18 March
2024
TEAM INTERNET GROUP
PLC
("Team
Internet" or "the Company" or "the Group")
Audited Annual Report
2023
Notice of Q1 2024
Results
Notice of Annual General
Meeting
and
Dividend
Timetable
A record year for revenue,
adjusted EBITDA and profit after tax
Team Internet Group Plc (AIM: TIG), the
global internet company that generates recurring revenue from creating meaningful and successful
connections: business to domains, brands to consumers, publishers
to advertisers, is pleased to announce its audited annual report
for the financial year 2023 is now available on the Group's website
at the following link: https://teaminternet.com/annual-interim-reports/.
The annual report will shortly be posted to those shareholders who
have opted to receive a hard copy.
Financial summary:
· Revenue increased by 15% to USD 836.9m (FY2022: USD
728.2m)
· Organic revenue growth of 13%
· Net revenue (gross profit) increased by 8% to USD 191.1m
(FY2022: USD 177.7m)
· Adjusted EBITDA increased by 12% to USD 96.4m (FY2022: USD
86.0m)
· Operating profit increased by 26% to USD 42.3m (FY2022: USD
33.6m)
· Profit before tax increased by 98% to USD 29.3m (FY2022: USD
14.8m)
· Profit after tax increased to USD 24.3m (FY2022: loss of USD
2.1m)
· Net debt increased by 31% to USD 74.1m as compared to USD
56.6m at 31 December 2022, following USD 39.7m of cash share
repurchases, (including Employee Benefit Trust repurchases), USD
3.6m payment of dividends and USD 21.5m settlement of deferred
contingent consideration during 2023
· Leverage increased to 0.96x adjusted EBITDA (31 December
2022: 0.84x), remaining under 1.0x
· Adjusted operating cash conversion of 96% (FY2022:
110%)
· Adjusted EPS for the year increased by 32% to 23.22 US cents
(FY2022: 17.56 US cents)
· Proposed final dividend of 2.0p (FY2022: 1.0p), an increase
of 100% as the group continues to pursue the progressive dividend
policy launched in 2022
Operational and corporate highlights
· On 4 September 2023, to support our next phase of continued
growth, the Group announced its rebranding from CentralNic Group to
Team Internet Group, and effective that same day, the Group's
shares commenced trading under the ticker "TIG".
· The Financial Times listed Team Internet among the top 250
fastest-growing companies and among the top 50 fastest-growing
technology companies in Europe
· Acquisition of Adrenalads, a business which has a rich
history with Zeropark, on 31 August 2023 for an initial
consideration of USD 2.1 million; the acquisition included deferred
consideration of USD 0.2 million payable in February
2025
· The Group adjusted its global office footprint to
post-pandemic working realities, notably reducing cash outflow,
lease liabilities and emissions
· Appointment of Marie Holive as Non-Executive Director and
Chair of the Audit & Risk Committee on 24 April 2023
· The Group successfully completed its first share buyback
programme of GBP 4.0 million worth of ordinary shares in January
2023, and a second share buyback programme commenced in May 2023
and was increased to GBP 34.0 million worth of ordinary shares in
July 2023. By 31 December 2023, the Group had repurchased a total
of GBP 28.4 million (USD 35.6 million) worth of ordinary shares
across the two programmes, with GBP 9.6 million (USD 12.2 million)
remaining of the share buyback scheme at 31 December
2023.
· On 16 June 2023, the Group paid its inaugural final dividend
of 1.0 pence per share totalling USD 3.6 million, reflecting a
renewed capital allocation geared towards greater return to
Shareholders
Notice of Q1 2024
Results
The
Company further announces that it will publish its results for the
three months ended 31 March 2024 on Monday 13 May 2024.
Annual General Meeting
The
Company also announces that its 2024 Annual General Meeting ("AGM)
will be held at 09.00 GMT on Thursday, 18 April 2024 at the
Company's registered office at 4th Floor, Saddlers House, 44 Gutter
Lane, London, ECV 6BR. The notice of AGM document will
shortly be available on the Company's website at
https://teaminternet.com/constitutional-documents-and-circulars/
The Company is offering facilities
for shareholders to attend by conference call to ask questions in
real time should they wish to do so.
