EBITDA is expected to be more than $3.5m for FY16, a significant improvement vs FY15
Companies: Minds + Machines Group Limited
Internet domains operator Minds + Machines Group on Wednesday gave a bumper trading update for the year ending 31 December, reporting topline billings growth of 100% at $15.8m.
The Group says it expects EBITDA, before restructuring costs, to be greater than $3.5m for FY16, a significant improvement on the $12.1m loss it posted last year.
Strong performance from H116 carried on into the second half of the year with billings up 30% on H215, at $7.7m. Once partner payments are stripped out, MMX's billings for the year increased 115% to $13.9m.
Renewals also saw a healthy increase versus the previous year, up a hefty 116% to £3.8m. 57% of renewals are for "standard name" accounts and 25% for "premium name" accounts.
Management says it expects renewal billings to continue to grow with the contribution from standard names increasing in number and percentage, giving investors a greater earnings visibility.
Broker finnCap covered the update in its Wednesday Morning Note, saying it confirmed a continuation of the key positive themes that emerged in H1:
"...meaningful billings, growth and cost discipline – together achieving FY16 adj. EBITDA >$3.5m. This represents a complete turn-around from FY15’s heavy loss and is testament to the decision to become a lean, pure-play registry business. With MMX’s domains gaining material traction in 2016 and additional domains scheduled to launch this year, the direction of travel for the business is clearly positive and we look forward to prelims, expected in April."
Chief Exec Toby Hall said the business' focus heading into 2017 will be to continue monetising its portfolio in terms of new registrations and renewals across Asia, Europe, and the US:
"We now have an organisational structure in place that will allow the Group to continue growing profitably. This is particularly exciting given the phenomenal growth we are seeing in what is still effectively a nascent industry - a nascent industry that saw a net growth of over 16million registrations during 2016 - broadly in line with that of .com and all the country codes combined."
MMX shares increased marginally on Wednesday, but the firm is still trading at a 25% discount to its mid-September high.
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BRR Media met with MMX CEO Toby Hall in December, listen to the interview:
Minds + Machines Group - Looking forward to 2017