Minds + Machines Group Limited (AIM:MMX) announced the Group’s unaudited interim results for the six month period ended 30 June 2018 (the “period”).
- Registrations within the MMX portfolio, excluding those from the acquisition of ICM Registry LLC (“ICM”), up 38% year on year to 1.5 million with particularly strong growth in the US;
- Group revenue increased 22% to $6.4 million (H1 2017: $5.3 million), ICM providing a two week contribution of $250,000;
- Renewal revenue up 40% to $3.4 million representing 52% of H1 revenues (H1 2017: $2.4 million representing 51%), ICM’s renewal revenue contribution being $241,000;
- Gross Profit increased 14% to $3.3 million (H1 2017: $2.9 million);
- Operating EBITDA increased 176% to $661,000 (H1 2017: $238,000);
- Operating expenses ($2.6 million) remained flat (H1 2017: $2.6 million) despite the acquisition of ICM;
- Cash and cash equivalents decreased from $15.9 million at the end of FY 2017 to $9.5 million at the end of the period, primarily as a result of the $10 million paid to acquire ICM in June 2018;
- Cash generated from ongoing operations was $0.5 million compared to a cash loss of $0.9 million for the period ending H1 2017;
- Fixed overheads for the enlarged Group currently running at $6.5 million on the year, which are expected to reduce to below $6 million as economies of scale are achieved;
- Strategic review completed with the ICM acquisition completed on 16 June 2018 with integration progressing well and according to plan;
- .vip had a second strong renewal season of above 76% resulting in overall registrations for the region improving 15% from 728,000 to 836,000 year on year;
- Exclusive relationship developed with Ethereum’s Name Service team enabling the launch of TLD .luxe, scheduled to enter General Availability on 6 November 2018; and
- Total net accounting loss for the period of $14.7 million primarily resulting from accounting treatments and restructuring of legacy contracts ($11.8 million), provisions under new accounting standards ($2.1 million) and one-off costs related to ICM acquisition ($0.7 million).
Commenting on the results Toby Hall, CEO of MMX said:
“The period has been a transformative time for the Company. The strong registration and renewal revenue growth in our existing MMX portfolio, complemented by the ICM acquisition, have contributed to significant revenue growth and a stronger business with an increasingly predictable level of recurring revenues, leading management to expect renewal revenues to surpass the Group’s full cost base within the next 24 months.
“As highlighted in the Restructuring section, the treatment of certain historic contracts, most notably those inherited by current management, has been addressed enabling a much clearer picture of the Company’s ongoing progress to be presented in future periods.
“As part of our strategy to increase market share and awareness of the Company, we are greatly encouraged by the progress of the .luxe initiative and ongoing collaboration with Ethereum’s Ethereum Name Service, which is helping to position MMX as a leading innovator within our industry.”
Commenting on current trading he added:
“We are currently experiencing healthy new sales activity on our standard and lower value premium names through the registrar channel across the portfolio. Likewise, our renewal revenue continues to build, bolstered by the renewals from the ICM portfolio, which is performing in line with management’s expectations. These stable revenue streams, when combined with a series of new initiatives coming into play around those properties launched in China in Q3 (being .law and .gowou) and the forthcoming launch of .luxe, lead management to remain cautiously optimistic about the full year operating EBITDA outcome. However, a slow-down in high value one-off sales is likely to impact top-line revenues.”