13 May
2024
TEAM INTERNET GROUP
PLC
("Team
Internet" or the "Company" or the "Group")
UNAUDITED FINANCIAL RESULTS
FOR THE THREE MONTHS ENDED 31 MARCH 2024
Substantial growth in operating profit with a 44% increase,
underpinning a confident outlook for FY24
Team Internet Group Plc (AIM: TIG,
OTCQX: TIGXF), the global internet company that generates recurring
revenue from creating meaningful and successful connections:
businesses to domains, brands to consumers, publishers to
advertisers, is pleased to
announce its unaudited financial results for the
three months ended 31 March 2024 ("Q1 2024").
Financial Summary:
● Organic revenue growth* of approximately 8%, for the trailing
twelve months ended 31 March 2024 ("TTM 2024")
● Gross revenue increased by 1% to USD 195.9m (versus three
months ended March 2023 ("Q1 2023"): USD 194.9m)
● Net revenue (Gross profit) increased by 4% to USD 47.6m (Q1
2023: USD 45.8m), with gross margin increasing from 23.5% to 24.3%,
a relative 3% uplift
● Adjusted EBITDA** increased by 4% to USD 22.2m (Q1 2023: USD
21.3m), with EBITDA margin increasing from 10.9% to 11.3%, a
relative 4% uplift
● Operating profit increased by 44% to USD 11.1m (Q1 2023: USD
7.7m)
● Profit before tax increased by 65% to USD 7.1m (Q1 2023: USD
4.3m)
● Profit after tax increased by 62% to USD 4.7m (Q1 2023: USD
2.9m)
● Adjusted EPS increased by 20% to USD 5.35 cents (Q1 2023: USD
4.46 cents)
● Net debt*** of USD 80.6m (31 December 2023: USD 74.1m) and
Leverage**** of 0.95x pro forma TTM 2024 EBITDA, remaining under
1.0x, following non-operating cash outflows in respect of the Group
acquiring USD 11.5m of its own shares
● Adjusted operating cash conversion of 80% (Q1 2023: 94%),
impacted by cash receipts from a significant business partner being
collected in April instead of March, due to Easter public holidays
coinciding with quarter-end. We expect cash conversion to normalise
nearer to 100% over the remainder of the year
Q1
highlights:
● In
the Online Marketing segment, the number of visitor sessions
increased by 19% to 6.0 billion for TTM 2024 from 5.0 billion for
the trailing twelve-month period ended 31 March 2023 ("TTM 2023").
Revenue per thousand sessions ("RPM") decreased by 10% from USD 102
to USD 91
● The
Online Presence segment recorded organic revenue growth of 14% TTM
2024 compared to 10% for TTM 2023
● Adjusted EBITDA as a percentage of Net revenue has increased
to 46.6% for Q1 2024 from 46.5% for Q1 2023, demonstrating that
Team Internet's continued growth can be achieved whilst maintaining
compelling operating leverage
Post period end highlights:
● FY2023 final dividend of 2.0p payable on 28 May 2024 (FY2022:
1.0p), an increase of 100% as the Group continues to pursue the
progressive dividend policy launched in 2022
● On
10 April 2024, the Group announced that its ordinary shares began
trading on the OTCQX® Best Market ("OTCQX") under the symbol
"TIGXF". OTCQX is the premier tier of OTC Markets where more than
12,000 US and global securities trade. Trading on OTCQX will
significantly enhance Team Internet's visibility and accessibility
in the world's largest capital market
● On
26 April 2024, the Group acquired Shinez I.O. Ltd and its
subsidiaries (together "Shinez") for an initial cash consideration
of USD 38.9m and USD 4.3m retained to cover for customary
warranties and indemnification.
Outlook:
Team Internet has once again
delivered a strong quarter, with both adjusted and statutory
earnings growth. The Group prioritises earnings growth over
top-line growth, whilst maintaining a robust 8% organic revenue
growth on a pro forma basis for TTM 2024. Adjusted EBITDA
Conversion remained healthy at 46.6% (Q1 2023: 46.5%) of Net
revenue, demonstrating continued strong profit margins.
The Directors remain confident in
the Group's strategic investments in product innovation, vertical
integration, and international expansion. These initiatives have
positioned the Group for success. Given these strong foundations,
the Directors are confident that the Group will meet market
expectations for the full year.*****
Michael Riedl, CEO of Team Internet, commented:
"I am pleased to report that the emphasis on holistically
managing for earnings and cash flow continues to yield substantial
benefits. This holds true even as we tailor the growth of our
Online Marketing sector to align with our enhanced focus on
sustainability and customer experience. We are laying the strong
operational foundations which will best position the Group to go
from strength to strength, as we execute on our strategy and
deliver attractive returns for our shareholders.
