REG - Team Internet Group - Audited 2024 Annual Report Notice of AGM
31/03/2025 07:15
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RNS Number : 8615C Team Internet Group PLC 31 March 2025
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (DIRECTLY OR INDIRECTLY) IN WHOLE
OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
FOR IMMEDIATE RELEASE
31 March 2025
Team Internet Group plc
("Team Internet" or the "Company" or the "Group")
Audited 2024 Annual Report
Notice of Annual General Meeting
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 audited annual report for the
financial year 2024 is now available on the Group's website at the following
link: https://teaminternet.com/annual-interim-reports/
(https://teaminternet.com/annual-interim-reports/) . The annual report will
shortly be posted to those shareholders who have opted to receive a hard copy.
The results for the financial year 2024 are in line with the Group's Trading
Updates announcement issued on 24 March 2025. The Group remains confident in
its ability to meet recently revised market expectations for 2025.
Financial summary
· Gross revenue decreased by 4.1% to USD 802.8 million (FY2023: USD
836.9 million)
· Net revenue (gross profit) decreased by 1.9% to USD 187.5 million
(FY2023: USD 191.1 million), with gross margin increasing from 22.8% to 23.4%
· Adjusted EBITDA((i)) decreased by 4.7% to USD 91.9 million (FY2023:
USD 96.4 million), with adjusted EBITDA as a percentage of net revenue
remaining close to 50% at 49.0% (FY2023: 50.4%)
· Operating profit decreased by 82.1% to USD 8.2 million (FY2023
restated((ii)): USD 45.7 million), following USD 36.0 million of impairment
charges primarily relating to the Group's Shinez I.O Ltd subsidiary, acquired
in April 2024, without which operating profit would have been USD 44.2
million, 3.3% lower than FY2023
· Due to the same impairment charges, a loss after tax of USD 17.7
million (FY2023 profit after tax restated: USD 25.1 million) was recorded
· Adjusted EPS (diluted) decreased by 5.5% to USD 21.22 cents (FY2023
restated((ii)): USD 22.46 cents)
· Adjusted operating cash flow increased by 7.0% to USD 99.1 million
(FY2023: USD 92.6 million)
· Adjusted operating cash conversion((iii)) of 108% (FY2023: 96%)
· Net debt((iv)) of USD 96.4 million (31 December 2023: USD 74.1
million, 30 June 2024: USD 109.9 million). Team Internet has continued to be
cash generative in 2024, reducing net debt by USD 13.5 million in the second
half of the year despite USD 12.0 million of shareholder distributions
including payment of an interim dividend of 1 pence per share
· Leverage increased to 1.2x adjusted EBITDA (31 December 2023: 1.0x)
· Interest cover decreased to 5.9x (31 December 2023: 7.3x)
· The directors do not propose a final dividend in respect of FY2024 as
the Company rebalances short-term shareholder returns with deleveraging
Operational and corporate summary
· The Group achieved record adjusted operating cash flow of USD 99.1
million
· Acquisition of Shinez I.O Ltd ('Shinez') for an initial cash
consideration of USD 31.8 million (net of cash acquired). Shinez has
underperformed relative to expectations, primarily due to changes in its
specific target markets. The restructuring plan for Shinez, which is now under
new management, includes transitioning Shinez's business model from text-based
to short-form video, aligning with consumer trends
· In 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 over 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
· Despite a shifting digital landscape, which resulted in adjusted
EBITDA declining 4.7%, Team Internet delivered record cash generation and
maintained robust margins, proving the resilience of our model. Our ability to
adapt and optimise ensures we remain well-positioned for future growth
· Short-term recalibration is essential for long-term success. By
focusing on high-quality revenue streams, AI-driven efficiencies, and
strategic cost discipline, we are building a leaner, more resilient business
primed for sustainable growth
· 2024 was a year of strategic transformation-expanding AI-driven
monetisation, increasing direct advertiser relationships, and enhancing our
tech stack to drive efficiency. Our Domains, Identity & Software and
Comparison segments outperformed expectations, setting the stage for further
expansion in 2025
Annual General Meeting
The Company also announces that its 2025 Annual General Meeting ("AGM") will
be held at 09.00 BST on Monday, 28 April 2025 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/
(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 proceedings 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
(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
BST 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.
Michael Riedl, CEO of Team Internet, commented:
"With our audited 2024 results now confirmed, we can look back on a year of
strategic realignment and operational resilience. Headwinds in the Search
segment led to reduced earnings but record adjusted operating cash flow,
improving margin quality, and outperformance in our DIS and Comparison
segments underscore the strength of our diversified model.
As we continue the disciplined execution of our strategy in 2025, we remain
focused on innovation, efficiency, and value creation - positioning Team
Internet to return to double-digit EBITDA growth from 2026 onwards."
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)
+44 (0) 203 207 7800
Mark Whitmore / Richard Andrews
SEC Newgate (for
media)
+44 (0) 203 757 6880
Bob Huxford / Tom Carnegie / Harry
Handyside
teaminternet@secnewgate.co.uk
((i))Earnings before interest, tax, depreciation, amortisation and impairment,
non-core operating expenses, foreign exchange gains and losses, and
share-based payment expenses
((ii))Information on prior period restatements was included in our Nine months
ended 30 September 2024 interim report and is included in our Annual Report
((iii))Adjusted operating cash conversion refers to the percentage of Adjusted
EBITDA that is converted into operating cash in the period. Operating cash
flows are adjusted for non-recurring working capital items, such as the
settlement of acquisition costs included within the balance sheet of acquired
entities. See note 9
((iv))Includes cash (USD 88.3m), bank debt and prepaid finance costs (USD
184.9m) and hedging assets (USD 0.2m) as of 31 December 2024 (31 December 2023
cash (USD 92.7m), bank debt and prepaid finance costs (USD 166.6m) and hedging
liabilities (USD 0.2m))
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: domain name management, identity and software solutions
(DIS segment) and high-growth digital advertising (Comparison and Search
segments). The DIS segment is a critical constituent of the global online
presence and productivity tool ecosystem, where the Company serves as the
primary distribution channel for a wide range of digital products. The
Company's Comparison and Search segments create 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 Company's high-quality earnings come from subscription recurring revenues
in the DIS segment and revenue share on rolling utility-style contracts in the
Comparison and Search segments.
For more information please visit: www.teaminternet.com
(http://www.teaminternet.com)
MANAGEMENT COMMENTARY ON GROUP PERFORMANCE
Introduction
We reported gross revenue of USD 802.8 million and net revenue of USD 187.5
million, with adjusted EBITDA of USD 91.9 million.
While Search net revenue declined by 14.6% due to product evolution and
cyclical weakness in click prices, our Domains, Identity & Software (DIS)
and Comparison segments outperformed expectations, with both segments
delivering growth in the year and together contributing 51.2% of net revenue
in 2024, up from 43.9% in 2023. These segments remain poised for further
expansion in 2025.
