Team Internet (TIG) 2019年年度報告「AIM」.pdf

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15、rede comuk comsecurityru comcDesigned and produced by CentralNic Group Plc Annual Report 20191Contents Overview Highlight s 2 Our sales 4 Reseller segment 5 Small Business segment 6 Corporat e segment 7 Cent ralNic Gr oup at a glance 8 Team Int ernet acquisit ion at a glance 10 Strategic report Chai

16、rmans st at ement 12 Chief Execut ive Of ficers r eport 13 Chief Financial Of ficers r eport 16 Governance Boar d of Dir ect ors 22 Dir ect ors r eport 24 Corporat e governance 28 Audit commit t ee r eport 32 Remunerat ion r eport 33Financial statements Independent audit ors r eport 36 Consolidat ed

17、 st at ement of compr ehensive income 41 Consolidat ed st at ement of financial posit ion 42 Consolidat ed st at ement of changes in equit y 43 Consolidat ed st at ement of cash flows 44 Not es t o t he consolidat ed financial st at ement s 45 Company st at ement of financial posit ion 83 Company st

18、 at ement of changes in equit y 84 Not es t o t he Company financial st at ement s 85 Par t icular s of subsidiar ies and associat es 91 Shar eholder inf ormat ion 94 Glossary 96OVERVIEWCentral Ni c Group Pl cI n thi s era of unprecedented i nterrupti on to busi ness acti vi ti es,I am pl eased to r

19、eport on another year of outstandi ng growth for Central Ni c Group i n 2019,effecti vel y doubl i ng i n revenue and adj usted EBI TDA whi l e remai ni ng a pure pl ay recurri ng revenue busi ness.Iain McDonal d Chai rman“”2 CentralNic Group Plc Annual Report 2019A year of outstandi ng growthOVERVI

20、EWFi nanci al hi ghl i ghtsRevenue up 95%to USD 109.2m (2018:USD 56.0m)Recurri ng revenues at 92%(2018:90%)Gross profit up 65%to USD 42.8m (2018:USD 25.9m)Adj usted EBI TDA(1)up 96%to USD 17.9m (2018:USD 9.1m)Cash bal ance at year end USD 26.2m (2018:USD 23.1m)2013In USD million2019Revenue i ncrease

21、d by a factor of 27 t imes si nce flotati on i n 2013(1)Excl udes i mpact of share-based payments expense for opti ons,forei gn exchange and non-core operati ng costs.4.18.013.629.031.956.0109.2 CentralNic Group Plc Annual Report 20193Operati onal hi ghl i ghtsSignificant client wins i ncl udi ng.bl

22、 og,the ccTLD.bh,MarkMoni tor,ZDNS,and Automatti c Operati onal effici enci es and savings of c.USD 1m achi eved through i ntegrati on of earl i er acqui si ti ons Four further acqui si ti ons strengtheni ng our core offeri ng,faci l i tati ng a st rat egic expansion i nto a new segment wi th the ac

23、qui si ti on of Team Int ernet i n December 2019 Augment ed Central Ni c s market strength,wi th+45%gr owt h of customer base f Post year-end events Tradi ng proves to be resi l i ent to the gl obal i mpact of COVI D-19 Team I nternet i ntegrati ng to pl an wi th strong fundamental s for FY19 and pl

24、 easi ng contri buti on to the Group for Q1 2020 Management restructure wi th new hi res Chi ef Peopl e Officer,Tracey Hi ckl i ng Head of Resel l er segment,Robbi e Bi rkner 4 CentralNic Group Plc Annual Report 2019Our sal esOVERVIEW Reseller Cor por at e Small businessesIn 2019,CentralNic served m

25、ore than 370,000 customers within three customer segments c.29,000 resel l ers i ncl udi ng al l the l argest domai n retai l ers i n the worl d c.1,000 corporati ons wi th up to 56,000 domai n names each to protect thei r brands c.340,000 smal l busi nesses i n al most every country i n the worl d

26、who need domai n names for thei r websi tes and emai lServices of f ered in 2019 Domai n names represented 92%of Central Ni cs revenue i n 2019,wi th the l ong tai l of domai ns(each contri buti ng 1%or l ess of revenues)accounti ng for 60%of domai n revenues New services We are scal i ng up addi ti

27、 onal servi ces to our customers such as hosti ng,websi te bui l di ng,securi ty certi ficati on,domai n moneti sati on,Office 365 software and onl i ne brand protecti on.Up-sel l i ng these servi ces to our customer base i s a core strategi c i ni ti ati ve to accel erate growthUSD 60.7mUSD 37.8mUS

28、D 10.7mWhat we sel lWho we sel l toCustomer concentration is low with the largest customer representing only c.5.1%of .org.xyz.io.de com.au.inf o.co.at.euot herco.nz1%1%2%2%2%2%3%4%4%2%1%1%19%56%CentralNic Group Plc Annual Report 20195Resel l er segment Over 29,000 cust omers,up 580%from 2018 122%re

29、venue growth to USD 60.7m i n 2019(2018:USD 27.3m)53%gross profit growth to USD 19.6m i n 2019(2018:USD 12.9m)32%gross margi n i n 2019(2018:47%)Si gni ficant cl i ent wi ns such as Automatti c,MarkMoni tor,ZDNS among others Renewal rate 70-90%DEC 2018 13,473,089DEC 2019 25,573,859GROWTH+12,100,770+

30、89%29,000 Resel l er customersCentral Ni c i s one of the worl d s l eadi ng domai n name resel l er pl atform busi nesses,suppl yi ng domai n names to more than 29,000 resel l er cl i ents.These i ncl ude al l of the worl d s l argest domai n name retai l ers,and some of the bi ggest compani es i n

31、 the worl d.The Resel l er segment i s compri sed of our Resel l er busi ness and Regi stry busi ness.Our Resel l er busi ness was enhanced i n 2019 by the acqui si ti on of Hexonet,TPP Whol esal e anda ful l year s contri buti on from our August 2018 acqui si ti on of KeyDri ve.CentralNic of fering

32、:Suppl i es the domai n names that the resel l er onsel l s to i ts customers,wi th over 1,000 di fferent top-l evel domai n extensi ons,i ncl udi ng the l ong tai l of hi gh-margi n country-code domai n names,sourced from 200+countri es and terri tori es around the worl d Recentl y started suppl yi

33、 ng rel ated I nternet servi ces such as SSL Certi ficate and hosti ng Standardi ses the processes for acqui ri ng those domai n names Automates al l the manual processes requi red i n regi steri ng domai n names Central i ses bi l l i ng and payments wi th si ngl e i nvoi ces coveri ng domai ns wi

34、th hundreds of sources Saves resel l ers from havi ng to work wi th dozens of addi ti onal suppl i ers around the worl d,each wi th i ts own uni que protocol s,technol ogi es and manual processes and bi l l i ngCUSTOMER CASE STUDY:LEADING US HOSTING COMPANY6 CentralNic Group Plc Annual Report 2019Sm

35、al l Busi ness segmentOVERVIEWCentralNic of fering:Sel l s customer a smal l portfol i o of domai n names usi ,l ocal country code.sg,and country code for nei ghbouri ng Mal aysi a,.my Provi des websi te hosti ng Provi des emai l hosti ng Provi des securi ty certi ficates as a resel l er of thi rd-p

36、arty provi ders Manages the customer rel ati onshi p i ncl udi ng bi l l i ng and customer servi ce Provi des expert advi ce,as an outsourced I T partner,to assi st the customer s growthDEC 2018 1,991,158DEC 2019 2,263,029GROWTH+271,871+13.7%2.3m Domai ns suppl i ed to smal l busi nessesCentral Ni c

37、 provi des more than 340,000 smal l busi nesses i n al most every country i n the worl d wi th domai n names and val ue-added servi ces,focusi ng on hi gh margi n,hi gh growth geographi es and customer types,not wel l served by l arger competi tors.These are al l provi ded vi a a subscri pti on mode

38、l l eadi ng to substanti al recurri ng revenues.Our Smal l Busi ness segment revenues for 2019 were USD 37.8m up 56%from USD 24.2m i n 2018.Gross profit i ncreased from USD 9.9m i n 2018 to USD 16.1m i n 2018.The portfol i o of Smal l Busi ness portal s was extended duri ng the year to i ncl ude a s

39、mal l retai l offeri ng of Hexonet.Over 340,000 cust omers 56%revenue growth to USD 37.8m i n 2019(2018:USD 24.2m)64%gross profit growth to USD 16.1m i n 2019(2018:USD 9.9m)Gross margi n 43%(2018:41%)Renewal rate 60-80%CUSTOMER CASE STUDY:SINGLE OFFICE,SINGAPORE-BASED COMPANY CentralNic Group Plc An

40、nual Report 20197Corporate segmentCentralNic of fering:Buys al l domai n names that are requi red by the customer on i ts behal f Admi ni sters and reports on the customer s domai n portfol i o Mi ti gates onl i ne busi ness conti nui ty ri sk by ensuri ng domai n names are renewed at appropri ate t

41、i me Provi des expert advi ce and gui dance on new regi strati ons and admi ni strati on of the portfol i o Protect customers brand and web presence from bei ng compromi sed,and from faci ng substanti al costs to recl ai m l ost domai n names Provi des onl i ne domai n name moni tori ng servi ces to

42、 effecti vel y and proacti vel y mi ti gate and defend agai nst onl i ne abuse of brandsDEC 2019 154,032Central Ni c manages the domai n portfol i os of over 1,000 corporate cl i ents,some of whi ch are the worl d s bi ggest brands.Many of these compani es buy several thousand domai n names i n orde

43、r to protectthese brands from bei ng compromi sed and they rel y on Central Ni c to advi se them and to ensure they are renewed at appropri ate ti me,preventi ng ri sk of substanti al recl ai m costs.Thi s i s a rel ati vel y new busi ness for Central Ni c and i t i s wi tnessi ng rapi d growth rate

44、s.The busi ness al so enj oys the hi ghest gross renewal rate i n the Group of over c.96%.Revenues for the segment i ncreased by 140%from USD 4.5m to USD 10.8m,and gross profit i ncreased by 65%from USD 3.2m to USD 7.0m.CUSTOMER CASE STUDY:A LEADING FMCG BRANDDomai n numbers of Corporate segment sho

45、wed double digit organi c growthGROWTH+16,723+12.2%Over 1,000 cust omers 140%revenue growth to USD 10.8m i n 2019(2018:USD 4.5m)65%gross profit growth to USD 7.0m i n 2019(2018:USD 3.2m)65%gross margi n i n 2019(2018:72%)Renewal rate 93-99%DEC 2018 137,3098 CentralNic Group Plc Annual Report 2019Cen

46、tral Ni c Group at a gl anceOVERVIEWBui l di ng the gl obal Revenue model Our subscript ion business model pr ovides high levels of r ecurring r evenues at 92%.Cust omer r enewal rat es ar e highly pr edict able depending on domain,segment and cust omer mat ur it y and r ange f r om bet ween c.65%an

47、d c.90%.We enjoy high cash conversion(pr e-t ax)wit h annual subscript ions all paid in advance.A trul y gl obal busi ness wi th customers i n al most every country i n the worl d.Our global pr esence is rapidly expanding as a r esult of our acquisit ive and organic expansion and a balance bet ween

48、high earnings qualit y market s in Nort h America and Eur ope and higher gr owt h market s in t he Rest of t he World.DEC 2018 2,723,014DEC 2019 5,359,638Domai ns i n the USA96.8%Percentage growth CentralNic Group Plc Annual Report 20199 di gi tal economyMarket The mar ket oppor t unit y is huge.Cen

49、t r alNic cur r ent ly has c.13%penet r at ion in t he Int ernet Ser vices Of f er ings mar ket which is highly f r agment ed and r ipe f or consolidat ion.The t ot al addr essable mar ket f or domain names and r elat ed int ernet ser vices is est imat ed at least USD 30bn.The massive lock down meas

