Webcentral Group Ltd (ASX: WCG) shares opened sharply lower in morning trade, down more than 10%. Within 30 minutes, however, the Webcentral share price had regained all those losses, only to be sliding lower again at time of writing, down 2.59% to 56.5 cents.
These wild share price moves come following Webcentral's release of its financial year 2021 first half results (H1 FY21).
What did Webcentral report?
The Webcentral share price is all over the show this morning after the company reported that revenue from its domain registrations rose early in 2020. This came as the pandemic saw more people working from home. However, Webcentral's revenue declined in the second half of 2020. H1 FY21 revenue from domain registration was down 4.2% relative to H1 FY20.
Revenue from the company's email services posted moderate growth (up 1.6%) and Webcentral said it expected further growth in this sector.
Meanwhile revenue from hosting services was down 17.4% compared to the first half of the 2020 financial year, falling to $7.25 million from $8.78 million.
Digital marketing revenue also fell by 33.4% over the previous corresponding half year. The company noted that this segment is a value add to its core products and it expects revenue from digital marketing will grow in line with the company's overall success.
Webcentral's revenue from other income decreased by 27.3% compared to the same half in 2020. The company expects revenue from other income to keep falling as it completes transitional service agreements, and brings in less revenue from its property sublease (due to shrinking property assets).
Total revenue declined by 14.7% compared to the first half of the 2020 financial year.
The company pointed to the impact of COVID-19 and poor customer experience as the cause for the drop in revenue.
It added that the business is undertaking "a number of initiatives to address these issues. Management is confident that revenue growth will return across all four core services as these short term issues are resolved."
Looking ahead, Webcentral forecasts strong growth with the introduction of the .au domains in the second half of 2021. It expects pre-registrations to commence near the end of first half of the year and a 25% to 35% growth in new domain name registrations.
Commenting on the results, managing director Joe Demase said:
The completion of the takeover has delivered significant value to both groups of shareholders. We are now focused on our Strategic Transformation Program to improve customer experience, achieve revenue growth and simplify Webcentral's operations.
Webcentral had been targeted for takeover by both 5G Networks Ltd (ASX: 5GN) and Keybridge Capital Limited (ASX: KBC), with the former prevailing.
Webcentral share price and company snapshot
Webcentral provides a range of website services including domain name registrations and renewals, website and email hosting, website development, search engine marketing and social advertising campaigns.
The Webcentral share price is up nearly 50% over the past 12 months and up more than 800% from its 30 March lows. In 2021, Webcentral shares are up around 28%.
By comparison the All Ordinaries Index (ASX: XAO) is up 2% so far in 2021.