The commencement of trading on OTCQX is another milestone in
making the Team Internet success story available to a broader
audience and we are excited about further milestones on this
journey to come.
Finally, with Shinez joining Team Internet, we now have a
robust platform addressing the 'Awareness' stage of the advertising
funnel, complementing our existing offerings, TONIC and VGL, which
focus on 'Consideration' and 'Conversion', respectively. We now
undoubtedly hold the most comprehensive product offering among our
peers.
We remain laser-focused on our OM2 vision - Omni Media, Omni
Monetisation - and leadership in the carefully targeted markets in
which we operate, making us even more resilient as we scale
up."
Results presentation:
There will be a webinar/conference
call for equity analysts at 10am BST today. This event will be
hosted by CEO Michael Riedl and CFO William Green.
Anybody wishing to register should
contact teaminternet@secnewgate.co.uk,
where further details will be provided.
Further, an Investor Meet Company
session will be held at 12pm BST today:
https://www.investormeetcompany.com/Team-Internet-group-plc/register-investor
Investors who already follow Team
Internet Group Plc on the Investor Meet Company platform will
automatically be invited. Questions can be submitted pre-event via
your Investor Meet Company dashboard up until 9am the day before
the meeting or at any time during the live presentation.
* Pro forma revenue, adjusted
for; acquired revenue, constant currency foreign exchange impact
and non-recurring revenues is USD 840m for
TTM 2024 and at
USD 778m for TTM
2023
** Earnings before interest,
tax, depreciation, amortisation, impairment, non-cash charges and
non-core operating expenses
*** Includes gross cash, bank
debt and prepaid finance costs as of 31 March 2024 (cash
of USD 75.5m and bank debt and prepaid finance costs of USD
156.8m); includes gross cash, bank debt, prepaid finance costs and
hedging assets of USD 0.7m (31 December 2023 cash of
92.7m, bank debt and prepaid finance costs of USD 166.6m and hedging
liabilities of USD 0.2m)
**** Includes Net Debt as
defined under*** (i) excluding
prepaid finance costs, (ii) plus guarantee obligations, and (iii)
plus the best estimate of any crystallised deferred consideration
payable in cash, all divided by pro forma EBITDA, i.e. last twelve
months' EBITDA including acquired entities' EBITDA on a pro forma
basis, and adjusted for rental expense capitalized under IFRS 16
and non-core expenses
***** Latest analyst forecasts,
prior to the contribution of Shinez to the enlarged Group forecast,
are within a range of USD 857m and USD 910m for FY24 gross revenue
and USD 98m and USD 108m for FY24 Adjusted EBITDA
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, OTCQX: TIGXF) 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
Team Internet continued to deliver
growth throughout the income statement, including 44% growth in
operating profit and 62% growth in profit after tax, as the Group
continues to execute on the delivery of profitability, cash
generation and shareholder value.
Performance Overview
The Group's key financial metrics are listed
below:
|
Three months
ended
31 March
2024
|
Three
months
ended
31 March
2023
|
Change
|
|
USD m
|
USD m
|
%
|
Revenue
|
195.9
|
194.9
|
1%
|
Net revenue/gross profit
|
47.6
|
45.8
|
4%
|
Adjusted EBITDA
|
22.2
|
21.3
|
4%
|
Operating profit
|
11.1
|
7.7
|
44%
|
Adjusted operating cash conversion (note 8)
|
80%
|
94%
|
n.m.
|
Profit after tax
|
4.7
|
2.9
|
62%
|
EPS - Basic (cents)
|
1.85
|
1.05
|
76%
|
EPS - Adjusted earnings - Basic (cents)
(note 7)
|
5.35
|
4.46
|
20%
|
Segmental analysis
Organic growth rates quoted below
are calculated on a pro forma basis including all the Group's
constituents as of the last balance sheet dates and adjusted for
non-recurring or non-cash revenues and on a constant currency
basis.
Online Marketing segment
Online Marketing segment Gross
revenue reduced by USD 3.8m, or 2.5%, from USD 149.7m to USD
145.9m, with Net revenue stable at USD 30.5m. Organic Gross revenue
grew at a rate of 7% for TTM 2024, propelled by Team Internet's
TONIC platforms, and driven by 19% growth in the number of consumer
journeys, to 6.0 billion for TTM 2024 from 5.0 billion for TTM
2023, while click prices continue to be under pressure on both the
demand (revenue) and supply (cost of sales) side, with RPM
decreasing by 10% from USD 102 to USD
91(1).