This shift underscores the increasing resilience of our business model, as we
continue to diversify revenue streams and strengthen our position across all
segments.
Performance review
The Group's financial performance during the period is reflected in the key
financial metrics listed below:
Year ended
Year ended 31 December
31 December 2023
2024 (restated) Change
USD m USD m %
Revenue 802.8 836.9 (4.1%)
Net revenue (gross profit) 187.5 191.1 (1.9%)
Adjusted EBITDA 91.9 96.4 (4.7%)
Operating profit 8.2 45.7 (82.1%)
Adjusted operating cash conversion 108% 96% 12.5%
(Loss)/profit after tax (17.7) 25.1 (170.5%)
EPS - Basic (cents) (6.98) 9.20 (175.9%)
EPS - Diluted (cents) (6.98) 8.89 (178.5%)
EPS - Adjusted earnings - basic (cents) 21.49 23.27 (7.6%)
EPS - Adjusted earnings - diluted (cents) 21.22 22.46 (5.5%)
Segment Highlights
The Group committed to providing greater information by reporting on the
profitability of each reporting segment, as well as separating out our
Comparison business, which has grown so favourably that it now qualifies as a
separate reporting segment.
The Group's new reporting segments performed as follows during financial years
2023 and 2024:
Year ended Year ended
31 December 31 December
2024 2023
(restated) Change
USD m USD m %
Domains, Identity & Software (DIS) (A)
Revenue 202.7 188.7 7.4%
Net revenue 73.6 68.2 7.9%
Adjusted EBITDA 19.4 12.9 50.4%
Comparison (B)
Revenue 63.0 44.2 42.5%
Net revenue 22.4 15.7 42.7%
Adjusted EBITDA 16.1 9.2 75.0%
Search (C)
Revenue 537.1 604.0 (11.1%)
Net revenue 91.5 107.2 (14.6%)
Adjusted EBITDA 56.4 74.3 (24.1%)
Total
Revenue 802.8 836.9 (4.1%)
Net revenue 187.5 191.1 (1.9%)
Adjusted EBITDA 91.9 96.4 (4.7%)
Notes for new reporting segments
(A) Comprises the former Online Presence segment and the Voluum SaaS business
B Comprises VGL Publishing AG and its affiliates and businesses, operating
product comparison websites such as Vergleich.org
(C) Represents the former Online Marketing segment, less Comparison and Voluum
Outlook
Current analyst consensus for 2025 adjusted EBITDA is between USD 60 million
and USD 62 million, with a return to double-digit Group earnings growth from
2026 onwards.
We look forward to providing our next update when the Company publishes its
results for the six months ended 30 June 2025 around the end of August 2025.
Michael Riedl
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended
Year ended 31 December
31 December 2023
2024 Restated
Note USD m USD m
Revenue 4 802.8 836.9
Cost of sales (615.3) (645.8)
Net revenue/gross profit 187.5 191.1
Operating expenses (178.7) (140.9)
Share-based payment expenses (0.6) (4.5)
Operating profit 8.2 45.7
Adjusted EBITDA((a)) 91.9 96.4
Depreciation of property, plant and equipment (3.0) (3.3)
Amortisation of intangible assets 8 (39.3) (38.1)
Impairment of intangible assets 8 (36.0) (0.7)
Non-core operating expenses((b)) 5 (7.1) (2.7)
Foreign exchange gains/(losses) 2.3 (1.4)
Share-based payment expenses (0.6) (4.5)
Operating profit 8.2 45.7
Finance income 1.2 0.6
Finance costs (18.7) (16.2)
Net finance costs 6 (17.5) (15.6)
(Loss)/profit before taxation (9.3) 30.1
Income tax expense (8.4) (5.0)
(Loss)/profit after taxation (17.7) 25.1
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations (13.0) 4.8
Gain arising on changes in fair value of hedging instruments 0.4 -
Total other comprehensive (expense)/income (12.6) 4.8
Total comprehensive profit for the period 30.3 29.9
Earnings per share:
Basic (cents) 7 (6.98) 9.20
Diluted (cents) 7 (6.98) 8.89
Adjusted earnings - Basic (cents) 7 21.49 23.27
Adjusted earnings - Diluted (cents) 7 21.22 22.46
All amounts relate to continuing activities
((a)) Earnings before interest, tax, depreciation, amortisation and
impairment, non-core operating expenses, foreign exchange gains and losses and
share-based payment 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.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 December 31 December 1 January
2024 2023 2023
Restated Restated
Note USD m USD m USD m
ASSETS
Non-current assets
Property, plant and equipment 2.3 2.6 1.8
Right-of-use assets 3.9 4.6 5.5
Intangible assets 8 75.8 110.4 134.2
Goodwill 8 204.7 213.2 208.1
Other non-current assets - 0.1 0.3
Deferred tax assets 11.9 12.8 9.5
Derivative financial instruments 0.2 - -
298.8 343.7 359.4
Current assets
Trade and other receivables 91.5 106.4 98.2
Inventory 0.2 0.2 0.6
Current tax assets 0.8 0.3 -
Cash and cash equivalents 88.3 92.7 94.8
180.8 199.6 193.6
TOTAL ASSETS 479.6 543.3 553.0
EQUITY AND LIABILITIES
Equity
Share capital 11 0.3 0.3 0.3
Share premium - - 98.3
Merger relief reserve 5.3 5.3 5.3
Share-based payment reserve 26.4 25.7 24.1
Cash flow hedging reserve 0.2 (0.2) (0.2)
Foreign exchange translation reserve (19.0) (6.0) (10.8)
Retained earnings 79.9 128.2 48.9
Total equity 93.1 153.3 165.9
Non-current liabilities
Other payables 5.2 4.5 11.4
Lease liabilities 2.6 3.2 3.8
Deferred tax liabilities 20.4 28.0 30.2
Borrowings 184.6 166.3 150.9
Derivative financial instruments - 0.2 0.2
212.8 202.2 196.5
Current liabilities
Trade, other payables and accruals 132.4 151.5 163.6
Current tax liabilities 39.6 34.4 24.7
Lease liabilities 1.4 1.6 1.9
Borrowings 0.3 0.3 0.3
Derivative financial instruments - - 0.1
173.7 187.8 190.6
TOTAL LIABILITIES 386.5 390.0 387.1
TOTAL EQUITY AND LIABILITIES 479.6 543.3 553.0
Total
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share- based payment reserve USD m Foreign exchange translation reserve equity
Merger relief reserve Cash flow hedging USD m USD m
Share capital Share premium USD m Reserve USD m Retained earnings
USD m USD m USD m
Balance as at 1 January 2023 0.3 98.3 5.3 24.1 (0.2) (10.8) 50.0 167.0
Prior year restatement (note 12) - - - - - - (1.1) (1.1)
Restated balance at 1 January 2023 0.3 98.3 5.3 24.1 (0.2) (10.8) 48.9 165.9
Profit for the year - - - - - - 25.1 25.1
Other comprehensive income
Translation of foreign operations - - - - - 4.8 - 4.8
Total comprehensive profit for the year - - - - - 4.8 25.1 29.9
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 - - - (1.6) - - - (1.6)
Balance as at 31 December 2023 0.3 - 5.3 25.7 (0.2) (6.0) 128.2 153.3
Loss for the year - - - - - - (17.7) (17.7)
Other comprehensive income
Translation of foreign operations - - - - - (13.0) - (13.0)
Other comprehensive income - changes in fair value of hedging instruments - - - - 0.4 - - 0.4
Total comprehensive profit/(loss) for the year - - - - 0.4 (13.0) (17.7) (30.3)
Dividends paid on equity shares - - - - - - (9.8) (9.8)
Repurchase of shares - - - - - - (20.8) (20.8)
Share-based payments - - - 0.8 - - - 0.8
Share-based payments - deferred tax - - - (0.1) - - - (0.1)
Balance as at 31 December 2024 0.3 - 5.3 26.4 0.2 (19.0) 79.9 93.1
· 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 2023.
