CentralNic Group - Growth at an attractive valuation

CentralNic provides domain name services and online marketing, focused on consolidating a highly fragmented global market. It offers a broad range of internet services, including reseller services, to corporates and SMEs (the online presence segment), as well as online marketing (the group’s second segment) to domain investors. Ahead of Q421, its seasonally strongest quarter, CentralNic reported 9M21 trading ahead of market expectations, with organic growth of 29%, driven by the group’s investment programme. Based on this strong trading, we raised our FY21 revenue estimate by 10% to US$384m, with adjusted EBITDA rising to US$43m, an 11.2% margin. CentralNic has recorded five-year revenue CAGR to FY20 of 78%. Further M&A should be expected.