Shareholders will be able to
follow the proceeding of the AGM over the online Investor Meet
Company platform by registering in advance via the following
link: https://www.investormeetcompany.com/team-internet-group-plc/register-investor
Shareholders who already
follow TEAM INTERNET GROUP
PLC on the Investor Meet Company platform
will automatically be invited.
Shareholders are invited to submit
any questions in respect of the meeting for the Board to consider.
Questions may be submitted in advance up until 09:00
GMT the day before the meeting or during the meeting over
the Investor Meet Company platform following
registration, and the Board will aim to respond to any such
questions relevant to the business of the meeting.
Shareholders taking part via
the Investor Meet Company platform will not be able to
speak or vote on the AGM resolutions. Shareholders are therefore
strongly encouraged to exercise their voting rights by completing
and submitting a Form of Proxy. It is highly recommended that
Shareholders submit their Form of Proxy as early as possible to
ensure that their votes are counted at the AGM. Shareholders are
strongly encouraged to appoint the Chairman as your proxy to ensure
that each Shareholder's vote will be counted in the event of
restrictions on shareholders and proxies attending the AGM in
person.
Dividend Timetable
Team Internet is proposing a
final dividend of 2.0p per share to be approved at the AGM as the
next step in the Group's plan to return cash to shareholders. The
dividend will be payable on 28 May 2024 for shareholders
on the Company's register of members at close of business
on 26 April 2024.
Michael Riedl, CEO of Team Internet, commented:
"This year has been a milestone for us with our
revenues growing by 15% to USD 837 million, and our adjusted EBITDA
increasing by 12% to USD 96 million. We have also seen a
significant breakthrough in bottom-line profitability, delivering a
profit after tax of USD 24.3 million, a notable improvement from
the USD 2.1 million loss after tax in 2022."
For further
information:
Team Internet Group Plc
|
+44 (0)
203 388 0600
|
Michael
Riedl, Chief Executive Officer
|
|
William
Green, Chief Financial Officer
|
|
Zeus Capital Limited (NOMAD
and Joint Broker)
|
|
Nick Cowles / Jamie Peel / James
Edis (Investment Banking)
|
+44 (0)
161 831 1512
|
Dominic King (Corporate
Broking)
|
+44 (0)
203 829 5000
|
Berenberg (Joint
Broker)
|
+44 (0)
203 207 7800
|
Mark
Whitmore / Richard Andrews / Alix Mecklenburg-Solodkoff
|
|
SEC Newgate (for
Media)
|
teaminternet@secnewgate.co.uk
|
Bob
Huxford / Alice Cho / Harry Handyside / Tom Carnegie
|
+44 (0)
203 757 6880
|
Forward-Looking Statements
This document includes
forward-looking statements. Whilst these forward-looking statements
are made in good faith, they are based upon the information
available to Team Internet at the date of this document and upon
current expectations, projections, market conditions and
assumptions about future events. These forward-looking statements
are subject to risks, uncertainties and assumptions about the Group
and should be treated with an appropriate degree of
caution.
About Team Internet Group Plc
Team Internet (AIM: TIG) creates
meaningful and successful connections from businesses to domains,
brands to consumers, publishers to advertisers, enabling everyone
to realise their digital ambitions. The Company is a leading global
internet solutions company that operates in two highly attractive
markets: high-growth digital advertising (Online Marketing segment)
and domain name management solutions (Online Presence segment). The
company's Online Marketing segment creates privacy-safe and
AI-generated online consumer journeys that convert general interest
online media users into confident high conviction consumers through
advertorial and review websites. The Online Presence segment is a
critical constituent of the global online presence and productivity
tool ecosystem, where Team Internet serves as the primary
distribution channel for a wide range of digital products. The
company's high-quality earnings come from subscription recurring
revenues in the Online Presence segment and revenue share on
rolling utility-style contracts in the Online Marketing
segment.
For more information please
visit: www.teaminternet.com
MANAGEMENT COMMENTARY ON PERFORMANCE
Introduction
2023 was another year of record
profitability for Team Internet. Long-standing followers of
the Group will be well aware of the consistent and continuing
growth in revenue, EBITDA and operating profit, but the development
of profitability all the way through the income statement adds an
additional dimension to the Group's financial strength. Delivery of
USD 24.3 million profit after tax provides further evidence of the
sustainability of the Group's business models and objectively
increases Shareholder value.