The 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,
generating utility-style referral and commission income through
partnerships with Google, Amazon and a multitude of other partners.
Our vision harnesses the Group's expertise in two critical areas:
first, to transform social media and other low-intent traffic into
qualified leads for search ad campaigns; and second, to effectively
turn search ad campaigns into successful e-commerce transactions.
By integrating these capabilities, we aspire to establish a robust
social commerce channel. This sector is expected to reach a value
of USD 80 billion(2) by 2025 in the US alone.
Online Presence segment
Reported Gross revenue in this
segment increased by 10.6% from USD 45.2m Q1 2023 to USD 50.0m in
Q1 2024. Net revenue increased by 12.5% from USD 15.2m to USD
17.1m, with much improved operating margins. Organic Gross revenue growth for the Online Presence segment
was 14% for TTM 2024, continuing the year-on-year double digit
growth which the segment demonstrated throughout 2023, driven by
the structural shift in demand towards Top Level Domains where Team
Internet has a competitive edge.
The number of processed domain
registration years increased by 1% from 13.5m for TTM 2023 to 13.6m
for TTM 2024 and the average revenue per domain year increased by
16% from USD 10.1 to USD 11.7.
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.
Michael Riedl
Chief Executive Officer
(1) Based on analysis of c.84% of the Online Marketing segment
which can be adequately and reliably described by this
KPI
(2) Source: "Social commerce: The future of how customers
interact with brands", McKinsey & Company, October 19,
2022
(3) Based on analysis of c.86% of this segment which can be
adequately and reliably described by this KPI
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
|
|
Unaudited
Three
months
ended
31 March
2024
|
|
Unaudited
Three
months
ended
31 March
2023
|
|
Audited
Year ended
31
December
2023
|
|
Note
|
USD m
|
|
USD m
|
|
USD m
|
|
|
|
|
|
|
|
Revenue
|
4
|
195.9
|
|
194.9
|
|
836.9
|
Cost of
sales
|
|
(148.3)
|
|
(149.1)
|
|
(645.8)
|
|
|
|
|
|
|
|
Net
revenue/gross profit
|
|
47.6
|
|
45.8
|
|
191.1
|
|
|
|
|
|
|
|
Operating
expenses
|
|
(35.8)
|
|
(37.2)
|
|
(144.3)
|
Share-based payments expense
|
|
(0.7)
|
|
(0.9)
|
|
(4.5)
|
|
|
|
|
|
|
|
Operating
profit
|
|
11.1
|
|
7.7
|
|
42.3
|
|
|
|
|
|
|
|
Adjusted
EBITDA(a)
|
|
22.2
|
|
21.3
|
|
96.4
|
Depreciation of property, plant and equipment
|
|
(0.7)
|
|
(0.8)
|
|
(3.3)
|
Amortisation and impairment of intangible assets
|
|
(10.0)
|
|
(9.0)
|
|
(38.8)
|
Non-core
operating expenses(b)
|
5
|
(1.0)
|
|
(1.4)
|
|
(6.1)
|
Foreign
exchange gain/(loss)
|
|
1.3
|
|
(1.5)
|
|
(1.4)
|
Share-based payment expenses
|
|
(0.7)
|
|
(0.9)
|
|
(4.5)
|
Operating
profit
|
|
11.1
|
|
7.7
|
|
42.3
|
|
|
|
|
|
|
|
Finance
income
|
|
0.3
|
|
-
|
|
0.6
|
Finance
costs
|
|
(4.3)
|
|
(3.4)
|
|
(13.6)
|
|
|
|
|
|
|
|
Net
finance costs
|
6
|
(4.0)
|
|
(3.4)
|
|
(13.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before
taxation
|
|
7.1
|
|
4.3
|
|
29.3
|
Income
tax expense
|
|
(2.4)
|
|
(1.4)
|
|
(5.0)
|
Profit after
taxation
|
|
4.7
|
|
2.9
|
|
24.3
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to profit and loss
|
|
|
|
|
|
|
Exchange
difference on translation of foreign operations
|
|
(5.0)
|
|
2.1
|
|
4.7
|
Movement
arising on changes in fair value of hedging instruments
|
|
0.9
|
|
(0.6)
|
|
-
|
|
|
|
|
|
|
|
Total comprehensive income
for the period/year
|
|
0.6
|
|
4.4
|
|
29.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
Basic
(cents)
|
|
1.85
|
|
1.05
|
|
8.94
|
Diluted
(cents)
|
|
1.79
|
|
1.02
|
|
8.63
|
Adjusted
earnings - Basic (cents)
|
|
5.35
|
|
4.46
|
|
23.22
|
Adjusted
earnings - Diluted (cents)
|
|
5.18
|
|
4.36
|
|
22.41
|
All amounts relate to continuing
activities
|
|
(a) Parent and subsidiary earnings before interest, tax,
depreciation, amortisation and
impairment, non-cash charges and non-core
operating expenses.