· 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 the shares in another company includes
issued shares, and 90% of the equity is held in the other company
· Share-based payment 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 Year ended Year ended
31 December 31 December
2024 2023
Restated
USD m USD m
Cash flow from operating activities
(Loss)/profit before taxation (9.3) 30.1
Adjustments for:
Depreciation of property, plant and equipment 3.0 3.3
Amortisation of intangible assets 39.3 38.1
Impairment of intangible assets 36.0 0.7
Finance costs (net) 17.5 15.6
Share-based payments 0.6 4.5
Decrease/(increase) in trade and other receivables 24.5 (8.5)
Decrease in trade and other payables and accruals (25.7) (6.0)
Decrease in inventories - 0.4
Cash flow inflow from operations 85.9 78.2
Income tax paid (9.3) (5.6)
Net cash flow inflow from operating activities 76.6 72.6
Cash flows from investing activities
Payments for property, plant and equipment (1.3) (1.9)
Payments for intangible assets (excluding domain names) (8.3) (8.3)
Payments for intangible assets - domain names (0.5) (3.3)
Payments of deferred consideration (4.2) (18.7)
Proceeds from disposal of subsidiary 0.2 -
Payments for acquisition of subsidiaries, net of cash acquired (31.8) (2.3)
Interest received 1.2 -
Net cash flow outflow from investing activities (44.7) (34.5)
Cash flows from financing activities
Drawdown of revolving credit facility 67.5 37.5
Repayment of revolving credit facility (50.0) (22.5)
Bank finance arrangement fees (0.3) (0.7)
Payment of dividends to ordinary Shareholders (9.8) (3.6)
Bank loan capital repayments (0.3) -
Repurchase of ordinary shares (21.2) (39.7)
Lease principal repayments (1.9) (2.3)
Interest paid (16.1) (12.1)
Net cash outflow from financing activities (32.1) (43.4)
Net decrease in cash and cash equivalents (0.2) (5.3)
Cash and cash equivalents at beginning of the year 92.7 94.8
Exchange (losses)/gains on cash and cash equivalents (4.2) 3.2
Cash and cash equivalents at end of the year 88.3 92.7
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. General information
Team Internet Group plc is a public company limited by shares incorporated
under the Companies Act 2006 and domiciled in England in the United Kingdom.
The Company 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 preliminary results for the year ended 31 December 2024 are an abridged
statement of the full Annual Report which was approved by the Board of
Directors on 28 March 2025. The consolidated financial statements in the full
Annual Report are prepared in accordance with UK-adopted international
accounting standards and in accordance with the Companies Act 2006 ('the Act')
as applicable to companies reporting under international accounting standards.
As applied to the Group, there are no material differences from International
Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB). The financial results for the year ended 31 December
2024 have been prepared on the basis of the accounting policies set out in the
Group's 2024 statutory accounts.
The financial results are condensed and do not represent statutory accounts
within the meaning of section 434 of the Act. The statutory accounts for the
year ended 31 December 2024, 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. The statutory accounts
for the year ended 31 December 2024 will be delivered to the Registrar of
Companies in England and Wales in accordance with section 441 of the Act.
The financial statements have been prepared on the going concern basis, which
assumes that the Group will continue to be able to meet its liabilities as
they fall due for the foreseeable future.
The Directors have conducted a comprehensive going concern review, considering
the Group's business activities, together with the factors likely to affect
its future development, performance and financial position, as set out in the
strategic report on pages 1 to 27 of the Annual Report, as well as the
principal risks of the Group are set out on pages 60 to 62 of the Annual
Report. In addition, note 29 of the Annual Report outlines the Group's
financial risk management objectives, as well as its exposure to liquidity and
other financial risks.
As at 31 December 2024, the Group had access to over USD 150.8 million of
liquidity (2023: USD 172.7 million), comprising cash and cash equivalents of
USD 88.3 million (2023: USD 92.7 million) and access to an undrawn revolving
credit facility (RCF) of USD 62.5 million (2023: USD 80.0 million). The Group
has net current assets of USD 7.1 million at 31 December 2024 (2023: USD 11.8
million). Current liabilities include USD 25.2 million of deferred revenue and
payments received on account from customers (2023: USD 22.4 million). These
liabilities will not result in a material cash outflow in 2024 since the Group
expects to continue to receive payments on account from customers. Excluding
these liabilities, the Group has net current assets of USD 32.3 million (2023:
34.2 million).
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
2. Basis of preparation (continued)
The Directors have undertaken a detailed financial assessment covering the
period to 30 June 2026 ('Review Period') and have considered whether the Group
can continue to meet its liabilities and other obligations for the foreseeable
future. The going concern model is made up of a Board-approved base case and a
severe-but-plausible downside. The base case financial projections indicate
that, throughout the Review Period, the Group will remain in compliance with
the financial covenants which are tested quarterly on a trailing 12 months'
basis under the terms of its Senior Facilities Agreement, maintaining an
Adjusted Leverage Ratio (Net Debt (which includes deferred consideration) to
Adjusted EBITDA (which includes lease payments)) below 2.5x and an Interest
Cover Ratio (EBITDA to Net Interest Charges on Bank Borrowings) of not less
than 4.0x.
The base case has then been used to model a range of adverse scenarios that
are deemed to be plausible downside conditions derived from the scenarios that
are outlined below. This assessment also evaluated the anticipated
effectiveness of proposed mitigating actions that are within the Group's
control and can be enacted in good time, ensuring a robust framework for
managing potential disruptions.
