Minds + Machines (MMX) announced today the Group’s unaudited interim results for the six month period ended 30 June 2016.
H1 2016 billings increased over 300% to US$8.05 million (H1 2015: US$2.0 million) significantly helped by the successful launch of .vip into China in May.
Toby Hall, CEO of MMX, commented:
“The first half of the year has been transformational for MMX with the Company achieving its stated goals of transitioning into a lean pure-play registry business, able to operate incisively across three time-zones and, more importantly, crossing-over into operating profitability for its ongoing operations, a transition which is ahead of management’s expectations. As underlined by our H1 success in China, both the industry as a whole and MMX itself have reached an inflexion point where the historic excitement surrounding new gTLDs is now beginning to be reflected by tangible results and meaningful progress. China and the Far East are leading the way and MMX has demonstrated it can and will continue to play a meaningful role in this region and the gTLD market as a whole.
“Given the continued strength of our cash balances and the strong performance of our ongoing operations in H1, the Board is therefore delighted to also announce today a tender offer for 100,000,000 ordinary share at 13 pence as well as the private subscription for 42,307,692 Ordinary shares at 13 pence by Goldstream Capital Master Fund I, advised by Goldstream Capital Management Limited, a private fund incorporated in the Cayman islands which is wholly owned by Hony Capital, a leading Chinese equity investment company. The Company is confident that Goldstream and Hony will be able to greatly assist MMX’s long term plans in China and the wider Asia region.”
“The executive management team is optimistic for the outcome of the year as a whole as we continue to stream-line operations, outsourcing where possible and investing in sales and marketing as appropriate. We remain excited about the medium and long term prospects for 2017 and beyond across our three markets of focus: Asia, Europe and the US.“
Financial highlights from period
· H1 2016 billings increased over 300% to US$8.05 million (H1 2015: US$2.0 million) significantly helped by the successful launch into China in the period;
· H1 2016 revenues doubled to US$7.4 million (H1 2015: US$3.6 million);
· Ongoing operating costs cut 27% to US$3.6 million (H1 2015: US$4.9 million) in period with further savings to be realised in H2 as Company decreases towards its 2017 target of US$6.0 million;
· Billings gross margin for period improved to 86% (H1 2015: 47%);
· Positive operating EBITDA before restructuring costs of US$2.0 million achieved for period (H1 2015: loss of US$2.7 million1);
· H1 2016 overall EBITDA before restructuring costs up 151% to US$1.0 million (H1 2015: US$1.9 million loss);
· Post restructuring costs, profit before tax of US$0.1 million achieved in period (H1 2015: US$2.0 million loss);
· Positive basic & diluted EPS of 0.02 cents delivered in period compared to H1 2015 loss per share of 0.24 cents for ongoing operations; and
· Cash & cash equivalents at period end of US$29.1 million, down 16% from US$34.7 million at 31 December 2015 due to foreign currency fluctuations, share buy-backs, share payments, and costs associated to discontinued operations and restructuring.
1 H1 2015 operating EBITDA loss of US$2.7 million is based on one-off profits from H1 2015 gTLD auctions being excluded.
· In H1 2016 MMX’s loss-making registrar was closed down with associated losses for H1 amounting to US$2.0 million of which just over US$1.0 million is attributable to amortization (FY 2015: loss of US$4.7 million).
Operational highlights from period
· Company transformed into a pure-play registry:
Ø transformational agreement signed to outsource MMX’s technical back-end onto Nominet’s platform – the migration progressing on-track for completion in Q4 2016;
Ø Agreement signed to allow MMX’s registrar customers to be migrated to Uniregistrar allowing MMX’s retail arm to be officially shut down in July 2016;
· Company restructured to allow it to operate efficiently across three time-zones: Asia, Europe and the US;
· Company successfully launched into China:
Ø Wholly Owned Foreign Entity (“WOFE”) established in Beijing, China;
Ø market successfully penetrated through through .vip launch in May;
Ø .vip widely recognized as the most successful new gTLD ever to be launched globally based on first month registrations and billings;
· London office re-opened and rationalisation of US operations begun; and
· Flexible outsourcing culture introduced.
· US operations rationalised into a single location in Seattle;
· Emerald Names initiative unwound and premium pricing strategy revised to potentially enable improved distribution through the retail channel in 2017; and
· Historically burdensome partner contracts now being transitioned onto a commercial footing.
A further announcement regarding the Tender Offer and Subscription will be released in due course. A circular containing details of, inter alia, the Tender Offer and Subscription will be posted to shareholders later today.
The unaudited interim accounts for the six months ended 30 June 2016 are available at www.mmx.co.