MMX.L Regulatory News (MMX)

Strictly embargoed until 07.00, 29 January 2020

Minds + Machines Group Limited

("MMX" or the "Company")

Trading Update

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 2019 ("FY 2019"). At the time of this update, all numbers are unaudited.

With strong trading continuing through to the end of 2019, the Company has experienced a fundamental improvement in topline revenue, revenue mix and cash generation in the year. Against this background we will announce a maiden dividend at the time of the FY 2019 Results, expected to be released in late March 2020.

Commenting on FY 2019 trading, Toby Hall, CEO of MMX, said:

"We have established a robust, scaleable platform that now delivers highly predictable and balanced revenue streams, based on continued organic growth augmented by ongoing innovation and selective acquisition. With a largely fixed operating cost and capacity across the platform, we therefore expect future growth to be incrementally positive. We likewise have good early visibility on 2020 revenues as a result of our significant renewal base, ongoing regular channel sales, and revenue generated from the strong new brand protection sales achieved late Q4 2019. In light of this progress and healthy outlook, we will introduce a maiden progressive dividend when the final results are announced in late March 2020."

Headline performance and operating update

Revenue for FY 2019 is expected to be significantly ahead of FY 2018 with the quality of revenue continuing to improve over FY 2019 in line with management's stated objective of decreasing reliance on one-off brokered sales. Renewal revenue is expected to equate to over 60% of expected total FY 2019 revenue (2018: 60%), new registration revenue through the registrar channel has increased to approximately 30% of FY 2019 revenue (2018: 20%) and, pleasingly, one-off brokered sales have been reduced to under 10% of FY 2019 revenue (2018: 18%).

The balancing of geographic contributions evidenced in H1 2019 has also continued through the second half of the year with more revenue being generated in the US and Europe, helped by the launch of our brand protection product, with Asia revenues remaining broadly flat in spite of the significant reduction in brokered sales from the region.

Cashflow from operations, including receipts of $1.6m from private auctions, amounted to $6.2m (2018: $2.3m of which $0.5m from private auctions), representing a strong improvement in cash conversion, a trend which we anticipate repeating in 2020. After loan and onerous contract payments totalling $10m, and share buy-backs of $0.6m, cash at year end stood at $6.6m (2018: $10.4m). The Company is debt free.

December developments

As announced on 23 December 2019, we successfully settled the onerous contract agreement for $5.1m, which will save the Company in excess of $3.0m over the remainder of the contract with an anticipated $1.2m gain in 2019, subject to audit completion. However, in spite of collecting $0.6m in cash in 2019 relating to contracts associated with bad debt provisions, it is likely that all remaining aged Chinese debtors will be provided for at the year end broadly negating the gain from the onerous contract settlement. Notwithstanding the provision, the Company will continue to pursue collection.

In late December 2019, the Company also sold its interest in its remaining retail division, join.law, which was established to support .law sales. The sale generated approximately $0.5m of cash, net of partner payments.

Notice of Final Results

A separate announcement confirming the publication date of the FY 2019 results in late March 2020 will made in due course.

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

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About MMX

Minds + Machines Group Limited (LSE: MMX) is the owner of a world class portfolio of 32 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.

The MMX portfolio is currently focused around generic names (e.g. .work, .vip), consumer interest (e.g. .fashion, .wedding), lifestyle (e.g. .fit, .surf, .yoga), professional occupations (e.g. .law), and geographic domains (e.g. .london, .boston, .miami, .bayern). In 2018, the Company completed its first acquisition, the ICM portfolio, and recently launched its first innovation based project, .luxe, which combines the strengths of the World Wide Web's naming system with that of blockchain. For more information on MMX and its rapidly growing renewal base, please visit www.mmx.co.