|
(b) Non-core operating expenses include items related primarily
to acquisition, integration and other related costs, which are not
incurred as part of the underlying trading performance of the
Group, and which are therefore adjusted for, in line with Group
policy.
|
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
|
|
Unaudited
Three
months
ended
31 March
2024
|
|
Restated
Unaudited
Three
months
ended
31 March
2023*
|
|
Restated
Audited
Year ended
31
December
2023*
|
|
USD m
|
|
USD m
|
|
USD m
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
Property,
plant and equipment
|
|
2.8
|
|
1.9
|
|
2.6
|
Right-of-use assets
|
|
4.8
|
|
5.2
|
|
4.6
|
Intangible assets
|
|
313.7
|
|
342.6
|
|
327.0
|
Deferred
receivables
|
|
0.1
|
|
0.2
|
|
0.1
|
Deferred
tax assets
|
|
13.0
|
|
10.6
|
|
12.8
|
Derivative financial instruments
|
|
0.7
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
335.1
|
|
360.5
|
|
347.1
|
CURRENT
ASSETS
|
|
|
|
|
|
|
Trade and
other receivables
|
|
97.5
|
|
97.0
|
|
106.7
|
Inventory
|
|
0.3
|
|
0.6
|
|
0.2
|
Derivative financial instruments
|
|
-
|
|
0.4
|
|
-
|
Cash and
bank balances
|
|
75.5
|
|
102.9
|
|
92.7
|
|
|
|
|
|
|
|
|
|
173.3
|
|
200.9
|
|
199.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
508.4
|
|
561.4
|
|
546.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Share
capital
|
|
0.3
|
|
0.3
|
|
0.3
|
Share
premium
|
|
-
|
|
98.3
|
|
-
|
Merger
relief reserve
|
|
5.3
|
|
5.3
|
|
5.3
|
Share-based payments reserve
|
|
26.3
|
|
24.9
|
|
25.7
|
Cash flow
hedging reserve
|
|
0.7
|
|
(0.8)
|
|
(0.2)
|
Foreign
exchange translation reserve
|
|
(11.1)
|
|
(8.7)
|
|
(6.1)
|
Retained
earnings
|
|
121.4
|
|
48.9
|
|
128.5
|
|
|
|
|
|
|
|
TOTAL
EQUITY
|
|
142.9
|
|
168.2
|
|
153.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
|
Other
payables
|
|
3.6
|
|
14.2
|
|
5.8
|
Lease
liabilities
|
|
2.9
|
|
3.4
|
|
3.2
|
Deferred
tax liabilities
|
|
25.9
|
|
28.4
|
|
28.0
|
Borrowings
|
|
156.5
|
|
151.0
|
|
166.3
|
Derivative financial instruments
|
|
-
|
|
0.8
|
|
0.2
|
|
|
188.9
|
|
197.8
|
|
203.5
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
Trade and
other payables and accruals
|
|
174.3
|
|
193.2
|
|
187.8
|
Lease
liabilities
|
|
2.0
|
|
1.9
|
|
1.6
|
Borrowings
|
|
0.3
|
|
0.3
|
|
0.3
|
|
|
|
|
|
|
|
|
|
176.6
|
|
195.4
|
|
189.7
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
365.5
|
|
393.2
|
|
393.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY AND
LIABILITIES
|
|
508.4
|
|
561.4
|
|
546.7
|
*
The comparative statement of financial positions
at 31 December 2023 and 31 March 2023 have been restated in line
with the amendments to International Financial Statement IAS 1:
Presentation of Financial Statements, effective 1 January 2024.
Borrowings of USD 18.7m at 31 December 2023 and USD 3.7m have been
reclassified from non-current to current borrowings as the Group
has the right to defer payment for at least twelve months from the
dates of the financial statements.
