CentralNic Group, a global internet platform company which derives recurring revenues selling online presence and marketing solutions, today issued a Q3 trading update and notice of results. Now, joining me today to discuss the company is Zeus Capital’s Bob Liao.
Q1: As mentioned, the company provided a trading update for the nine months of 2021, can you just tell us how the revenues and profits are tracking against the full-year expectations?
A1: They’re tracking well ahead, at least of our expectations. The company said they’d expect nine months revenue to be £280 million and that represents already 80% of our full-year forecast so they’re tracking ahead on the top line. With expected EBIDTA, they said EBITDA would be at least £32 million which is about 77% of our full-year forecasts.
So, it’s looking like the full-year, if things continue to go as planned, they’re going to be coming ahead significantly of our expectations especially if it’s a strong Q4 which it should be.
Q2: I understand the company’s organic growth for the nine month period was 29%, what’s driving that strong growth?
A2: There’s a couple of things driving up growth, one is their online marketing division which is their newest division and one that has been driving momentum over the last 18 months. They’ve been introducing a lot of new innovative products, they’ve been consolidating the market, using that scale to take market share and it’s a very strongly growing market, online marketing. So, that’s one major driver.
As well, the direct and indirect divisions, which has historically been the core of the business, is now accelerating growth and that’s because the company has made some significant investments in a lot of account management, sales and also in the product as well. That is resulting in the growth in that business, accelerating in the first-half was closer to the high single digits which is an improvement on the previous year. So, accelerating growth in that end of the business as well.
Overall, that’s a strong acceleration to 29% growth compares to 20% in the first half and only 9% in 2020 so momentum is only continuing for this one.
Q3: Just looking in Q4 and beyond, how do you view the outlook for CentralNic Group?
A3: I think the momentum has been strong for a while on the revenue front and what this trading update really says to us is that not only are we getting on the top line but it looks like the EBITDA has some earnings momentum behind it as well.
So, if you look at what the company said about trading for the full-year in terms of guidance and outlook, they’re talking about trading comfortably at or above the upper end of market expectations. That’s for both revenue and EBITDA so the outlook has been upgraded by the management team and again, I still think we see a bit of potential upside on top of that, based on the earnings outlook that we just talked about previously