50、ur es in r esponse t o COVID-19 in ear ly 2020 have cr eat ed addit ional demand f or online communicat ion t ools,like email,and online sales t ools,like e-commer ce websit es,acceler at ing t he under lying demand f or Cent r alNics ser vices.Though t his has also been negat ively af f ect ed by r

51、 educed business act ivit y and business closur es in some sect or s.DEC 2018 5,617,807 DEC 2019 7,590,257DEC 2019 15,041,025Domai ns i n Western EuropeDomai ns i n the Rest of the Worl d35.1%Percentage growth107.2%Percentage growth DEC 2018 7,260,735The l eadi ng provi der of moneti sati on servi c

52、es Wi th gl obal presence,Team I nternet deri ves revenue from the moneti sati on of the portfol i os of domai n name i nvestorsKey financi al sCentral Ni c acqui red Team I nternet for a total consi derati on of USD 48m,equi val ent to 3.9 ti mes Team I nternet s EBI TDA for the peri od 1 January 2

53、019 to 24 December 2019.The acqui si ti on was compl eted on 24 December 2020,so the i mpact on Central Ni c s 2019 resul ts was negl i gi bl e.The acqui si ti on i s earni ngs enhanci ng and expected to be si gni ficantl y accreti ve i n the financi al year ended 31 December 2020,before any synergi

54、 es.USD 74.0m 2019 Revenuec.22 mi l l i on Moneti sati on of c.domai ns worl dwi de c.35,000 CustomersUSD 12.3m 2019 Adj usted EBITDA10 CentralNic Group Plc Annual Report 2019Team I nternet acqui si ti on at a gl anceOVERVIEWMoneti sati on of for domai n i nvestors Team I nternet Hi ghl i ghtsExpans

55、i on to a new segment of the domai n-rel ated I nternet Servi ces Offeri ngs market moneti sati on of traffic for domai n i nvestors.Further di versi ficati on of revenue streams.I ntegrati ng to pl an wi th proven strong fundamental s for FY 2019,and a pl easi ng contri buti on to the Group for Q1

56、2020.Hi ghl y experi enced team and tal ent l ocated i n Germany.CentralNic Group Plc Annual Report 201911 domai n namesThe resul ts for the fi rst quarter of 2020 support the resi l i ence of the Group s busi nesses,as i t conti nues to take si gni fi cant steps forward i n i ts strategy to bui l d

57、 a l eadi ng gl obal domai n name and web servi ces provi der.Al l di vi si ons conti nued to grow organi cal l y duri ng 2019,through a combi nati on of new cl i ent wi ns and i ncreased busi ness from exi sti ng customers,wi th conti nued heal thy profi t margi ns generati ng hi gh l evel s of ope

58、rati ng cash fl ow.The Group al so made four earni ngs accreti ve acqui si ti ons duri ng the year,expandi ng i ts servi ce offeri ng and i ncreasi ng scal e.I n addi ti on,Central Ni c Group wi dened i ts market offeri ng at the end of 2019 by addi ng a new busi ness model Domai n name moneti sati

59、on vi a the acqui si ti on of Team I nternet AG,whi ch has al ready proved to be a hi ghl y earni ngs accreti ve addi ti on to the Group.The Group s conti nued transformati on i s the resul t of enormous hard work from our executi ves and staff,and I thank them on behal f of the Board and the shareh

60、ol ders for thei r efforts.We have worked hard to ensure that the busi nesses that we acqui red have been i ntegrated i nto our group structure to ensure consi stent standards and effi ci ent use of resources.I woul d al so l i ke to wel come the new staff and seni or executi ves who j oi ned the en

61、l arged Group i n 2019,as wel l as the new i nvestors who j oi ned the share regi ster or who subscri bed to Central Ni c Group s mai den bond i ssue,l i sted on the Osl o exchange i n October 2019.The new fi nanci al year has started wi th a number of new appoi ntments to strengthen the Group s l e

62、adershi p,i ncl udi ng Robbi e Bi rkner,as Head of our Resel l er segment and Tracey Hi ckl i ng as the Group s Chi ef Peopl e Offi cer.These appoi ntments are expected to enhance the Group s abi l i ty to dri ve rapi d organi c and M&A l ed growth.Tradi ng i n Q1 2020,together wi th the Group s hi

63、gh percentage of recurri ng revenues,provi de the Board wi th every confi dence of meeti ng market expectati ons for 2020.The Group s l ong-standi ng proacti ve focus on ensuri ng busi ness conti nui ty for i tsel f and i ts customers has prepared i t wel l for the chal l enges presented by the nove

64、l COVI D-19,i ncl udi ng the movement of our gl obal workforce to home worki ng compl eted before i t was mandated by Government.We conti nue to moni tor the si tuati on and our Group s resul ts cl osel y.We conti nue to see l ots of i nteresti ng bol t-on M&A opportuni ti es.We have chosen to defer

65、 the payment of our mai den di vi dend to preserve capi tal to make tacti cal acqui si ti ons.I n the current busi ness envi ronment we bel i eve that thi s wi l l generate better returns for sharehol ders.The Di rectors wi l l conti nue to moni tor the potenti al payment of a di vi dend and wi l l

66、keep sharehol ders i nformed of any deci si on.Iain McDonal d Chai rman 26 Apri l 2020 Chai rman s statement12 CentralNic Group Plc Annual Report 2019I n thi s era of unprecedented i nterrupti on to busi ness acti vi ti es,I am pl eased to report on another year of outstandi ng growth for Central Ni

67、 c Group Pl c(Central Ni c Group or the Group)i n 2019,effecti vel y doubl i ng revenue and adj usted EBI TDA whi l e remai ni ng a pure pl ay recurri ng revenue busi ness.Iain McDonald ChairmanSTRATEGIC REPORT Chi ef Executi ve Officer s reportMarket and strategy Central Ni c Group i s a l eadi ng

68、gl obal vendor of onl i ne subscri pti ons to domai n names a key i nfrastructure component of the i nternet used as the foundati on for both emai l and websi tes.I n 2019,over 90%of Group revenues came from domai n names,wi th the remai nder from recurri ng revenue domai n-rel ated servi ces.Centra

69、l Ni c Group has a l oyal and sti cky customer base,wi th approxi matel y 80%of Central Ni c Group s revenues deri ved from recurri ng annual fees that were agreed i n years pri or to 2019.The bal ance of domai n revenues i s deri ved from fi rst year domai n regi strati ons generated by our resel l

70、 ers or acqui red di rectl y by Central Ni c Group.The total addressabl e market(TAM)for Central Ni c Group s servi ces i s esti mated at USD 30 bi l l i on,wi th the maj ori ty of those markets currentl y served by smal l er i ndependent compani es provi di ng si gni fi cant opportuni ti es for Cen

71、tral Ni c Group to grow market share by wi nni ng new customers and through acqui si ti ons.A trul y gl obal company,Central Ni c Group s staff are concentrated i n i ts mai n hubs i n Germany,Austral asi a and the UK,whi l e i t di stri butes domai ns from those centres to customers i n al most eve

72、ry country i n the worl d.I n 2019,Central Ni c Group suppl i ed over 28 mi l l i on domai ns to over 370,000 customers.Customer concentrati on was mi ni mal wi th Central Ni c Group s l argest customer representi ng l ess than 10%of i ts revenues.Central Ni c Group i s a l eader among i ts peers as

73、 the fi rst omni-pl atform provi der.I t devel oped an i ntegrated stack of hi ghl y automated propri etary software pl atforms,customi sed top each customer type,whi ch i t now mai ntai ns,updates and operates.Reseller segment Central Ni c Group i s a worl d l eader i n i ts Resel l er segment,whi

74、ch grew 122%i n 2019.Thi s segment operates pl atforms for resel l ers such as regi strars,hosti ng compani es and tel cos.I t operates under the brands Key-Systems,Hexonet,PartnerGate,TPP Whol esal e and Toweb and i s ranked number two i n the Worl d by vol ume.I n addi ti on to domai n names,the G

75、roup i s starti ng to sel l i n-demand servi ces such as Mi crosoft Offi ce 365 and AWS hosti ng,whi ch the Di rectors expect wi l l provi de a meani ngful contri buti on to organi c growth i n the future.The Resel l er segment al so i ncl udes Central Ni c Group s Regi stry Sol uti ons busi ness,wh

76、i ch operates a pl atform for regi stri es of country-codes(ccTLDs)and new Top-Level Domai ns(nTLDs).Wi th over 115 TLDs usi ng i ts regi stry pl atform,Central Ni c Group s Regi stry Sol uti ons busi ness i s ranked i n the top fi ve gl obal l y and i s the l eadi ng regi stry provi der for new TLD

77、s,fi ni shi ng 2019 wi th over 40%market share of nTLDs by vol ume.Small Business segment Central Ni c Group s Smal l Busi ness segment i s a rapi dl y growi ng chal l enger,emergi ng from a fi el d of hundreds of l ocal competi tors as a gl obal pl ayer of i ncreasi ng i mportance,growi ng 56%i n 2

78、019.Our onl i ne retai l ers target hi gh-margi n and hi gh-growth ni ches gl obal l y,speci al i si ng i n customers buyi ng l arge quanti ti es of domai n names and country-code domai ns,and upsel l i ng other domai n-rel ated servi ces to these customers.CentralNic Group Plc Annual Report 201913C

79、entral Ni c Group enj oyed another record year i n 2019,wi th 60.9%year-on-year growth excl udi ng the effect of acqui si ti ons made duri ng 2019.I ncl udi ng the four acqui si ti ons made i n the second hal f of 2019,revenues for the year were USD 109.2m,a 95%i ncrease over 2018,taki ng the Group

80、s Compound Annual Growth Rate(CAGR)si nce i t l i sted i n 2013 to al most 73%.Adj usted EBI TDA for 2019 was USD 17.9m,a 96%i mprovement on 2018,wi th margi ns and cash generati on mai ntai ned year-on-year.Ben Crawford Chief Execut ive Of ficerChi ef Executi ve Officer s report conti nuedCorporate

81、 segment Central Ni c Group s Corporate segment grew 140%i n 2019.I t servi ces l arge corporati ons that vi ew domai n names as a form of i ntel l ectual property si mi l ar to trademarks,whi ch must be secured and protected by brand owners.Over 1,000 corporate cl i ents to date have entrusted thei

82、 r domai n portfol i o management to Central Ni c Group,whi ch i ncl udes Fortune 1000 compani es and househol d brand names.IT and shared services Behi nd the scenes,Central Ni c Group busi nesses are servi ced by a central hub of I T and corporate servi ces,i ncl udi ng fi nance,HR,devel opment,an

83、d a si ngl e procurement functi on for domai ns and other mi croservi ces,streaml i ni ng the i nternal suppl y chai n.The Company al so has a dedi cated team that oversees the successful i ntegrati on of each newl y acqui red busi ness.Operational review Central Ni c Group experi enced both acqui s

84、i ti on-dri ven and organi c growth i n i ts Resel l er,Smal l Busi ness and Corporate segments i n 2019.Gi ven the di ffi cul ti es of swi tchi ng suppl i ers i n the domai n i ndustry,customers tend to be very sti cky,and cl i ent wi ns from other suppl i ers are rel ati vel y rare,whi ch of cours

85、e benefi ts the Group on the fl i psi de.Nonethel ess,Central Ni c Group has conti nued to wi n more customers away from i ts competi tors wi th i ts focus on expert servi ce,cl ose col l aborati on wi th cl i ents,and feature ri ch,fl exi bl e and automated technol ogy.Si gni fi cant customer wi ns

86、 i n the Resel l er segment i ncl ude regi stry servi ce contracts for the TLDs.Bl og,.Gay,.Musi c,.Bui l d,.Luxury,.Bond and.BH.Central Ni c Regi stry Sol uti ons ended 2019 wi th over 40%of the total nTLD market by vol ume whi ch i s more than the next fi ve competi tors combi ned.Maj or resel l e

