Team Internet Group Plc (LON: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, has announced its unaudited financial results for the six months ended 30 June 2024 (“H1 2024”).
Financial summary:
● Organic gross revenue growth(i) of approximately 9%, for the trailing twelve months ended 30 June 2024 (“TTM 2024”)
● Gross revenue increased by 3% to USD 409.7m (versus six months ended 30 June 2023 (“H1 2023”): USD 396.4m)
● Net revenue (gross profit) increased by 7% to USD 97.7m (H1 2023: USD 91.2m), with gross margin increasing from 23.0% to 23.8%, a relative 3.5% uplift
● Adjusted EBITDA(ii) increased by 4% to USD 46.6m (H1 2023: USD 44.6m), with EBITDA margin increasing from 11.3% to 11.4%, a relative 0.9% uplift
● Operating profit increased by 13% to USD 22.9m (H1 2023 restated(iii): USD 20.2m)
● Profit before tax increased by 8% to USD 14.4m (H1 2023: USD 13.3m)
● Profit after tax increased by 4% to USD 9.8m (H1 2023: USD 9.4m)
● Adjusted EPS (diluted) increased by 12% to USD 10.74 cents (H1 2023 restated(iii): USD 9.63 cents)
● Net debt(iv) of USD 109.9m (31 December 2023: USD 74.1m) and leverage(v) of 1.2x pro forma TTM 2024 EBITDA, following non-operating cash outflows related to the initial cash outflow (net of cash acquired) for acquisition of the Shinez for USD 31.8m, repurchase of own shares of USD 12.6m and dividend payment of USD 7.2m
● Adjusted operating cash conversion of 87% (FY 2023: 96%), we expect cash conversion to normalise nearer to 100% over the remainder of the year
H1 highlights:
● In the Online Marketing segment, the number of visitor sessions increased by 16% to 6.1 billion for TTM 2024 from 5.3 billion for the trailing twelve-month period ended 30 June 2023 (“TTM 2023”). Revenue per thousand sessions (“RPM”) decreased by 12% from USD 100 to USD 88
● The Online Presence segment recorded organic revenue growth of 8% in TTM 2024
● Adjusted EBITDA as a percentage of net revenue remains healthy at 48% for H1 2024 (H1 2023: 49%)
● On 26 April 2024, the Group acquired Shinez I.O. Ltd and its subsidiaries (together “Shinez”) for an initial cash consideration of USD 31.8m (net of cash acquired), a further USD 1.3m subject to completion of operational milestones, and a further USD 4.3m retained to cover for customary warranties and indemnification. The acquisition includes additional contingent payments of up to USD 12.3m in cash, payable on Shinez achieving ambitious financial targets over the next two years
● FY2023 final dividend of 2.0 pence per share paid on 28 May 2024 (FY2022: 1.0 pence per share), 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
Post period end highlights:
● The Board intends to declare an interim dividend of 1.0 pence per ordinary share, subject to bank approval per the conditions of the Company’s Facilities Agreement, which the Company expects to be granted. The Company will provide details on the proposed dividend timetable shortly.
Outlook:
Team Internet has once again delivered a strong quarter, with growth in both adjusted and statutory earnings. Although the Group prioritises earnings growth over top-line growth, a robust 9% organic revenue growth has been maintained on a pro forma basis for TTM 2024. Adjusted EBITDA conversion remained healthy at 48% (H1 2023: 49%) 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.(vi)
Michael Riedl, CEO of Team Internet, commented: “Team Internet has delivered another strong set of trading results for the first half of the year. Year-on-year growth in trading results for Q2 2024 was slightly ahead of that seen in Q1 2024, with growth across revenue, net revenue and adjusted EBITDA, demonstrating momentum as we move into the second half of the year.
The addition of Shinez to the Group has introduced platform capability that addresses the ‘awareness’ stage of the advertising funnel, complementing our existing solutions: TONIC for ‘consideration’ and comparison platforms for ‘conversion’. Our vision is to strategically integrate Shinez, TONIC and VGL into a synergistic platform designed to enhance advertising revenue. By doing so, we will drive future profitability through improved targeting, increased RPM, and the accumulation of valuable first-party data.”
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 [email protected], 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.
(i)Pro forma revenue, adjusted for: acquired revenue, constant currency foreign exchange impact and non-recurring revenues is USD 954m for TTM 2024 and at USD 878m for TTM 2023
(ii)Earnings before interest, tax, depreciation, amortisation, impairment, non-core operating expenses, foreign exchange gains and losses, and share-based payment expenses
(iii)Please see note 12 for further information
(iv)Includes cash (USD 86.2m), bank debt and prepaid finance costs (USD 197.0) and hedging assets (USD 0.9m) as of 30 June 2024 (31 December 2023 cash (USD 92.7m), bank debt and prepaid finance costs (USD 166.6m) and hedging liabilities (USD 0.2m))
(v)Includes Net Debt as defined under(iv)(a) excluding prepaid finance costs, (b) plus guarantee obligations, and (c) 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 expenses capitalised under IFRS 16 and non-core expenses
(vi)Latest analyst forecasts are within a range of USD 931m and USD 984m for FY24 gross revenue and USD 105m and USD 115m for FY24 Adjusted EBITDA