Risk factors applied against future forecasts
The following risk factors have been considered in reaching the
severe-but-plausible downside scenario:
Scenario 1 - Reduction in net revenue
Linking to industry-wide dynamics and current market conditions, the Directors
have considered a reduction of net revenue from the base case of an average of
19% over the Review Period, applying greater sensitivity to the Search segment
and less sensitivity to the DIS segment. The greater sensitivity applied to
the Search segment reflects the recent announcement by Google that from 19
March 2025, Google will begin the process of opting all Google Ads accounts
out of AdSense for Domains ('AFD'), while allowing advertisers to opt back in.
The Directors are confident that the Group is well-positioned to successfully
manage the transition in the Search segment and continue its operations during
the entire Review Period and the Group's liquidity position and revenue
diversification strategy provide a strong foundation to navigate this shift.
Scenario 2 - Increase in SOFR
Linking to macroeconomic factors, the Directors considered the appropriateness
of the SOFR rates to be used. No increase in SOFR is included in the downside
as this is not considered plausible given the current market expectations of a
fall in SOFR over the next twelve months. Furthermore, current interest rate
swap pricing has been received which shows fixed pricing at circa 58 basis
points below SOFR.
Mitigation options
The Directors have considered the mitigations that could be applied in a
deteriorating trading environment to either increase profit and/or conserve
cash to reduce interest cost; these include various reductions in overhead
expenses including marketing costs, discretionary professional fees, personnel
costs and incentives.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
2. Basis of preparation (continued)
Conclusion on going concern
Whilst the Group forecasts to meet all its covenants in both scenarios, the
Directors note the Group's headroom in respect of its interest cover ratio is
more impacted than its headroom in respect of its adjusted leverage ratio,
particularly in the severe-but-plausible downside scenario in 2026 as the
impacts of the adverse scenarios increase.
In reviewing the assessment outlined above, the Directors are confident that
the Group has the necessary resources and mitigations available to continue
operations and discharge its obligations as they fall due for at least 12
months from the date of approval of the financial statements. Accordingly, the
consolidated financial statements continue to be prepared on a going concern
basis. The financial statements do not include any adjustments that would
result from the basis of preparation being inappropriate.
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 (CODM) to determine allocation of
resources to segments and to assess segmental performance. The CODM comprises
the Board of Directors. The CODM is not provided with operating segment assets
and liabilities, nor segmental cash flows arising from the operating,
investing and financing activities and therefore this is not disclosed.
The Group has three reporting segments, Domains, Identity & Software
(DIS), Comparison and Search. The DIS segment comprises the former Online
Presence segment and the Voluum SaaS business. The Comparison segment
comprises VGL Publishing AG and its affiliate businesses, operating product
comparison websites such as Vergleich.org. The Search segment represents the
former Online Marketing segment, less Comparison and Voluum. Previously the
reporting segments comprised Online Presence (DIS, not including Voluum) and
Online Marketing, which comprised the remainder of the Group.
Management reviews the activities of the Group in the segments disclosed
below:
Year ended 31 December 2024
DIS Comparison Search Total
USD m USD m USD m USD m
Revenue 202.7 63.0 537.1 802.8
Cost of sales (129.1) (40.6) (445.6) (615.3)
Net revenue/gross profit 73.6 22.4 91.5 187.5
Operating expenses (54.2) (6.3) (35.1) (95.6)
Adjusted EBITDA 19.4 16.1 56.4 91.9
Year ended 31 December 2023 (restated*)
DIS Comparison Search Total
USD m USD m USD m USD m
Revenue 188.7 44.2 604.0 836.9
Cost of sales (120.5) (28.5) (496.8) (645.8)
Net revenue/gross profit 68.2 15.7 107.2 191.1
Operating expenses (55.3) (6.5) (32.9) (94.7)
Adjusted EBITDA 12.9 9.2 74.3 96.4
* Prior period figures have been restated to reflect the changes to operating
segments in 2024
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
4. Revenue
The Group's revenue is generated indirectly from consumers located in the
following geographical areas:
Year ended Year ended
31 December % 31 December 2023 %
2024 USD m
USD m
Americas 349.3 44% 427.6 52%
EMEA 396.3 49% 338.7 40%
APAC 57.2 7% 70.6 8%
802.8 100% 836.9 100%
The Group's revenue is invoiced directly to the following geographical areas:
Year ended Year ended
31 December % 31 December 2023 %
2024 USD m
USD m
Americas 114.7 14% 90.7 11%
EMEA 658.6 82% 714.1 85%
APAC 29.5 4% 32.1 4%
802.8 100% 836.9 100%
On a reporting segment basis, the Group's revenue is invoiced directly to the
following geographical areas:
Year ended % Year ended %
31 December 31 December 2023
2024 USD m
USD m
DIS
Americas 80.4 10% 72.9 9%
EMEA 99.4 12% 92.3 11%
APAC 22.9 3% 23.5 3%
202.7 25% 188.7 23%
Comparison
Americas 0.2 - 0.3 -
EMEA 62.4 8% 43.3 5%
APAC 0.4 - 0.6 -
63.0 8% 44.2 5%
Search
Americas 34.1 4% 17.5 2%
EMEA 496.8 62% 578.5 69%
APAC 6.2 1% 8.0 1%
537.1 67% 604.0 72%
All revenue
Americas 114.7 14% 90.7 11%
EMEA 658.6 82% 714.1 85%
APAC 29.5 4% 32.1 4%
Total revenue 802.8 100% 836.9 100%
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
5. Non-core operating expenses
Year ended Year ended
31 December 2024 31 December 2023
USD m Restated(*)
USD m
Acquisition related costs 5.0 4.6
Integration costs 2.5 3.6
Restructuring costs 2.0 1.5
9.5 9.7
Reassessment of contingent consideration (2.4) (7.0)
Non-core operating expenses 7.1 2.7
* Certain prior period figures are restated, refer to note 12 for further
information.
6. Net finance costs
Year ended Year ended
31 December 31 December 2023
2024 Restated(*)
USD m USD m
Interest income from financial assets held for cash management purposes 1.2 0.6
Finance income 1.2 0.6
Interest on bank borrowings 15.8 13.4
Amortisation of arrangement fees on borrowings 1.4 1.4
Impact of unwinding of discount on net present value of deferred consideration 0.5 1.2
Interest expense on leases 0.2 0.2
Other interest 0.8 0.1
Gain arising on derivatives classified as fair value hedges - (0.1)
Finance costs 18.7 16.2
* Certain period figures are restated, refer to note 12 for further
information.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (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. Exact
numbers have been used in the calculation of earnings per share, rather than
the rounded numbers used in the financial statements.
