Unaudited Interim Results to 30 June 2024
12/08/2024 07:00
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RNS Number : 9852Z Team Internet Group PLC 12 August 2024
12 August 2024
TEAM INTERNET GROUP PLC
("Team Internet" or the "Company" or the "Group")
UNAUDITED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024
Year-on-year growth in all key financial metrics including a 7% increase in
net revenue,
13% increase in operating profit and an 8% increase in profit before tax
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
six months ended 30 June 2024 ("H1 2024").
Financial summary:
● Organic gross revenue growth((i)) of approximately 9%, for the
trailing twelve months ended 30 June 2024 ("TTM 2024")
● Gross revenue increased by 3% to USD 409.7m (versus six months
ended 30 June 2023 ("H1 2023"): USD 396.4m)
● Net revenue (gross profit) increased by 7% to USD 97.7m (H1 2023:
USD 91.2m), with gross margin increasing from 23.0% to 23.8%, a relative 3.5%
uplift
● Adjusted EBITDA((ii)) increased by 4% to USD 46.6m (H1 2023: USD
44.6m), with EBITDA margin increasing from 11.3% to 11.4%, a relative 0.9%
uplift
● Operating profit increased by 13% to USD 22.9m (H1 2023
restated((iii)): USD 20.2m)
● Profit before tax increased by 8% to USD 14.4m (H1 2023: USD
13.3m)
● Profit after tax increased by 4% to USD 9.8m (H1 2023: USD 9.4m)
● Adjusted EPS (diluted) increased by 12% to USD 10.74 cents (H1
2023 restated((iii)): USD 9.63 cents)
● Net debt((iv)) of USD 109.9m (31 December 2023: USD 74.1m) and
leverage((v)) of 1.2x pro forma TTM 2024 EBITDA, following non-operating cash
outflows related to the initial cash outflow (net of cash acquired) for
acquisition of the Shinez for USD 31.8m, repurchase of own shares of USD 12.6m
and dividend payment of USD 7.2m
● Adjusted operating cash conversion of 87% (FY 2023: 96%), we
expect cash conversion to normalise nearer to 100% over the remainder of the
year
H1 highlights:
● In the Online Marketing segment, the number of visitor sessions
increased by 16% to 6.1 billion for TTM 2024 from 5.3 billion for the trailing
twelve-month period ended 30 June 2023 ("TTM 2023"). Revenue per thousand
sessions ("RPM") decreased by 12% from USD 100 to USD 88
● The Online Presence segment recorded organic revenue growth of 8%
in TTM 2024
● Adjusted EBITDA as a percentage of net revenue remains healthy at
48% for H1 2024 (H1 2023: 49%)
● On 26 April 2024, the Group acquired Shinez I.O. Ltd and its
subsidiaries (together "Shinez") for an initial cash consideration of USD
31.8m (net of cash acquired), a further USD 1.3m subject to completion of
operational milestones, and a further USD 4.3m retained to cover for customary
warranties and indemnification. The acquisition includes additional contingent
payments of up to USD 12.3m in cash, payable on Shinez achieving ambitious
financial targets over the next two years
● FY2023 final dividend of 2.0 pence per share paid on 28 May 2024
(FY2022: 1.0 pence per share), an increase of 100% as the Group continues to
pursue the progressive dividend policy launched in 2022
● On 10 April 2024, the Group announced that its ordinary shares
began trading on the OTCQX® Best Market ("OTCQX") under the symbol "TIGXF".
OTCQX is the premier tier of OTC Markets where more than 12,000 US and global
securities trade. Trading on OTCQX will significantly enhance Team Internet's
visibility and accessibility in the world's largest capital market
Post period end highlights:
● The Board intends to declare an interim dividend of 1.0 pence per
ordinary share, subject to bank approval per the conditions of the Company's
Facilities Agreement, which the Company expects to be granted. The Company
will provide details on the proposed dividend timetable shortly.
Outlook:
Team Internet has once again delivered a strong quarter, with growth in both
adjusted and statutory earnings. Although the Group prioritises earnings
growth over top-line growth, a robust 9% organic revenue growth has been
maintained on a pro forma basis for TTM 2024. Adjusted EBITDA conversion
remained healthy at 48% (H1 2023: 49%) of net revenue, demonstrating continued
strong profit margins.
The Directors remain confident in the Group's strategic investments in product
innovation, vertical integration, and international expansion. These
initiatives have positioned the Group for success. Given these strong
foundations, the Directors are confident that the Group will meet market
expectations for the full year.((vi))
Michael Riedl, CEO of Team Internet, commented: "Team Internet has delivered
another strong set of trading results for the first half of the year.
Year-on-year growth in trading results for Q2 2024 was slightly ahead of that
seen in Q1 2024, with growth across revenue, net revenue and adjusted EBITDA,
demonstrating momentum as we move into the second half of the year.
The addition of Shinez to the Group has introduced platform capability that
addresses the 'awareness' stage of the advertising funnel, complementing our
existing solutions: TONIC for 'consideration' and comparison platforms for
'conversion'. Our vision is to strategically integrate Shinez, TONIC and VGL
into a synergistic platform designed to enhance advertising revenue. By doing
so, we will drive future profitability through improved targeting, increased
RPM, and the accumulation of valuable first-party data."
Results presentation:
There will be a webinar/conference call for equity analysts at 10am BST today.
This event will be hosted by CEO Michael Riedl and CFO William Green.
Anybody wishing to register should contact 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.
((i))Pro forma revenue, adjusted for: acquired revenue, constant currency
foreign exchange impact and non-recurring revenues is USD 954m for TTM 2024
and at USD 878m for TTM 2023
((ii))Earnings before interest, tax, depreciation, amortisation, impairment,
non-core operating expenses, foreign exchange gains and losses, and
share-based payment expenses
((iii))Please see note 12 for further information
((iv))Includes cash (USD 86.2m), bank debt and prepaid finance costs (USD
197.0) and hedging assets (USD 0.9m) as of 30 June 2024 (31 December 2023 cash
(USD 92.7m), bank debt and prepaid finance costs (USD 166.6m) and hedging
liabilities (USD 0.2m))
( )((v))Includes Net Debt as defined under((iv))(a) excluding prepaid finance
costs, (b) plus guarantee obligations, and (c) plus the best estimate of any
crystallised deferred consideration payable in cash, all divided by pro forma
EBITDA, i.e. last twelve months' EBITDA including acquired entities' EBITDA on
a pro forma basis, and adjusted for rental expenses capitalised under IFRS 16
and non-core expenses
((vi))Latest analyst forecasts are within a range of USD 931m and USD 984m
for FY24 gross revenue and USD 105m and USD 115m for FY24 Adjusted EBITDA
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 / 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 / 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 in trading results, through a
combination of organic growth and the strong performance of businesses
acquired over the last several years.
