IE Domain Registry Annual Report 2019

IE Domain Registry  Annual Report & Review  2019 7 Chief Executive’s Report The 12.4% level of .ie non-renewals/deletions is an increase compared to 2018 (11.2%) however it is very low by international standards where non-renewal rates can be over 30% – reflecting the shorter domain life-cycles, as domains are increasingly used for the promotion of one-off events and campaigns. There was no progress in 2019 on the Company’s application to ICANN for the transfer from UCD of ‘ccTLD Manager’ status to IE Domain Registry, which was submitted to ICANN in February 2011, accompanied by letters of support from stakeholders in the local internet community. In order to complete the transfer request ICANN will need a letter of support from the Irish government. The Department of Communications, Climate Action and Environment is still considering the matter. Financial review Registration revenue increased by 8.7% to €3.61 million (2018 – €3.32 million). The deferred income on the balance sheet increased by 4.9% in 2019, to €2.51 million (2018 – €2.39 million). This is because the invoiced value of registration fees increased by 4.3%, reflecting renewals and new growth in 2019 (2018 – 12.4%). Administration expenses increased by 9.6% from €1.61 million to €1.76 million. Promotion, sponsorship, and advertising costs remained high as the company continued its Strategic Development Fund and continued its joint promotion with Registrars of the .ie namespace and continued the OPTIMISE Fund, which assists SMEs organisations to develop and e-commerce enable their members’ .ie websites. Employment costs increased by 12.6% in 2019 to €1.63 million reflecting additional staff recruitment and cost of living salary increases. The Company records its financial investments on a Mark to Market basis of valuation. The financial investments market value at 31 December 2019 was €4.3m (2018 – €4.1m). Accordingly, the movement in the capital markets by year end yielded net unrealised gains of €193,974 (2018 – unrealised losses of €122,033). The deferred tax liability on the balance sheet was increased accordingly. The financial position of the Company at 31 December 2019 is solid. Members’ Funds increased by 5.9% from €3.9 million at December 2018 to €4.1 million by the end of December 2019. Cash and cash equivalents increased to €7.5 million (2018 – €6.9 million) including €4.3 million invested with multiple investment managers. Continuous improvements review Every team member is part of the continuous improvement process at IE Domain Registry and strives for excellence in customer experience (CX) in all aspects of the operation. The Company continued to focus on controlling costs for the channel and for our business operations. The recent policy changes and ongoing incremental process improvements will help to decrease the channel’s customer service costs and improve the user experience for their end-customers. The data escrow function continued to operate, whereby relevant data sets within the .ie database are extracted, encrypted and transmitted to a third party, to be held in safekeeping and only released to the appropriate authorities in the unlikely event of a catastrophic event occurring at the registry. This added layer of resilience, reliability and protection provides business continuity and peace of mind for government, regulators and stakeholders. The Technical Services team remains vigilant in protecting the national DNS infrastructure against ongoing and new external cyber security threats, in particular in the face of the continuing global increase in ransomware, malware and DDoS attacks, thereby contributing to the safety, security and resilience of the .ie domain. Market development and digitalisation by SMEs We again commissioned Core Research to conduct independent research into SMEs reluctance to digitalise their sales channels. It is becoming clearer that the problem is not one of awareness of the benefits, as many SMEs are active online in a personal capacity. Our research shows that SMEs’ fear, uncertainty and doubt (FUD) are major factors. Business owners say that the barriers keeping them offline include confusion about the range of digital tools and options available, or inadequate skillsets. Perhaps there is also a fear of trying to compete head-on with the online marketplace giants, such as Amazon. It is clear that further research is needed to guide policymakers on how to improve internet usage and uptake by the small business community. In response, we continued to be a digital advocate for SMEs in 2019, providing research data and insights to policymakers and stakeholders. We believe that there is a need to provide supports and shoulder-to-shoulder assistance to SMEs to enable them to digitise to leverage the benefits of having .ie addresses and being identifiably Irish online.