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Internet domain name specialist Minds + Machines (LON:MMX) is targeting a move into profit next year after a round of cost reductions.
M+M has saved US$1.3mln through job cuts in June and this, allied with the development of a direct sales team, “would have a very material direct effect on our bottom-line results over the next 12 months,” said Antony Van Couvering, chief executive.
At end-June, M+M had 217,200 domain names under management, some 3.43% of the total new top level domain (TLD) names – the part of a web address after the final dot - registered and within its target market share of between of 3-5%.
Sales of premium names are currently running at an annualised growth rate of 1.83, in line with the 1.75-2.5 annual growth target, while standard name sales growth were also currently on target at an annualised rate of 2.22 times.
Premium domains are domains that have already been registered but are now being resold for a premium rate.
In an interview with Proactive Investors, Van Couvering said examples of premium domain names would be taxis.london and theatres.london.
“These are names that a business that is doing that sort of thing would prize, because they say exactly what they do,” Van Couvering said.
M+M has what it calls its Emerald Names business, which is currently registering up to 30,000 premium names from across its portfolio of TLDs.
Internet users who type an unregistered web address into their web browser get a “page not found” message; once Emerald Names has registered an address, instead of receiving the “page not found” message users will instead be directed to a “this site name for sale” page.
Premium name revenue will be around 8% below target in the first half due to the fact that a dedicated sales team has only recently been established, while discounts to promote standard names will also mean its revenue missing its target.
M+M expects standard name revenues to pick up next year due to the promotional work. Sales of standard names rose by 83% over the half.
In October, the domain names .law and .abogado will become generally available, while ten names, including .london have their first anniversary, which should generate revenues from renewals.
M+M added it is still interested in eight contested domain auctions, while cash at the half-year was US$46.9mln.
House broker N+1 Singer said the update showed good growth in domain name sales and progress establishing a direct premium name sales team.
Management of operating costs remains a key priority and further costs saving measures are being reviewed, with the group targeting a crossover into cash profitability in 2016.
“The cash position remains strong at US$46.9mln with an announcement regarding a potential share buy-back or special dividend due in September,” the broker said.
Shares in Minds + Machines were off one-eighth of a penny at 7p in lunchtime trading.