Year ended Year ended
31 December 2024 31 December
USD m 2023
Restated*
USD m
(Loss)/profit after tax (17.7) 25.1
Operating profit 8.2 45.7
Depreciation of property, plant and equipment 3.0 3.3
Amortisation of intangible assets 39.3 38.1
Impairment of intangible assets 36.0 0.7
Non-core operating expenses 7.1 2.7
Foreign exchange (gains)/losses (2.3) 1.4
Share-based payment expenses 0.6 4.5
Adjusted EBITDA 91.9 96.4
Depreciation (3.0) (3.3)
Net finance costs (17.5) (15.7)
Current income tax (16.9) (14.0)
Adjusted earnings 54.5 63.4
Weighted average number of shares:
Basic 254,098,662 272,131,265
Effect of dilutive potential ordinary shares 3,210,759 9,869,695
Diluted average number of shares 257,309,421 282,000,960
Earnings per share:
Basic (cents) (6.98) 9.20
Diluted (cents) (6.98) 8.89
Adjusted earnings - Basic (cents) 21.49 23.27
Adjusted earnings - Diluted (cents) 21.22 22.46
* Certain prior period figures are restated, refer to note 12 for further
information.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
8. Intangible assets
Domain names Customer list Intangible assets total Intangible assets and goodwill
USD m USD m Patents and trademarks Intellectual property USD m USD m
Software USD m USD m Goodwill
USD m USD m
Cost or deemed cost
At 1 January 2023 43.3 58.9 101.1 10.2 4.5 218.0 217.3 435.3
Restatement (note 12) - - - - - - (5.6) (5.6)
At 1 January 2023 (restated) 43.3 58.9 101.1 10.2 4.5 218.0 211.7 429.7
Additions 3.3 5.4 - - 3.0 11.7 - 11.7
Acquisition of subsidiary - 0.5 0.6 - - 1.1 1.3 2.4
Exchange differences 0.8 0.7 1.9 - 0.3 3.7 3.8 7.5
At 31 December 2023 47.4 65.5 103.6 10.2 7.8 234.5 216.8 451.3
Additions 0.5 6.9 - - 1.4 8.8 - 8.8
Acquisition of subsidiary - 7.0 15.3 - 4.3 26.6 8.6 35.2
Disposals - (2.8) - (1.2) - (4.0) - (4.0)
Disposal of subsidiary - (0.2) - - - (0.2) - (0.2)
Exchange differences (1.3) (1.7) (4.3) (0.2) (0.6) (8.1) (8.7) (16.8)
At 31 December 2024 46.6 74.7 114.6 8.8 12.9 257.6 216.7 474.3
Amortisation and impairment
At 1 January 2023 11.6 25.3 42.7 2.3 1.9 83.8 3.6 87.4
Charge for the year 7.7 12.9 14.6 0.9 2.0 38.1 - 38.1
Impairment - - - - 0.7 0.7 - 0.7
Exchange differences 0.3 0.4 0.7 - 0.1 1.5 - 1.5
At 31 December 2023 19.6 38.6 58.0 3.2 4.7 124.1 3.6 127.7
Charge for the year 7.9 15.0 13.6 0.9 1.9 39.3 - 39.3
Impairment(**) - 8.9 14.0 0.7 3.8 27.4 8.6 36.0
Disposals - (2.8) - (1.2) - (4.0) - (4.0)
Disposal of subsidiary - (0.1) - - - (0.1) - (0.1)
Exchange differences (0.6) (1.3) (2.4) - (0.6) (4.9) (0.2) (5.1)
At 31 December 2024 26.9 58.3 83.2 3.6 9.8 181.8 12.0 193.8
Net book value
At 31 December 2024 19.7 16.4 31.4 5.2 3.1 75.8 204.7 280.5
At 31 December 2023(*) 27.8 26.9 45.6 7.0 3.1 110.4 213.2 323.6
* Certain prior period figures are restated, refer to note 12 for further
information.
** Primarily relates to an impairment of USD 33.0 million in relation to
Shinez. See note 10 for details of the Shinez business combination.
( )
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
9. 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:
Year ended
Year ended 31 December 2023
31 December Restated(*)
2024 USD m
USD m
Cash conversion
Cash flow from operations 85.9 78.2
Non-core costs incurred and paid 11.3 6.1
Change in working capital due to non-recurring working capital items 1.9 8.3
Adjusted cash flow from operations 99.1 92.6
Adjusted EBITDA 91.9 96.4
Adjusted operating cash conversion % 108% 96%
* Certain prior period figures are restated, refer to note 12 for further
information.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
9. Financial instruments (continued)
Net debt is shown in the table below:
Debt related financial
instruments
Bank debt
Cash Net debt
USD m USD m USD m USD m
At 1 January 2023 (151.2) 94.8 (0.2) (56.6)
Drawdown of revolving credit facility (37.5) 37.5 - -
Repayment of revolving credit facility 22.5 (22.5) - -
Capital repayments 0.3 (0.3) - -
Prepaid finance cost additions 0.7 (0.7) - -
Amortisation of prepaid finance costs (1.4) - - (1.4)
Other cash movements - (19.3) - (19.3)
Foreign exchange differences - 3.2 - 3.2
At 31 December 2023 (166.6) 92.7 (0.2) (74.1)
Drawdown of revolving credit facility (67.5) 67.5 - -
Repayment of revolving credit facility 50.0 (50.0) - -
Capital repayments 0.3 (0.3) - -
Prepaid finance costs additions 0.3 (0.3) - -
Amortisation of prepaid finance costs (1.4) - - (1.4)
Mark-to-market revaluation - - 0.4 0.4
Acquisition of Shinez (initial cash consideration, net of cash acquired) - (31.8) - (31.8)
Other cash movements - 14.7 - 14.7
Foreign exchange differences - (4.2) - (4.2)
At 31 December 2024 (184.9) 88.3 0.2 (96.4)
The Group's drawn-down RCF of USD 37.5m (31 December 2023: USD 20.0m) is
classified as a non-current liability following the IAS 1 amendment effective
1 January 2024 (see note 12 for further information). The RCF would become
repayable if the Group breaches a quarterly covenant, which are leverage and
interest cover covenants. There is no indication that the Group will breach
these covenants.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
10. Business combinations
Shinez I.O Ltd
On 26 April 2024, Team Internet Group plc acquired the entire issued share
capital of a leading Israel-based online marketing business, Shinez I.O Ltd.
Shinez specialises in the production and promotion of highly engaging content
across diverse channels such as social media, search engines and native
networks. Its current 40 popular portals include luxandlush.com,
cooking4all.com and theprimarymarket.com. Leveraging this expertise, Shinez
monetises real-time visits through an expansive network of advertising
exchanges, utilising cutting-edge technology and strategies. This approach
maximises the revenue potential of each piece of content, and positions Shinez
at the forefront of digital marketing innovation.