In the financial year 2023, the
Group recorded overall year‑on‑year growth in gross revenues of
14.9% from USD 728.2 million to USD 836.9 million. Net revenue
(gross profit) increased by 7.5% from USD 177.7 million to USD
191.1 million. Adjusted EBITDA increased by 12.1% from USD 86.0
million to USD 96.4 million.
Performance Overview
The Group has performed strongly during the
period with the key financial metrics listed below:
|
Audited
Year ended
31 December
2023
|
Audited
Year ended
31 December
2022
|
|
|
USD m
|
USD m
|
Change %
|
Revenue
|
836.9
|
728.2
|
15%
|
Net revenue/gross
profit
|
191.1
|
177.7
|
8%
|
Adjusted EBITDA
|
96.4
|
86.0
|
12%
|
Adjusted operating cash
conversion
|
96%
|
110%
|
(14%)
|
Profit/(loss) after tax
|
24.3
|
(2.1)
|
n.m.
|
EPS - Basic (cents)
|
8.94
|
(0.78)
|
n.m.
|
EPS - Adjusted earnings - basic
(cents)
|
23.22
|
17.56
|
32%
|
|
|
|
|
Online Marketing segment
Team Internet's Online Marketing
segment continued its growth story in 2023, despite less favourable
trading conditions than in recent years. Gross revenue in the
Online Marketing segment was USD 657.1 million, an increase of
14.3% over the USD 574.7 million recorded in 2022. Net revenue in
2023 was USD 131.7 million, an increase of 5.3% over the 2022
figure of USD 125.1 million.
Online Presence segment
The Online Presence segment
yielded gross revenue of USD 179.8 million, delivering a 17.1%
increase over the USD 153.5 million recorded in 2022. Net revenue
in 2023 was USD 59.4 million, an increase of 12.9% over the 2022
figure of USD 52.6 million. In achieving a higher level of growth
than in previous years, the Online Presence business lays down a
marker that double-digit percentage growth is a realistic
aspiration for the domain name procurement and distribution
business.
Outlook
We confirm our guidance that the
Group is confident in its ability to meet current market
expectations. Our established brands, market leadership,
cutting-edge technology, the assembled talent and robust cash flow
will allow us to translate our current success into future
success.
Michael Riedl
Chief Executive Officer
CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY
|
Share
capital
|
Share
premium
|
Merger relief
reserve
|
Share-based payments
reserve
|
Cash flow hedging
reserve
|
Foreign exchange translation
reserve
|
Retained
earnings
|
Equity attributable to owners
of the Parent Company
|
|
USD m
|
USD m
|
USD m
|
USD m
|
USD m
|
USD m
|
USD m
|
USD m
|
Balance as at 31 December
2021
|
0.3
|
39.8
|
5.3
|
19.5
|
(6.4)
|
2.9
|
52.5
|
113.9
|
Loss for
the year
|
-
|
-
|
-
|
-
|
-
|
-
|
(2.1)
|
(2.1)
|
Other
comprehensive income - translation of foreign operations
|
-
|
-
|
-
|
-
|
-
|
(13.7)
|
-
|
(13.7)
|
Other
comprehensive income - gain arsing on changes in fair value hedging
instruments
|
-
|
-
|
-
|
-
|
6.2
|
-
|
-
|
6.2
|
Total
comprehensive loss for the year
|
-
|
-
|
-
|
-
|
(6.2)
|
(13.7)
|
(2.1)
|
(9.6)
|
Transactions with
owners
|
|
|
|
|
|
|
|
|
Issue of
share capital
|
-
|
59.6
|
|
|
|
|
|
59.6
|
Share
issue costs
|
-
|
(1.1)
|
|
|
|
|
|
(1.1)
|
Repurchase
of shares
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.4)
|
(0.4)
|
Share-based payments
|
-
|
-
|
-
|
4.7
|
-
|
-
|
-
|
4.7
|
Share-based payments - deferred tax assets
|
-
|
-
|
-
|
(0.1)
|
-
|
-
|
-
|
(0.1)
|
Balance as at 31 December
2022
|
0.3
|
98.3
|
5.3
|
24.1
|
(0.2)
|
(10.8)
|
50.0
|
167.0
|
Profit for
the year
|
-
|
-
|
-
|
-
|
-
|
-
|
24.3
|
24.3
|
Other
comprehensive income - translation of foreign operations
|
-
|
-
|
-
|
-
|
-
|
4.7
|
-
|
4.7
|
Total
comprehensive gain for the year
|
-
|
-
|
-
|
-
|
-
|
4.7
|
24.3
|
29.0
|
Transactions with
owners
|
|
|
|
|
|
|
|
|
Dividends
paid on equity shares
|
-
|
-
|
-
|
-
|
-
|
-
|
(3.6)
|
(3.6)
|
Cancellation of share premium
|
-
|
(98.3)
|
-
|
-
|
-
|
-
|
98.3
|
-
|
Repurchase
of shares
|
-
|
-
|
-
|
-
|
-
|
-
|
(40.5)
|
(40.5)
|
Share-based payments
|
-
|
-
|
-
|
3.2
|
-
|
-
|
-
|
3.2
|
Share-based payments - deferred tax assets
|
-
|
-
|
-
|
(1.6)
|
-
|
-
|
-
|
(1.6)
|
Balance as at 31 December
2023
|
0.3
|
-
|
5.3
|
25.7
|
(0.2)
|
(6.1)
|
128.5
|
153.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
· Share
capital represents the nominal value of the Company's cumulative
issued share capital.