87、rs recrui ted i n 2019 i ncl uded Automatti c,MarkMoni tor,ZDNS and Tel enor.These new cl i ent wi ns,together wi th growth of exi sti ng customers,resul ted i n the resel l er busi nesses Central Ni c Group owned for the ful l year 2019 i ncreasi ng thei r domai ns under management from 13.5 mi l l

88、 i on to 25.5 mi l l i on duri ng the year.I n the retai l sector,the busi nesses Central Ni c Group owned for the whol e of 2019 enj oyed growth from 2.0 mi l l i on to 2.3 mi l l i on domai ns under management.I n March 2019,Central Ni c Group was sel ected by the i nternet regul ator,I CANN(I nte

89、rnet Corporati on for Assi gned Names and Numbers)for the bul k transfer of 680,000 domai n names from a former regi strar that was no l onger accredi ted.Fol l owi ng a ful l competi ti ve appl i cati on process I CANN sel ected Central Ni c Group to take over management of the domai n names.Such a

90、 process i s the offi ci al procedure when a former regi strar l oses accredi tati on i n order to ensure the end customers enj oy conti nui ty of servi ce.A number of cri teri a were taken i nto account i n sel ecti ng Central Ni c Group as the successful candi date,i ncl udi ng the Company s exper

91、i ence,hi story of compl i ance,stabi l i ty,and overal l reputati on for professi onal i sm.Central Ni c Group compl eted the mi grati ons i n the space of two months.I n Central Ni c Group s Corporate segment,domai ns under management i ncreased from 137,000 to 154,000 i n 2019,due to i ncreased a

92、cti vi ty from exi sti ng cl i ents as wel l as new cl i ent wi ns.Integrations Recurri ng net cost savi ngs of approxi matel y USD 1 mi l l i on were real i sed i n 2019,compri si ng the ful l year effect of cost savi ngs made i n 2018 pl us successes i n i ntegrati ons i n 2019.Thi s i ncl uded Ke

93、yDri ve s KS Regi stry cl i ents bei ng mi grated to the Central Ni c Regi stry pl atform,whi l e Central Ni c Group s EPP Gateway cl i ents were mi grated to the KeyDri ve resel l er pl atform.Both the KS Regi stry and EPP Gateway pl atforms were reti red.Addi ti onal l y,our I nstra retai l busi n

94、ess swi tched to the Central Domai n Procurement pl atform for 400 Top-Level Domai ns,i n some i nstances I nstra s l ower procurement costs were shared among Group compani es.Central Ni c Group has a dedi cated team of i ntegrati on proj ect managers who pl an and track i ntegrati ons accordi ng to

95、 a cl earl y defi ned bl uepri nt.For each acqui si ti on made,the i ntegrati on pl an fol l owi ng that bl uepri nt i ncl udes ten work streams whi ch l i st hundreds of tasks from i mmedi ate acti ons l i ke changi ng si gnatori es on bank accounts,through to l ong term proj ects such as the mergi

96、 ng of software pl atforms.Key obj ecti ves for i ntegrati on i ncl ude obtai ni ng vi si bi l i ty and control of costs and earni ngs,use of Group resources,cross-sel l i ng opportuni ti es and cost reducti ons.Acquisitions Customers are very sti cky i n the domai n busi ness gi ven the hi gh l eve

97、l s of automati on and hi gh swi tchi ng costs,wi th transfers between provi ders amounti ng to a smal l proporti on of al l transacti ons.Thi s customer sti cki ness,combi ned wi th the hi gh val ue and qual i ty of earni ngs of exi sti ng customer books,makes the domai n i ndustry a very attracti

98、ve and rel ati vel y l ow ri sk i ndustry i n whi ch to acqui re busi nesses.I n total,fi ve successful acqui si ti ons contri buted to Central Ni c Group s growth i n 2019,wi th the acqui si ti on of Team I nternet AG bei ng compl eted on 24 December 2019 and havi ng i ts fi rst materi al i mpact o

99、n 2020.Central Ni c Group enj oyed the ful l year effect of i ts acqui si ti ons of KeyDri ve,compl eted on 2 August 2018,and Gl obehosti ng,compl eted the fol l owi ng month,maki ng a si gni fi cant contri buti on to the growth experi enced i n 2019.Al l acqui si ti ons were of compani es wi th a h

100、i gh l evel of recurri ng revenues,excel l ent customer retenti on and hi gh l evel s of cash conversi on.On 1 August 2019 Central Ni c Group acqui red the Sydney-based busi ness TPP Whol esal e,the l eadi ng pl atform for resel l ers of domai n names and hosti ng i n Austral asi a a carve out of ce

101、rtai n trade and assets from ARQ Group Li mi ted(“ARQ”),a company l i sted on the Austral i an Securi ti es Exchange.TPP Whol esal e serves around 14,000 resel l er customers and has 840,000 domai ns under management,i ncl udi ng 19%of al l .com.au regi strati ons.TPP Whol esal e i s an extensi on i

102、 n Austral i a and New Zeal and of Central Ni c Group s l argest busi ness uni t,whi ch suppl i es domai n names to resel l ers gl obal l y i ncl udi ng most of the worl d s top ten domai n name retai l ers by vol ume.Central Ni c Group has provi ded TPP Whol esal e customers wi th conti nui ty of s

103、ervi ce,whi l e i t wi l l al so upgrade the servi ce wi th new products.The TPP Whol esal e acqui si ti on al so marked the fi rst steps i n Central Ni c Group becomi ng a resel l er of Amazon Web Servi ces and Mi crosoft Offi ce 365.The total consi derati on was AUD 24m i ncl udi ng taxes,pai d i

104、n cash and by assumi ng certai n l i abi l i ti es of c.AUD 1.6m(USD 1.1m)from ARQ at compl eti on.Central Ni c 14 CentralNic Group Plc Annual Report 2019STRATEGIC REPORT CentralNic Group Plc Annual Report 201915Group i ncurred a number of one-off i ntegrati on costs of whi ch AUD 0.7m arose i n Cen

105、tral Ni c Group s 2019 fi nanci al year.On 7 August 2019 Central Ni c Group acqui red al l of the shares i n Hexonet,a l eadi ng i nternati onal pl atform for resel l ers of domai n names,wi th operati ons i n Canada and Germany,i n cl ose proxi mi ty to Central Ni c Group s mai n German operati on.

106、Hexonet sel l s domai n name subscri pti ons di rectl y and vi a more than a thousand resel l ers i n over 110 countri es,managi ng over 3.8 mi l l i on domai ns on i ts propri etary software pl atforms.I n 2018,Hexonet s revenues were c.EUR 16.5 mi l l i on(c.USD 19.4m),representi ng a CAGR of 8%on

107、 a USD basi s for the two precedi ng years,wi th an EBI TDA of c.EUR 0.8m(c.USD 0.9m).Central Ni c Group acqui red al l of the shares i n Hexonet for up to EUR 10.0 mi l l i on,subj ect to customary net cash and worki ng capi tal adj ustments,the payment bei ng subj ect to Hexonet bei ng del i vered

108、 by the sel l er wi th over EUR 0.3m(c.USD 0.4m)of ongoi ng cost reducti ons compared to the 2018 cost base.Further,Central Ni c Group fi l l ed staff vacanci es budgeted at EUR 0.3m(c.USD 0.4m)wi th staff from Hexonet.On 7 August 2019 Central Ni c Group acqui red the i nternati onal domai n name re

109、tai l er I deegeo Group Ltd(“I deegeo”).The acqui si ti on was both strategi c and earni ngs accreti ve to Central Ni c Group.I deegeo i s the operator of the retai l websi te i ,a l eadi ng i nnovator i n the appl i cati on of User Centred Desi gn to the retai l i ng of domai n names,wi th 180,000

110、domai ns under management.Si nce the acqui si ti on Central Ni c Group has started to depl oy the desi gn sol uti ons devel oped by I deegeo across i ts retai l websi tes,noti ng that hi gh usabi l i ty i s parti cul arl y i deal for customers i n emergi ng economi es,whi ch i s a key target market

111、for Central Ni c Group.The Company retai ned the staff of I deegeo and appoi nted one of the founders as Customer Engagement Product Pl anner and Manager across i ts retai l brands.For the fi nanci al year ended 31 March 2019,I deegeo s revenues were c.NZD 6.2 mi l l i on(c.USD 4.2m),wi th an EBI TD

112、A(adj usted for the costs of the sharehol ders l eavi ng the busi ness)of NZD 0.9m(c.USD 0.6m).The consi derati on represents a mul ti pl e of 5.8 ti mes trai l i ng adj usted EBI TDA and was pai d i n cash.To fund the above acqui si ti ons and to refi nance i ts bank debt,Central Ni c Group success

113、ful l y pl aced a debut EUR 50m seni or secured bond i ssue on 24 June 2019,whi ch was subsequentl y l i sted on the Osl o Stock Exchange and tapped for an addi ti onal EUR 40m for the Team I nternet AG acqui si ti on.The bond,whi ch matures i n Jul y 2023,has a coupon of three-month EURI BOR(wi th

114、a fl oor of zero per cent)pl us 7%p.a.wi th quarterl y i nterest payments.Pareto Securi ti es acted as Sol e Bookrunner for the bond i ssue.Central Ni c Group was advi sed by Rothschi l d&Co i n connecti on wi th the bond i ssue.The i ssue was oversubscri bed and supported by a wi de range of debt c

115、api tal markets i nvestors gl obal l y.Thi s bond establ i shed Central Ni c Group as an i ssuer and,i n combi nati on wi th our strong support among equi ty market i nvestors,provi des us wi th consi derabl e fi nanci al fl exi bi l i ty,over the medi um-term,to pursue our strategi c growth obj ect

116、i ves.On 24 December 2019,Central Ni c Group acqui red web servi ces company Team I nternet AG,a l eadi ng provi der of moneti sati on servi ces for domai n i nvestors.As reported by Matomy Medi a Group Ltd.as part of thei r audi ted annual report for FY2019,duri ng the peri od from 1 January 2019 t

117、hrough 24 December 2019,the date of the sal e of Team I nternet AG to Central Ni c Group,Team I nternet recorded revenue of USD 74.0m and adj usted EBI TDA of USD 12.3m.Central Ni c Group acqui red Team I nternet AG for a total consi derati on of USD 48m cash,equi val ent to 3.9 ti mes Team I nterne

118、t AG s EBI TDA for the peri od 1 January 2019 to 24 December 2019.The acqui si ti on i s earni ngs enhanci ng and expected to be si gni fi cantl y accreti ve i n the fi nanci al year ended 31 December 2020,before any synergi es.Through these acqui si ti ons i n combi nati on wi th i ts organi c grow

119、th,Central Ni c Group doubl ed i ts revenue run-rate from the begi nni ng of 2018 to the begi nni ng of 2019.Recurri ng revenues from domai n name subscri pti on sal es form the foundati on of Central Ni c Group s busi ness and contri buted the vast maj ori ty,an esti mated 92%,of Central Ni c Group

120、 s revenues i n 2019.However,the hi ghl y attracti ve addi ti onal,domai n-rel ated software and servi ces represent an earni ngs opportuni ty si gni fi cantl y greater than domai n names,and Central Ni c Group has been focused on rapi dl y gai ni ng exposure to those servi ces.I n that respect,2019

121、 was a transformati onal year,i n whi ch the acqui si ti ons made have the effect that our pro forma revenues from domai n sal es are now matched by the pro forma revenues from sel l i ng domai n-rel ated software and servi ces.I n addi ti on to the contri buti on these acqui si ti ons have made to

122、the conti nued growth of Central Ni c Group,they al so represent a practi cal demonstrati on of our team s abi l i ty to source and compl ete deal s around the worl d and successful l y i ntegrate them.The Di rectors conti nue to bui l d a pi pel i ne of acqui si ti on targets that fi t the Group s

123、cri teri a wi th a vi ew to maki ng further acqui si ti ons i n the comi ng years.As Central Ni c Group s sector i s provi ng resi l i ent to busi ness i nterrupti on,the Di rectors note the conti nued avai l abi l i ty of attracti ve acqui si ti on targets,whi ch,coupl ed wi th the Group s proven a

