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What Minds + Machines does:

Minds + Machines Group PLC (LON:MMX) owns and operates a portfolio for generic top-level domains (TLDs).

TLDs are the suffixes attached to the end of website addresses (e.g. .com, .org, .net), with MMX’s portfolio mainly focusing on geographic domains (.london, .boston, .miami), professional occupations (.law), consumer interests (.fashion, .wedding, cooking), lifestyle (.fit, .surf, .yoga), outdoor activities (.fishing, .garden, .horse) and generic names (.vip, .work, .casa).

In total, MMX owns around 26 TLDs. A particular highlight is its ‘.luxe’ domain, which looks to provide a  standardised naming convention for blockchain addresses.

MMX works with an international network of registrars and domain distributors to help disseminate its portfolio, counting registrars like US-based GoDaddy Inc (NYSE:GDDY) among its partners.

 

How is it doing:

In its full-year results for 2019, the company reported that revenue was up 25% to US$17.3mln from US$12.4mln in 2018.

Automated sales through the registrar channel (e.g. domain name sellers such as GoDaddy) were up 40% to US$17.3mln from 2018’s US$12.4mln, and now represent 91% of total revenues (2018: 82%).

MMX said the first quarter saw no signs of automated sales through the registrar channel being negatively affected by coronavirus to date in any region, including China.

New registrations revenue was up 84% to US$5.6mln from US$3.0mln the year before while renewal revenues rose 25% to U$11.7mln from US$9.4mln in 2018, and represent 62% of total revenue, unchanged year-on-year.

Profit before tax was £4.9mln, compared to a loss the year before of £12.7mln.

The group’s cash flow improved significantly to US$6.2mln, up from US$2.3mln the year before, helped by receipts of US$1.6mln from private auctions of top-level domains.

Cash at the year-end stood at US$6.6mln, down from US$10.4mln after a re-payment of its working capital facility of US$3.0mln, final partner and onerous contract related payments of US$6.7mln, and US$0.4mln of share buy-backs.

 

CEO Interview:

 

What the broker says, finnCap

Commenting on the group’s 2019 results, analysts at finnCap said: “MMX management is getting this right; registrations are growing by 36% to 2.46m at YE without heavy discounting across the portfolio; renewals are growing and the unique innovation (e.g. AdultBlock and .luxe use in blockchain) is already contributing. Even coronavirus may actually assist long term by driving online activity.”

They added: “Given its automated business model and the switch of business and leisure online, this global issue [of the coronavirus pandemic] may well be beneficial to MMX”