· Share
premium represents the cumulative excess of the fair value of
consideration received for the issue of shares in excess of their
nominal value less attributable share issue costs and other
permitted reductions. The Company's share premium was
cancelled in full during the year.
· Merger
relief reserve represents the cumulative excess of the fair value
of consideration received for the issue of shares in excess of
their nominal value less attributable shares issue costs and other
permitted reductions, where the consideration for shares in another
company includes issued shares, and 90% of the equity is held in
the other company.
· Share-based payments reserve represents the cumulative value
of share-based payments, excluding related employment taxes,
recognised through equity and deferred tax assets arising
thereon.
· Cash
flow hedging reserve represents the effective portion of changes in
the fair value of derivatives.
· Foreign exchange translation reserve represents the cumulative
exchange differences arising on Group consolidation.
· Retained earnings represents the cumulative value of the
profits not distributed to Shareholders but retained to finance the
future capital requirements of the Group.
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
|
Audited
Year ended
31 December
2023
USD m
|
|
Audited
Year ended
31 December
2022
USD m
|
Cash flow from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Profit before taxation
|
|
|
29.3
|
|
14.8
|
|
|
|
|
|
|
Adjustments for:
|
|
|
|
|
|
Depreciation of property, plant and
equipment
|
|
|
3.3
|
|
3.0
|
Amortisation and impairment of
intangible assets
|
|
|
38.8
|
|
36.4
|
Finance cost (net)
|
|
|
13.0
|
|
18.8
|
Share-based payments
|
|
|
4.5
|
|
5.7
|
Increase in trade and other
receivables
|
|
|
(8.5)
|
|
(9.8)
|
Increase in trade and other
payables and accruals
|
|
|
0.2
|
|
16.9
|
Decrease in inventories
|
|
|
0.4
|
|
0.2
|
Cash flow from operations
|
|
|
81.0
|
|
86.0
|
|
|
|
|
|
|
Income tax paid
|
|
|
(5.6)
|
|
(8.4)
|
|
|
|
|
|
|
Net cash flow generated from operating
activities
|
|
|
75.4
|
|
77.6
|
|
|
|
|
|
|
Cash flow used in investing activities
|
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
|
(1.9)
|
|
(1.3)
|
Purchase of intangible
assets
|
|
|
(8.3)
|
|
(5.2)
|
Payment of deferred
consideration
|
|
|
(21.5)
|
|
(2.7)
|
Proceeds from disposals of
investments
|
|
|
-
|
|
0.1
|
Acquisition of subsidiaries and
domain portfolio assets, net of cash acquired
|
|
|
(5.6)
|
|
(81.5)
|
|
|
|
|
|
|
Net cash flow used in investing activities
|
|
|
(37.3)
|
|
(90.6)
|
|
|
|
|
|
|
Cash flow generated/(used in) financing
activities
|
|
|
|
|
|
Proceeds from borrowings
|
|
|
-
|
|
185.5
|
Settlement of forward foreign
exchange contracts
|
|
|
-
|
|
(25.5)
|
Repayment of bond
financing
|
|
|
-
|
|
(128.6)
|
Drawdown/(repayment) of revolving
credit facility
|
|
|
15.0
|
|
(18.8)
|
Bank finance arrangement
fees
|
|
|
(0.7)
|
|
(3.4)
|