124、bi l i ty to source,compl ete and i ntegrate compl ex acqui si ti ons around the worl d,provi de an ongoi ng opportuni ty to bui l d a si zeabl e gl obal busi ness to ri val the l argest i ndustry pl ayers.Post year-end and outlook I am del i ghted to report that tradi ng i n Q1 2020 was i n l i ne

125、wi th the Di rectors expectati ons,despi te the gl obal busi ness restri cti ons to sl ow the progress of COVI D-19.As some of our group compani es are consi dered cri ti cal i nfrastructure,our Group has a l ong hi story of bei ng focussed on busi ness conti nui ty,whi ch prepared us wel l for swi

126、tchi ng our staff to worki ng from home whi l e provi di ng undi mi ni shed servi ce to our customers.As a provi der of onl i ne subscri pti on servi ces wi th hi gh cash-conversi on and sol i d organi c growth,we do not expect Central Ni c Group to be severel y affected by COVI D-19,but we wi l l t

127、ake the necessary precauti ons to preserve our cash and revi ew our acqui si ti on pi pel i ne and fi nanci ng pl ans to ensure that we mai ntai n stabi l i ty and opti mi se our busi ness strategi es i n the new gl obal cl i mate.Ben Crawford Chi ef Executi ve Offi cer 26 Apri l 2020 Chi ef Fi nanc

128、i al Officer s report16 CentralNic Group Plc Annual Report 2019STRATEGIC REPORT I n the fi nanci al year 2019,the Group recorded overal l year-on-year growth i n revenues of 95%from USD 56.0m to USD 109.2m.The growth i n the revenue l i ne fl owed proporti onal l y down to Adj usted EBI TDA*,whi ch

129、i ncreased by 96%to USD 17.9m(2019:USD 9.1m).The Adj usted EBI TDA Margi n i ncreased from 16.3%to 16.5%.Forei gn exchange gai ns were USD 1.4m,after USD 0.8m i n 2018.The attracti ve cash generati ve profi l e of the Group conti nued i n 2019 wi th net operati ng cash fl ow before tax and non-core

130、expenses bei ng USD 18.6m(2018:USD 11.8m).Cash at the end of 2019 was USD 26.2m(2018:USD 23.1m).Key Performance Indicators 2019:Revenue:USD 109.2m(2018:USD 56.0m)Adj usted EBI TDA*:USD 17.9m(2018:USD 9.1m)Operati ng l oss:USD 0.5m(2018:USD 3.6m)Di l uted EPS:(4.67)cents(2018:(5.04)cents)Adj usted Di

131、 l uted EPS:(6.81)cents(2018:(4.77)cents)Cash Bal ance:31 Dec 2019:USD 26.2m(2018:USD 23.1m)Net Debt*:31 Dec 2019:USD 75.0m(2018:USD 3.2m)*Earni ngs before i nterest,tax,depreci ati on and amorti sati on,forei gn exchange,and non-core operati ng costs and revenues(acqui si ti on costs,i ntegrati on

132、costs,share opti on expense and settl ement i tems)*I ncl udi ng prepai d fi nance costs of USD 3.5m I n 2018 the Company adopted segments rel ated to customer types,namel y Resel l ers,Smal l Busi nesses and Corporates,wi th each havi ng di sti nct needs that are served by Central Ni c Group s prop

133、ri etary SaaS pl atform.For each segment,revenue and gross profi t contri buti ons to the total operati ng expendi ture to operate the omni-pl atform shared servi ces core are reported bel ow.Reseller segment Two Resel l er portal s,namel y Hexonet and TPP Whol esal e,have been added through the acq

134、ui si ti ons i n the year.The Resel l er segment now addresses c.29,000 customers wi th c.25.6m domai n names under management.Thi s has contri buted to revenue i n the Resel l er segment i ncreasi ng by 122%from USD 27.3m to USD 60.7m.Gross profi t for the segment i ncreased by 53%from USD 12.9m to

135、 USD 19.6m.The decrease i n the gross margi n from 47%to 32%i s dri ven by the hi gher bl ended share of regi strar busi ness comi ng from the acqui si ti ons as opposed to the near 100%gross margi n regi stry busi ness of the l egacy Central Ni c Group busi ness and i s not i ndi cati ve of decl i

136、ni ng pri ces.Small Business segment The portfol i o of Smal l Busi ness portal s was extended by the acqui si ti on of the I WantMyN portal.I n total,the Smal l Busi ness segment now addresses c.340,000 customers owni ng c.2.2m domai n names and yi el ded revenue of USD 37.8m,an i ncrease of 56%ove

137、r the USD 24.2m recorded i n 2018.Gross profi t i n 2019 was USD 16.1m,an i ncrease of 64%over the 2018 fi gure of USD 9.9m.2019 was yet another transformati onal year for Central Ni c Group,not onl y by the number and vol ume of acqui si ti ons compl eted,but al so i n the way that the Group struct

138、ured and financed them.Most i mportantl y,the acqui si ti ons were i mmedi atel y accreti ve as demonstrated by Central Ni c Group s 2019 financi al performance.Michael Riedl Chief Financial Of ficer Corporate segment Revenue i n the Corporate segment was USD 10.8m,an i ncrease of 140%from the USD 4

139、.5m reported i n 2018,and Gross Profi t i ncreased by 120%to USD 7.0m from USD 3.2m i n 2018.I t served c.1,000 customers and managed c.154,000 domai ns on thei r behal f.For 2019,the one week of tradi ng of Team I nternet AG under Central Ni c ownershi p has been i ncl uded i n the Corporate segmen

140、t.Overhead expenses Group overhead expenses excl udi ng forei gn exchange,depreci ati on,amorti sati on,i mpai rment and non-core operati ng expenses i ncreased 48%from USD 16.8m to USD 24.9m.Goi ng forward,the Company pl ans to amend i ts segmental reporti ng to refl ect the new real i ty subsequen

141、t to the 2019 acqui si ti ons and the accompanyi ng revi ew of the management structure.Earnings profile The qual i ty of the Group s earni ngs remai ns an i mportant strategi c pri ori ty for Central Ni c Group and i ts i nvestors,as the Group i ncreases the proporti on of revenues deri ved from pr

142、edi ctabl e sources.Today,vi rtual l y al l the Group s revenue i s from recurri ng,and i n most cases,subscri pti on-based servi ces.Adj usted EBI TDA of USD 17.9m(2018:USD 9.1m)has been deri ved from the operati ng l oss of USD 0.5m(2018:USD 3.6m)after adj usti ng for the fol l owi ng i tems:a)dep

143、reci ati on of USD 1.3 m(2018:USD 0.3m);b)amorti sati on of i ntangi bl e assets of USD 8.3 m(2018:USD 5.6m);c)fai r val ue movement of i nvestment of USD 0.0m(2018:USD 1.3m);d)non-core operati ng expenses of USD 7.3m(2018:USD 5.8m);e)forei gn exchange gai ns of USD 1.5m(2018:USD 0.8m);f)i mmateri a

144、l amounts of associ ate i ncome;and g)share-based payment expense of USD 2.9m(2018:USD 0.5m).Non-core expenses of USD 7.3m i ncl uded USD 3.4m acqui si ti on expenses,USD 3.3m i ntegrati on expenses and USD 0.6m other expenses.Other non-cash expenses i ncl uded the acqui red amorti sati on of i ntan

145、gi bl e assets of USD 8.3m(2018:USD 5.6m).Thi s reflects the ful l year effect of the schedul ed amorti sati on for i denti fi ed i ntangi bl e assets of KeyDri ve,as wel l as the 5 months post-acqui si ti on of TPP,Hexonet,I deegeo and for a margi nal part Team I nternet AG.Basi c and di l uted ear

146、ni ngs per share of(4.67)cents(2018:(5.04)cents)has been i mpacted by non-recurri ng acqui si ti on costs,amorti sati on charges,and other si gni fi cant non-core operati ng costs.Further detai l s of the earni ngs per share cal cul ati ons are provi ded i n note 12 to the financi al statements.Grou

147、p statement of financial position The Group had net assets of USD 77.4m at 31 December 2019(2018:USD 78.1m).Capital expenditure and investing activities Other than acqui si ti ons,for whi ch further detai l s on the fai r val ue are provi ded i n note 25 to the financi al statements,the Group had re

148、l ati vel y l i mi ted capi tal expendi ture.Excl udi ng acqui si ti ons,USD 4.5m of property,pl ant,and equi pment have been added.Out of these,USD 3.6m rel ated to recogni si ng so cal l ed Ri ght of Use Assets under I FRS 16.Further,USD 0.2m of i ntangi bl e assets have been acqui red.Excl udi ng

149、 acqui si ti ons and I FRS 16,USD 1.1m of tangi bl e and i ntangi bl e assets have been added,representi ng c.1%of group revenue.I n l i ne wi th the appropri ate treatment for transl ati on of a forei gn operati on i nto the Group s presentati onal currency,both the tangi bl e and i ntangi bl e ass

150、ets are transl ated at the cl osi ng rate,generati ng forei gn exchange di fferences as presented i n notes 13 and 14 to the financi al statements.Except for goodwi l l,i ntangi bl e assets are amorti sed i n l i ne wi th the Group s accounti ng pol i cy.The carryi ng val ue of goodwi l l i s tested

151、 annual l y for i mpai rment,whi l e the Di rectors al so consi der other i ntangi bl e assets and i nvestments for i ndi cati ons of i mpai rment.Further detai l s are provi ded i n notes 13,14 and 16 to the financi al statements.Cash flow and net cash The cash flow statement for the Group i ncl ud

152、es two maj or themes:the entri es rel ated to the financi ng and compl eti on of acqui si ti ons and the resul ts of the ongoi ng operati ons of the busi ness,consi deri ng fluctuati ons i n worki ng capi tal.Net cash flow from operati ng acti vi ti es after tax was hi gher than the previ ous year a

153、t USD 16.3m(2018:USD 8.8m).I n both years,the net cash flow from operati ng acti vi ti es was i n l i ne wi th expectati ons rel ati ve to Adj usted EBI TDA.I nvesti ng acti vi ti es were mai nl y rel ated to the four acqui si ti ons compl eted duri ng the fi nanci al year.The net cash outfl ow tota

154、l l ed USD 79.4m i n 2019 as compared wi th USD 17.6m i n 2018 where the KeyDri ve acqui si ti on was l argel y fi nanced through an i ssue of equi ty.CentralNic Group Plc Annual Report 201917Chi ef Fi nanci al Officer s report conti nuedBond issue and loan refinancing On 3 Jul y 2019,the Company su

155、ccessful l y i ssued EUR 50m of bonds i n pri vate pl acement to 40 i nsti tuti onal i nvestors.The bond carri es a coupon of 7%above 3-month EURI BOR,wi th a fl oor at 0%.I t matures on 3 Jul y 2023 and the Company i s abl e to cal l the bond wi thout i ndemni fi cati on anyti me i n the 12 months

156、precedi ng the maturi ty.I n case of a change of control,the Company may cal l the bond at 105%and the bondhol ders may put the bond at 101%of nomi nal val ue.The col l ateral i s si mi l ar to the col l ateral formerl y provi ded to Si l i con Val l ey Bank(SVB),whose l oan has been ful l y repai d

157、 from the bond proceeds.A maj or di fference i s that the col l ateral may be fl exi bl y shared wi th other fi nance provi ders,ei ther i n the form of pari passu l oans or bond i ssues,revol vi ng credi t faci l i ti es(RCF)or l etter of credi t faci l i ti es(LCF).The Company has i ssued addi ti

158、onal bonds for EUR 40m on 23 December 2019 to Macquari e Pri nci pal Fi nance.The bond was l i sted on the Osl o Stock Exchange on 30 September 2019 and i s the fi rst securi ty of the Company bei ng l i sted on a Regul ated Market i n the meani ng of the EU s Fi nanci al Servi ces Acti on Pl an.The

