12th Dec 2022 14:56
(Alliance News) - CentralNic Group PLC's promotion of Chief Financial Officer Michael Riedl to chief executive officer earned the applause of Berenberg on Monday as it maintained its 'buy' rating.
Berenberg commented: "We think Mr Riedl is a great pick for CEO, given his extensive knowledge in both online marketing and the online presence businesses, which we think will thrive under his leadership."
CentralNic is a web domain and internet services provider.
Riedl replaces Ben Crawford at the top of the company. Crawford was appointed CEO in 2009, and during his tenure, revenue grew from USD2 million to USD700 million, the company noted.
Riedl was named CFO in 2019. The company said he has "strong financial and operational experience" with a "wide and in-depth knowledge of the company's markets as a whole".
"This leadership change comes at a time when the business is in great shape, outperforming peers both fundamentally and on a share price basis. We expect this to continue in future," Berenberg commented.
CentralNic added that William Green, CentralNic's financial director, will replace Riedl as the new CFO, initially in a non-board capacity.
Berenberg noted that Green has "contributed significantly to the group's accelerated reporting cycle, the refinancing in October 2022, and the improved analytical insights".
Chair Iain McDonald said: "Michael has brought a wealth of industry experience and excellent strategic and leadership skills to CentralNic, and I am delighted that he will be our new chief executive officer. He has impressed the board with the impact he has made over the last four years, where he has brought clarity, structure and focus, with the combination of skills and experience to lead the business through its next strategic phase."
The executive changes helped CentralNic retain its 'buy' rating from Berenberg, with a target price of 250 pence.
Shares were up 5.0% at 137.50 pence each on Monday afternoon in London. However, they are essentially flat over the past 12 months.
Alongside the executive changes announced on Monday, CentralNic said trading has remained robust since its last update in November.
"Yet again, the company has upgraded its FY 2022 revenue and Ebitda guidance by about 1.5% and 2.5%, respectively, compared with the mid-point of consensus estimates," Berenberg said.
Centralnic now expects its 2022 results to be at the upper end of market expectations. The company placed market expectations for revenue between USD701.0 million and USD709.6 million.
For earnings before interest, tax, depreciation and amortisation, it placed consensus between USD80.0 million and USD84.1 million.
In 2021, CentralNic's revenue was USD410.5 million, and its adjusted EBITDA was USD46.3 million.
CentralNic also announced that it intends to launch a maiden share buyback before the end of the year. It will give details shortly.
"Through a disciplined capital allocation policy, the group wants to ensure returns to shareholders through share buybacks and/or M&A, but M&A will still remain a significant part of the CentralNic growth story," Berenberg said.
By Chris Dorrell, Alliance News reporter
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