CentralNic Q1 2022 report: revenue increased by 86%

CentralNic Group Plc (AIM: CNIC) announced its unaudited financial results for the three months ended 31 March 2022.  Both revenue and Adjusted EBITDA have increased year-on-year, driven by a combination of acquisitions and underlying organic growth.

Financial summary:

• Revenue increased by 86% to USD 156.6m (Q1 2021: USD 84.4m)
• Organic growth* for the trailing twelve months ending 31 March 2022 of c.53%
• Net revenue/ gross profit increased by 43% to USD 39.9m (Q1 2021: USD 27.9m)
• Adjusted EBITDA** increased by 83% to USD 18.5m (Q1 2021: USD 10.1m)
• Operating profit of USD 10.0m (Q1 2021: USD 1.4m)
• Non-core operating expenses reduced by 63% to USD 1.1m (Q1 2021: 2.9m)
• Adjusted operating cash conversion of 128% (Q1 2021: 163%) ahead of historic averages
• Net debt*** down by 18% to USD 61.3m (gross interest-bearing debt of USD 151.9m, cash of USD 90.6m) as compared to USD 75.0m on 31 December 2021 (gross interest-bearing debt of USD 131.1m, cash of USD 56.1m)

Operational highlights:          

• Company’s organic growth further accelerated during the period, driven by investments in new management, staff and systems. EBITDA as a percentage of Net Revenue has increased from 36% in Q1 2021 to 46% in Q1 2022, demonstrating that CentralNic’s growth translates into operating leverage
• The Financial Times listed CentralNic among the top 250 fastest-growing companies and among the top 50 fastest-growing technology companies in Europe

Corporate highlights:

• Acquisition of VGL Verlagsgesellschaft mbH (VGL) in March 2022 for an enterprise value of EUR 60 million (approx. USD 65 million)
• Oversubscribed GBP 42 million equity raise on 28 February 2022, EUR 21 million bond placing on 7 March 2022 and fully taken up Open Offer of GBP 3 million on 21 March 2022
• Leverage**** as defined under the Bond Terms reduced from 2.22x as of 31 December 2021 to 1.56x due to improved profitability, continued deleverage and the largely equity financed acquisition of VGL
• Acquisition of Fireball GmbH and the .ruhr TLD in February 2022 for a total of c USD 0.7 million

Outlook:

• CentralNic’s results for Q1 2022 demonstrate the potential of its strong marketplace model for Online Presence and Online Marketing services
• The Directors are confident that the Company is comfortably trading in line with the recently upgraded forecasts^[1] 
• The Company will issue an H1 trading update on 18 July 2022

Ben Crawford, CEO of CentralNic, commented: “CentralNic has enjoyed a strong start to the year with year-on-year organic growth now reaching north of 50%, gaining market share in a growing market. At the same time, we have continued to add scale and capability through the completion of three strategic acquisitions in the period, including VGL, our largest acquisition to date, funded by an oversubscribed equity placing and tap bond issue. With notably reduced leverage and a healthy cash cushion, CentralNic remains well positioned for the future .“

* Pro forma revenue, adjusted for acquired revenue, constant currency FX impact and non-recurring revenues is estimated at USD 533 million for the trailing 12 months ending 31 March 2022 and at USD 349 million for the trailing 12 months ending 31 March 2021

** Parent, subsidiary and associate earnings before interest, tax, depreciation, amortisation, non-cash charges and non-core operating expenses

*** Includes gross cash, bond and bank debt and prepaid finance costs; it does not include the Mark-To-Market (MTM) valuations for the bond hedges of USD 9.4m as of 31 March 2022 (USD 6.4m as of 31 December 2021)

**** Includes Net Debt as defined under *** plus (i) the Mark-To-Market (MTM) valuations for the bond hedges, (ii) lease liabilities, (iii) guarantee obligations, and (iv) the best estimate of any Deferred Consideration payable in cash, all divided by pro forma EBITDA, i.e. last twelve months’ EBITDA including acquired entities’ EBITDA on a pro forma basis

These unaudited financial results have been prepared for the purpose of fulfilling the information undertaking requirements included in the bond terms for the Senior Secured Callable Bond Issue. To the best of our knowledge, these unaudited financial results have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Issuer and the Group taken as a whole. In addition, to the best of our knowledge, these unaudited financial results include a fair review of the development and performance of the business and the position of the Issuer and the Group taken as a whole. The principal risks and uncertainties that the business faces remain materially consistent with the risks and uncertainties described in the Risks section of the Group’s 2021 annual report.

Ben Crawford – CEO

Don Baladasan – Group Managing Director

Michael Riedl – CFO