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
|
Share
capital
USD m
|
Share
premium
USD m
|
Merger relief
reserve
USD m
|
Share- based payments
reserve USD m
|
Cash flow
hedging
Reserve USD
m
|
Foreign exchange translation
reserve
USD m
|
Retained
earnings
USD m
|
Equity attributable to
owners
of the Parent
Company
USD m
|
Balance as at 1 January
2023
|
0.3
|
98.3
|
5.3
|
24.1
|
(0.2)
|
(10.8)
|
50.00
|
167.0
|
Profit
for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
2.9
|
2.9
|
Translation of foreign operations
|
-
|
-
|
-
|
-
|
-
|
2.1
|
-
|
2.1
|
Other
comprehensive income - changes in fair value of hedging
instruments
|
-
|
-
|
-
|
-
|
(0.6)
|
-
|
-
|
(0.6)
|
Total comprehensive income
for the period
|
-
|
-
|
-
|
-
|
(0.6)
|
2.1
|
2.9
|
4.4
|
Repurchase of shares
|
-
|
-
|
-
|
-
|
-
|
-
|
(4.0)
|
(4.0)
|
Share-based payments
|
-
|
-
|
-
|
(0.1)
|
-
|
-
|
-
|
(0.1)
|
Share-based payments - deferred tax
|
-
|
-
|
-
|
0.9
|
-
|
-
|
-
|
0.9
|
Balance as at 31 March
2023
|
0.3
|
98.3
|
5.3
|
24.9
|
(0.8)
|
(8.7)
|
48.9
|
168.2
|
Profit
for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
21.4
|
21.4
|
Translation of foreign operations
|
-
|
-
|
-
|
-
|
-
|
2.6
|
-
|
2.6
|
Other
comprehensive income - changes in fair value of hedging
instruments
|
-
|
-
|
-
|
-
|
0.6
|
-
|
-
|
0.6
|
Total comprehensive income
for the period
|
-
|
-
|
-
|
-
|
0.6
|
2.6
|
21.4
|
24.6
|
Dividends
paid on equity shares
|
-
|
-
|
-
|
-
|
-
|
-
|
(3.6)
|
(3.6)
|
Cancellation of shares
|
-
|
(98.3)
|
-
|
-
|
-
|
-
|
98.3
|
-
|
Repurchase of shares
|
-
|
-
|
-
|
-
|
-
|
-
|
(36.5)
|
(36.5)
|
Share-based payments
|
-
|
-
|
-
|
3.3
|
-
|
-
|
-
|
3.3
|
Share-based payments - deferred tax
|
-
|
-
|
-
|
(2.5)
|
-
|
-
|
-
|
(2.5)
|
Balance as at 31 December
2023
|
0.3
|
-
|
5.3
|
25.7
|
(0.2)
|
(6.1)
|
128.5
|
153.5
|
Profit
for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
4.7
|
4.7
|
Translation of foreign operations
|
-
|
-
|
-
|
-
|
-
|
(5.0)
|
-
|
(5.0)
|
Other
comprehensive income - changes in fair value of hedging
instruments
|
-
|
-
|
-
|
-
|
0.9
|
-
|
-
|
0.9
|
Total comprehensive income
for the period
|
-
|
-
|
-
|
-
|
0.9
|
(5.0)
|
4.7
|
0.6
|
Repurchase of shares
|
-
|
-
|
-
|
-
|
-
|
-
|
(11.8)
|
(11.8)
|
Share-based payments
|
-
|
-
|
-
|
0.2
|
-
|
-
|
-
|
0.2
|
Share-based payments - deferred tax
|
-
|
-
|
-
|
0.4
|
-
|
-
|
-
|
0.4
|
Balance as at 31 March
2024
|
0.3
|
-
|
5.3
|
26.3
|
0.7
|
(11.1)
|
121.4
|
142.9
|
· 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.
· 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.
· Share-based payments reserve represents the cumulative value
of share-based payments 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.
NOTES TO THE UNAUDITED FINANCIAL
RESULTS
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
three months ended 31 March 2024 have been prepared in accordance
with the accounting policies outlined in the Group 2023 statutory
accounts, except for the changes to IAS 1: Presentation of
Financial Statements effective 1 January 2024, and comply with the
disclosure requirements of IAS 34: Interim Financial
Reporting.
Following the changes to IAS 1,
amounts drawn from the Group's revolving credit facilities are
classified as non-current liabilities in the financial statements.
This is based on the Group's ability to defer payments for at least
twelve months from the date of the financial statements. This
change in accounting policy has been applied retrospectively, with
comparative figures for 31 December 2023 and 31 March 2023
restated.
