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CentralNic reports 2017 earnings, merger with KeyDrive still in the works

Company reports revenue increase in 2017 and hopes to merge with KeyDrive in Q3.

Domain name company CentralNic (London AIM: CNIC) published its 2017 annual report (pdf) today.

Topline revenue increased from £22.1m in 2016 to £24.3m in 2017. Profit after tax was basically flat at £1.0, but the company’s Adjusted EBITA measure grew from £5.5m to £6.6m.

CentralNic divides its business into three groups:

Retail – domain name registrars such as Instra and Internet.bs
Wholesale – registry services, such as managing the back end for .xyz
Enterprise – mostly premium domain name sales, but also corporate domain management and dot-brands

Revenue grew in the retail and wholesale divisions but slipped in enterprise. CentralNic has been on a premium domain hamster wheel that the company admits is running out of energy.

On the wholesale side, revenue growth came mostly from .xyz and Radix’s top level domains.

The company renegotiated its contract to run .xyz. It extended the contract until 2032 and structured it as a flat-fee agreement, with some increases possible based on volume.

CentralNic completed its acquisition of Slovakia’s .sk country code by buying SK-NIC on December 5, 2017. This contributed £0.3m of revenue for the 26 final days of the year. That business has nice margins; the adjusted EBITA margin was 79% for that period.

The company said merger discussions with KeyDrive are continuing and it hopes to complete the combination in Q3 of this year.

It also said it plans to offer online security and brand protection services to its corporate clients.

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