159、 Company has adopted a pol i cy of quarterl y tradi ng updates.The rel ati onshi p wi th SVB has been mai ntai ned.The Company currentl y has a super seni or revol vi ng credi t faci l i ty(RCF)and l etter of credi t faci l i ty for a combi ned total amount of EUR 7.5m.On the bal ance sheet date,the

160、 RCF has been uti l i sed for an equi val ent of USD 2.2m and the LCF has been uti l i sed for an equi val ent of USD 1.75m.The Group i s i n compl i ance wi th the mai ntenance covenant rati os and i ts payment obl i gati ons under the bond and faci l i ti es agreement.Further detai l i s provi ded

161、 i n note 24 to the financi al statements.Consideration shares Under the earnout agreed for the acqui si ti on of KeyDri ve S.A.i n 2018,duri ng the 2019 fi nanci al year,USD 6,834,000 Addi ti onal Consi derati on attri butabl e to the FY2018 obj ecti ves became payabl e to i nter.servi ces.15%,equa

162、l l i ng USD 1,025,100 has been settl ed i n cash.The remai nder of the Addi ti onal Consi derati on attri butabl e to FY2018 obj ecti ves was settl ed by i ssui ng 7,384,978 Addi ti onal Consi derati on Shares,at 59.3p per share.i nter.servi ces hol di ng i ncreased from c.16.4%to c.19.1%of the i s

163、sued share capi tal of the Company.Out of the total consi derati on of USD 48m for the acqui si ti on of Team I nternet AG,USD 45m i s cash-settl ed and USD 3m has been settl ed i n Central Ni c Group Pl c shares on compl eti on.Central Ni c Group Pl c shares have been val ued at 59p,resul ti ng i n

164、 3,911,650 shares havi ng been i ssued to the sel l ers,subj ect to a 12 months restri cti on on sal es and a 6 months orderl y market condi ti on.Earnout and deferred consideration SK-Ni c met i ts performance target and therefore USD 1.8m was pai d to the vendors duri ng 2019.Further tranches of U

165、SD 1.7m,USD 0.7m and USD 1.1m wi l l become payabl e subj ect to the achi evement of performance cri teri a i n each of 2020,2022,and 2024.For KeyDri ve,out of the USD 6.8m havi ng become due under the earnout USD 1.0m has been settl ed i n cash.The remai ni ng earnout amount due i s expected to be

166、determi ned and settl ed i n June 2020.I n rel ati on to Gl obeHosti ng,USD 0.7m became payabl e i n September 2019 and another USD 0.5m i s anti ci pated to become payabl e i n September 2020.For Team I nternet AG,USD 3.0m have been deferred unti l June 2020 and USD 1.0m wi l l be wi thhel d unti l

167、 March 2021 to cover eventual warranty breaches.Other post-completion obligations For the TPP Whol esal e acqui si ti on was an asset deal,meani ng that stamp duti es of AUD 270k have been assessed as payabl e i n 2020.Further a two-year mi grati on program has been commi ssi oned from the sel l er,

168、who i s a publ i c I T servi ces busi ness,to move the operati ons out of the sel l er s I T i nfrastructure i nto a Cl oud envi ronment.The esti mated proj ect cost i s AUD 2.8m.Significant accounting policies and critical accounting j udgements The Summary of the Group s si gni ficant accounti ng

169、pol i ci es i s set out i n note 3 and the Group s cri ti cal accounti ng j udgements i s set out i n note 4 to the fi nanci al statements.Group financial risk management The Di rectors revi ew the financi al ri sk management pol i cy,noti ng that the Group i s exposed to deposi t ri sk,credi t ri s

170、k,market ri sk,I T securi ty,i mpact on soci ety,forei gn currency ri sk and other ri sks ari si ng from financi al i nstruments.Further detai l s of the Fi nanci al Ri sk Management Framework are provi ded i n note 29 to the financi al statements.18 CentralNic Group Plc Annual Report 2019STRATEGIC

171、REPORT The Group s finance functi on i s responsi bl e for managi ng i nvestment and fundi ng requi rements i ncl udi ng cash flow moni tori ng and proj ecti ons.The cash flow proj ecti ons are revi ewed regul arl y by the Di rectors to ensure the Group has suffi ci ent l i qui di ty at al l ti mes

172、to meet i ts cash requi rements and execute i ts busi ness strategy.The Group s strategy i s to finance i ts operati ons through the cash generated from operati ons and where necessary,equi ty and debt finance,notabl y to support i nvesti ng acti vi ti es.The Group s financi al i nstruments compri s

173、e cash and vari ous i tems such as trade and deferred recei vabl es.Deposit risk Deposi t ri sk i s mi ti gated by the Di rectors setti ng pol i cy that the Group onl y pl aces deposi ts wi th banks and financi al i nsti tuti ons wi th hi gh credi t rati ngs.Credit risk The Group s exposure to credi

174、 t ri sk from trade recei vabl es i s rel ati vel y l ow,due to the fact that the busi ness has tradi ti onal l y deal t wi th customers who often pay at the poi nt or sal e or i n advance.Where there are credi t accounts,whi ch i s an i ncreasi ng trend i n the i ndustry parti cul arl y for the l a

175、rger domai n name regi strars,recei vabl es are control l ed through credi t l i mi ts and regul ar moni tori ng.Market risk There i s a ri sk that the market for domai ns for whi ch the Group provi des regi stry and regi strar servi ces may not i ncrease as qui ckl y as expected or that the new TLD

176、s may not generate the revenue l evel s anti ci pated by the Di rectors.I n ei ther case,the Group s revenues coul d reduce bel ow expectati ons wi th an i mpact on profitabi l i ty.The ri sk i s mi ti gated to a degree by operati ng mul ti pl e l i nes of busi ness themsel ves exposed to many verti

177、 cal and geographi cal markets and segments,the maj ori ty of whi ch have very l i ttl e rel i ance on new TLDs.IT security I f the Group does not prevent securi ty breaches or becomes suscepti bl e to cyber-attacks,i t may be exposed to l awsui ts,l ose customers,suffer harm to i ts reputati on,and

178、 i ncur addi ti onal costs.Unauthori sed access,computer vi ruses,acci dents,empl oyee error or mal feasance,i ntenti onal mi sconduct by computer“hackers”and other di srupti ons can occur that coul d compromi se the securi ty of the Group s i nfrastructure or confidenti al i nformati on.The Group h

179、as created a resi l i ent network i nfrastructure and Domai n Name System server constel l ati on,wi th fai l over secondary systems to ensure cri ti cal regi stry functi ons are mai ntai ned.The Resel l er segment has been certi fied under I SO 27001/2013 for data securi ty,thereby mi ti gati ng ri

180、 sk by adherence to i nternati onal best practi ce.The Company conducts i ndependent I T audi ts on new acqui si ti ons and from ti me to ti me on i ts exi sti ng busi nesses.Impact on society The Group has a posi ti ve i mpact on soci ety by offeri ng i nternet servi ces i n devel opi ng countri es

181、,contri buti ng to the Uni ted Nati ons Broadband Commi ssi on s obj ecti ve of connecti ng the 50%of the worl d that i s sti l l offl i ne wi th affordabl e i nternet.The Company can see l i ttl e negati ve i mpact on soci ety from i ts acti vi ti es.Whi l st the I nternet i tsel f adds a potenti a

182、l avenue through whi ch fraudsters and other undesi rabl es can operate,the Company has stri ngent pol i ci es rel ati ng to i ts posi ti on as an enabl er of such traffi c and at al l ti mes adheres to l aws and regul ati ons i n each and every j uri sdi cti on,i ncl udi ng worki ng wi th regul ato

183、ry authori ti es at al l ti mes.Foreign currency risk The Di rectors note that the Group has predomi nantl y traded i n US Dol l ars,Euros,GB Sterl i ng Pounds and Austral i an Dol l ars,and consi ders the exposure to forei gn currency ri sk to be acceptabl e.The Group has hel d reserves i n each of

184、 these currenci es to meet tradi ng obl i gati ons as requi red.The currency ri sk i s acti vel y moni tored through a peri odi c revi ew of i nflows and outfl ows by currency,i ncl udi ng an assessment of the extent to whi ch currenci es are natural l y hedged across the Group s busi ness l i nes.W

185、here thi s i s not the case,consi derati on i s gi ven to the use of hedgi ng i nstruments.I n parti cul ar,the Company has l ocked i n rates i t consi dered favourabl e for GBP/EUR before the December 2019 UK el ecti ons and GBP/USD near 35 year l ows ami dst the COVI D-19 events.Gi ven the Group d

186、oes more than hal f i ts trade i n US Dol l ars and the i ndustry i n whi ch i t operates i s predomi nantl y tradi ng i n US Dol l ars,the Di rectors resol ved to amend i ts presentati onal currency i n compl i ance wi th I AS 21 to US Dol l ars for al l fi nanci al years commenci ng after 31 Decem

187、ber 2018.Al i gni ng the reporti ng currency to the domi nant tradi ng currency wi l l reduce the exposure to forei gn currency ri sk and faci l i tate benchmarki ng to l i sted peers.CentralNic Group Plc Annual Report 201919Brexit risk The Di rectors gi ve due consi derati on to other ri sk factors

188、 as they ari se.Parti cul ar attenti on i s attri buted to the Uni ted Ki ngdom the wi thdrawal of the Uni ted Ki ngdom(UK)from the European Uni on(EU),commonl y referred to as“Brexi t”,as wel l as addi ti onal regul atory requi rements bei ng attri buted to busi ness i n the domai n i ndustry,by na

189、ti onal or supranati onal l awmakers,or regul atory bodi es such as the I nternet Corporati on for Assi gned Names and Numbers(“I CANN”)or the London Stock Exchange(“LSE”).I n the opi ni on of the Di rectors,Brexi t carri es l i mi ted ri sk for the day-to-day operati ons of the Group,as onl y a sma

190、l l fracti on of the Group s trade i s to UK customers or from UK subsi di ari es to EU customers.Onl y 3%of gl obal sal es are wi th UK customers.Yet,the Di rectors are cogni sant of more general ri sk such as market turmoi l or i ncreased vol ati l i ty of the Pound Sterl i ng to other currenci es

191、.COVID-19 risk To date,Central Ni c Group has not experi enced i nterrupti ons i n i ts servi ces to customers or i n i ts suppl y chai n,and the Company confi rms that i ts current tradi ng i s i n l i ne wi th market expectati ons.Central Ni c Group s busi ness i s expected to remai n resi l i ent

192、.I ts servi ces are procured and del i vered over the i nternet,and the maj ori ty of Central Ni c Group s revenues are payments from exi sti ng subscri bers and customers on rol l i ng contracts.The Group s core product i s the sal e of domai n names,whi ch are core i nfrastructure that enabl e the

193、 functi oni ng of emai l and websi tes the most i mportant communi cati on tool s used between work col l eagues worki ng remotel y and between compani es and thei r customers.As provi ders of essenti al i nternet servi ces,a number of Central Ni c Group compani es were wel l prepared for the curren

194、t condi ti ons,wi th Busi ness Conti nui ty pl ans al ready i n pl ace preci sel y for si tuati ons where staff were unabl e to work from the offi ce.Central Ni c Group pre-empti vel y stopped travel,meeti ngs and offi ce worki ng across i ts gl obal l ocati ons i n advance of formal Government di r

195、ecti ves and has been successful i n protecti ng i ts staff from the spread COVI D-19.These steps have enabl ed Central Ni c Group to conti nue to run al l servi ces company-wi de wi thout i nterrupti on and to uti l i se al l staff producti vel y vi a remote worki ng.Sal ary infl ation risk The Com

196、pany i s l everagi ng i ts presence i n di fferent countri es through vari ous ti me zones to attract the ri ght tal ent where i t i s avai l abl e at the ri ght cost.Further i t i s worki ng on automati on of repeti ti ve processes.A good exampl e i s Team I nternet AG,a hi ghl y automated and mach

