Revenue up, operating profit falls for CentralNic Group

The AIM-traded firm said gross revenue increased 24% year-on-year to $194.9m for the three months ended 31 March, while organic revenue growth for the trailing 12 months to the end of March was 46%.

Gross profit rose 15% to $45.8m, and adjusted EBITDA increased 15% to $21.3 m, although operating profit slid 23% to $7.7m due to increased non-cash charges.

Adjusted earnings per share (EPS) were ahead 23% at 5.54 US cents, while CentralNic’s net debt narrowed by $7.3m to $49.3m, despite $4m being spent on share buybacks.

Adjusted operating cash conversion was 94%, reflecting a temporary change in working capital mix, but the company said it expected it to reach 100% or more for the full year.

Looking ahead, CentralNic said it expected the positive momentum to continue into the second quarter.

With its high recurring revenues and strong cash conversion, CentralNic said it was well-positioned for further growth as it scaled up.

The firm also demonstrated strong operating leverage, with adjusted EBITDA as a percentage of net revenue at 47% for the first quarter.

While CentralNic said it was closely monitoring the global macroeconomic environment, its board said it was confident in the company's targeted investments in product innovation, vertical integration, and international expansion.

Its directors said they expected the company to perform at least in line with current market expectations for the full year.

Additionally, CentralNic announced its second share buyback programme, in which it was planning to repurchase £4m of its own shares.

The board said it believed the capital return was in the best interests of all shareholders, given the cash-generative nature of the business and its strong performance.

“I am pleased to announce that CentralNic has achieved highly resilient results in the first quarter of the year, demonstrating our industry leadership and reputation for excellence,” said chief executive officer Michael Riedl.

“We have secured key partnerships with the world's leading technology companies including Google, Amazon and recently Microsoft, a testament to the strength and quality of our offering.

“We are confident in our business model and our ability to continue delivering high-quality earnings and strong growth.”

At 1215 BST, shares in CentralNic Group were down 2.79% at 111.21p.

Reporting by Josh White for Sharecast.com.