Team Internet acquired Shinez for an enterprise value of USD 41.8 million, on
a net debt-free basis and subject to customary adjustments for net working
capital, payable in cash. The initial consideration represents a multiple of
4.0x Shinez's FY23 adjusted EBITDA. Additional contingent payments of up to
USD 12.3 million may become due subject to Shinez achieving ambitious
financial targets over the next two years, payable in cash. As the USD 12.3
million of contingent payments is also contingent on continued employment of
specific employees/contractors, the fair value of this consideration will be
charged to the statement of comprehensive income within non-core expenses as
remuneration and is therefore not included within consideration in the table
below. In view of the post-acquisition performance, the probability of any
additional contingent consideration becoming due is negligible, and therefore
no liability for this has been recognised at 31 December 2024.
Contingent consideration of USD 0.8 million is payable on completion of
operational milestones. A further USD 0.5 million of contingent payments is
payable, contingent on operational milestones and the continued employment of
the contractor. This amount was charged to the statement of comprehensive
income within non-core expenses as remuneration and is therefore not included
within consideration in the table below. It is included within accrued
expenses and was paid in January 2025 on successful completion of the
milestones.
Total consideration payable in the table below of USD 42.0 million comprises
the enterprise value of USD 41.8 million, less discounting of deferred
consideration of USD 0.7 million, plus working capital adjustments totalling
USD 1.4 million. Initial cash consideration, net of cash acquired, is USD 31.8
million (USD 37.6 million of initial cash consideration, less cash acquired of
USD 5.8 million).
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
10. Business combinations (continued)
The following table summarises the consideration paid for Shinez I.O Ltd and
the fair values of the assets and liabilities at the acquisition date, in line
with Group policies.
USD m
Initial cash consideration (adjusted for cash and working capital) 37.6
Consideration contingent on completion of operational milestones 0.8
Deferred consideration (USD 4.3m discounted to present value) 3.6
Total consideration 42.0
Fair values recognised on acquisition
Assets
Customer list 15.3
Software 7.0
Intellectual property 4.3
Right-of-use assets 0.2
Trade and other receivables 14.0
Current tax assets 0.3
Cash and cash equivalents 5.8
46.9
Liabilities
Trade payables 7.9
Other current liabilities 2.6
Lease liability 0.2
Deferred tax liability 2.8
13.5
Total identifiable estimated net assets at fair value 33.4
Goodwill arising on acquisition 8.6
Purchase consideration 42.0
For the post-completion period to 31 December 2024, the Group's financial
statements for Shinez reflect revenues of USD 26.3 million, adjusted EBITDA
loss of USD 1.9 million and a post-tax loss of USD 34.1 million, including
amortisation and impairment of acquired intangibles. If the acquisition had
been made on 1 January 2024 the contribution to the Group's results, for the
year ended 31 December 2024, would have been revenues of USD 54.8 million,
adjusted EBITDA loss of USD 0.8 million and a loss after tax of USD 33.4
million, including amortisation and impairment of acquired intangibles.
Goodwill arising on the acquisition primarily relates to the specific
synergistic benefits able to be realised through Shinez being part of the
larger Team Internet Group, as well as goodwill in relation to employees.
Since the acquisition of Shinez in April 2024, the asset has underperformed
relative to expectations, primarily due to unanticipated changes in its
specific target markets. In response, the Group has swiftly taken corrective
actions, integrating additional advertising inventory and refining revenue
optimisation strategies to enhance Shinez's performance.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
10. Business combinations (continued)
While these measures aim to support Shinez's return to profitability, we
currently expect limited EBITDA contribution in the near term. However, the
technology, content library, social media reach, behavioural data and skilled
workforce assembled within Shinez represent a valuable addition to the Group.
We believe these elements will strengthen our competitive advantage as we
advance our core Search services. The Shinez assets themselves will be
redeveloped with a view to using primarily organic traffic, more short-form
video content and higher-intent advertising.
Deferred consideration payments
During the year, the following deferred consideration payments were made:
· the final deferred cash consideration payment of USD 0.1 million for
the acquisition of NameAction in January 2024;
· the final deferred cash consideration payment of EUR 1.0 million (USD
1.1 million) for the acquisition of SK-NIC was made in two instalments: EUR
0.4 million (USD 0.4 million) in March 2024 and EUR 0.6 million (USD 0.7
million) in May 2024;
· in July 2024, a deferred consideration payment for the acquisition of
M.A. Aporia was settled in cash for USD 2.3 million; and
deferred cash consideration payments of USD 0.7 million for the acquisition of
Shinez I.O Ltd were made in June 2024 (USD 0.4 million) and September 2024
(USD 0.3 million) in respect of operational milestones achieved.
Contingent payments treated as non-core costs
In October 2024, a payment of USD 3.0 million was made for the acquisition of
M.A. Aporia, related to contingent payments tied to continued employment of
specific employees. It is anticipated that this will be the last material
acquisition-related contingent payment across the Group.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
11. Share buyback programme and Employee Benefit Trust
During the year the Company repurchased 13,901,734 shares under its share
buyback programme at an average price of GBP 1.18 (USD 1.49), compared to
22,136,411 shares purchased in the year ended 31 December 2023 at GBP 1.28
(USD 1.60). These repurchased shares are held in treasury. The total value of
share repurchases for the year ended 31 December 2024, including commission on
shares purchased, amounted to GBP 16.3 million (USD 20.8 million).
At 31 December 2024 the Employee Benefit Trust ("EBT") held 5,820,086 shares
(31 December 2023: 9,104,431 shares). In December 2024 YTD, the number of
shares held in the EBT reduced due to satisfying the exercise of share options
by employees of the Group. During 2024, 617,167 share options were granted
(2023: 5,861,745), 3,294,083 share options were exercised (2023: 5,764,035)
and 805,312 share options were forfeited (2023: 1,702,436). During the period
15,160,084 ordinary shares held in treasury were cancelled. Following the
cancellation, the issued share capital of the Company is 273,500,000.
The number of shares held, and outstanding share options is as follows:
31 December 2024 31 December 2023
Number Number
Issued share capital 273,500,000 288,660,084
Shares held by the Employee Benefit Trust (5,820,086) (9,104,431)
Shares held in treasury (21,098,061) (22,356,411)
Share capital 246,581,853 257,199,242
Outstanding share options 7,874,972 11,357,200
Share capital plus outstanding share options 254,456,825 268,556,442
12. Changes in accounting policies and correction of errors
Restatements have been made to the financial statements at 31 December 2022
and for the year ended 31 December 2023 as described below. There are no
changes to taxation in respect of the restatements.
Classification of borrowings and reassessment of contingent consideration -
change in accounting policies (adjustment 1)
The consolidated statements of financial position at 31 December 2022 and for
the year ended 31 December 2023 have been restated in line with the amendments
to International Financial Statement IAS 1: Presentation of Financial
Statements ("IAS 1"), effective 1 January 2024.