Performance overview
The Group's key financial metrics are listed
below:
Six months
Six months ended ended
30 June 30 June
2024 2023
Restated* Change
USD m USD m %
Revenue 409.7 396.4 3%
Net revenue/gross profit 97.7 91.2 7%
Adjusted EBITDA 46.6 44.6 4%
Operating profit 22.9 20.2 13%
Adjusted operating cash conversion (note 9) 87% 94% n.m.
Profit after tax 9.8 9.4 4%
EPS - Basic (cents) 3.84 3.40 13%
EPS - Diluted (cents) 3.73 3.37 10%
EPS - Adjusted earnings - Basic (cents) (note 7) 11.07 9.72 14%
EPS - Adjusted earnings - Diluted (cents) (note 7) 10.74 9.63 12%
(*) Certain prior period figures are restated, please refer to note 12 for
further information.
Segmental analysis
Organic growth rates quoted below are calculated on a pro forma basis
including all of 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
Gross revenue increased by USD 8.1m, or 3%, from USD 304.4m to USD 312.5m,
with Net revenue increasing by 5% from USD 61.8m to USD 65.0m demonstrating
improved operating margins. Organic gross revenue grew at a rate of 9% for TTM
2024, driven by 16% growth in the number of consumer journeys, from 5.3
billion for TTM 2023 to 6.1 billion for TTM 2024. Click prices continue to be
under pressure on both the demand (revenue) and supply (cost of sales) side,
with RPM decreasing by 12% from USD 100 to USD 88((1)).
Our Online Marketing segment aims to become the leading Digital Audience
Matching platform. We match audiences and advertisers between platforms that
are not innately integrated, such as linking social media users with search ad
campaigns on leading search engines, programmatic display, and video ad
inventory. We also connect users starting their product search on search
engines with leading e-commerce platforms and their marketplace partners. In
line with our OM(2) - omni-media, omni-monetisation - vision, we continually
expand our network of digital audiences and demand sources. By harnessing the
power of artificial intelligence, we enhance the relevance and value of our
first-party data as we expand our international footprint.
The Group aims to leverage the Shinez platform to generate revenue from
previously unmonetised TONIC and VGL visitor sessions through programmatic
display and video advertising on a pay-per-view basis. In return, the
behavioural insights gathered from TONIC and VGL will enable Shinez to more
effectively connect advertisers with relevant audiences when viewing its
content. By doing so, we will drive future profitability through improved
targeting, increased RPM, and the accumulation of valuable first-party data.
Online Presence segment
Reported gross revenue in this segment increased by 6% from USD 92.0m in H1
2023 to USD 97.2m in H1 2024. Net revenue increased by 11% from USD 29.4m to
USD 32.7m, with much improved operating margins. Organic gross revenue growth
for the Online Presence segment was 8% for TTM 2024, continuing the
year-on-year 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 decreased by 3% from 13.8m
for TTM 2023 to 13.4m for TTM 2024, and the average revenue per domain year
increased by 13.3% from USD 10.5 to USD 11.9((2)).
The Online Presence segment empowers businesses and individuals worldwide to
create, maintain, and protect their digital identities, starting with a domain
name. This segment serves its global subscriber base through both direct and
indirect channels.
Michael Riedl
Chief Executive Officer
((1)) Based on analysis of c.81% of the Online Marketing segment which can be
adequately and reliably described by this KPI
((2)) 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 Six months Audited
Six months ended Year ended
ended 30 June 31 December
30 June 2023 2023
2024 Restated* Restated*
Note USD m USD m USD m
Revenue 4 409.7 396.4 836.9
Cost of sales (312.0) (305.2) (645.8)
Net revenue/gross profit 97.7 91.2 191.1
Operating expenses (73.5) (68.7) (140.9)
Share-based payment expenses (1.3) (2.3) (4.5)
Operating profit 22.9 20.2 45.7
Adjusted EBITDA((a)) 46.6 44.6 96.4
Depreciation of property, plant and equipment (1.3) (1.5) (3.3)
Amortisation and impairment of intangible assets (20.3) (18.5) (38.8)
Non-core operating expenses((b)) 5 (1.6) (0.5) (2.7)
Foreign exchange 0.8 (1.6) (1.4)
Share-based payment expenses (1.3) (2.3) (4.5)
Operating profit 22.9 20.2 45.7
Finance income 0.6 - 0.6
Finance costs (9.1) (6.9) (16.2)
Net finance costs 6 (8.5) (6.9) (15.6)
Profit before taxation 14.4 13.3 30.1
Income tax (4.6) (3.9) (5.0)
Profit after taxation 9.8 9.4 25.1
Exchange differences on translation of foreign operations (5.7) 0.9 4.8
Gain arising on changes in fair value of hedging instruments 1.1 0.9 -
Total comprehensive profit for the period 5.2 11.2 29.9
Earnings per share:
Basic (cents) 7 3.84 3.40 9.20
Diluted (cents) 7 3.73 3.37 8.89
Adjusted earnings - Basic (cents) 7 11.07 9.72 23.27
Adjusted earnings - Diluted (cents) 7 10.74 9.63 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, in line with Group policy.