Accrued interest on bond
tap
|
|
|
-
|
|
0.4
|
Proceeds of issuance of ordinary
shares (net)
|
|
|
-
|
|
58.6
|
Payment of dividend to ordinary
Shareholders
|
|
|
(3.6)
|
|
-
|
Repurchase of ordinary
shares
|
|
|
(39.7)
|
|
(0.4)
|
Lease principal
repayments
|
|
|
(2.3)
|
|
(2.2)
|
Interest paid
|
|
|
(12.1)
|
|
(7.8)
|
Net cash flow (used in)/generated from financing
activities
|
|
|
(43.4)
|
|
57.0
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash
equivalents
|
|
|
(5.3)
|
|
44.0
|
Cash and cash equivalents at
beginning of the year
|
|
|
94.8
|
|
56.1
|
Exchange gains/(losses) on cash and
cash equivalents
|
|
|
3.2
|
|
(5.3)
|
|
|
|
|
|
|
Cash and cash equivalents at end of the
year
|
|
|
92.7
|
|
94.8
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO THE AUDITED ANNUAL
ACCOUNTS
1. General
information
Team Internet Group Plc is the UK
holding company of a group of companies whose principal activities
create meaningful and successful connections from businesses to
domains, brands to consumers, publishers to advertisers, enabling
everyone to realise their digital ambitions. The Company is
registered in England and Wales. Its registered office and
principal place of business is 4th Floor, Saddlers House,
44 Gutter Lane, London EC2V 6BR.
2. Basis of
preparation
The financial results for the year
ended 31 December 2023 have been prepared on the basis of the
accounting policies set out in the Group's 2023 statutory
accounts.
The financial results are
condensed and do not represent statutory accounts within the
meaning of section 435 of the Companies Act 2016. The statutory
accounts for the year ended 31 December 2023, upon which the
auditors issued an unqualified opinion, are available on the
Group's website and did not contain statements under section 498(2)
or (3) of the Companies Act 2006.
3. Segment
analysis
Operating segments are organised
around the products and services of the business and are prepared
in a manner consistent with the internal reporting used by the
chief operating decision maker to determine allocation of resources
to segments and to assess segmental performance. The Directors do
not rely on analyses of segment assets and liabilities, nor on
segmental cash flows arising from the operating, investing and
financing activities for each reportable segment, for their
decision making and therefore have not included them.
The Group has two segments: Online
Marketing and Online Presence. The Online Marketing segment creates
privacy-safe AI-based customer journeys that help online consumers
make informed choices. The Online Presence segment conducts
business as a global distributor of domain names through a network
of channel partners as well as selling domain names and ancillary
services to end users, monitoring services to protect brands
online, technical and consultancy services to corporate clients,
and licensing the Group's in-house developed registry management
platform on a global basis.
