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M+M lays off dozens in focus on S&M, promises profit next year

Kevin Murphy, September 22, 2015, 12:39:15 (UTC), Domain Registries

Minds + Machines has outlined its plan to refocus its business on sales and marketing, which has already resulted in a couple dozen job losses, as the latest stage of its profit runway.

The new gTLD company also outlined plans to return about half of its cash reserves — mostly obtained by losing new gTLD auctions — to its shareholders.

For the first half of the year, the London-listed company reported an EBITDA loss of $1.2 million, compared to income of $5.7 million a year earlier, on revenue that was up to $3.6 million from $113,000 in the comparable 2014 period.

The company said it is “committed to achieving its stated goal of crossing over into profitability in 2016” and blamed high operating costs for the loss, but said it has been restructuring to help it return to profit.

M+M said its headcount has been reduced from 58 to 44, but that it has added ten jobs in sales and marketing, which seems to indicate at least 24 people recently lost their jobs.

The bottom line was also affected by the fact that most of the company’s cashflow to date has been generated by auction losses, and there were more of those last year than this.

The company hit three of its six “key performance indicator” targets — domains under management market share, premium sales growth and standard sales growth — but fell short of the other three.

Average revenue per name for premiums was $184 versus a $200-$225 target, and average revenue per standard name was down from $28 to $10, largely due to a deep discount promotion for .work domains. Higher prices for soon-to-launch .law could increase the average, M+M said.

The company also announced that it will spent £15 million ($23.1 million) of its cash reserves on a share buyback.

That’s almost half of the $48.3 million is has in the bank. This time last year, M+M’s share price peaked at 12p; it’s currently at 8.55p.

The price saw a spike in May, shortly before then-chairman Fred Krueger was asked to resign by the board. Krueger has since sold off the majority of his substantial shareholding, despite explicitly saying that he would not.

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Comments (2)

  1. Andrew says:

    Wait, the company is getting out of the new TLD business to focus on S&M? Man, that’s crazy.

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