In the financial statements for
the year ended 31 December 2023, the drawn revolving credit
facilities totalling USD 18.9m (including prepaid finance costs)
were reclassified as non-current liabilities. Similarly, for the
period ended 31 March 2023, the drawn revolving credit facilities
amounting to USD 3.7m (including prepaid finance costs) were
reclassified as non-current liabilities.
The unaudited 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 online 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.
The chief operating decision maker
reviews the activities of the Group in the segments disclosed
below:
|
|
Unaudited
Three months
ended
31 March
2024
USD m
|
|
Unaudited
Three months
ended
31 March
2023
USD m
|
|
Audited
Year ended
31
December
2023
USD m
|
Online
Marketing
|
|
|
|
|
|
|
Revenue
|
|
145.9
|
|
149.7
|
|
657.1
|
Cost of
sales
|
|
(115.4)
|
|
(119.1)
|
|
(525.4)
|
Net
revenue/gross profit
|
|
30.5
|
|
30.6
|
|
131.7
|
Online
Presence
|
|
|
|
|
|
|
Revenue
|
|
50.0
|
|
45.2
|
|
179.8
|
Cost of
sales
|
|
(32.9)
|
|
(30.0)
|
|
(120.4)
|
Net
revenue/gross profit
|
|
17.1
|
|
15.2
|
|
59.4
|
|
|
|
|
|
|
|
Total
revenue
|
|
195.9
|
|
194.9
|
|
836.9
|
Total cost
of sales
|
|
(148.3)
|
|
(149.1)
|
|
(645.8)
|
Net revenue/gross
profit
|
|
47.6
|
|
45.8
|
|
191.1
|
NOTES TO THE UNAUDITED FINANCIAL RESULTS
(continued)
4. Revenue
The Group's revenue is generated
indirectly from consumers located in the following geographical
areas:
|
Unaudited
Three
months
ended
31 March
2024
USD m
|
%
|
Unaudited
Three
months
ended
31 March
2023
USD m
|
%
|
Audited
Year ended
31 December
2023
USD m
|
%
|
Americas
|
90.6
|
46%
|
104.4
|
54%
|
444.5
|
53%
|
EMEA
|
90.9
|
46%
|
74.0
|
38%
|
326.2
|
39%
|
APAC
|
14.4
|
8%
|
16.5
|
8%
|
66.2
|
8%
|
|
195.9
|
100%
|
194.9
|
100%
|
836.9
|
100%
|
The Group's revenue is invoiced
directly to the following geographical areas:
|
Unaudited
Three
months
ended
31 March
2024
USD m
|
%
|
Unaudited
Three
months
ended
31
March
2023
USD m
|
%
|
Audited
Year ended
31 December
2023
USD m
|
%
|
Americas
|
24.3
|
12%
|
20.6
|
11%
|
90.7
|
11%
|
EMEA
|
164.4
|
84%
|
166.1
|
85%
|
714.1
|
85%
|
APAC
|
7.2
|
4%
|
8.2
|
4%
|
32.1
|
4%
|
|
195.9
|
100%
|
194.9
|
100%
|
836.9
|
100%
|
The Group's revenue is invoiced
directly to the following geographical areas:
|
Unaudited
Three
months
ended
31 March
2024
USD m
|
%
|
Unaudited
Three
months
ended
31 March
2023
USD m
|
%
|
Audited
Year ended
31 December
2023
USD m
|
%
|
Online
Marketing
|
|
|
|
|
|
|
Americas
|
4.6
|
2%
|
4.6
|
3%
|
20.5
|
3%
|
EMEA
|
139.3
|
71%
|
142.6
|
73%
|
626.5
|
75%
|
APAC
|
2.0
|
1%
|
2.5
|
1%
|
10.1
|
1%
|
|
145.9
|
74%
|
149.7
|
77%
|
657.1
|
79%
|
Online
Presence
|
|
|
|
|
|
|
Americas
|
19.7
|
10%
|
16.0
|
8%
|
70.2
|
8%
|
APAC
|
25.1
|
13%
|
23.5
|
12%
|
87.6
|
10%
|
EMEA
|
5.2
|
3%
|
5.7
|
3%
|
22.0
|
3%
|
|
50.0
|
26%
|
45.2
|
23%
|
179.8
|
21%
|
|
|
|
|
|
|
|
Total
revenue
|
195.9
|
100%
|
194.9
|
100%
|
836.9
|
100%
|
|
|
|
|
|
|
|
5. Non-core operating
expenses
|
Unaudited
Three
months
ended
31 March
2024
USD m
|
|
Unaudited
Three
months
ended
31 March
2023
USD m
|
|
Audited
Year ended
31
December
2023
USD m
|
|
|
|
|
|
|
Acquisition related costs
|
0.5
|
|
0.3
|
|
1.0
|
Integration and streamlining costs
|
0.5
|
|
0.3
|
|
4.7
|
Other
costs(1)
|
-
|
|
0.8
|
|
0.4
|
|
1.0
|
|
1.4
|
|
6.1
|
(1) Other costs include items related primarily to business
reviews and restructuring expenses.