197、i ne l earni ng based busi ness model that achi eves c.USD 1.7m annual revenue per empl oyee,putti ng i t i nto one l eague wi th maj or compani es such as Googl e,Facebook or Netfl i x on the effi ci ency scal e.Other risk Pertai ni ng to regul atory requi rements,the Group has assured that i ts su

198、bsi di ari es are compl i ant wi th the EU General Data Protecti on Regul ati on(GDPR)respecti vel y i n thei r i mpl ementati ons to each perti nent j uri sdi cti on l aw.The Group i s moni tori ng devel opments i n rel ati on to EU State Ai d i nvesti gati ons fol l owi ng the EU Commi ssi on open

199、i ng a State Ai d i nvesti gati on i nto the Group Fi nanci ng Exempti on i n the UK s Control l ed Forei gn Company regi me i n October 2017.I n l i ne wi th current UK tax l aw,the Group appl i es thi s regi me.Based on i ts current assessment,the Group does not consi der any provi si on i s requi

200、 red i n rel ati on to thi s i ssue.Michael Riedl Chi ef Fi nanci al Offi cer 26 Apri l 202020 CentralNic Group Plc Annual Report 2019Chi ef Fi nanci al Officer s report conti nuedSTRATEGIC REPORT Section 172(1)statement The Board recogni ses i ts responsi bi l i ty to take i nto consi derati on the

201、 needs and concerns of al l our stakehol ders as part of our di scussi on and deci si on-maki ng processes,and i n thi s regard,we wel come the fresh stance under secti on 172 of the U.K.Compani es Act 2006(s.172)as part of the 2018 U.K.Corporate Governance Code(New Code).The Board consi ders the i

202、nterests of the Group s empl oyees and other stakehol ders,i ncl udi ng the i mpact of i ts acti vi ti es on the communi ty,envi ronment and the Group s reputati on,when maki ng deci si ons.The Board,acti ng fai rl y between members,and acti ng i n good fai th,consi ders what i s most l i kel y to p

203、romote the success of the Group for i ts sharehol ders i n the l ong-term.The Group s stakehol der engagement acti vi ti es hel p to i nform the Board s deci si ons.By thoroughl y understandi ng our key stakehol der groups,we can factor thei r i nsi ghts and concerns i nto Boardroom di scussi ons.Re

204、ad more about:The Group s goal s,strategy and busi ness model i n the Strategi c report on pages 12 to 21.How we manage ri sks on pages 19 to 20.Corporate governance on pages 28 to 31.CentralNic Group Plc Annual Report 201921Board of Di rectors22 CentralNic Group Plc Annual Report 2019Iain McDonald

205、Chairman(aged 49)I ai n i s a gl obal expert i n technol ogy and e-commerce,havi ng had a strong track record i n i nvesti ng i n earl y stage compani es such as ASOS,The Hut Group,Eagl e Eye Sol uti ons,Anatwi ne and Metapack.He i s the founder of Bel eri on Capi tal,an i nvestor and i nvestment ad

206、vi sor i n technol ogy and e-commerce compani es.I ai n i s al so a non-executi ve di rector of vari ous of hi s i nvestee compani es,as wel l as other technol ogy compani es such as The Hut Group and B.Previ ousl y,I ai n was a top-ranked retai l and e-commerce anal yst and hel d posi ti ons i n a

207、number of UK i nvestment banks.I ai n graduated from the London School of Economi cs and Pol i ti cal Sci ence(LSE),wi th a BSc i n Economi cs&Economi cs Hi story.Benj amin Crawford Chief Execut ive Of f icer(aged 54)Ben i s a speci al i st i n gl obal busi ness and corporate devel opment i n compl

208、ex i nternet-rel ated busi ness wi th cruci al stakehol der rel ati ons requi rements,i ncl udi ng government rel ati ons at up to Mi ni steri al l evel.Hi s former posi ti ons i ncl uded Foundi ng Presi dent of Loui se Bl oui n Medi a,i ntegrati ng 11 acqui si ti ons i n three countri es and person

209、al l y managed rel ati onshi ps wi th the Chi nese Government;Managi ng Di rector of SportBusi ness Group;and Executi ve Producer of the offi ci al websi te of the Sydney Ol ympi c Games,where he fi rst devel oped extensi ve experi ence i n worki ng wi th Governments on hi ghl y sensi ti ve i nterne

210、t proj ects.Ben has an MBA from the Austral i an Graduate School of Management and a Fi rst-Cl ass Honours Degree from the Uni versi ty of Sydney.Don Baladasan Gr oup Managing Dir ect or(aged 46)Don,a Chartered Management Accountant,has years of experi ence as a Di rector of AI M l i sted compani es

211、.Over the years he has assi sted both publ i c and pri vate busi nesses i n restructuri ng,rai si ng and managi ng several mi l l i on pounds of equi ty and debt.Don has experi ence of i ntegrati ng i nternati onal l y acqui red compani es from a fi nance,governance and commerci al perspecti ve.Don

212、founded Mataxi s a consul tancy that speci al i ses i n advi si ng and partneri ng fast growi ng enti ti es.Duri ng thi s ti me Don has operated as COO and CFO for busi nesses that have undergone rapi d transformati on.Pri or to thi s Don was Head of Accounti ng Devel opment at Stemcor,an i nternati

213、 onal steel trader whi ch at the ti me had operati ons i n 46 countri es.Don was i ntegral i n the i ntegrati on of acqui red busi ness through thi s peri od of rapi d growth whi ch saw turnover doubl e to i n excess of GBP 6 bi l l i on.Don i ni ti al l y studi ed Medi ci ne at Guy s Hospi tal befo

214、re compl eti ng a BSc i n Economi cs at CASS Busi ness School.He was then awarded a pl ace on the Fi nanci al Ti mes graduate scheme where he trai ned as a Chartered Management Accountant.Don has hel d vari ous fi nance and operati onal rol es i n bl ue chi p busi nesses such as Pearson,WPP and BUPA

215、.Don was CFO of Central Ni c at the ti me of i ts I PO on AI M.Michael Riedl Chief Financial Of f icer (aged 44)Mi chael Ri edl was Executi ve Vi ce Presi dent and CFO of KeyDri ve S.A.from August 2011,overseei ng the growth of the company over the next seven years.Pri or to j oi ni ng KeyDri ve S.A

216、.,Mi chael hel d managi ng posi ti ons i n the pri vate equi ty and I CT i ndustri es.He started hi s career wi th Rol and Berger Strategy Consul tants where he speci al i sed i n performance i mprovement programmes.Mi chael was Chi ef Restructuri ng Offi cer at Group Sai nt-Paul i n Luxembourg from

217、 2004 to 2007 before j oi ni ng DZ Equi ty Partners,the pri vate equi ty fi rm,i n Frankfurt i n 2007.I n 2008,Mi chael j oi ned BI P I nvestment Partners where he worked on pri vate equi ty opportuni ti es wi th a focus on buyouts unti l 2011.Mi chael hol ds a Bachel or s degree i n Computer Sci en

218、ce from James Madi son Uni versi ty,USA,a Master of Sci ence degree i n Busi ness Admi ni strati on from European Busi ness School,Germany,and an LLM from Frankfurt School of Fi nance and Management.He i s al so a Chartered Management Accountant.GOVERNANCEMike Turner Non-Execut ive Dir ect or(aged 5

219、9)Mi ke i s a recogni sed l eader i n UK and cross-border Technol ogy M&A.He has over 30 years of experi ence worki ng i n London,New York and Los Angel es,advi si ng pri vate and publ i cl y hel d cl i ents on corporate transacti ons i n technol ogy,tel ecoms,adverti si ng/marketi ng servi ces,trad

220、i ti onal/di gi tal medi a,i nternet and e-commerce sectors.Mi ke i s a Partner and Gl obal Head of Technol ogy Medi a and Communi cati ons at the i nternati onal l aw fi rm Tayl or Wessi ng,as wel l as hol di ng a number of non-executi ve Board posi ti ons wi th medi a and technol ogy compani es.Pr

221、evi ousl y,Mi ke was a General Partner responsi bl e for technol ogy i nvestments at Oakfi el d Partners.Mi ke obtai ned an LLB at the Uni versi ty of Readi ng.Thomas Rickert Non-Execut ive Dir ect or(aged 50)Thomas Ri ckert i s an attorney-at-l aw i n Germany.He i s the owner of Ri ckert Rechtsanwa

222、l tsgesel l schaft mbH,a l aw fi rm based i n Bonn,Germany.Thomas has extensi ve experi ence i n the domai n i ndustry worki ng on domai n di sputes as wel l as advi si ng Regi strars,Regi stry Servi ce Provi ders and Regi stry Operators both on contractual as wel l as pol i cy matters.Thomas i s an

223、 expert speaker on domai n rel ated subj ects both at the nati onal and i nternati onal l evel.Thomas served on the Counci l of the Generi c Names Supporti ng Organi sati on(GNSO),whi ch i s the body responsi bl e for devel opi ng pol i cy for generi c domai n names,for four years(2011-2015).He i s

224、one of the co-chai rs of the CCWG-ACCT,a group that works on i mprovi ng I CANN s accountabi l i ty.Samuel Dayani Non-Execut ive Dir ect or(aged 42)Samuel Dayani i s a partner at the Joseph Samuel Group,where he i s responsi bl e for managi ng the Group s i nvestments and busi ness devel opment i n

225、the Real Estate,Medtech,Energy&Renewabl es,Fashi on and Technol ogy&Tel ecoms sectors.Samuel was responsi bl e for purchasi ng Central Ni c Group i n 2003 and managi ng the restructuri ng of the busi ness,bui l di ng the management team and del i veri ng an i nsti tuti onal grade busi ness for i ts

226、l i sti ng i n 2013.Previ ousl y Samuel was the Chi ef Operati ng Offi cer and l ater Managi ng Di rector of Vi aVi si on Ltd,an i nteracti ve TV company on Sky,when i t was sol d to Yoomedi a Pl c i n 2004.Tom Pridmore Non-Execut ive Dir ect or(aged 48)Tom Pri dmore began hi s career as a sol i ci

227、tor at Norton Rose,speci al i si ng i n corporate fi nance,where he acted on behal f of i nsti tuti onal cl i ents i n rel ati on to a vari ety of corporate fi nance and M&A acti vi ti es.Tom then j oi ned Fl extech/Tel ewest Pl c as Head of Corporate Strategy,where he was responsi bl e for di recti

228、 ng i nvestment i nto strategi c I nternet and i nteracti ve tel evi si on compani es.I n 2000,Tom co-founded the i nternati onal fund manager and i nvestment advi ser Devel opment Capi tal Management Li mi ted.I n thi s capaci ty he has setup and managed real estate i nvestment and devel opment ope

229、rati ons i n Turkey,I ndi a,North Afri ca,Eastern Europe and the UK on behal f of both i nsti tuti onal and pri vate cl i ents.CentralNic Group Plc Annual Report 201923Directors reportPrincipal activities CentralNic Group Plc is the ultimate holding company of a Group of companies.The principal acti

230、vities of the Group are the provision of domain name Reseller,Small Business and Corporate services.A more comprehensive description of the Groups activities,perf ormance,and likely developments are provided in the Chairmans statement,the Chief Executive Of f icers report,the Chief Financial Of f ic

231、ers report,the Corporate Governance report and the Remuneration report,which are incorporated by ref erence into this report.A list of the subsidiary undertakings is disclosed in the Particulars of Subsidiaries and Associates on pages 91 to 93 of the f inancial statements.Financial instruments Detai

232、ls of the use of f inancial instruments and f inancial risk management are included in note 28 to the f inancial statements.Resul ts and dividends I nf ormation on the results is provided in the Chairmans statement and the Chief Financial Of f icers report.The Directors do not propose a f inal divid

233、end f or 2019.However,despite this def erral of the Groups maiden dividend,the Directors remain f irmly committed to introducing a dividend as part of a progressive and commercially prudent dividend policy.Directors The Company was incorporated on 19 June 2013,with a view to becoming the Parent Comp