(*) Certain prior period figures are restated, please refer to note 12 for
further information.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Unaudited Audited
Unaudited 30 June 31 December
30 June 2023 2023
2024 Restated(*) Restated(*)
Note USD m USD m USD m
ASSETS
Non-current assets
Property, plant and equipment 2.6 2.2 2.6
Right-of-use assets 4.7 4.7 4.6
Intangible assets 8 337.5 332.3 323.6
Other non-current assets 0.1 0.2 0.1
Deferred tax assets 14.5 10.2 12.8
Derivative financial instruments 0.9 0.7 -
360.3 350.3 343.7
Current assets
Trade and other receivables 117.1 94.2 106.7
Inventory 0.3 0.5 0.2
Derivative financial instruments - 0.7 -
Cash and bank balances 86.2 82.6 92.7
203.6 178.0 199.6
TOTAL ASSETS 563.9 528.3 543.3
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 27.4 26.4 25.7
Cash flow hedging reserve 0.9 0.7 (0.2)
Foreign exchange translation reserve (11.7) (9.9) (6.0)
Retained earnings 119.7 40.3 128.2
Total equity 141.9 161.4 153.3
Non-current liabilities
Other payables 5.6 7.2 4.5
Lease liabilities 3.2 3.2 3.2
Deferred tax liabilities 26.9 26.6 28.0
Borrowings 196.7 151.2 166.3
Derivative financial instruments - - 0.2
232.4 188.2 202.2
Current liabilities
Trade, other payables and accruals 187.7 176.7 185.9
Lease liabilities 1.6 1.7 1.6
Borrowings 0.3 0.3 0.3
189.6 178.7 187.8
TOTAL LIABILITIES 422.0 366.9 390.0
TOTAL EQUITY AND LIABILITIES 563.9 528.3 543.3
The financial statements on pages 1 to 20 were approved by the Board of
Directors and authorised for issue on 12 August 2024.
(*) Certain prior period figures are restated, please refer to note 12 for
further information.
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) 50.0 167.0
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 period - - - - - - 9.4 9.4
Translation of foreign operations - - - - - 0.9 - 0.9
Other comprehensive income - changes in fair value of hedging instruments - - - - 0.9 - - 0.9
Total comprehensive profit for the period - - - - 0.9 0.9 9.4 11.2
Dividends paid on equity shares - - - - - - (3.6) (3.6)
Repurchase of shares - - - - - - (14.4) (14.4)
Share-based payments - - - 1.4 - - - 1.4
Share-based payments - deferred tax - - - 0.9 - - - 0.9
Balance as at 30 June 2023 0.3 98.3 5.3 26.4 0.7 (9.9) 40.3 161.4
Profit for the period (restated, see note 12) - - - - - - 15.7 15.7
Translation of foreign operations (restated, see note 12) - - - - - 3.9 - 3.9
Other comprehensive income - changes in fair value of hedging instruments - - - - (0.9) - - (0.9)
Total comprehensive profit for the period - - - - (0.9) 3.9 15.7 18.7
Cancellation of shares - (98.3) - - - - 98.3 -
Repurchase of shares - - - - - - (26.1) (26.1)
Share-based payments - - - 1.8 - - - 1.8
Share-based payments - deferred tax - - - (2.5) - - - (2.5)
Balance as at 31 December 2023 0.3 - 5.3 25.7 (0.2) (6.0) 128.2 153.3
Profit for the period - - - - - - 9.8 9.8
Translation of foreign operations - - - - - (5.7) - (5.7)
Other comprehensive income - changes in fair value of hedging instruments - - - - 1.1 - - 1.1
Total comprehensive profit for the period - - - - 1.1 (5.7) 9.8 5.2
Dividends paid on equity shares - - - - - - (6.4) (6.4)
Repurchase of shares - - - - - - (11.9) (11.9)
Share-based payments - - - 0.5 - - - 0.5
Share-based payments - deferred tax - - - 1.2 - - - 1.2
Balance as at 30 June 2024 0.3 - 5.3 27.4 0.9 (11.7) 119.7 141.9
· 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
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December
CONSOLIDATED STATEMENT OF CASH FLOWS 2024 2023 2023
Restated(*) Restated(*)
USD m USD m USD m
Cash flow from operating activities
Profit before taxation 14.4 13.3 30.1
Adjustments for:
Depreciation of property, plant and equipment 1.3 1.5 3.3
Amortisation and impairment of intangible assets 20.3 18.5 38.8
Finance costs (net) 8.5 6.9 15.6
Share-based payments 1.3 2.3 4.5
(Increase)/decrease in trade and other receivables (10.4) 4.0 (8.5)
Increase/(decrease) in trade and other payables 1.2 (11.3) (6.0)
(Increase)/decrease in inventories (0.1) 0.1 0.4
Cash flow generated from operations 36.5 35.3 78.2
Income tax paid (5.1) (2.4) (5.6)
Net cash flow generated from operating activities 31.4 32.9 72.6
Cash flow used in investing activities
Purchase of property, plant and equipment (0.8) (0.8) (1.9)
Purchase of intangible assets (3.5) (3.8) (8.3)
Payment of deferred consideration (1.6) (15.2) (18.7)
Acquisition of subsidiaries and related assets, net of cash acquired (32.2) (2.1) (5.6)
Net cash flow used in investing activities (38.1) (21.9) (34.5)
Cash flow generated from/(used in) financing activities
Drawdown of revolving credit facility 30.0 - 15.0
Bank finance arrangement fees (0.1) (0.2) (0.7)
Payment of dividend to ordinary Shareholders(**) (7.2) (3.6) (3.6)
Repurchase of ordinary shares (12.6) (13.9) (39.7)
Lease principal repayments (1.0) (1.1) (2.3)
Bank loan capital repayments (0.2) (0.1) -
Interest paid (6.7) (6.0) (12.1)
Net cash flow generated from/(used in) financing activities 2.2 (24.9) (43.4)
Net decrease in cash and cash equivalents (4.5) (13.9) (5.3)
Cash and cash equivalents at beginning of the period 92.7 94.8 94.8
Exchange (losses)/gains on cash and cash equivalents (2.0) 1.7 3.2
Cash and cash equivalents at end of the period 86.2 82.6 92.7
(*) Certain prior period figures are restated, please refer to note 12 for
further information.