Following the changes to IAS 1, amounts drawn from the Group's RCF, and all
prepaid finance costs, 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 as long
as the Group is still in compliance with its banking covenants. This change in
accounting policy has been applied retrospectively, with comparative figures
for 31 December 2022 and 31 December 2023 restated, i.e. borrowings of USD 5.0
million at 31 December 2022 and USD 18.6 million at 31 December 2023 have been
reclassified from current to non-current borrowings.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
12. Changes in accounting policies and correction of errors (continued)
The Group has also changed its policy in respect of the classification of
changes in fair value of contingent consideration in respect of business
combinations. Previously changes in the fair value of contingent consideration
were recognised within finance costs. The Group has changed its policy to
recognise such items within operating profit in instances where the fair value
is reassessed as a result of over or underperformance by the acquired entity
resulting in more, or less, consideration payable in relation to an earn-out.
This change in accounting policy provides reliable and more relevant
information on the nature of these transactions. Consequently, a credit of USD
2.8 million in the year ended 31 December 2023 has been reclassified from
finance costs to operating expenses (non-core expenses).
Contingent consideration - correction of errors (adjustment 2)
Fair value reassessments of contingent consideration after the finalisation of
their fair value, but within twelve months of the date of acquisition, were
previously accounted for as adjustments to goodwill, however, under IFRS 3,
such changes should be accounted for within the statement of comprehensive
income. To correct this, USD 2.1 million has been credited to non-core
operating costs within the statement of comprehensive income for the year
ended 31 December 2023, and goodwill increased by USD 2.1 million at 31
December 2023. There has also been an increase of USD 0.1 million to goodwill
in respect of foreign exchange differences which impacted the year ended 31
December 2023, with the corresponding credit recorded in the foreign exchange
translation reserve.
Contingent consideration should be reassessed at the end of each reporting
period, however management did not fully reassess the contingent consideration
at December 2023. Having now done so, based on the information available as at
31 December 2023, USD 2.1 million has been credited to non-core operating
costs in the statement of comprehensive income for the year ended 31 December
2023 to correct this error and reduce contingent consideration on the balance
sheet.
In line with IFRS 3, contingent consideration linked to the continued
employment of owners of acquired entities should be treated as remuneration
and charged to the statement of comprehensive income over the contingent
period. Previously the Group treated these payments as part of the acquisition
consideration for an acquired entity and included these amounts within
goodwill. To correct this error, in respect of the M.A. Aporia business
combination, goodwill has been reduced by USD 5.6 million at both 31 December
2022 and for the year ended 31 December 2023, and non-core operating costs
have increased by USD 3.6 million in the year ended 31 December 2023. The
impact for the unwinding of the discount on deferred consideration is a
reduction in finance costs of USD 0.2 million for the year ended 31 December
2023. The corresponding entries result in a decrease in deferred consideration
of USD 5.1 million and the recognition of a current liability relating to
contingent consideration treated as remuneration of USD 1.9 million as at 31
December 2023. The impact on retained earnings at 1 January 2023 is USD 1.1
million (current liabilities: USD 0.7 million and non-current liabilities USD
0.4 million) relating to contingent consideration treated as remuneration.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
12. Changes in accounting policies and correction of errors (continued)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended
Year ended Accounting policy changes 31 December
31 December (adjustment 1) Correction of errors 2023
2023 (adjustment 2) Restated
USD m USD m USD m USD m
Revenue 836.9 - - 836.9
Cost of sales (645.8) - - (645.8)
Net revenue/gross profit 191.1 - - 191.1
Operating expenses (144.3) 2.8 0.6 (140.9)
Share-based payment expenses (4.5) - - (4.5)
Operating profit 42.3 2.8 0.6 45.7
Adjusted EBITDA 96.4 - - 96.4
Depreciation of property, plant and equipment (3.3) - - (3.3)
Amortisation of intangible assets (38.1) - - (38.1)
Impairment of intangible assets (0.7) - - (0.7)
Non-core operating expenses (6.1) 2.8 0.6 (2.7)
Foreign exchange loss (1.4) - - (1.4)
Share-based payment expenses (4.5) - - (4.5)
Operating profit 42.3 2.8 0.6 45.7
Finance income 0.6 - - 0.6
Finance costs (13.6) (2.8) 0.2 (16.2)
Net finance costs (13.0) (2.8) 0.2 (15.6)
Profit before tax 29.3 - 0.8 30.1
Income tax (5.0) - - (5.0)
Profit after tax 24.3 - 0.8 25.1
Exchange differences on translation of foreign operations 4.7 - 0.1 4.8
Total comprehensive profit for the period 29.0 - 0.9 29.9
Earnings per share:
Basic (cents) 8.94 - 0.26 9.20
Diluted (cents) 8.63 - 0.26 8.89
Adjusted earnings - Basic (cents) 23.22 - 0.05 23.27
Adjusted earnings - Diluted (cents) 22.41 - 0.05 22.46
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
12. Changes in accounting policies and correction of errors (continued)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Accounting policy changes (adjustment 1) Correction of errors 31 December Accounting policy changes Correction of errors USD m 31 December
1 January 2023 USD m (adjustment 2) 1 January 2023 2023 USD m 2023
USD m USD m USD m USD m Restated
USD m
ASSETS
Non-current assets
Property, plant and equipment 1.8 - - 1.8 2.6 - - 2.6
Right-of-use assets 5.5 - - 5.5 4.6 - - 4.6
Intangible assets 134.2 - - 134.2 110.4 - - 110.4
Goodwill 213.7 - (5.6) 208.1 216.6 - (3.4) 213.2
Other non-current assets 0.3 - - 0.3 0.1 - - 0.1
Deferred tax assets 9.5 - - 9.5 12.8 - - 12.8
365.0 - (5.6) 359.4 347.1 - (3.4) 343.7
Current assets
Trade and other receivables 98.2 - - 98.2 106.4 - - 106.4
Inventory 0.6 - - 0.6 0.2 - - 0.2
Current tax assets - - - - 0.3 - - 0.3
Cash and bank balances 94.8 - - 94.8 92.7 - - 92.7
193.6 - - 193.6 199.6 - - 199.6
Total assets 558.6 - (5.6) 553.0 546.7 - (3.4) 543.3
EQUITY AND LIABILITIES
Equity
Share capital 0.3 - - 0.3 0.3 - - 0.3
Share premium 98.3 - - 98.3 - - - -
Merger relief reserve 5.3 - - 5.3 5.3 - - 5.3
Share-based payment reserve 24.1 - - 24.1 25.7 - - 25.7
Cash flow hedging reserve (0.2) - - (0.2) (0.2) - - (0.2)
Foreign exchange translation reserve (10.8) - - (10.8) (6.1) - 0.1 (6.0)
Retained earnings 50.0 - (1.1) 48.9 128.5 - (0.3) 128.2
Total equity 167.0 - (1.1) 165.9 153.5 - (0.2) 153.3
Non-current liabilities
Other payables 13.9 - (2.5) 11.4 5.8 - (1.3) 4.5
Lease liabilities 3.8 - - 3.8 3.2 - - 3.2
Deferred tax liabilities 30.2 - - 30.2 28.0 - - 28.0
Borrowings 145.9 5.0 - 150.9 147.7 18.6 - 166.3
Derivative financial instruments 0.2 - - 0.2 0.2 - - 0.2
194.0 5.0 (2.5) 196.5 184.9 18.6 (1.3) 202.2
Current liabilities
Trade and other payables and accruals 165.6 - (2.0) 163.6 153.4 - (1.9) 151.5
Current tax liabilities 24.7 - - 24.7 34.4 - - 34.4
Lease liabilities 1.9 - - 1.9 1.6 - - 1.6
Borrowings 5.3 (5.0) - 0.3 18.9 (18.6) - 0.3
Derivative financial instruments 0.1 - - 0.1 - - - -
197.6 (5.0) (2.0) 190.6 208.3 (18.6) (1.9) 187.8
Total liabilities 391.6 - (4.5) 387.1 393.2 - (3.2) 390.0
Total equity and liabilities 558.6 - (5.6) 553.0 546.7 - (3.4) 543.3
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
13. Subsequent events
A review of events subsequent to the balance sheet date up to the date that
the financial statements were issued was carried out and it was determined
that there were no such events requiring recognition or disclosure in the
financial statements.
