The information contained within
this announcement is deemed by the Company to constitute inside
information stipulated under the Market Abuse Regulation (EU) No.
596/2014 as it forms part of the domestic law of the United Kingdom
by virtue of the European Union (Withdrawal) Act 2018 (as amended)
("UK MAR"). Upon the publication of this announcement via the
Regulatory Information Service, this inside information is now
considered to be in the public domain.
NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION (DIRECTLY OR INDIRECTLY) IN WHOLE OR IN PART IN, INTO
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FOR IMMEDIATE RELEASE
4
March 2025
Team Internet Group
plc
("Team Internet" or the
"Group")
Response to Rule 2.8
announcement from Verdane,
Search market development
and
Notice of
results
The Board (the "Board") of Team
Internet Group plc (AIM: TIG, OTCQX: TIGXF) notes the announcement
from Verdane Fund Manager AB ("Verdane") confirming that it does
not intend to make a firm offer for Team Internet. As a result,
Verdane is bound by the restrictions set out in Rule 2.8 of the
City Code on Takeovers and Mergers (the "Takeover
Code").
The Board remains confident
in Team Internet's fundamental prospects and business. Team
Internet is a highly profitable and cash-generative business and,
as announced on 11 November 2024, continues to explore options to
increase shareholder value including optimising its capital
allocation strategy, as well as a comprehensive review of its asset
ownership. The interaction of the Board with the two recent
inbound approaches (as noted in the announcement on 7 January 2025)
was consistent with the Board's efforts to maximise shareholder
value. We have also received repeated approaches for our
Domains, Identity & Software ("DIS") segment, which continues
to trade strongly.
Search market development
Google recently announced that from 19 March 2025, it
will begin the process of opting all Google Ads accounts out of
AdSense for Domains ("AFD"), while allowing advertisers to opt back
in. The timeline for completing this process, the rate of
advertisers opting back in, and the potential impact on average
click prices-and consequently, our Revenue Per Thousand impressions
("RPM") KPI-cannot be accurately estimated at this time. This is
expected to lead to an accelerated move from AFD to Google's latest
monetisation product, Related Search On Content ("RSOC").
The Board believes that Team Internet is
well-positioned to navigate this transition and that this will be a
positive development in due course, producing a much more
sustainable market and create a more valuable business.
Strategic
response
As a leading provider of domain monetisation and
digital advertising solutions, Team Internet has been preparing for
the arrival of Google's latest monetisation product, RSOC and Team
Internet's transition to RSOC. RSOC is core to the transformation
of our Search segment into a content and video publishing
powerhouse and offers an enhanced user and advertiser experience,
as indicated in our November 2024 investor presentation[1]. The market development has been
long-anticipated, though the announced acceleration is a challenge.
It is anticipated that, during this transition period,
contributions from AFD will decline faster than contributions from
RSOC appreciate, meaning that the financial performance of Team
Internet's Search segment will see a trough in 2025 before it
recovers from 2026 onwards and returns to the long-term
pattern.
In addition, we are a market leader in zero-click
solutions via our Zeropark platform, which offers an alternative to
AFD. We continue to work closely with our partners to navigate this
transition effectively. We are seeing unprecedented demand for our
solutions and are strategically prioritising new customer
onboarding to ensure service quality and performance[2].
Balanced earnings
composition
Even following the challenges associated with the
Search division transition, we have a business which is highly
profitable and cash generative. This means we are well placed to
continue our review of asset ownership, use our cashflows to reduce
debt, continue to return cash to shareholders via a mix of
dividends and buybacks, or a blend of some or all
of these actions.
In 2024, our Search segment generated $91 million in
net revenue, of which approximately $72 million was derived from
our Google AFD relationship, the remainder being generated by RSOC,
zero-click, display and video advertising.
Our DIS segment, which operates on a
subscription-based model, provides a stable and resilient revenue
stream, serving as a strong foundation for long-term
profitability.
Additionally, our Comparison segment continues to
experience strong organic growth with significant operating
leverage, providing significant runway for future profit
growth.
The DIS and Comparison segments together contributed
52% of the Group's net revenue in 2024, up from 44% in 2023, and
are expected to grow further in 2025 and beyond.
Outlook
At this stage our best estimate of 2025 Search
segment Adjusted EBITDA is between $20 million and $25 million
(2024: $57 million). We expect 2025 Adjusted EBITDA of between $40
million and $43 million (2024: $36 million) from our DIS and
Comparison segments, which is consistent with our previous
estimates. That adds up to a range of between $60 million and $68
million for Group Adjusted EBITDA in 2025 before a return to
double-digit earnings growth from 2026 onwards.
Notice of
results
The Group will provide a further update when it
publishes its audited Annual report for the financial year ended 31
December 2024 on Monday, 24 March 2025.
On the day of results there will be a webinar for
equity analysts at 10:00, UK time. The presentation will be hosted
by CEO Michael Riedl and CFO Billy Green. To register please
contact SEC Newgate at teaminternet@secnewgate.co.uk where further
details will be provided.
Furthermore, Team Internet will hold an Investor Meet
Company session at 12:00, UK time, on 24 March 2025. Investors can
sign up to Investor Meet Company for free to meet Team Internet
Group Plc via:
https://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 09:00 the day before the meeting or
at any time during the live presentation.
CEO
Comment
Michael Riedl, CEO
of Team Internet, commented:
"Changes in the digital
advertising landscape are inevitable and Team Internet has a proven
track record of adapting to industry shifts and emerging stronger.
The early reception of our RSOC solution has been extremely
positive, and we remain confident that our diversified model,
financial strength, and proactive strategy will continue to deliver
long-term shareholder value."
Enquiries
For further information, please
contact:
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 / James Edis (Investment
Banking)
+44 (0) 161 831 1512
Dominic King (Corporate Broking)
+44 (0) 203 829
5000
Berenberg (Joint Broker)
Mark Whitmore / Richard Andrews /
Alix Mecklenburg-Solodkoff
+44(0) 203 207
7800
Important
notices
In accordance with Rule 26.1 of the
Takeover Code, a copy of the announcement will be available on Team
Internet's website at www.teaminternet.com by no later than 12 noon
(London time) on the business day following the date of this
announcement. The content of the website referred to in this
announcement is not incorporated into, and does not form part of,
this announcement.
This announcement has been prepared
in accordance with English law and information disclosed may not be
the same as that which would have been prepared in accordance with
the laws of jurisdictions outside England.
The distribution of this
announcement in jurisdictions other than the United Kingdom may be
affected by the laws of relevant jurisdictions. Therefore, any
persons who are subject to the laws of any jurisdiction other than
the United Kingdom or shareholders of Team Internet who are not
resident in the United Kingdom will need to inform themselves
about, and observe, any applicable requirements.
Certain statements in this
announcement are forward looking and so involve risk and
uncertainty because they relate to events, and depend upon
circumstances that will occur in the future and therefore results
and developments can differ materially from those anticipated. The
forward-looking statements reflect knowledge and information
available at the date of preparation of this announcement and Team
Internet undertakes no obligation to update these forward-looking
statements.
