Member Info for Silverblade

Whilst not unexpected, there are some aspects of the FY2018 results which make uncomfortable reading. In Nov 2018 MMX forecast revenue was due to be >$16m. Then last month it was targeted at $15.5m. It was actually $15.1m – with the main reason given the $600K prior period adjustment. It is not good enough to keep on publishing targets and failing to meet them. The same goes for the EBITDA target of $4.1m – also missed. ICM revenue contribution was $3.9m – so MMX’s historic portfolio generated $11.2m – that’s almost a 20% YOY decline. Our total costs were $11.5m (Overhead, Costs of sales, Partner Payments) – so without ICM we were trading at an operational loss, and that’s before the write-downs. I want to believe our current management have a handle on delivering profit from our business, but I must question some aspects of financial reporting at a time when we need absolute confidence in the business in order to improve sentiment and attract investors. The avoidance of any reference to future dividends is baffling given previous comments on that subject. Clear guidance on current cash in the business would also be useful.

Moving forward – the business needs to minimise costs, maximise revenue, deliver positive earnings per share, use retained losses and deliver an investor income stream. Pretty simple really; and being delivered by other registries; but elusive to MMX to date. 2019 appears to have started well – high renewals, auction income, good sales (possibly some premium income), china becoming more active, product innovation continues – but none of this matters if we can’t generate profit and distribute to shareholders. Based on a total FY2019 cost base of $11.5m (based on 2018) any revenue above this is bottom line profit. By now the company will have a reasonable understanding of its target performance – esp given the 2 data engineers onboarded. It would also be interesting to see if bonuses were paid in relation to last year – remuneration info has been excluded from the full report.

We can now put 2018 into the past and focus on 2019 and beyond and the anticipated improvement on how the market values the business – but only when it delivers on its potential - and we will need to wait until later this year to see such evidence. SB

Indeed Sunday - so much so that someone dipped in with a £68 purchase today! Let’s hope next week is the start of positive sentiment returning to the business and investors see a reason to purchase a bit more than today’s action.,,,c’mon mmx!! SB

Just tried....denied.....looks like its restricted to a selected audience BKD.......! SB

Sunday - I would go further and say the negative pricing of next weeks anticipated results into the current share price is way over the top for reasons which have been well discussed on this board - and fully agree that next week is more about 2019 than 2018, albeit recognising that it was the decisions made in 2018 that will allow a more positive 2019, 2020. Its not pleasant to see a company valuation at the current levels from where it was last year despite the addition of a significant purchase, but I remain optimistic about the current trading year and beyond. SB

At this time of year it may be someone looking to offset a loss against a capital gain for their tax return. Or it was a buy disguising itself as a sell! The reality is next weeks results will show a decent ish trading profit but a whopping paper loss - and being on AIM you never know how the market will react and for some the risk may outweigh the potential upside. SB

Our renewals income for 2018 is c.$9.4m (slightly less than $10m target). Target renewals income for 2019 is $12m – which should cover ALL costs (overhead, cost of sales, partner payments). $12M renewals should be achievable based on full year MMX and ICM performance (91% renewals on adult domains as of last communication). So – c.$20m (?) billings this year – clearly puts the business in a great position. And yes, we have $9m net cash – but remember $3m is restricted, and the company needs to maintain appropriate cash in bank – hence my point that any pay-out in relation to 2018 would be minimal (at best). We are continuing to make decent sales – and assuming the adult domains are $68 a pop – that’s great business. SB

I believe it will be mentioned (it’s hard to avoid it quite frankly) and I’m now 50/50 that there will be a small dividend announced ie in the region of 0.1/0.15p per share. I didn’t think it would be introduced because the full year results will be a chunky loss due to write downs, but as Rykan pointed out we have cash in the bank, are making good profits and TH mentioned increased flexibility which may (or may not....) have been a clue. That would trigger the start of a progressive dividend. SB

It doesn’t help does it when these types of mistakes are made. I mean seriously according to the article we are trading above our brokers target price. Poor way to end a poor week. SB

Thanks SJL. Thinking about the donuts deal – if the sale price was $500m, and that represented a multiple of 14 x EBITDA – that would imply an EBITDA of $35m. I imagine that donuts probably had a pretty high overhead/cost of sales – say $15m pa – so income would need to be $50m to deliver the EBITDA number. Based on 4m domains – gives a weighted average of $12.50 revenue per domain (sales, renewals, premiums). MMX corresponding figures for 2018 would be $9 revenue per domain ($16m billings and 1.8m domains). The addition of the ICM portfolio, the renewal prices of our volume domains (vip and work) together with the higher pricing of .shopping and .luxe should also assist to improve our average revenue per domain – so even if we maintain the 1.8 domains number in 2019 our revenue should grow – it will be interesting to see if the company provides any metrics/analysis on average revenue breakdown as part of the full year results to allow some forecasting for the current year. All IMO and based on approximate numbers. SB