12. Changes in accounting policies and correction of errors (continued)
CONSOLIDATED STATEMENT OF CASH FLOWS Year ended Accounting policy changes Correction of errors Year ended
31 December (adjustment 1) (adjustment 2) 31 December
2023 2023
Restated
USD m USD m USD m USD m
Cash flow from operating activities
Profit before taxation 29.3 - 0.8 30.1
Adjustments for:
Depreciation of property, plant and equipment 3.3 - - 3.3
Amortisation of intangible assets 38.1 - - 38.1
Impairment of intangible assets 0.7 - - 0.7
Finance costs (net) 13.0 2.8 (0.2) 15.6
Share-based payments 4.5 - - 4.5
Increase in trade and other receivables (8.5) - - (8.5)
Decrease in trade and other payables 0.2 (2.8) (3.4) (6.0)
Decrease in inventories 0.4 - - 0.4
Cash flow inflow/(outflow) from operating activities 81.0 - (2.8) 78.2
Income tax paid (5.6) - - (5.6)
Net cash flow inflow/(outflow) from operating activities 75.4 - (2.8) 72.6
Cash flow outflow from investing activities
Payments for property, plant and equipment (1.9) - - (1.9)
Payments for intangible assets (excluding domain assets) (8.3) - - (8.3)
Payments for intangible assets - domain name assets (3.3) - - (3.3)
Payments of deferred consideration (21.5) - 2.8 (18.7)
Acquisition of subsidiaries, net of cash acquired (2.3) - - (2.3)
Net cash flow from investing activities (37.3) - 2.8 (34.5)
Cash flow from financing activities
Drawdown of revolving credit facility 37.5 - - 37.5
Repayment of revolving credit facility (22.5) - - (22.5)
Bank finance arrangement fees (0.7) - - (0.7)
Payment of dividend to ordinary Shareholders (3.6) - - (3.6)
Repurchase of ordinary shares (39.7) - - (39.7)
Lease principal repayments (2.3) - - (2.3)
Interest paid (12.1) - - (12.1)
Net cash flow outflow from financing activities (43.4) - - (43.4)
Net decrease in cash and cash equivalents (5.3) - - (5.3)
Cash and cash equivalents at beginning of the year 94.8 - - 94.8
Exchange gains on cash and cash equivalents 3.2 - - 3.2
Cash and cash equivalents at end of the year 92.7 - - 92.7
GLOSSARY
The Group discloses and describes a number of alternative performance measures
and terms used in these financial statements. These are listed below:
Adjusted earnings per share
Adjusted earnings per share ('Adjusted EPS') is stated before amortisation and
impairment, non-core operating expenses, foreign exchange gains and losses,
share-based payment expenses and deferred tax to provide a widely used metric
that provides a more appropriate measure of the ongoing and underlying
earnings per share. Deferred tax mainly relates to items adjusted for within
amortisation.
Adjusted EBITDA
The Group reports adjusted earnings before interest, tax, depreciation,
amortisation and impairment, non-core operating expenses, foreign exchange
gains and losses and share-based payment expenses ('Adjusted EBITDA'). This
metric is widely used by internal and external stakeholders to assess the
underlying profitability of a company.
Adjusted EBITDA is considered to be tax jurisdiction, capital structure,
property plant and equipment asset and intangible asset agnostic, as well as
providing a more appropriate measure of ongoing and underlying profitability.
Adjusted operating cash conversion
Adjusted cash conversion refers to the percentage of Adjusted EBITDA that
converted into operating cash in the period. Operating cash flows are adjusted
for non-recurring working capital items, such as the settlement of acquisition
costs included within the balance sheet of acquired entities.
Net debt
The Group defines net debt as: gross cash, less bank debt and prepaid finance
costs, and adding/subtracting bank debt-related hedging assets/liabilities as
at the balance sheet date. The Group considers net debt an appropriate measure
to determine its overall financial position and is a widely used metric by
internal and external stakeholders to assess the solvency or liquidity of the
Group.
Non-core operating expenses
Non-core operating expenses are disclosed and described separately in the
consolidated financial statements where it is necessary to do so to provide
further understanding of the financial performance of the Group. They are
items of expense relating to projects that have been shown separately due to
the significance of their nature or amount, which are generally outside the
ordinary scope of business, are discretionary and non-recurring, and convey a
future benefit. Acquisition and integration expenses are the most relevant
items falling into this taxonomy.
Pro forma revenue
Non-GAAP information has been provided for period-to-period comparison of
revenue performance. Revenue for the entire comparative period is used,
irrespective of when the acquisition by the Group arose.
Revenue by geographical location of indirect consumer
There is a material difference between the geographical location of the
indirect consumer and the invoiced customer. The Group therefore discloses the
geographical location of both the indirect (end) consumer and the (direct)
invoiced party.
Revenue per domain year
Revenue generated from the sale of an internet domain divided by the licence
period (in years) of the internet domain sold.
Revenue per thousand sessions ('RPM')
Revenue generated for every thousand sessions or visits to a website.
Revenue per visitor session
Revenue generated from each visitor session to a website.
Top-Level Domain or 'TLD'
A top-level domain is one of the domains at the highest level in the Domain
Name System of the Internet. For example, in the domain name
'www.teaminternet.com', the top-level domain is .com
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