(**) Dividend paid of USD 7.2m is USD 0.8m greater than the dividend in the
consolidated statement of changes in equity of USD 6.4m. This is due to funds
advanced to the paying agent, which will be returned to the Group.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
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 (company number 08576358). 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 six months ended 30 June 2024 have been prepared
in accordance with the accounting policies outlined in the Group's 2023
statutory financial statements, except for the changes to IAS 1: Presentation
of Financial Statements effective 1 January 2024 and the classification of the
reassessment of contingent consideration in the income statement, and comply
with the disclosure requirements of IAS 34: Interim Financial Reporting. The
financial statements have been restated for the changes in accounting policies
and errors in respect of contingent consideration, please refer to note 12 for
further information.
The Group adopted the following new pronouncements during the period to 30
June 2024, which did not have a material impact on the Group's interim
financial statements:
• Amendment to IFRS 16 - Leases on sale and leaseback; and
• Amendment to IAS 7 and IFRS 7 - Supplier finance.
The unaudited financial results are condensed and do not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006. The
financial statements 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. These interim financial statements for the six-month period ended 30
June 2024 have been reviewed, not audited.
Going concern
The Directors have procedures in place to review the forecasts and budgets for
the going concern review period, which have been drawn up with appropriate
regard for the macroeconomic environment in which the Group operates,
particular circumstances influencing the domain name and online advertising
industry and the Group itself. These were prepared with reference to
historical and current industry knowledge, as well as contractual trading
activities and prospects that relate to the future strategy of the Group. As a
result, at the time of approving the financial statements, the Directors
consider that the Group has sufficient resources to continue in operational
existence for the foreseeable future, and that it is therefore appropriate to
adopt the going concern basis in the preparation of the financial statements.
As at 30 June 2024, the Group had access to over USD 136.2m of liquidity,
comprising cash and cash equivalents of USD 86.2m and access to an undrawn
Revolving Credit Facility (RCF) of USD 50.0 million. In considering whether
the Group's financial statements can be prepared on a going concern basis, the
Directors have reviewed the Group's business activities together with factors
likely to affect its performance, financial position and access to liquidity
(including consideration of financial covenants).
The Group has net current assets of USD 14.0m at 30 June 2024. Current
liabilities include USD 23.5m of liabilities not expected to result in a cash
outflow in the foreseeable future, comprising deferred revenue of USD 5.7m and
payments received on account from customers of USD 17.8m. Excluding these
liabilities, the Group has net current assets of USD 37.5m.
The Directors have, after careful consideration of the factors set out above,
concluded that it is appropriate to adopt the going concern basis for the
preparation of the financial statements, and the financial statements do not
include any adjustments that would result if the going concern basis was not
appropriate.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
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 reporting segments, Online Marketing and Online Presence.
Online Marketing is comprised of three operating segments which meet the
qualitative and quantitative thresholds for aggregation as one reporting
segment. Online Presence is comprised of one operating segment.
Our Online Marketing segment aims to become the leading Digital Audience
Matching platform, matching audiences and advertisers between platforms that
are not innately integrated. Our Online Presence segment enables business and
individuals globally to create, maintain and protect their digital identity
online, commencing the journey with a domain name. The Online Presence segment
is serving its global subscriber base through direct and indirect channels.
The Group's reporting segments performed as follows during the period:
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 June 30 June 31 December
2024 2023 2023
USD m USD m USD m
Online Marketing
Revenue 312.5 304.4 657.1
Cost of sales (247.5) (242.6) (525.4)
Net revenue/gross profit 65.0 61.8 131.7
Online Presence
Revenue 97.2 92.0 179.8
Cost of sales (64.5) (62.6) (120.4)
Net revenue/gross profit 32.7 29.4 59.4
Total revenue 409.7 396.4 836.9
Total cost of sales (312.0) (305.2) (645.8)
Total net revenue/gross profit 97.7 91.2 191.1
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
4. Revenue
The Group's revenue is generated indirectly from consumers located in the
following geographical areas:
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December 2023
2024 2023 USD m
USD m % USD m % %
Americas 182.9 45% 206.3 52% 444.5 53%
EMEA 198.9 48% 157.4 40% 326.2 39%
APAC 27.9 7% 32.7 8% 66.2 8%
409.7 100% 396.4 100% 836.9 100%
The Group's revenue is invoiced directly to the following geographical areas:
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December 2023
2024 2023 USD m
USD m % USD m % %
Americas 55.7 14% 44.9 11% 90.7 11%
EMEA 339.5 83% 334.9 85% 714.1 85%
APAC 14.5 3% 16.6 4% 32.1 4%
409.7 100% 396.4 100% 836.9 100%
On a reporting segment basis, the Group's revenue is invoiced directly to the
following geographical areas:
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December 2023
2024 2023 USD m
USD m % USD m % %
Online Marketing
Americas 16.1 4% 9.3 3% 20.5 3%
EMEA 292.4 71% 289.9 73% 626.5 75%
APAC 4.0 1% 5.2 1% 10.1 1%
312.5 76% 304.4 77% 657.1 79%
Online Presence
Americas 39.6 10% 35.6 9% 70.2 8%
EMEA 47.1 11% 45.0 11% 87.6 10%
APAC 10.5 3% 11.4 3% 22.0 3%
97.2 24% 92.0 23% 179.8 21%
Total revenue 409.7 100% 396.4 100% 836.9 100%
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
5. Non-core operating expenses
Unaudited Audited
Unaudited Six months Year ended
Six months ended 31 December
ended 30 June 2023
30 June 2023 Restated(*)
2024 Restated(*) USD m
USD m USD m
Acquisition costs 3.1 2.6 4.7
Reassessment of contingent consideration (2.4) (4.9) (7.0)
Total acquisition related costs/(income) 0.7 (2.3) (2.3)
Integration and streamlining costs 0.5 1.6 3.3
Other costs 0.4 1.2 1.7
Non-core operating expenses 1.6 0.5 2.7
* Certain prior period figures are restated, please refer to note 12 for
further information.
6. Net finance costs
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2023
2024 2023 Restated(*)
USD m Restated(*) USD m
USD m
Finance income (0.6) - (0.6)
Impact of unwinding of discount on net present value of deferred consideration 0.4 0.8 1.2
Amortisation of arrangement fees on borrowings 0.7 0.7 1.4
Interest on bank borrowings 7.4 6.1 13.5
Other interest 0.5 - -
Interest expense on leases 0.1 0.1 0.2
Gain arising on derivatives classified as fair value hedges - (0.8) (0.1)
Net finance costs 8.5 6.9 15.6
* Certain period figures are restated, please 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
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.
