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Minds + Machines in discussions with bidders from Asia, North America and Europe

Minds + Machines launched the review in late May after receiving a number of informal bid approaches
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The company is one of the world’s leading operators and owners of internet top-level domains

Minds + Machines Group Limited (LON:MMX) gave an upbeat update on renewal rates in China as well as a progress report on its strategic review.

On the latter, investors were told discussions are ongoing with a number of “interested parties” from Asia, North America and Europe.

We’ll learn more on this front when the company, one of the world’s leading operators and owners of internet top-level domains, publishes its interims in late September.

Bid approaches

Minds + Machines launched the review in late May after receiving a number of informal bid approaches.

On China, where the .vip domain has been a huge success, M+M said first-year renewal rates have surpassed 75% - which is among the best-in-class.

Chief executive Toby Hall said it was encouraging to see early sales “transition into meaningful first year renewals”.

“This both validates our premium pricing model and demonstrates the underlying robustness of the Chinese domain market when appropriate roll-out strategies are executed that are not reliant on aggressive discounting tactics,” he added.

Hall said the strong renewal rates, as well as new registrations that have grown by over 45% in the first-half, also bode well for the firm’s premium revenues from China in the final six months of the year.

.vip a big success

That’s because M+M will start releasing its 2017 .vip premium inventory to the broader market for the first time, off the back of the published first year renewal rates.

CEO Hall was upbeat on prospects for the sales  –  and expects the company to hit a major financial landmark more quickly than anticipated.

"Whilst the holding back of material premium inventory in China, and no scheduled new domain launch in the period, will mean first-half 2017 sales will not repeat the quantum of first-half 2016, the quality and make-up of the revenue is significantly improved,” he said.

“This gives the board confidence that the company is on track to achieve a key benchmark where recurring revenues from renewals should be equal to or greater than fixed overheads - earlier than anticipated, and within the current financial year.”

At 12.15pm, the shares were marking time at 12.25p each.

Harold Evans, analyst at City broker finnCap, said: “It is clearly very encouraging to see a sustained level of demand from both new and existing customers and in so doing, this reiterates .vip’s significant value.”

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