Management reviews the activities
of the Team Internet Group in the segments disclosed
below:
|
|
|
|
Audited
Year ended
31 December
2023
USD m
|
|
Audited
Year ended
31 December
2022
USD m
|
Online
Marketing
|
|
|
|
|
|
|
Revenue
|
|
|
|
657.1
|
|
574.7
|
Cost of
sales
|
|
|
|
(525.4)
|
|
(449.6)
|
Gross
profit
|
|
|
|
131.7
|
|
125.1
|
|
|
|
|
|
|
|
Online
Presence
|
|
|
|
|
|
|
Revenue
|
|
|
|
179.8
|
|
153.5
|
Cost of
sales
|
|
|
|
(120.4)
|
|
(100.9)
|
Gross
profit
|
|
|
|
59.4
|
|
52.6
|
|
|
|
|
|
|
|
Total
revenue
|
|
|
|
836.9
|
|
728.2
|
Total cost of
sales
|
|
|
|
(645.8)
|
|
(550.5)
|
Gross
profit
|
|
|
|
191.1
|
|
177.7
|
NOTES TO THE AUDITED ACCOUNTS
(continued)
4. Revenue
The Group's revenue is generated
indirectly from consumers located in the following geographical
areas:
|
|
Audited
Year ended
31 December
2023
USD m
|
|
Audited
Year ended
31 December
2022
USD m
|
Americas
|
|
444.5
|
|
402.9
|
United States of
America
|
|
367.1
|
|
341.4
|
Rest of Americas
|
|
77.4
|
|
61.5
|
Europe, Middle East & Africa (EMEA)
|
|
326.2
|
|
260.6
|
Germany
|
|
100.2
|
|
78.8
|
United Kingdom
|
|
40.5
|
|
31.2
|
France
|
|
30.0
|
|
21.7
|
Netherlands
|
|
17.8
|
|
15.7
|
Switzerland
|
|
12.6
|
|
10.1
|
Ireland
|
|
3.0
|
|
3.1
|
Luxembourg
|
|
0.9
|
|
0.8
|
Rest of EMEA
|
|
121.2
|
|
99.2
|
Asia Pacific (APAC)
|
|
66.2
|
|
64.7
|
Australia
|
|
20.8
|
|
19.7
|
Rest of APAC
|
|
45.4
|
|
45.0
|
Total revenue
|
|
836.9
|
|
728.2
|
The Group's revenue is invoiced
directly to the following geographical areas:
|
|
Audited
Year ended
31 December
2023
USD m
|
|
Audited
Year ended
31 December
2022
USD m
|
Americas
|
|
90.7
|
|
71.2
|
United States of
America
|
|
80.7
|
|
60.7
|
Rest of Americas
|
|
10.0
|
|
10.5
|
EMEA
|
|
714.1
|
|
626.9
|
Ireland
|
|
559.2
|
|
483.7
|
Germany
|
|
38.8
|
|
28.5
|
Luxembourg
|
|
30.9
|
|
33.0
|
Netherlands
|
|
9.9
|
|
9.2
|
United Kingdom
|
|
8.6
|
|
7.0
|
Switzerland
|
|
8.5
|
|
7.5
|
France
|
|
8.1
|
|
7.7
|
Rest of EMEA
|
|
50.1
|
|
50.3
|
APAC
|
|
32.1
|
|
30.1
|
Australia
|
|
12.8
|
|
13.0
|
Rest of APAC
|
|
19.3
|
|
17.1
|
Total revenue
|
|
836.9
|
|
728.2
|
NOTES TO THE AUDITED ACCOUNTS
(continued)
4. Revenue
(continued)
The Group's revenue by segment,
invoiced directly is summarised below, based on geographical
areas:
|
|
Audited
Year ended
31 December
2023
USD m
|
|
Audited
Year ended
31 December
2022
USD m
|
Online
Marketing
|
|
|
|
|
North America
|
|
19.0
|
|
18.5
|
Rest of Americas
|
|
1.5
|
|
0.9
|
Total Americas
|
|
20.5
|
|
19.4
|
EMEA
|
|
626.5
|
|
547.5
|
APAC
|
|
10.1
|
|
7.8
|
|
|
657.1
|
|
574.7
|
Online
Presence
|
|
|
|
|
North America
|
|
67.5
|
|
49.3
|
Rest of Americas
|
|
2.7
|
|
2.2
|
Total Americas
|
|
70.2
|
|
51.5
|
EMEA
|
|
87.6
|
|
79.6
|
APAC
|
|
22.0
|
|
22.4
|
|
|
179.8
|
|
153.5
|
All
revenue
|
|
|
|
|
North America
|
|
86.5
|
|
67.8
|
Rest of Americas
|
|
4.2
|
|
3.1
|
Total Americas
|
|
90.7
|
|
70.9
|
EMEA
|
|
714.1
|
|
627.1
|
APAC
|
|
32.1
|
|
30.2
|
Total revenue
|
|
836.9
|
|
728.2
|
For the year ended 31 December
2023, there was one customer that represented more than 10% of the
Group's revenue, amounting to USD 566.9 million (2022: USD 492.8
million) across two segments, Online Marketing: USD 558.9 million
(2022: 483.2 million) and Online Presence: USD 8.0 million (2022:
USD 9.6 million). The customer is an aggregator who does not
procure the services for its own use but provides access to an
estimated three to four million end customers who order and consume
the services.