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December
2024 2023 2023 Restated*
USD m Restated* USD m
USD m
Profit after tax attributable to owners 9.8 9.4 25.1
Operating profit 22.9 20.2 45.7
Depreciation of property, plant and equipment 1.3 1.5 3.3
Amortisation and impairment of intangible assets 20.3 18.5 38.8
Non-core operating expenses 1.6 0.5 2.7
Foreign exchange (gain)/loss (0.8) 1.6 1.4
Share-based payment expenses 1.3 2.3 4.5
Adjusted EBITDA 46.6 44.6 96.4
Depreciation (1.3) (1.5) (3.3)
Net finance costs (excluding gains arising on derivatives classified as fair (8.5) (7.7) (15.7)
value hedges) - note 6
Current income tax (8.5) (8.5) (14.0)
Adjusted earnings 28.3 26.9 63.4
Weighted average number of shares:
Basic 255,427,532 276,168,951 272,131,265
Effect of dilutive potential ordinary shares 7,917,828 2,584,870 9,869,695
Diluted average number of shares 263,345,360 278,753,821 282,000,960
Earnings per share:
Basic (cents) 3.84 3.40 9.20
Diluted (cents) 3.73 3.37 8.89
Adjusted earnings - Basic (cents) 11.07 9.72 23.27
Adjusted earnings - Diluted (cents) 10.74 9.63 22.46
* Certain prior period figures are restated, please refer to note 12 for
further information.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
8. Intangible assets
Domain names Customer list Patents and trademarks Intellectual property
USD m Software USD m USD m Goodwill USD m Total
USD m USD m USD m
Cost or deemed cost
At 1 January 2023 43.3 58.9 101.1 10.2 217.4 4.5 435.4
Restatement (note 12) - - - - (5.6) - (5.6)
At 1 January 2023 (restated) 43.3 58.9 101.1 10.2 211.8 4.5 429.8
Additions 1.7 2.2 - - - 1.7 5.6
Exchange differences 0.4 0.4 1.3 - 1.3 0.1 3.5
At 30 June 2023 45.4 61.5 102.4 10.2 213.1 6.3 438.9
Amortisation and impairment
At 1 January 2023 11.7 25.3 42.7 2.3 3.6 1.9 87.5
Charge for the period 3.7 6.3 7.2 0.5 - 0.8 18.5
Exchange differences 0.2 0.1 0.2 - - 0.1 0.6
At 30 June 2023 15.6 31.7 50.1 2.8 3.6 2.8 106.6
Net book value
At 1 January 2023 (restated) 31.6 33.6 58.4 7.9 208.2 2.6 342.3
At 30 June 2023 29.8 29.8 52.3 7.4 209.5 3.5 332.3
Cost or deemed cost
At 1 July 2023 45.4 61.5 102.4 10.2 213.1 6.3 438.9
Additions 1.6 3.2 - - - 1.3 6.1
Acquisition of subsidiary - 0.5 0.6 - 1.3 - 2.4
Exchange differences 0.4 0.3 0.6 - 2.4 0.2 3.9
At 31 December 2023 47.4 65.5 103.6 10.2 216.8 7.8 451.3
Amortisation and impairment
At 1 July 2023 15.6 31.7 50.1 2.8 3.6 2.8 106.6
Charge for the period 4.0 6.6 7.4 0.4 - 1.2 19.6
Impairment - - - - - 0.7 0.7
Exchange differences - 0.3 0.5 - - - 0.8
At 31 December 2023 19.6 38.6 58.0 3.2 3.6 4.7 127.7
Net book value
At 1 July 2023 (restated) 29.8 29.8 52.3 7.4 209.5 3.5 332.3
At 31 December 2023 27.8 26.9 45.6 7.0 213.2 3.1 323.6
Cost or deemed cost
At 1 January 2024 47.4 65.5 103.6 10.2 220.2 7.8 454.7
Restatement (note 12) - - - - (3.4) - (3.4)
At 1 January 2024 (restated) 47.4 65.5 103.6 10.2 216.8 7.8 451.3
Additions 0.4 2.8 - - - 0.7 3.9
Acquisition of subsidiary - 7.0 15.3 - 9.3 4.3 35.9
Exchange differences (0.7) (0.6) (2.3) - (3.8) (0.3) (7.7)
At 30 June 2024 47.1 74.7 116.6 10.2 222.3 12.5 483.4
Amortisation and impairment
At 1 January 2024 19.6 38.6 58.0 3.2 3.6 4.7 127.7
Charge for the period 3.9 7.4 7.4 0.5 - 1.1 20.3
Exchange differences (0.3) (0.6) (1.0) - - (0.2) (2.1)
At 30 June 2024 23.2 45.4 64.4 3.7 3.6 5.6 145.9
Net book value
At 1 January 2024 (restated) 27.8 26.9 45.6 7.0 213.2 3.1 323.6
At 30 June 2024 23.9 29.3 52.2 6.5 218.7 6.9 337.5
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:
Unaudited Unaudited Audited
Six months Six months ended Year ended
ended 30 June 31 December
30 June 2023 2023
2024 USD m Restated(*)
USD m USD m
Cash conversion
Cash flow from operations 36.5 35.3 78.2
Non-core costs incurred and paid during the period 2.2 3.2 6.1
Change in working capital due to non-recurring working capital items 1.9 3.4 8.3
Adjusted cash flow from operations 40.6 41.9 92.6
Adjusted EBITDA 46.6 44.6 96.4
Adjusted operating cash conversion % 87% 94% 96%
* Certain prior period figures are restated, please refer to note 12 for
further information.
