10th Jun 2014 10:50
LONDON (Alliance News) - Minds + Machines Group Ltd Tuesday swung to profit in 2013 following its transition from an investment company into an operating business dealing with internet domain names, as new rules came into effect allowing a proliferation of new top level domains to go live.
A top level domain name is the suffix of an internet address such as .com or .net which are designated to approved organisations by the Internet Corporation for Assigned Names and Numbers. Up until now ICANN has only allowed a relatively small number of domains such as .com, .org and .gov.
However, changes to rules governing domain names are allowing the launch of new domains; and eight domains in which Minds + Machines has an interest have already gone live, including .london in April.
The company posted a pretax profit of GBP729,000, swung from a pretax loss of GBP3.1 million, despite posting revenue of only GBP36,000 compared to GBP420,000, as it saw GBP4.1 million in profits from its participation in three generic top level domain auctions.
The company expects its revenues from continuing operations to move it towards a cash neutral position during the latter part of 2014 as it begins to generate revenues from its first live domains.
It expects further revenue growth in 2015 as it continues to launch new generic top level domains in its portfolio.
Alongside this, as the company bolsters its operations, it expects administrative expenses to increase slightly. It expects its marketing expenses to rise significantly in 2014; marketing expenses in the first quarter of 2014 came in at GBP252,000.
Minds + Machines has a further 22 uncontested domain applications, and a further 35 wholly-owned contested applications, which will be moving forward to auction rounds.
The company raised GBP21 million in a share placing in January, which it said has bolstered the company's cash going forward.
"We believe that our cash resources are more than sufficient to get us to profitability and take advantage of these tremendous opportunities. As they say in American Baseball, this is the beginning of the first innings," said Executive Chairman Fred Kreuger. "It's going to a very exciting game."
Shares in Minds + Machines were trading up 2.1% at 12.25 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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