Results for Year Ended 31 October 2010
Top Level Domain Holdings Limited (AIM: TLDH) today announces its audited results for the year ended 31 October 2010 (the “Period”). The full results are available in the attached document (PDF).
The Chairman’s Statement is part of the announcement and is produced below:
I am pleased to present this year’s annual report for Top Level Domain Holdings, Ltd. (“the Company”) together with the consolidated financial statements for the period ended 31 October 2010.
2010 saw the Company’s continued involvement in new top-level domains (“TLDs”), as well as additional investment in existing TLDs. The Company completed its new Network Operations Center in Los Angeles, and in August 2010, our wholly-owned investee, Minds and Machines, won the contract to provide registry services for .FM, the top-level domain for well-known Internet properties such as last.fm and ping.fm. In November 2010, we completed a placing of new ordinary shares in the Company, which raised £4.8 million before expenses (equivalent to approximately US$7.5 million at that time) to provide additional working capital and enable the Company to further develop its TLD portfolio and business.
Existing TLDs, open to registrants worldwide, include .com, .net, and .org. The Internet Corporation for Assigned Names and Numbers (“ICANN”), the regulatory body which oversees internet domain names worldwide, intends to allow qualified applicants to apply to own and operate new generic TLDs (”gTLDs”).
Given the substantial impact that the introduction of new gTLDs is expected to have on the Internet, ICANN’s detailed rule book and implementation plan for the new gTLDs has been subject to extensive scrutiny by all relevant interest groups, including governments, civil society, Internet industry leaders and multinational companies.
At the recent ICANN meeting in San Francisco, which concluded on 18 March 2011, the ICANN Board of Directors resolved that it intended to complete the process for final approval of the gTLD implementation program at an extraordinary meeting of the ICANN Board to be held on Monday, 20 June 2011, at the next ICANN public meeting in Singapore.
Since ICANN’s last meeting, in December 2010, the ICANN Board has made substantial progress in reaching agreements and compromises with ICANN‟s Government Advisory Committee (“GAC”), which represents the interests of governments. ICANN and the GAC have met in a number of specially convened face-to-face sessions over the last few months, including twice during the recent ICANN meeting in San Francisco. During that time, the points of disagreement have been substantially reduced, and ICANN has adopted a detailed timeline and implementation plan ahead of its meeting in Singapore to further reduce or eliminate any remaining concerns prior to final approval of the new gTLD program.
In particular, ICANN intends that its final response to outstanding issues with GAC will be published on 15 April 2011, with a 30 day consultation period thereafter.
The period for public comment will close on 15 May 2011. ICANN then plans to publish the Final Guidebook for gTLD applications on 30 May 2011.
The Company’s strategy continues to be one of building a portfolio of gTLD applicants and infrastructure technologies. We continue to take a conservative view toward the timing of what we believe to be a revolutionary stage of the development of the Internet. We maintain substantial cash reserves and low operating costs to accommodate unforeseen delays, and the Company remains well positioned to realize its strategy.
Recognizing that new gTLDs are imminent, and that the Company’s activities will be increasingly focused on operational priorities, the Company appointed Antony Van Couvering as CEO of the Company. Already a member of the Company’s Board and CEO of Minds and Machines, the Company‟s wholly-owned registry services company, Mr. Van Couvering’s long experience as an executive and entrepreneur in the domain name space will provide the Company with strong leadership as new TLDs are introduced.
In October 2010, the ICANN Board dropped the policy of prohibiting cross-ownership between registries and registrars, thereby making the domain industry far more fluid. While the previous restrictions would have prevented some industry players from competing in the registry space, the new rules open new areas of business and revenue lines for TLDH, and therefore we expect the Company to benefit from the liberalization of the market.
Minds and Machines LLC (100% Group ownership), which was founded in 2008 by Antony Van Couvering, is a full-service consulting and registry services company that provides a complete registry solution for new gTLD applicants. Minds and Machines LLC has secured an exclusive license to extend the CoCCA registry platform, currently deployed in over 20 countries, to new gTLDs.
DotNYC LLC (65% Group ownership). The team of DotNYC LLC has launched five successful top level domains, advised a number of other top level domain companies and created the model for public-private partnerships for geographic-based web addresses. dotNYC LLC expects to apply for the New York City gTLD, .nyc.
DotEco LLC (25% Group ownership) , which is based in California, intends to build an environmentally-focused gTLD. DotEco LLC has agreements with and strong support from several major environmental organizations, and expects to apply for the .eco gTLD.
Our websites, TutorialBlog and AppCraver, continued to perform well during the period. AppCraver remains a leading iPhone application review website with substantial and growing traffic and revenue. Tutorial Blog continues to generate revenue with minimal associated costs.
The Company’s second-level domain portfolio was sold in November 2009 for £150,000. The Company does not intend at this time to invest in any further second-level domain names.
Financial results
Revenue for the year ended 31 October 2010 was £62,000, with finance revenue totaling £6,000. Administrative expenses amounted to £976,000. Share options expensed amounted to £33,000. The retained loss for the period attributable to members of the parent Company was £941,000, equivalent to a loss of 0.33 pence per share. Cash and cash equivalents at 31 October 2010 amounted to £3.6m.
Outlook
As the policy debates about new top-level domains reach their end point, we are entering an exciting period of development for the Company. We believe that the introduction of generic top-level domains will create significant opportunities in both direct investment and service revenues. We retain a conservative stance however as to the timing of the actual commencement of the ICANN application process and are managing our cash flow accordingly to ensure the longevity to capture what we believe to be an exceptional opportunity for our Company.
With our substantial cash resources, low operating costs and our significant interests in prospective applicants for new gTLDs, we believe that TLDH is well positioned ahead of the start of the gTLDs application and award process.
Frederick R. Krueger, Chairman