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)
Capital repayments 0.1 (0.1) - -
Prepaid finance cost additions 0.2 (0.2) - -
Amortisation of prepaid finance costs (0.6) - - (0.6)
Mark-to-market revaluation - - 0.9 0.9
Other cash movements - (13.6) - (13.6)
Foreign exchange differences - 1.7 - 1.7
At 30 June 2023 (151.5) 82.6 0.7 (68.2)
Drawdown of revolving credit facility (15.0) 15.0 - -
Capital repayments 0.2 (0.2) - -
Prepaid finance cost additions 0.5 (0.5) - -
Amortisation of prepaid finance costs (0.8) - - (0.8)
Mark-to-market revaluation - - (0.9) (0.9)
Other cash movements - (5.7) - (5.7)
Foreign exchange differences - 1.5 - 1.5
At 31 December 2023 (166.6) 92.7 (0.2) (74.1)
Drawdown of revolving credit facility (30.0) 30.0 - -
Capital repayments 0.2 (0.2) - -
Amortisation of prepaid finance costs (0.7) - - (0.7)
Prepaid finance costs 0.1 (0.1)
Mark-to-market revaluation - - 1.1 1.1
Acquisition of Shinez (initial cash consideration, net of cash acquired) - (31.8) - (31.8)
Other cash movements - (2.4) - (2.4)
Foreign exchange differences - (2.0) - (2.0)
At 30 June 2024 (197.0) 86.2 0.9 (109.9)
The Group's drawn-down RCF of USD 50.0m (31 December 2023: USD 20.0m, 30 June
2023: USD 5.0m) 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
Acquisition of 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
from its current shareholders.
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 ourfashiontrends.com,
falafelandcaviar.com and travelerdreams.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 41.8m, 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 consideration of up to
USD 12.3m will be due subject to Shinez achieving ambitious financial targets
over the next two years, payable in cash. As the USD 12.3m of contingent
payments is also contingent on continued employment of the shareholders, the
fair value of this consideration will be charged to the income statement
within non-core expenses as remuneration, and is therefore not included within
consideration in the table below.
Total consideration payable in the table below of USD 42.5m comprises the
enterprise value of USD 41.8m, less discounting of deferred consideration of
USD 0.7m, plus working capital adjustments totalling USD 1.4m. Initial cash
consideration, net of cash acquired, is USD 31.8m (USD 37.6m of initial cash
consideration, less cash acquired of USD 5.8m).
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. The fair values of the acquired assets and liabilities
are provisional pending completion of the purchase price allocation as
required under IFRS 3: Business combinations ("IFRS 3").
USD m
Initial cash consideration (adjusted for cash and working capital) 37.6
Consideration contingent on completion of operational milestones 1.3
Deferred consideration (USD 4.3m discounted to present value) 3.6
Total consideration 42.5
Fair values recognised on acquisition
Assets
Customer list 15.3
Software 7.0
Intellectual property 4.3
Trade and other receivables 14.6
Deferred tax asset 0.3
Corporation tax receivable 0.3
Cash and cash equivalents 5.8
47.6
Liabilities
Trade payables 8.2
Other current liabilities 3.0
Deferred tax liability 3.2
14.4
Total identifiable estimated net assets at fair value 33.2
Goodwill arising on acquisition 9.3
Purchase consideration 42.5
For the period post acquisition to 30 June 2024, revenues of USD 10.7m,
adjusted EBITDA of USD 0.1m and a post tax loss of USD 0.6m, including
amortisation of acquired intangibles, have been generated by Shinez. If the
acquisition had been made on 1 January 2024 the contribution to the Group's
results, for the six months ended 30 June 2024, would have been revenues of
USD 39.3m, adjusted EBITDA of USD 1.2m and a profit after tax of USD nil,
including amortisation 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.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
10. Business combinations (continued)
Deferred consideration payments
During the six-month period ended 30 June 2024 the following deferred
consideration payments were made:
· The final deferred cash consideration payment of USD 0.1m was
made for the acquisition of NameAction in January 2024
· The final deferred cash consideration payment of EUR 1.0m (USD
1.1m) for the acquisition of SK-NIC was made in two instalments: EUR 0.4m (USD
0.4m) on March 2024 and EUR 0.6m (USD 0.7m) on May 2024
· A deferred cash consideration payment of USD 0.4m for the
acquisition of Shinez I.O. Ltd was made on June 2024 in respect of operational
milestones achieved
11. Share buyback programme and Employee Benefit Trust
During the period, the Company repurchased 7,074,384 shares under its share
buyback programme at an average share price of GBP 1.34 (FY2023: 22,136,411
shares at a share price of GBP 1.27). These shares are held in treasury by the
Company. The total share repurchase in H1 2024 is USD 11.9m.
At 30 June 2024 the Employee Benefit Trust ("EBT") held 7,532,894 shares (31
December 2023: 9,104,431 shares, 30 June 2023: 10,115,916 shares). In H1 2024,
the number of shares held in the EBT reduced due to satisfying the exercise of
share options by employees of the Group. During H1 2024, 546,551 share options
were granted, 1,555,964 share options were exercised and 614,676 share options
were forfeited.
The number of shares held, and outstanding share options is as follows:
Unaudited Unaudited Audited
30 June 30 June 31 December
2024 2023 2023
Number Number Number
Issued share capital 287,900,000 288,660,084 288,660,084
Shares held by the Employee Benefit Trust (7,532,894) (10,115,916) (9,104,431)
Shares held in Treasury (29,430,795) (5,898,850) (22,356,411)
Share capital 250,936,311 272,645,318 257,199,242
Outstanding share options 9,733,111 13,608,065 11,357,200
Share capital plus outstanding share options 260,669,422 286,253,383 268,556,442
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
12. Changes in accounting policies and correction of errors
Restatements have been made to the financial statements for the periods ended
31 December 2023 and 30 June 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
The consolidated statements of financial position at 31 December 2023 and at
30 June 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 2023 and 30 June 2023 restated, i.e. borrowings of USD 18.6m
at 31 December 2023 and of USD 3.6m at 30 June 2023 have been reclassified
from current to non-current borrowings.
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
2.8m in the six-month period ended 30 June 2023, and in the year ended 31
December 2023, has been reclassified from finance costs to operating expenses
(non-core expenses).