5. Non-core operating
expenses
|
Audited
Year ended
31 December
2023
USD m
|
|
Audited
Year ended
31 December
2022
USD m
|
Acquisition related costs
|
1.0
|
|
3.5
|
Integration and streamlining costs
|
4.7
|
|
4.0
|
Other
costs
|
|
0.4
|
|
0.7
|
|
|
|
6.1
|
|
8.2
|
|
|
|
|
|
|
6. Net finance
costs
|
Audited
Year ended
31 December
2023
USD m
|
|
Audited
Year ended
31 December
2022
USD m
|
Finance
income
|
(0.6)
|
|
-
|
Impact of
unwinding of discount on net present value of deferred
consideration
|
1.4
|
|
1.0
|
Reappraisal of deferred consideration
|
(2.8)
|
|
(1.3)
|
Arrangement fees on borrowings
|
1.4
|
|
3.0
|
Interest
expense on bank borrowings and bond interest
|
13.5
|
|
10.2
|
Interest
expense on leases
|
|
0.2
|
|
0.2
|
(Gain)/loss arising on derivatives classified as fair value
hedges
|
|
(0.1)
|
|
0.1
|
Foreign
exchange loss on borrowings
|
|
-
|
|
5.6
|
Net finance
costs
|
|
13.0
|
|
18.8
|
NOTES TO THE AUDITED ACCOUNTS
(continued)
7. Earnings per
share
Earnings per share has been
calculated by dividing the consolidated profit/(loss) after
taxation attributable to ordinary Shareholders by the weighted
average number of ordinary shares in issue during the period, plus
vested options, as these options have little or no exercise price,
less shares held in treasury and by the Group's Employee Benefit
Trust.
Diluted earnings per share has
been calculated on the same basis as above, except that the
weighted average number of ordinary shares that would be issued on
the conversion of the unvested dilutive potential ordinary shares
as calculated using the treasury stock method (arising from the
Group's share option scheme) into ordinary shares has been added to
the denominator. There are no changes to the profit (numerator) as
a result of the dilutive calculation.
Due to the loss made in the prior
year, the impact of the potential shares to be issued on exercise
of share options would be anti-dilutive and therefore diluted
earnings per share is reported on the same basis as basic earnings
per share.
|
|
Audited
Year ended
31 December
2023
USD m
|
|
|
Audited
Year ended
31 December
2022
USD m
|
Profit/(loss) after tax attributable to owners
|
|
24.3
|
|
|
(2.1)
|
Operating profit
|
|
42.3
|
|
|
33.6
|
Depreciation of property, plant and
equipment
|
|
3.3
|
|
|
3.0
|
Amortisation and impairment of
intangible assets
|
|
38.8
|
|
|
36.4
|
Non-core operating
expenses
|
|
6.1
|
|
|
8.2
|
Foreign exchange
losses/(gains)
|
|
1.4
|
|
|
(0.9)
|
Share-based payment
expenses
|
|
4.5
|
|
|
5.7
|
Adjusted EBITDA
|
|
96.4
|
|
|
86.0
|
Depreciation
|
|
(3.3)
|
|
|
(3.0)
|
Finance costs (excluding deferred
consideration amounts, foreign exchange loss on borrowings and
write off of arrangement fees on borrowing - note 6)
|
|
(15.9)
|
|
|
(13.0)
|
Taxation
|
|
(14.0)
|
|
|
(22.9)
|
Adjusted earnings
|
|
63.2
|
|
|
47.1
|
Weighted average number of shares:
|
|
|
|
|
|
Basic
|
|
272,131,265
|
|
|
268,207,663
|
Effect of dilutive potential
ordinary shares
|
|
9,869,695
|
|
|
13,501,204
|
Diluted average number of
shares
|
|
282,000,960
|
|
|
281,708,867
|
Earnings per share:
|
|
|
|
|
|
Basic (cents)
|
|
8.94
|
|
|
(0.78)
|
Diluted (cents)
|
|
8.63
|
|
|
(0.78)
|
Adjusted earnings - Basic
(cents)
|
|
23.22
|
|
|
17.56
|
Adjusted earnings - Diluted
(cents)
|
|
22.41
|
|
|
16.72
|
|
|
|
|
|
|
Basic and diluted earnings per
share of 8.94 cents (2022: (0.78) cents) have been impacted by
depreciation, amortisation, impairment, non-core operating
expenses, foreign exchange gains and losses and share-based payment
expenses.
