
The owner and operator of Internet top-level domains said it will fund USD10.0 million of acquisition costs in cash from existing reserves and will issue 225.0 million shares, worth USD31.0 million.
Shares in Minds + Machines were trading 9.4% lower at 9.15 pence each on Friday.
The company expects the acquisition to be earnings enhancing in the current financial year. ICM Registry reported sales of USD7.3 million and income of USD3.5 million in 2017.
"We are delighted to have entered this agreement," said Chief Executive Toby Hall. "We see this transaction as a major step forward in our ambition to introduce a progressive dividend policy over the next 18 months."
Separately, Minds + Machines said 2017 was a maiden year of profitability achieved with pretax profit of USD3.8 million. The prior year, it posted pretax loss of USD2.4 million.
In 2016 the company said it aimed to restructured the business into a pure-play registry, which led to USD4.9 million restructuring costs. In 2017, the company did not record such expenses, while also cut its operating costs to USD5.3 million from USD6.5 million.
Revenue declined, however, to USD14.3 million versus USD15.0 million year-on-year. Minus partner payments, revenue was GBP12.0 million versus USD13.5 million in 2016.
Meanwhile, the renewal revenue base doubled to GBP4.8 million from GBP2.4 million the prior year, helped by healthy renewals across all Minds + Machines main properties in the US and Europe. Overall driving domains under management grew 61% to GBP1.3 million in 2017.
"2017 has been about proving out the business model: firmly locking-in the operational gains of 2016 to ensure a profitable base, and developing a long-term growth strategy," added Hall.
Looking ahead, the company said that it expects good progress across each of its geographic regions to continue in the second half of 2018, driven by the ICM Registry acquisition. It also anticipates launch of one new innovation based project.