Contingent consideration - correction of errors
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. Under IFRS 3, such
changes should be accounted for within the income statement. To correct this,
USD 2.1m has been credited to operating costs (non-core expenses) within the
income statement in the six-month period ended 30 June 2023, and in the year
ended 31 December 2023. Goodwill has increased by USD 2.7m at 30 June 2023 and
USD 2.1m at 31 December 2023. Accrued contingent consideration increased by
USD 0.5m at 30 June 2023. There has also been an increase of USD 0.1m to
goodwill in respect of foreign exchange differences which impacted the year
ended 31 December 2023 related to these adjustments, six-month period ended 30
June 2023 USD nil.
Contingent consideration should be reassessed at the end of each reporting
period. 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, a further USD 2.1m has been credited to operating costs
(non-core expenses) in the income statement for the year ended 31 December
2023 to correct this error and reduce the contingent consideration.
In line with IFRS 3, contingent consideration linked to the continued
employment of owners of acquired entities should be treated as remuneration,
charged to the income statement 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. Consequently, in
respect of one business combination, goodwill has been reduced by USD 5.6m at
both 30 June 2023 and 31 December 2023, and operating costs (non-core
expenses) have increased by USD 3.6m in the year ended 31 December 2023 (of
which USD 2.2m relates to six-month period ended 30 June 2023). The impact on
finance costs for the unwinding of the discount of deferred consideration is a
reduction in finance costs of USD 0.2m for the year ended 31 December 2023 (of
which USD 0.1m relates to the six-month period ended 30 June 2023). Deferred
consideration decreased by USD 5.1m at 31 December 2023 and USD 5.6m at 30
June 2023. Accruals in respect of contingent consideration treated as
remuneration of USD 1.9m have been recognised at 31 December 2023 (30 June
2023: USD 3.3m). The impact on retained earnings at 1 January 2023 is USD 1.1m
comprising contingent consideration treated as remuneration.
Impact on earnings per share
Earnings per share for the year ended 31 December 2023 have been impacted by
the adjustments described above; there is no impact from the above adjustments
for earnings per share for the period ended 30 June 2023.
In line with the audited 31 December 2023 financial statements, adjusted
earnings per share for 30 June 2023 have been restated to exclude deferred
tax, which mainly relates to items adjusted for within amortisation.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
12. Changes in accounting policies and correction of errors (continued)
The consolidated statement of comprehensive income, consolidated statement of
financial position and consolidated statement of cash flows have been restated
as follows:
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Unaudited Unaudited
Six months Six months Audited
ended ended Audited Year ended
30 June Accounting policy changes 30 June Year ended Accounting policy changes 31 December
2023 Correction of errors 2023 31 December Correction of errors 2023
Restated 2023 Restated
USD m USD m USD m USD m USD m USD m USD m USD m
Revenue 396.4 - - 396.4 836.9 - - 836.9
Cost of sales (305.2) - - (305.2) (645.8) - - (645.8)
Net revenue/gross profit 91.2 - - 91.2 191.1 - - 191.1
Operating expenses (71.4) 2.8 (0.1) (68.7) (144.3) 2.8 0.6 (140.9)
Share-based payment expenses (2.3) - (2.3) (4.5) - (4.5)
Operating profit 17.5 2.8 (0.1) 20.2 42.3 2.8 0.6 45.7
Adjusted EBITDA 44.6 - - 44.6 96.4 - - 96.4
Depreciation of property, plant and equipment (1.5) - - (1.5) (3.3) - - (3.3)
Amortisation and impairment of intangible assets (18.5) - - (18.5) (38.8) - - (38.8)
Non-core operating expenses (3.2) 2.8 (0.1) (0.5) (6.1) 2.8 0.6 (2.7)
Foreign exchange loss (1.6) - - (1.6) (1.4) - - (1.4)
Share-based payment expenses (2.3) - - (2.3) (4.5) - - (4.5)
Operating profit 17.5 2.8 (0.1) 20.2 42.3 2.8 0.6 45.7
Finance income - - - 0.6 - - 0.6
Finance costs (4.2) (2.8) 0.1 (6.9) (13.6) (2.8) 0.2 (16.2)
Net finance costs (4.2) (2.8) 0.1 (6.9) (13.0) (2.8) 0.2 (15.6)
Profit before tax 13.3 - - 13.3 29.3 - 0.8 30.1
Income tax (3.9) - - (3.9) (5.0) - - (5.0)
Profit after tax 9.4 - - 9.4 24.3 - 0.8 25.1
Exchange differences on translation of foreign operations 0.9 - - 0.9 4.7 - 0.1 4.8
Gain arising on changes in fair value of hedging instruments 0.9 - - 0.9 - - - -
Total comprehensive profit for the period 11.2 - - 11.2 29.0 - 0.9 29.9
Earnings per share:
Basic (cents) 3.40 - - 3.40 8.94 - 0.26 9.20
Diluted (cents) 3.37 - - 3.37 8.63 - 0.26 8.89
Adjusted earnings - Basic (cents) 11.37 (1.65) - 9.72 23.22 - 0.05 23.27
Adjusted earnings - Diluted (cents) 11.26 (1.63) - 9.63 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 Correction of errors Unaudited Accounting policy changes Correction of errors Audited
Unaudited 30 June Audited 31 December
30 June 2023 31 December 2023
2023 Restated 2023 Restated
USD m USD m USD m USD m USD m USD m USD m USD m
ASSETS
Non-current assets
Property, plant and equipment 2.2 - - 2.2 2.6 - - 2.6
Right-of-use assets 4.7 - - 4.7 4.6 - - 4.6
Intangible assets 335.2 - (2.9) 332.3 327.0 - (3.4) 323.6
Deferred receivables 0.2 - - 0.2 0.1 - - 0.1
Deferred tax assets 10.2 - - 10.2 12.8 - - 12.8
Derivative financial instruments 0.7 - - 0.7 - - - -
353.2 - (2.9) 350.3 347.1 - (3.4) 343.7
Current assets
Trade and other receivables 94.2 - - 94.2 106.7 - - 106.7
Inventory 0.5 - - 0.5 0.2 - - 0.2
Derivative financial instruments 0.7 - - 0.7 - - - -
Cash and bank balances 82.6 - - 82.6 92.7 - - 92.7
178.0 - - 178.0 199.6 - - 199.6