NOTES TO THE UNAUDITED FINANCIAL RESULTS
(continued)
6. Net finance
costs
|
Unaudited
Three
months
ended
31 March
2024
USD m
|
|
Unaudited
Three
months
ended
31 March
2023
USD m
|
|
Audited
Year ended
31
December
2023
USD m
|
|
|
|
|
|
|
Finance
income
|
(0.3)
|
|
-
|
|
(0.6)
|
Impact of
unwinding of discount on net present value of deferred
consideration
|
0.3
|
|
0.5
|
|
1.4
|
Reappraisal of deferred consideration
|
-
|
|
-
|
|
(2.8)
|
Arrangement fees on borrowings
|
0.3
|
|
0.3
|
|
1.4
|
Interest
on bank borrowings
|
3.6
|
|
3.0
|
|
13.5
|
Interest
expense on leases
|
0.1
|
|
0.1
|
|
0.2
|
Gains
arising on derivatives classified as fair value hedges
|
-
|
|
(0.5)
|
|
(0.1)
|
Net finance
costs
|
4.0
|
|
3.4
|
|
13.0
|
7. Earnings per
share
Earnings per share has been
calculated by dividing the consolidated profit 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.
|
Unaudited
Three
months
ended
31 March
2024
USD m
|
|
Unaudited
Three
months
ended
30 March
2023
USD m
|
|
Audited
Year ended
31
December
2023
USD m
|
|
|
|
|
|
|
Profit
after tax attributable to owners
|
4.7
|
|
2.9
|
|
24.3
|
Operating
profit
|
11.1
|
|
7.7
|
|
42.3
|
Depreciation of property, plant and equipment
|
0.7
|
|
0.8
|
|
3.3
|
Amortisation and impairment of intangible assets
|
10.0
|
|
9.0
|
|
38.8
|
Non-core
operating expenses
|
1.0
|
|
1.4
|
|
6.1
|
Foreign
exchange (gain)/loss
|
(1.3)
|
|
1.5
|
|
1.4
|
Share-based payment expenses
|
0.7
|
|
0.9
|
|
4.5
|
Adjusted
EBITDA
|
22.2
|
|
21.3
|
|
96.4
|
Depreciation
|
(0.7)
|
|
(0.8)
|
|
(3.3)
|
Net
finance costs (excluding reappraisal of deferred consideration and
gains arising on derivatives classified as fair value hedges) -
note 6
|
(4.0)
|
|
(3.9)
|
|
(15.9)
|
Current
income tax
|
(3.8)
|
|
(4.4)
|
|
(14.0)
|
Adjusted
earnings
|
13.7
|
|
12.2
|
|
63.2
|
|
|
|
|
|
|
Weighted average number of
shares:
|
|
|
|
|
|
Basic
|
256,699,397
|
|
275,271,743
|
|
272,131,265
|
Effect of
dilutive potential ordinary shares
|
8,369,555
|
|
6,786,531
|
|
9,869,695
|
Diluted
average number of shares
|
265,068,952
|
|
282,058,274
|
|
282,000,960
|
Earnings per
share:
|
|
|
|
|
|
Basic
(cents)
|
1.85
|
|
1.05
|
|
8.94
|
Diluted
(cents)
|
1.79
|
|
1.02
|
|
8.63
|
Adjusted
earnings - Basic (cents) (1)
|
5.35
|
|
4.46
|
|
23.22
|
Adjusted
earnings - Diluted (cents) (1)
|
5.18
|
|
4.36
|
|
22.41
|
Basic and diluted earnings per
share of 1.85 and 1.79 cents (Q1 2023: 1.05 and 1.02 cents) have
been impacted by depreciation, amortisation, impairment, non-core
operating expenses, foreign exchange gains and losses and
share-based payment expenses.