234、any of the Group af ter admission to AI M.The admission was completed on 2 September 2013,and at this time the Board was expanded.I n 2019 there were changes in Board members to ref lect the development of the business.The Directors who served during the year were as f ollows:Executi ve Di rectors B

235、enj ami n Crawf ord(Chief Executive Of f icer)Donald Baladasan(Group Managing Director)Mi chael Ri edl(Chief Financial Of f icer,appointed to the Board on 19 March 2019)Alexander Si f f ri n(Chief Operating Of f icer,appointed to the Board on 30 July 2019,resigned f rom the Board on 31 March 2020)No

236、n-Executi ve Di rectors Iai n McDonald(Non-Executive Chairman,since 9 December 2019)Mi ke Turner(Non-Executive Chairman,until 9 December 2019)Samuel Dayani Thomas Ri ckert Thomas Pri dmore The biographical details of the Directors are provided on pages 22 and 23 of this annual report.Two Directors w

237、ill retire at the Companys Annual General Meeting and being eligible will of f er themselves f or re-election.The Directors and their interests in the shares in the Group The Directors of the Company,and their interests in the shares and share options of the Company,are shown in the Remuneration rep

238、ort on pages 33 to 35 of this annual report.Transactions with any parties related to the Directors are disclosed in note 25 to the f inancial statements.Post year-end Further details on post year-end events are disclosed in the Chief Executive Of f icers report.Directors confl icts of interest Each

239、Director is required,in accordance with the provisions of the Companies Act 2006,to declare any interests that may give rise to a conf lict of interest with the Company on appointment and subsequently as they arise.Where such a conf lict or potential conf lict arises,the Board is empowered under the

240、 Companys Articles of Association to consider and authorise such conf licts as appropriate.Articl es of Association The Companys Articles of Association set out the Companys internal regulation and cover such matters as the rights of Shareholders,the appointment and removal of Directors and the cond

241、uct of Board and general meetings.A copy of the Companys Articles of Association is available on the Groups website.Subject to the provisions of legislation,the Companys Articles of Association and any directions given by resolutions of the Shareholders,the Board may exercise all powers of the Compa

242、ny and may delegate authorities to committees and management as it sees f it.Details of the committees of the Board and their activities are contained in the Corporate Governance report on pages 28 to 31 of this report.The Directors are responsible f or the maintenance and integrity of the corporate

243、 and f inancial inf ormation included on the Companys website.Principal risks and uncertainties The boards assessment of the principal risks and uncertainties,together with the mitigating f actors,are presented in the Strategic report on pages 19 to 20.24 Central Nic Group Pl c Annual Report 2019GOV

244、ERNANCESubstantial sharehol ders I n addition to the Directors interests disclosed in the Remuneration report,the Company has been notif ied that the f ollowing Shareholders interests exceeded 3%of the Companys ordinary share capital in issue at 31 March 2020:Ordinary shares Percentage inter.service

245、s GmbH 35,391,585 18.74%Kestrel I nvestment Partners 30,272,118 16.03%Erin I nvest&Finance Limited 21,630,382 11.45%Gresham House Plc 13,177,571 6.98%Schroders 11,700,867 6.20%Chelverton Asset Management 9,827,500 5.20%Herald I nvestment Management 8,909,615 4.72%Cavendish Asset Management 6,085,124

246、 3.59%No substantial Shareholders have dif f erent voting rights to other holders of the share capital of the Company.Corporate governance The Corporate Governance report,on pages 28 to 31 is incorporated into this annual report by ref erence.Corporate responsibil ity The Board recognises its employ

247、ment,environmental and health and saf ety responsibilities,and devotes appropriate resources towards monitoring and improving compliance with existing standards.Management and staff CentralNic Groups management team has been assembled to ensure the Group has the number of people and range of skills

248、required to deliver the business strategy and to support the expansion of the Group as it becomes an increasingly international business.The team is diverse and brings f unctional expertise across a number of disciplines including technical and operational delivery,f inance,law,marketing and sales.W

249、hile the business is managed under budgetary controls,the Directors f ocus on ensuring there is succession planning in place as is appropriate f or a business of our size.Our staf f and consultants represent a number of dif f erent nationalities,and we are pleased by the gender diversity in our busi

250、ness.The executive leaders within the business recognise the importance of engaging with employees and do so inf ormally on a day-to-day basis.We of ten use a cascade approach to employee communications,with the heads of departments disseminating appropriate inf ormation to their teams,including tho

251、se situated in various locations around the world.While we do not believe that human rights issues are a signif icant risk to our business currently,we are conscious that as we expand into new international markets issues of human rights may become more signif icant.The Directors keep all aspects of

252、 business development under review,and act with caution and integrity to ensure all our activities and specif ically business development activities are respectf ul of human rights.Communication with employees is primarily through f ormal and inf ormal meetings and through the use of the Groups inf

253、ormation systems.This comprises regular communication of inf ormation af f ecting our managers and their teams,to ensure all employees are kept up to date with issues af f ecting them.The Board recognises the importance of engaged employees working within the Group and how they are vital to the f ut

254、ure success of the business.However,given the size of the Group and the specialist nature of its technical operations,there is dependency on a f ew key individuals,and this is discussed f urther in the Strategic report on pages 12 to 21.The Group is committed to achieving equal opportunities and to

255、complying with anti-discrimination legislation.The Group is committed to of f ering employees and job applicants equal and f air opportunity to benef it f rom employment without regard to their sex,sexual orientation,marital status,race,religion or belief,age or disability.The Board of Directors com

256、prises nine members,all of whom are male,the Senior Management team of f our is made up of three men and one women,and the overall staf f number of three hundred and thirty-seven contains two hundred and thirty-f our men and one hundred and three women.The Group has a policy of share participation f

257、 or employees across the Group at all levels.Standards accreditations The Registry channel of CentralNic Groups Reseller segment is certif ied against I SO 27001(I nf ormation security management),I SO 9001(Quality management system)and I SO 22301(Business continuity management)and SK-NI C a.s.is ce

258、rtif ied against I SO 27001(I nf ormation security management).These certif ications are internationally recognised and provide CentralNic Groups stakeholders with additional levels of assurance as to the technical integrity of the Groups I T system.Central Nic Group Pl c Annual Report 201925Directo

259、rs report continuedAnti-bribery and corruption,anti-money l aundering and sanctions compl iance CentralNic Group conducts business ethically,maintains f inancial integrity and strives to behave responsibly in its business dealings.The Groups Directors and its senior management are committed to ensur

260、ing strict adherence to its anti-bribery and corruption policy and compliance with anti-bribery and corruption laws.The Group also maintains and ensures adherence to its policies in relation to Anti-Money Laundering and Trade Sanctions and Embargoes,again to comply with relevant laws across the rele

261、vant jurisdictions.All Directors,employees and consultants have received training in maintaining the highest standards of prof essional conduct and are aware of the need to carry out business f airly,honestly and openly.Clear lines of communication and responsibility are in place to report any incid

262、ences or suspected incidences of abuse to provide an ef f ective,trusted reporting mechanism.Environment The Group is committed to operating in an environmentally responsible manner.The Directors consider environmental impact when making decisions.The community,charitabl e and pol itical donations T

263、he Directors consider the impact on the community when making decisions.During the year charitable donations totalling USD 10,000 were made(2018:USD 13,000).The Group made no political donations during the year,either in the UK or overseas.Pol icy on the payment of creditors The Groups policy is to

264、agree terms and conditions f or its business transactions with suppliers and to endeavour to abide by these terms and conditions,subject to the suppliers meeting their obligations.No one supplier is considered to be essential to the business of the Group.R&D activity The Group undertakes research an

265、d development activities to enhance its competitive position in its chosen markets,drawing on skilled development resource f rom across the Group.Heal th and safety The Directors and senior management are committed to providing f or the welf are,health and saf ety of the Groups employees and have pr

266、ocedures in place,including regular monitoring by third party specialists,to ensure compliance with its legal and contractual obligations.These procedures proved ef f ective as at the time of writing the annual report,no member of staf f has contracted COVI D-19.Business continuity The Group has bui

267、lt a resilient technology inf rastructure,designed to provide data security and continuity of service.The Board recognises the ongoing importance of resilience to cyber threats and invests in primary and secondary data centres along with a distributed domain name server constellation operated by the

268、 Group and third-party providers.The Board keeps the inf rastructure requirements under review and adopts a continuous improvement approach to f urther investment,within appropriate parameters,as business activities expand.The technical provision,alongside customer support,is considered one of the m

269、ost signif icant aspects of business continuity.This strategy has proven ef f ective in the events around COVI D-19 where the Company was able to switch to Home Of f ice operations virtually seamlessly f or materially all global staf f.The proper f unctioning of the operations is f ollowed up by the

270、 Companys business continuity committee.Statement of Directors responsibil ities in respect of the annual report and the financial statements The Directors are responsible f or preparing the Strategic report,the Directors report and the f inancial statements in accordance with applicable law and reg

271、ulations.Company law requires the Directors to prepare f inancial statements f or each f inancial year.Under that law the Directors have elected to prepare the Group f inancial statements in accordance with I nternational Financial Reporting Standards(I FRS)as adopted by the EU and applicable law an

272、d the Company f inancial statements in accordance with Financial Reporting Standard 102.Under company law the Directors must not approve the f inancial statements unless they are satisf ied that they give a true and f air view of the state of af f airs of the Company and the Group and of the prof it

273、 or loss of the Group f or that period.I n preparing these f inancial statements,the Directors are required to:select suitable accounting policies and then apply them consistently;make judgments and accounting estimates that are reasonable and prudent;state whether applicable accounting standards ha

274、ve been f ollowed,subject to any material departures disclosed and explained in the f inancial statements;and prepare the f inancial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.The Directors are responsible f or keeping adequ

275、ate accounting records that are suf f icient to show and explain the Companys transactions and disclose with reasonable accuracy at any time the f inancial position of the Company and enable them to ensure that the f inancial statements comply with the Companies Act 2006.They are also responsible f

276、or saf eguarding the assets of the Company and hence f or taking reasonable steps f or the prevention and detection of f raud and other irregularities.26 Central Nic Group Pl c Annual Report 2019GOVERNANCEThey are f urther responsible f or ensuring that the Strategic report and the Directors report

277、and other inf ormation included in the annual report and f inancial statements is prepared in accordance with applicable law in the United Kingdom.The maintenance and integrity of the CentralNic Group website is the responsibility of the Directors;the work carried out by the auditors does not involv

278、e the consideration of these matters and,accordingly,the auditors accept no responsibility f or any changes that may have occurred in the accounts since they were initially presented on the website.Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the

279、other inf ormation included in annual reports may dif f er f rom legislation in other jurisdictions.Discl osure of audit information The Directors conf irm that,as at the date of approval of this annual report,so f ar as each Director is aware there is no relevant audit inf ormation of which the Com

280、panys auditor is unaware and that he or she has taken all the steps that he or she ought to have taken as a Director in order to make himself or herself aware of any relevant audit inf ormation and to establish that the Companys auditor is aware of that inf ormation.Going concern The Directors have

281、in place procedures to review the f orecasts and budgets f or the coming year,which have been drawn up with appropriate regard f or both the macroeconomic environment in which the Group operates and the particular circumstances inf luencing the Domain Name industry and the Group itself.These were pr

282、epared with ref erence to historic and current industry knowledge,contracted trading activities and prospects that relate to the f uture strategy of the Group.As a result,at the time of approving the f inancial statements,the Directors consider that the Company and the Group have suf f icient resour

283、ces to continue in operational existence f or the f oreseeable f uture and that it is appropriate to adopt the going concern basis in the preparation of the f inancial statements.The COVI D-19 pandemic has been duly considered in making the judgement on the Going concern assumption.As with all f ore

284、casts,the Directors cannot guarantee that the going concern basis will remain appropriate given the inherent uncertainty relating to f uture events.Principal areas of Uncertainty and Risks are highlighted on pages 19 to 20.Auditors The Companys independent external auditors,Crowe U.K.LLP,were initia

