Further thoughts.....19 Jul 2019 14:57
One of the things that frustrates me is the changing references to how our turnover is publicised. I don’t know if its deliberate – but mmx have used billings, revenues in the past (and I appreciate the difference) and now its cash inflows – maybe just being pedantic – but stick with one definition.
If we are to assume from the update that H1 2019 income received was $8.6m v H1 2018 of $6.3m (reported as $6.4m in the unaudited release from last year which included $250k from ICM), and the former includes $2.8m of ICM ‘stabilised’ costs, then despite a 30% increase in new sales billings, our like for like turnover for the original 28 mmx domains has decreased from $6.05m to $5.8m (virtually back to H1 2017 levels) – despite the belief that our renewals are being renewed at higher prices that the original sales (esp in the .vip and .work domains). And that’s despite some premium sales in .law and .vip amongst others. I know we are now one business so don’t have a go at stabilising ICM revenue and avoid the same issue on our original portfolio.
The deal to pay .london a one off $5.1m isn’t as bad as I first thought given the current balance sheet liability is $7.9m and we might actually make a bit of positive income over the remainder of the contract (3 years to go I think). An overall $3.3m balance sheet improvement.
It will be good to see how the buyback is done; I suspect it may be a tender offer similar to the previous one which provided shareholders with the option to sell shares back to the company at a premium to current valuation. A 20% premium would see shareholders offered c. 7.2p to sell a portion of their shares at that price, with £1m allowing circa 14 million shares to be bought at that price (or roughly 1.5% of your holding). Doesn’t remove many shares but the share price should move. SB