25 Jan 2021 07:01
Minds + Machines Group Limited
("MMX" or the "Company")
Trading Update and Appointment of new CEO
Minds + Machines Group Limited (AIM: MMX), one of the world's leading owners and operators of Internet Top-Level Domains ("TLDs"), is pleased to provide the following trading update for the year ended 31 December 2020 ("FY 2020"). At the time of this update, all numbers are unaudited.
CEO Appointment
The Board of Directors is pleased to announce that Tony Farrow, who re-joined MMX at the end of October as Interim CEO has been appointed CEO of the Company. Mr. Farrow will also join the Board of Directors following completion of regulatory due diligence.
Commenting on FY 2020 trading, Tony Farrow said:
"It is great to be back working with the MMX team. Our FY 2021 plan will focus on AdultBlock sales, extensive release of inventory to the market, quality registrations with the view of future renewal revenue and standardized promotions for our channel partners. It is a straightforward business where focus must remain on the quality of our domain registrations and promotions with our channel partners. We lost some of the momentum after the initial launch of AdultBlock in FY 2019. However, FY 2021 was always the target year for the full rollout of this new product, and I am encouraged by the dialogue with our channel partners to really move AdultBlock in FY 2021. I look forward to sharing more insight and information when we release our FY 2020 results in the Spring."
Trading Update
MMX revenues in FY 2020 were largely in line with those for FY 2019. Renewal revenue remained consistent in FY 2020 at 68%. FY 2020 new standard registration revenue increased to 24% with reduced dependency on premium domains.
Billings declined 3% year on year, reflecting increases in most TLDs but a significant drop in AdultBlock billings in FY 2020 following its initial launch in FY 2019. In FY 2020 98% of billings were delivered through the registrar channel, eliminating the Company's historical reliance on one-off brokered sales.
Domains Under Management ("DUMs") declined 19% in FY 2020 compared to FY 2019, with no loss in contribution, reflecting an intentional shift by the Company to more profitable transactions. Continuing our sales efforts toward our higher margin TLDs will be a principle focus in FY 2021.
In addition to the departure of the Company's former CEO and CFO, in FY 2020 MMX also reduced its workforce by 20%. Severance costs associated with this right sizing means that the reductions did not result in cost savings in FY 2020, but the reduced staffing will reduce costs in FY 2021. No separation costs were paid to the former CEO and CFO.
The new executive team is also reviewing the contribution received from each of its TLDs and the growth prospects for each from new sales initiatives to ensure the carrying values associated with each TLD is appropriate going forward.
Cashflow from operations was $6.4m in 2020 (2019: $0.5M, including onerous contract payments of $6.6M). Cash at year end stood at $8.9m (2019: $6.6m) after share and option buy-backs in the year of $3.1M. Through the share buy-back programme and the cancellation or buy-out of employee share options and restricted share awards, in FY 2020 the Company reduced the number of common shares outstanding by 3% and its fully diluted shares outstanding by more than 8.5%. The Company remains debt free.
Notice of Final Results
A separate announcement confirming the publication date of the FY 2020 results will be made in due course.
For further information
Minds + Machines Group Limited | |
Tony Farrow (CEO) Bryan Disher (Interim CFO)
| via Belvedere Communications
|
finnCap Ltd | Tel: +44 (0) 20 7220 0500 |
Corporate finance - Stuart Andrews / Carl Holmes / Simon Hicks Corporate broking - Tim Redfern / Richard Chambers
| |
Belvedere Communications Limited John West Llew Angus | Tel: +44 (0) 20 3687 2754
|
About MMX
Minds + Machines Group Limited (LSE: MMX) is the owner of a world class portfolio of ICANN approved top-level domains (gTLDs). The Company generates revenues through the registration and annual renewal of names by organisations and individuals within each of its top-level domains, sales being processed through the Group's network of global registrar and distribution partners.
For more information on MMX please visit www.mmx.co.
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.