285、lly appointed on 17 July 2013 and were most recently reappointed at the Companys Annual General Meeting of 20 June 2019.I t is proposed by the Board they be put f orward f or reappointment as auditors and a resolution concerning their reappointment will be proposed at the f orthcoming Annual General

286、 Meeting.Registered office 4th Floor,Saddlers House,44 Gutter Lane,London,England,EC2V 6BR.Registered number:08576358 Approved by the Board and signed on its behalf by:Iai n McDonal d Chairman 26 April 2020 Central Nic Group Pl c Annual Report 201927Corporate governanceIntroduction The Directors app

287、reciate the value of good corporate governance and have with ef f ect f rom September 2018 adopted the QCA Corporate Governance Code.The Company takes steps to ensure compliance by the Board and employees with the terms of the code.The Board of CentralNic Group Plc places governance and controls at

288、the centre of its strategy.The Company has a dedicated Compliance committee which meets monthly.The remit of the Compliance committee is to ensure that all governance policies are administered,reviewed and complied with across the Group.Michael Riedl,the Chief Financial Of f icer of the Group,chairs

289、 this committee and provides a conduit between the Board and the committee.This ensures timely decisions and challenges are communicated to the Board.I n addition,a f ormal summary report relating on the Compliance committee is reported at Board meetings.Board governance and pol icy At year-end,the

290、Board comprised of a Non-Executive Chairman,f our Executive Directors and f our Non-Executive Directors.One Executive Director retired af ter year-end.The Board meets regularly to consider the business strategy,perf ormance and the f ramework of internal controls.To enable the Board to discharge its

291、 duties,all Directors receive appropriate and timely inf ormation.Brief ing papers are distributed to all Directors in advance of Board meetings.All Directors have access to the advice and services of the Company Secretary,who is responsible f or ensuring that the Board procedures are f ollowed,and

292、that applicable rules and regulations are complied with.I n addition,procedures are in place to enable the Directors to obtain independent prof essional advice in the f urtherance of their duties,if necessary,at the Companys expense.I n line with the requirements of the Companys Articles of Associat

293、ion,the Group has voluntarily chosen that two Directors will retire at the Annual General Meeting and,being eligible,will of f er themselves f or re-election.The majority of the Board is made up of independent Non-Executive Directors.We judged the Chairman to be independent at the time of his appoin

294、tment and consider all other Non-Executive Directors to be independent under the terms of the Code.I n addition,procedures are in place to enable the Directors to obtain independent prof essional advice in the f urtherance of their duties,if necessary,at the Companys expense.Throughout their period

295、in of f ice the Directors are continually updated on the Groups business,the industry,corporate social responsibility matters and other changes af f ecting the Group by written brief ings and meetings with senior management.They are also updated on changes to the legal and governance requirements of

296、 the Group,and upon themselves as Directors,on an ongoing and timely basis.Directors time commitment We set out the likely time commitment f or each Non-Executive Director in their appointment letter.This is of course an estimate and may change depending on the demands of the business.We expect Non-

297、Executive Directors to devote to discharge their duties ef f ectively and attend all meetings of the Board.The attendance of each Director at Board and committee meetings during the during the f inancial year ended 31 December 2019 is set out in the table below:Attendance tabl e Audit Remuneration N

298、ominations Board Committee Committee Committee I ain McDonald 9/9 4/4 3/3 Ben Crawf ord 9/9 Donald Baladasan 8/9 Michael Riedl(f rom 19 March 2019)8/8 4/4 Alexander Sif f rin(f rom 30 July 2019)4/4 Thomas Rickert 9/9 4/4 3/3 3/3 Samuel Dayani 9/9 3/3 Mike Turner 8/9 4/4 2/3 2/3 Tom Pridmore 6/9 4/4

299、3/3 3/3 Attendance is expressed as the number of meetings attended/number eligible to attend.Directors attendance by invitation at meetings of committees of which they are not a member is not ref lected in the above table.Board performance eval uation A f ormal process of perf ormance evaluation of

300、the Board,its committees and its individual Directors takes place every year.The review may be conducted internally or by external consultants.The perf ormance of the Board,its committees and its individual Directors is also continually monitored by the Chairman.The Remuneration and Nominations comm

301、ittees coordinate on succession planning of the executive leadership team and make recommendations to the Board f or the re-appointment of Non-Executive Directors if and when necessary.As the business has developed,the composition of the Board has been under constant review to ensure that it remains

302、 appropriate to the managerial requirements of the Group.I n line with the requirements of the Companys Articles of Association,the Group has voluntarily chosen that two Directors will retire at the Annual General Meeting and,being eligible,will of f er themselves f or re-election.28 Central Nic Gro

303、up Pl c Annual Report 2019GOVERNANCE Central Nic Group Pl c Annual Report 201929Board committees The Company has established Audit,Nomination and Remuneration committees.The terms of ref erence f or the three committees were reviewed during the year and are available f or inspection on request f rom

304、 the Company Secretary.Audi t Commi ttee The Audit committee has I ain McDonald as Chairman and other members of the committee include Mike Turner,Thomas Rickert and Thomas Pridmore.The Chief Financial Of f icer is invited to and regularly does attend the committee meetings,as does the Chief Executi

305、ve Of f icer.The primary responsibilities of the committee,having due regard f or the interests of Shareholders,include:Monitoring the integrity of the half yearly and annual f inancial statements and f ormal announcements regarding the Groups f inancial perf ormance.Reviewing signif icant accountin

306、g policies,areas of signif icant estimates and judgments and disclosures in f inancial reports.Monitoring the quality and ef f ectiveness of internal control procedures and risk management systems.Considering the requirement f or I nternal Audit,taking into account the size,distribution and nature o

307、f the Company and the Group and its operations.Reviewing the external auditor reports relating to the Companys accounting and internal control procedures.Overseeing the Boards relationship with the external auditors,including their continued independence and making recommendations to the Board on th

308、e selection of external auditors.The Audit committee is required to meet at least twice a year.During the year the committee met on f our occasions.The appointment of the independent external auditor is approved by the Shareholders annually.The independent auditors audit of the f inancial statements

309、 is conducted in accordance with I nternational Standards on Auditing,I SA(UK and I reland)issued by the Auditing Practices Board.I t is noted that the external auditor also operates procedures designed to saf eguard their objectivity and independence.Af ter taking into account the size,distribution

310、,current robust procedures and controls,together with the nature of the Company and the Group and its operations,the Audit committee has concluded that an internal audit f unction is not presently required.The Audit committee will re-evaluate this position on a regular basis.The Audit committee revi

311、ews all f ees related to non-audit work,and the committee reviews any material non-audit work prior to commencement.Details of auditor f ees can be f ound in note 7 to the f inancial statements.Remunerati on commi ttee The Groups Remuneration committee is responsible,on behalf of the Board,f or deve

312、loping remuneration policy.Details of objectives and policy are provided in the Remuneration report on pages 33 to 35.The Remuneration committee has Tom Pridmore as its Chairman and other members of the committee include Mike Turner,Samuel Dayani and Thomas Rickert.The primary responsibilities of th

313、e committee,having due regard f or the interests of Shareholders include:Determining and agreeing with the Board the remuneration policy f or the Chairman of the Board,the Non-Executive Directors and the Executive Directors and other senior managers.Reviewing the design of share incentive plans f or

314、 approval by the Board and determining the award policy to Executive Directors and personnel under existing plans.Determining the remainder of the remuneration packages(principally salaries,bonus and pension)f or the Executive Directors and senior management including any perf ormance-related target

315、s.Reviewing and noting remuneration trends across the Group.Co-ordinating with the Nominations committee in relation to the remuneration to be of f ered to any new Executive Director.Taking responsibility f or the selection criteria and if appropriate selecting,appointing and setting terms of ref er

316、ence f or any remuneration consultants engaged to advise the committee.The Remuneration Committee was created in September 2013 and is required to meet at least twice a year.During 2019 the Committee met on three occasions.I t is the Groups policy that Executive Directors service contracts contain a

317、t least a three-month notice period.Nomi nati ons Commi ttee The Groups Nominations committee has the power and authority to carry out a selection process of candidates bef ore proposing new appointments to the Board.The Nominations committee has Mike Turner as its Chairman and other members of the

318、committee include I ain McDonald,Thomas Rickert and Tom Pridmore.Corporate governance continuedThe Nominations committee was created in September 2013 and is required to meet at least once a year.During 2019 the committee met on three occasions.The Group has adopted a policy f or Directors and key e

319、mployee share dealings which is appropriate f or an AI M-quoted Group.The Directors comply with Rule 21 of the AI M rules relating to Directors dealings and take reasonable steps to ensure compliance by the Groups applicable employees.The Executive and Non-Executive Directors service contracts are a

320、vailable f or inspection by Shareholders on request to the Company Secretary.The Chairman and Non-Executive Directors do not participate in agenda items at any meeting when discussions in respect of matters relating to their own position take place.Risk management and internal control s The Board ha

321、s primary responsibility f or establishing and maintaining the Groups f inancial and non-f inancial controls,as well as identif ying the major risks f acing the Group.I nternal control systems are designed to meet the particular needs of the Group and the risks to which it is exposed.By their nature

322、,internal controls can provide reasonable but not absolute assurance against material misstatement or loss.The Executive Directors and Senior Management have specif ic responsibilities f or aspects of the Groups af f airs and have regular discussions to address operational matters,as well as conside

323、ring the skill sets required in their teams to maintain the internal controls required.Accounting procedures The f inancial processes and control systems are kept under regular review by the Executives with oversight f rom the Board,with a view to f urther evolution and improvement as the Groups act

324、ivities expand.This includes the maintenance of and adherence to a Financial Procedures Board Memorandum which is reviewed and updated periodically.Accounting procedures are managed on a day-to-day basis by the Finance team.Responsibility levels are set and agreed with the Board,with authority deleg

325、ated to appropriate responsible managers as well as the Executive.Segregation of duties is deployed to the degree this is practical and ef f icient,noting the size and geographic distribution of the Group.Monthly management accounts are reported to the Board,under I FRS(EU)with the content aligned t

326、o the Groups management inf ormation requirements.The Board reviews the accounts in detail during each Board meeting and requests f urther inf ormation as the need arises.Comparisons to approved budgets and f orecasts are prepared with associated commentary provided.The Company prepares annual budge

327、ts which are reviewed by the Board.The Budgets are then updated during the year to provide latest f orecasts.Capital expenditure is regulated by the budget process and is kept under regular review during the year.I nvestment appraisal techniques,using discounted cash f low projections,are deployed i

328、n relation to material investments and are reviewed by the Board as part of good governance such that material transactions that are signif icant in terms of their size or type are only undertaken af ter Board review.The Board acknowledges that there are processes in place f or identif ying,evaluati

329、ng and managing risks f aced by the Group,and places emphasis on continuous process improvement.Corporate responsibil ity,the environment and heal th and safety The Group is committed to maintaining and promoting high standards of business integrity.Company values,which incorporate the principles of

330、 corporate social responsibility and sustainability,guide the Groups relationships with its stakeholders including clients,employees and the communities and environment in which the Group operates.The Groups approach to sustainability addresses both its environmental and social impacts,supporting th

331、e Groups vision to remain an employer of choice,while meeting client demands f or socially responsible partners.By way of example the Group Companies have arranged and promoted a number of ACE(Athletics,Community and Environmental)activities in the past.I n the last f inancial year,the Company has t

332、aken steps to ensure slavery and human traf f icking is not taking place in our supply chains or in any part of our business.Our f ull statement in response to Section 54,Part 6 of the Modern Slavery Act 2015 which sets out the steps that the Group has taken and its ongoing commitment to this vitall

333、y important topic can be f ound on the CentralNic Group I nvestor site at https:/ Group respects local laws and customs while supporting international laws and regulations.These policies have been integral in the way Group Companies have done business in the past and will continue to play a central role in inf luencing the Groups practice in the f uture.30 Central Nic Group Pl c Annual Report 2019