CentralNic sells domains for US$ 4.5 million

CentralNic plc, (AIM:CNIC), announced today that it has entered into its largest ever premium domain name sale agreement under which it will receive consideration of US$ 4.5 million.

The press release does not mention the specific domain names but it is sure to assume that it is one or more domains from this list:

QC.COM
AR.COM
HU.COM
KR.COM
UY.COM
GB.COM
NO.COM
SE.COM

CentralNic announced in May 2016 that it was going to delete several of its subdomains-websites from the 8 domains above. CentralNic advised that from April 30, 2017 these domain extensions will be sunsetted, meaning that new registrations and renewals will not be permitted.

So the domain/s have not yet been transferred to the buyer and why the announcement talks about an “entered” agreement and not a done deal.

This is a quote of my May article about CentralNic:

The most obvious reason is that there are not many registrations in these 8 2-letter domains to support the business model. The company probably plans to sell the domains for a few million dollars and buyers can be found in the Chinese market that prefers short .com domains.

It is not clear which of the 8 domain names above are wholly owned by CentralNic and could be part of this deal. Also other domains outside of the 8 above could be part of this agreement.

The agreement today also ensures that CentralNic‘s 2016 company earnings are pumped so as “to finish the year with earnings in line with market expectations and substantially ahead of the same period last year. “.

Meanwhile people that trusted CentralNic for years and are now loosing their domain names and websites are not too happy: CentralNic’s CEO, Ben Crawford, Ignores My Questions (So I Will Answer Them)

Here is the complete press release issued today:

CentralNic plc, (AIM:CNIC), the internet platform business which derives revenues from the global sale of domain names, is pleased to announce that it has entered into its largest ever premium domain name sale agreement under which it will receive consideration of US$ 4.5 million.  

Premium Domain Name Sale

Under the premium domain sale agreement entered into on 13 December 2016, CentralNic will receive US$ 4.5 million consideration in cash, the proceeds of which will be utilised to further accelerate growth within the Group.  After accounting for associated costs and using an illustrative US$/STG exchange rate, the contribution to 2016 Adjusted EBITDA is expected to be approximately £2.8 million. 

Pre Close Trading Update

The CentralNic Board confirmed that, as a result of this sale, the Company expects to finish the year with earnings in line with market expectations and substantially ahead of the same period last year. 

During 2016 CentralNic’s wholesale division retained its position as the global leader by volume, accounting for almost one in three of all new Top-Level Domain name registrations.  There are  excellent prospects for future growth moving into 2017, resulting from a much larger base of domain names due to renew combined with the accreditation of the .xyz TLD by China’s Ministry for Industry and Information Technology.  

CentralNic’s retail division became the Group’s highest revenue generator in 2016, augmented by the acquisition of the Instra Group in January 2016.  Retail division earnings are expected to be in line with expectations in 2016, while the Group continues to focus on developing services to stimulate future growth.

CentralNic’s enterprise division has achieved record results in premium domain name trading.  Progress was also made in developing software licensing and managed service revenues, although new corporate customer acquisition is taking longer than anticipated. 

CentralNic CEO Ben Crawford said: “2016 has been a transformational year for CentralNic, adding significant scale to the Group with revenues expected to grow by over 110% and Adjusted EBITDA by over 65%.”

“The Group is now well positioned to continue to grow its recurring earnings businesses, notably wholesale and retail, while seeking to become an established supplier to the enterprise domain name market.  We look forward to continue executing our growth strategy in 2017.”