(1) In line with 31 December 2023, adjusted earnings per share
for 31 March 2023 has been adjusted to exclude deferred tax, which
mainly relates to items adjusted for within amortisation
NOTES TO THE UNAUDITED FINANCIAL RESULTS
(continued)
8. Financial
instruments
The 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:
|
Unaudited
Three
months
ended
31 March
2024
USD m
|
|
Unaudited
Three months
ended
31 March
2023
USD m
|
|
Audited
Year ended
31
December
2023
USD m
|
Cash
conversion
|
|
|
|
|
|
Cash flow
from operations
|
16.7
|
|
18.6
|
|
81.0
|
Exceptional costs incurred and paid during the
year
|
1.0
|
|
1.4
|
|
6.1
|
Settlement of one-off working capital items from the prior
year
|
-
|
|
0.1
|
|
5.5
|
|
|
|
|
|
|
Adjusted cash flow from
operations
|
17.7
|
|
20.1
|
|
92.6
|
Adjusted
EBITDA
|
22.2
|
|
21.3
|
|
96.4
|
Conversion %
|
80%
|
|
94%
|
|
96%
|
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 2023
|
(166.6)
|
92.7
|
(0.2)
|
(74.1)
|
Repayment of revolving credit
facility
|
10.0
|
(10.0)
|
-
|
-
|
Capital repayments
|
0.1
|
(0.1)
|
-
|
-
|
Amortisation of prepaid finance
costs
|
(0.3)
|
-
|
-
|
(0.3)
|
Mark-to-market
revaluation
|
-
|
-
|
0.9
|
0.9
|
Other cash movements
|
-
|
(5.6)
|
-
|
(5.6)
|
Foreign exchange
differences
|
-
|
(1.5)
|
-
|
(1.5)
|
At 31 March 2024
|
(156.8)
|
75.5
|
0.7
|
(80.6)
|
9. Business
combinations
Deferred consideration payments
During the three month period
ended 31 March 2024 the following deferred
consideration payments were made:
· On 16
January 2024, a deferred consideration payment for the acquisition
of NameAction was settled in cash for EUR 0.1m (USD
0.1m)
· On 5
March 2024, a deferred consideration payment for the acquisition of
SK-NIC was settled in cash for EUR 0.4m (USD 0.4m)
NOTES TO THE UNAUDITED FINANCIAL RESULTS
(continued)
10 Share buyback
programme and Employee Benefit Trust
During the period the Company
repurchased 6,534,293 shares under its share buyback programme at
an average share price of £1.33 (FY2023: 22,136,411 shares at a
share price of £1.27). These shares are held in treasury by the
Company. The total share repurchase in Q1 2024 is USD
11.8m.
At 31 March 2024 the Employee
Benefit Trust ("EBT") held 7,966,797 shares (31 December 2023:
9,104,431 shares, 31 March 2023: 9,050,817 shares). In Q1 2024, the
number of shares held in the EBT reduced due to satisfying exercise
of share options by employees of the Group. During Q1 2024,
1,125,097 share options were exercised and 60,334 share options
were forfeited.
The number of shares held and
outstanding share options is as follows:
|
Unaudited
31 March
2024
Number
|
|
Unaudited
31 March
2023
Number
|
|
Audited
31
December
2023
Number
|
Issued
share capital
|
288,660,084
|
|
288,660,084
|
|
288,660,084
|
Shares
held by the Employee Benefit Trust
|
(7,966,797)
|
|
(9,050,817)
|
|
(9,104,431)
|
Shares
held in Treasury
|
(28,890,704)
|
|
(2,570,160)
|
|
(22,356,411)
|
|
|
|
|
|
|
Share
capital
|
251,802,583
|
|
277,039,107
|
|
257,199,242
|
Outstanding share options
|
10,171,769
|
|
18,372,001
|
|
11,357,200
|
Share capital plus
outstanding share options
|
261,974,352
|
|
295,411,108
|
|
268,556,442
|
11. Events occurring
after the period end
The following significant events
occurred after the Group's period end date of 31 March 2024 and
before the signing of these Unaudited Financial Results on 13 May
2024:
· On 26
April 2024, the Group acquired Shinez I.O. Ltd and its subsidiaries
(together "Shinez") for an initial cash consideration of USD 38.9m
and USD 4.3m retained to cover for customary warranties and
indemnification. The acquisition includes additional contingent
consideration of up to USD 12.3m in cash and may become due subject
to Shinez achieving ambitious financial targets over the next two
years
· In
April 2024 the Company cancelled 760,084 ordinary shares resulting
in an issued share capital of 287,900,000 ordinary
shares