REG - Team Internet Group - FY 2024 Trading Update

Team InternetAnnouncement

04/02/2025 07:15

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RNS Number : 7489V  Team Internet Group PLC  04 February 2025

4 February 2025

 

Team Internet Group plc

("Team Internet" or the "Company", or the "Group")

 

FY 2024 Trading Update   

Record operating cash flow, balanced earnings composition and new enhanced
reporting segments

 

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, announces its trading update for the full year 2024.

 

For the financial year 2024, the Company expects to report gross revenue of
c.USD 803 million (2023: USD 837 million), net revenue (gross profit) of
c.USD 188 million (2023: USD 191 million) and adjusted EBITDA(1) of c.USD 92
million (2023: USD 96 million).

 

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:

 12 months to 31 Dec                         2024         2023         Growth
                                             USD million  USD million  %
 Domains, Identity & Software (DIS) (A)
 Revenue                                     203          189          7%
 Net revenue                                 74           68           9%
 Adjusted EBITDA                             19           13           46%
 Comparison (B)
 Revenue                                     63           44           43%
 Net revenue                                 23           16           44%
 Adjusted EBITDA                             17           9            89%
 Search (c)
 Revenue                                     537          604          (11%)
 Net revenue                                 91           107          (15%)
 Adjusted EBITDA                             56           74           (24%)

 Total
 Revenue                                     803          837          (4%)
 Net revenue                                 188          191          (2%)
 Adjusted EBITDA                             92           96           (4%)

 

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

 

Key Operational Updates

Domains, Identity & Software (DIS)

DIS delivered above-market revenue growth of 7%, with expanding margins
driving a 9% increase in net revenue and a 46% improvement in EBITDA,
showcasing efficiency gains and operational leverage. As part of our strategy,
Team Internet has consolidated its subscription-based platforms and
Software-as-a-Service (SaaS) businesses into a streamlined offering.

Comparison

Our Comparison segment demonstrated exceptional performance, with revenue
growth of 43% and EBITDA increasing by 89% year-on-year. The segment benefits
from our AI-native platform, which has enabled faster internationalisation,
including new launches in Italy, Spain, and a relaunch in France between
mid-October and today. More country launches are scheduled for the current
year.

Search

As previously announced, the Search segment faced a challenging market in the
second half of 2024, leading to a 15% contraction in net revenue. Despite
these headwinds continuing, the Group has prioritised improved customer
experience and brand trust over volume growth to strengthen long-term
sustainability.

 

Capital Allocation and Financial Position

 

Net Debt(2) was c.USD 97 million as at 31 December 2024 compared to USD 74
million as at 31 December 2023. This is after the impact of:

·    USD 21 million of share repurchases;

·    USD 10 million payments of dividends; and

·    USD 32 million of acquisition consideration, net of cash acquired,
during 2024.

 

Pertaining to the latter, the Group expects to record a non-cash impairment
charge in respect of the acquisition of Shinez I.O Ltd. ("Shinez") in its
audited FY 2024 accounts. Legal action against the sellers of Shinez is
ongoing. The restructuring plan for Shinez, which is now under new management,
includes transitioning Shinez' business model from text-based to short-form
video, aligning with consumer trends.

 

Adjusted operating cash flow reached a record high of c.USD 95 million (2023:
USD 93 million) representing an adjusted operating cash conversion of 103%,
reflecting prudent management of working capital.

CEO, Michael Riedl, stated,

"We are reflecting on a year of significant developments for Team Internet.
Despite modest contractions in Group revenue and EBITDA, we ended the year
with record operating cash flow and the most balanced earnings composition in
our history. This underscores the resilience and potential of our diversified
business model.

Our DIS segment achieved above-market growth, while our Comparison segment
showcased extraordinary results, driven by our cutting-edge AI-native
platform. We are confident that our Search division's transition into a more
content-rich consumer experience will ultimately set up the division for
sustainable long-term growth.

Looking forward, we remain committed to delivering sustainable earnings growth
and shareholder returns through disciplined capital allocation, including
dividends and share buybacks. We are well-positioned to capitalise on growth
opportunities across all segments."

 

(1) Earnings before interest, tax, depreciation, amortisation, impairment,
non-core operating expenses, foreign exchange gains and losses and share-based
payment expenses. 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.

(2) Includes gross cash, interest-bearing debt, prepaid finance costs and
debt-related hedging assets/liabilities.

 

Note

As announced earlier today, Verdane Fund Manager AB is now required either to
announce a firm intention to make an offer for Team Internet Group plc or to
announce that it does not intend to make an offer by no later than 5.00
p.m. (London time) on 4 March 2025. Further announcements will be made as
appropriate.

 

For further information:

 Team Internet Group Plc                                                      via SEC Newgate

 Michael Riedl, Chief Executive Officer

 William Green, Chief Financial Officer

 HSBC Bank plc (Financial Adviser)                                           +44 (0) 20 7991 8888

 Christopher Fincken / Andrew Owens

 Alina Vaskina (Corporate Broking)
 Zeus (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                                      +44 (0) 20 3207 7800
 Mecklenburg-Solodkoff
 SEC Newgate (for Media)                                                     +44 (0) 203 757 6880

 Bob Huxford / Tom Carnegie / Harry Handyside                                teaminternet@secnewgate.co.uk

About Team Internet Group plc

Team Internet (AIM: TIG) creates meaningful and successful connections from
businesses to domains, brands to consumers, publishers to advertisers,
enabling everyone to realise their digital ambitions. The Company is a leading
global internet solutions company that operates in two highly attractive
markets: domain name management 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)

 

Appendix: Profit forecasts

Team Internet Profit Estimate for FY 2024

 

1.1.  The guidance in relation to FY 2024 included in this announcement
constitutes an ordinary course profit estimate ("FY 2024 Profit Estimate") for
the purposes of the City Code on Takeovers and Mergers (the "Code"):

 

1.2.  Basis of preparation

 

The basis of accounting used for the FY 2024 Profit Estimate is consistent
with the Group's existing accounting policies, which are in accordance with
UK-adopted International Accounting Standards and in accordance with the
Companies Act 2006 and the accounting policies which were applied in the
preparation of the Group's financial statements for the year ended 31 December
2023.

 

Although the financial period to which the FY 2024 Profit Estimate relates has
been completed, the Company's audited accounts for the year ended 31 December
2024 are not available as at the date of this trading update. Accordingly, the
FY 2024 Profit Estimate is based on the Company's unaudited interim results
for the nine months ended 30 September 2024 and the Company's unaudited
management accounts for the three months ended 31 December 2024.

 

1.3.  Principal assumptions

 

1.4.  In confirming the FY 2024 Profit Estimate remains valid, the directors
of Team Internet have made the following principal assumptions in respect of
the financial year ending 31 December 2024:

 

Factors outside the influence or control of the Company

 

•        there will be no retrospective change in legislation or
regulatory requirements that will have a material impact on the Company's
operations.

 

Factors both outside and within the influence or control of the Company

 

•        no events will arise between the date of this trading update
and the date on which the Company announces its audited results for the
financial year ended 31 December 2024, which would require incorporation in
the FY 2024 results in accordance with UK-adopted International Accounting
Standards and/or the Company's accounting policies.

 

 

1.5.  Directors' confirmation

 

The Directors confirm that the FY 2024 Profit Estimate remains valid and that
it has been properly compiled on the basis of the principal assumptions stated
above and that the basis of accounting used is consistent with Team Internet's
accounting policies set out above.

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