NOTES TO THE AUDITED ACCOUNTS
(continued)
8. Financial
instruments
The Team Internet Group is exposed
to market risk, credit risk and liquidity risk arising from
financial instruments. The Group's overall financial risk
management policy focusses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the
Group's financial performance. The Group does not trade in
financial instruments.
Cash conversion was as
follows:
|
Audited
Year ended
31 December
2023
USD m
|
|
Audited
Year ended
31 December
2022
USD m
|
Cash conversion
|
|
|
|
Cash flow from
operations
|
81.0
|
|
86.0
|
Exceptional costs incurred and
paid during the year
|
6.1
|
|
7.8
|
Settlement of non-recurring
working capital items from the prior year
|
5.5
|
|
1.2
|
Adjusted cash flow from operations
|
92.6
|
|
95.0
|
Adjusted EBITDA
|
96.4
|
|
86.0
|
Conversion %
|
96%
|
|
110%
|
|
|
|
|
|
|
|
Net debt
is shown in the table below:
|
|
|
|
|
Bank debt
|
Cash
|
Financial
instruments
|
Net debt
|
|
|
USD m
|
USD m
|
USD m
|
USD m
|
|
At 31 December
2022
|
(151.2)
|
94.8
|
(0.2)
|
(56.6)
|
|
Bank
facilities extension costs
|
0.7
|
(0.7)
|
-
|
-
|
|
New
financing revolving credit facility
|
(15.0)
|
15.0
|
-
|
-
|
|
Amortisation
|
(1.3)
|
-
|
-
|
(1.3)
|
|
Other
cash movements
|
-
|
(19.6)
|
-
|
(19.6)
|
|
Foreign
exchange differences
|
0.2
|
3.2
|
-
|
3.4
|
|
At 31 December
2023
|
(166.6)
|
92.7
|
(0.2)
|
(74.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
9. Business
combinations
Acquisition of Adrenalads LLC
On 31 August 2023, Team Internet
acquired Adrenalads LLC, a Los Angeles based online marketing
company that has a rich history of collaboration with
Zeropark. The purchase price comprised initial consideration of USD
2.1 million and deferred consideration of USD 0.2 million, payable
in February 2025. The acquisition will be immediately earnings
accretive. The acquisition aims to seamlessly integrate Adrenalads
into the Zeropark ecosystem and is anticipated to strengthen
Zeropark's ties with e-commerce stakeholders, improve the
efficiency of internal media-buying processes, open new supply
channels for Zeropark and establish a presence in the strategic
Pacific time zone.
Deferred consideration payments
The following deferred
consideration payments were made in the year ended 2023:
· Deferred contingent consideration payments for the
acquisition of VGL Publishing AG was settled in cash for EUR 13.7
million (USD 14.9 million), which includes EUR 12.4 million
(USD 13.6 million) in respect of 2022's
performance.
· On 27
July 2023, the final deferred contingent consideration payment for
the acquisition of InterNexum GmbH was settled in cash for EUR 0.6
million (USD 0.6 million).
· The
first deferred contingent consideration payment for the acquisition
of M.A Aporia was settled in cash for USD 2.3 million in two
instalments: USD 0.8 million was paid on 13 July 2023 and USD 1.5
million was paid on 24 August 2023. A second deferred consideration
payment was settled in cash for USD 2.8 million on 19 October
2023.
· On 19
October 2023, the deferred consideration payment for the
acquisition of Intellectual Property Management Company was
settled in cash for USD 0.8 million.
10. Share buyback programme
The Group successfully completed
its first share buyback programme of GBP 4.0 million worth of
ordinary shares in January 2023, and a second share buyback
programme commenced in May 2023 and was increased to GBP 34.0
million worth of ordinary shares in July 2023. By 31 December 2023,
the Group had repurchased a total of GBP 28.4 million (USD 35.6
million) worth of ordinary shares across the two programmes, with
GBP 9.6 million (USD 12.2 million) remaining of the share buyback
scheme at 31 December 2023.
To date (close of business
Thursday 14 March 2024), the Company has bought back 28.3 million
shares under its programmes at a cumulative cost of GBP 36.2
million. GBP 1.8 million remains available for the remainder of the
programme.