SJL - if you pick this up - do you have any more details on the donuts purchase by arby? If they paid a reputed $500m, we know the domains under management at the time of the sale were about 4m from 238 gtlds - approx. 16% of the total global market in registration numbers from c.20% of gtlds domains. What what we don't know is the level of revenue/billings this produced; cash generation, EBITDA, PBT, debt etc. Its difficult to find any publicly available info given the private nature of the business. MMX have 6% of the total global market registrations from 2.5% of the gtld domains; currently just over 40% of donuts total in registrations - and we have a relatively good idea of financial performance. There will clearly be differences in certain domains which achieve higher sales and renewal prices (in our case the former ICM portfolio. law, Chinese shopping) but on a like for like we appear to benchmark pretty well against the largest operator. I guess I just wondered if I am missing anything as to why (beyond the business scale and economies that come with it) arby paid what appears to be such a premium - or is that just the price to secure the number one operator in a growing sector. SB

perhaps TH gave a hint when he referred to increased flexibility available to the company following the repayment of the London and Capital loan - which is due to be repaid prior to the announcement on the 3rd April - leaving mmx debt free. SB

Taps I'm as frustrated and disappointed as everyone else here who is sitting on their respective losses. I value PI opinions - as long as they are reasonable - and can fully appreciate the emotional reaction we all have when company performance does not meet our objectives. I'm not apportioning blame to a team who I believe have taken some major steps to restructuring a business from where it was to how it now operates. But in our case the market needs evidence that we don't have any more bad contracts, no more over reliance on premiums/china, have a continued focus on low overheads (could do better on this), can secure high levels of renewals, can make acquisitions and effectively integrate them, can develop market leading innovations and most importantly - can make a healthy trading profit and share that with shareholders. SB

....we are getting a bit ahead of our self are we not? Any changes at senior management level will be as a result of interventions at board level - driven by both institutional and larger shareholders - with those parties currently controlling 65%+ of the companies shares. As far as I can see - those parties are currently supporting the team at mmx both vocally (SJL), share purchases (SJL and Turcan), providing financial support (London and Capital) and no share selling (all - to date). The last update on 5th March was well received; and contained sufficient detail on the progress being made to satisfy the majority on this board. The price disconnect remains and will only start to remedy when there is clear evidence that this progress delivers to the bottom line; that's starts on 3rd April, but in reality its H1 2019 (and FY 2019) that will show what has been achieved. Those are the timescales I believe we should be looking at; acknowledging we all have our own specific concerns to resolve which the current share price and trading activity don't make any easier. SB

We are currently in a closed period until 3rd April....and my intervention would include the potential for both director purchases and share buybacks - the latter on the assumption any potential dividend would not be announced until the H1 2019 results in September and I don't really want to spend another six months at 5/6p. SB

6p to sell, 6.1p to buy - tightest spread for quite some time. There may be some upcoming pressure on the price if former ICM shareholders need to sell to raise some cash as part of their upcoming US tax bill as alluded to previously by SJL. If that happens - we need some purchasers in the market. I know there are mixed views on the board on this issue but in the current absence of private investor interest I would still support some limited intervention by the company to avoid further price declines. SB

I spotted the 9.5k boston uplift this morning - alongside usual decent sales at vip and work. Wonder which registrar placed the order - should find out later today. SB

Possibly not Donury - but if it was me - I would give the price every last opportunity to reach even the lowest possible target if it was worth upwards of £600K to me. SB

Sunday - the early publication of the results had been puzzling me for a while - the first batch of share options (7.5m each) available to TH and MS need to trade at an average of 8.1p for the 20 trading days prior to the results being announced before being worth any money, unless any corporate changes occur. So by advancing the publication date, they removed a few weeks from any potential uplift from the current share price which will result in them lapsing. Maybe unconnected but you never know....SB

Time will tell if there is any connection. I think the ability to issue one off tokens is being used to solve the cookies issue. SB

I think SJL’s new business – AVSecure - is due to launch in April 2019 as a leading provider of global legal age verification requirements (This was addressed in the UK via the Digital Economy Act 2017). This will cover a range of industry sectors (including adult) – and seek to benefit both consumers in terms of online security and businesses where they need to comply with age restricted goods and service. AVSecure appear to be using both purchasable age verification cards from retailers (probably with a PIN for subsequent use) and blockchain technology (based on Ethereum) which will create one off tokens for browser visits. Clearly, I don’t know if there is any link between AVSecure and mmx, or whether SJL’s recent insider status is connected (appreciate you might not be able to comment SJL), or whether the timing of mmx’s accounts have been accelerated to mention in results. Interesting prospect for .luxe though! SB