REG - Team Internet Group - Unaudited Q1 Financial Results to 31 March 2024
13/05/2024 07:00
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RNS Number : 0704O Team Internet Group PLC 13 May 2024
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
(mailto: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
(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) teami (mailto:teaminternet@secnewgate.co.uk) nterne
(mailto:teaminternet@secnewgate.co.uk) t@secnewgate.co.uk
(mailto: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
(http://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 Three months
31 March ended
2024 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 Unaudited
Three months Three months Audited
ended ended Year ended
31 March 31 March 31 December
2024 2023 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 Restated Restated
Unaudited Unaudited Audited
Three months Three months Year ended
ended ended 31 December
31 March 31 March 2023(*)
2024 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.
Equity attributable to owners
of the Parent Company
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share- based payments reserve USD m Foreign exchange translation reserve USD m
Merger relief reserve Cash flow hedging 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) 50.00 167.0
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.
Unaudited Unaudited Audited
Three months Three months ended Year ended
ended 31 March 31 December
31 March 2023 2023
CONSOLIDATED STATEMENT OF CASH FLOWS 2024
USD m USD m USD m
Cash flow from operating activities
Profit before taxation 7.1 4.3 29.3
Adjustments for:
Depreciation of property, plant and equipment 0.7 0.8 3.3
Amortisation and impairment of intangible assets 10.0 9.0 38.8
Finance costs (net) 4.0 3.4 13.0
Share-based payments 0.7 0.9 4.5
Decrease/(increase) in trade and other receivables 9.2 1.2 (8.5)
(Decrease)/increase in trade and other payables (14.9) (1.1) 0.2
Decrease/(increase) in inventories (0.1) 0.1 0.4
Cash flow generated from operations 16.7 18.6 81.0
Income tax paid (3.6) (0.8) (5.6)
Net cash flow generated from operating activities 13.1 17.8 75.4
Cash flow used in investing activities
Purchase of property, plant and equipment (0.8) (0.2) (1.9)
Purchase of intangible assets (1.8) (1.8) (8.3)
Payment of deferred consideration (0.5) - (21.5)
Acquisition of subsidiaries and related assets, net of cash acquired - (1.9) (5.6)
Net cash flow used in investing activities (3.1) (3.9) (37.3)
Cash flow used in financing activities
(Repayment)/drawdown of revolving credit facility (10.0) - 15.0
Bank finance arrangement fees - - (0.7)
Proceeds of issuance of ordinary shares (net) - - (3.6)
Repurchase of ordinary shares (11.5) (4.0) (39.7)
Lease principal repayments (0.5) (0.6) (2.3)
Bank loan capital repayments (0.1) (0.1) -
Interest paid (3.6) (2.8) (12.1)
Net cash flow used in financing activities (25.7) (7.5) (43.4)
Net (decrease)/increase in cash and cash equivalents (15.7) 6.4 (5.3)
Cash and cash equivalents at beginning of the period/year 92.7 94.8 94.8
Exchange (losses)/gains on cash and cash equivalents (1.5) 1.7 3.2
Cash and cash equivalents at end of the period/year 75.5 102.9 92.7
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 Unaudited
Three months ended Three months ended Audited
31 March 31 March Year ended
2024 2023 31 December
USD m USD m 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 Unaudited
Three months Three months Audited
ended ended Year ended
31 March 31 March 31 December 2023
2024 2023 USD m
USD m % 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 Unaudited
Three months Three months Audited
ended ended Year ended
31 March 31 March 31 December 2023
2024 2023 USD m
USD m % 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 Unaudited
Three months Three months Audited
ended ended Year ended
31 March 31 March 31 December 2023
2024 2023 USD m
USD m % 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 Unaudited Audited
Three months Three months Year ended
ended ended 31 December
31 March 31 March 2023
2024 2023 USD m
USD m 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 Unaudited Audited
Three months Three months Year ended
ended ended 31 December
31 March 31 March 2023
2024 2023 USD m
USD m 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 Unaudited Audited
Three months Three months Year ended
ended ended 31 December
31 March 30 March 2023
2024 2023 USD m
USD m 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 (4.0) (3.9) (15.9)
arising on derivatives classified as fair value hedges) - note 6
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 Unaudited
Three months Three months ended Audited
ended 31 March Year ended
31 March 2023 31 December
2024 USD m 2023
USD m 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:
Financial
Bank debt Cash 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 Unaudited Audited
31 March 31 March 31 December
2024 2023 2023
Number Number 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
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