CentralNic plc, (AIM:CNIC), the internet platform business which derives revenues from the global sale of domain names, has told DirectorsTalk 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(1) is expected to be approximately GBP2.8 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 LON:CNIC 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.”