Total assets 531.2 - (2.9) 528.3 546.7 - (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 payments reserve 26.4 - - 26.4 25.7 - - 25.7
Cash flow hedging reserve 0.7 - - 0.7 (0.2) - - (0.2)
Foreign exchange translation reserve (9.9) - - (9.9) (6.1) - 0.1 (6.0)
Retained earnings 41.4 - (1.1) 40.3 128.5 - (0.3) 128.2
Total equity 162.5 - (1.1) 161.4 153.5 - (0.2) 153.3
Non-current liabilities
Other payables 8.4 - (1.2) 7.2 5.8 - (1.3) 4.5
Lease liabilities 3.2 - - 3.2 3.2 - - 3.2
Deferred tax liabilities 26.6 - - 26.6 28.0 - - 28.0
Borrowings 147.6 3.6 - 151.2 147.7 18.6 - 166.3
Derivative financial instruments - - - - 0.2 - - 0.2
185.8 3.6 (1.2) 188.2 184.9 18.6 (1.3) 202.2
Current liabilities
Trade and other payables and accruals 177.3 - (0.6) 176.7 187.8 - (1.9) 185.9
Lease liabilities 1.7 - - 1.7 1.6 - - 1.6
Borrowings 3.9 (3.6) - 0.3 18.9 (18.6) - 0.3
182.9 (3.6) (0.6) 178.7 208.3 (18.6) (1.9) 187.8
Total liabilities 368.7 - (1.8) 366.9 393.2 - (3.2) 390.0
Total equity and liabilities 531.2 - (2.9) 528.3 546.7 - (3.4) 543.3
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (continued)
12. Changes in accounting policies and correction of errors (continued)
Unaudited Accounting policy changes Correction of errors Unaudited Audited Accounting policy changes Correction of errors Audited
Six months Six months Year ended Year ended
ended ended 31 December 31 December
CONSOLIDATED STATEMENT OF CASH FLOWS 30 June 30 June 2023 2023
2023 2023 Restated
Restated
USD m USD m USD m USD m USD m USD m USD m USD m
Cash flow from operating activities
Profit before taxation 13.3 - - 13.3 29.3 - 0.8 30.1
Adjustments for:
Depreciation of property, plant and equipment 1.5 - - 1.5 3.3 - - 3.3
Amortisation and impairment of intangible assets 18.5 - - 18.5 38.8 - - 38.8
Finance costs (net) 4.2 2.8 (0.1) 6.9 13.0 2.8 (0.2) 15.6
Share-based payments 2.3 - - 2.3 4.5 - - 4.5
Decrease/(increase) in trade and other receivables 4.0 - - 4.0 (8.5) - - (8.5)
(Decrease)/increase in trade and other payables (8.6) (2.8) 0.1 (11.3) 0.2 (2.8) (3.4) (6.0)
Decrease in inventories 0.1 - - 0.1 0.4 - - 0.4
Cash flow generated from operations 35.3 - - 35.3 81.0 - (2.8) 78.2
Income tax paid (2.4) - - (2.4) (5.6) - - (5.6)
Net cash flow generated from operating activities 32.9 - - 32.9 75.4 - (2.8) 72.6
Cash flow used in investing activities
Purchase of property, plant and equipment (0.8) - - (0.8) (1.9) - - (1.9)
Purchase of intangible assets (3.8) - - (3.8) (8.3) - - (8.3)
Payment of deferred consideration (15.2) - - (15.2) (21.5) - 2.8 (18.7)
Acquisition of subsidiaries and related assets, net of cash acquired (2.1) - - (2.1) (5.6) - - (5.6)
Net cash flow used in investing activities (21.9) - - (21.9) (37.3) - 2.8 (34.5)
Cash flow used in financing activities
Drawdown of revolving credit facility - - - - 15.0 - - 15.0
Bank finance arrangement fees (0.2) - - (0.2) (0.7) - - (0.7)
Proceeds of issuance of ordinary shares (net) (3.6) - - (3.6) (3.6) - - (3.6)
Repurchase of ordinary shares (13.9) - - (13.9) (39.7) - - (39.7)
Lease principal repayments (1.1) - - (1.1) (2.3) - - (2.3)
Bank loan capital repayments (0.1) - - (0.1) - - - -
Interest paid (6.0) - - (6.0) (12.1) - - (12.1)
Net cash flow used in financing activities (24.9) - - (24.9) (43.4) - - (43.4)
Net decrease in cash and cash equivalents (13.9) - - (13.9) (5.3) - - (5.3)
Cash and cash equivalents at beginning of the period 94.8 - - 94.8 94.8 - - 94.8
Exchange gains on cash and cash equivalents 1.7 - - 1.7 3.2 - - 3.2
Cash and cash equivalents at end of the period 82.6 - - 82.6 92.7 - - 92.7
13. Subsequent events
The Board intends to declare an interim dividend of 1.0 pence per ordinary
share, subject to bank approval per the conditions of the Company's Facilities
Agreement, which the Company expects to be granted. The Company will provide
details on the proposed dividend timetable shortly.
Independent review report to Team Internet Group Plc
Report on the consolidated interim financial statements for the six-month
period ended 30 June 2024
Our conclusion
We have reviewed Team Internet Group Plc's consolidated interim financial
statements (the "interim financial statements") for the six-month period ended
30 June 2024 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the AIM Rules for Companies.
The interim financial statements comprise:
· the consolidated statement of financial position as at
30 June 2024;
· the consolidated statement of comprehensive income for the period
then ended;
· the consolidated statement of cash flows for the period then
ended;
· the consolidated statement of changes in equity for the period
then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements have been prepared in accordance with
UK-adopted International Accounting Standard 34, 'Interim Financial Reporting'
and the AIM Rules for Companies.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The interim financial statements are the responsibility of, and have been
approved by the directors. The directors are responsible for preparing the
interim financial statements in accordance with the AIM Rules for Companies
which require that the financial information must be presented and prepared in
a form consistent with that which will be adopted in the company's annual
financial statements. In preparing the interim financial statements, the
directors are responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend
to liquidate the group or to cease operations, or have no realistic
alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements based on our review. Our conclusion, including our Conclusions
relating to going concern, is based on procedures that are less extensive than
audit procedures, as described in the Basis for conclusion paragraph of this
report. This report, including the conclusion, has been prepared for and only
for the company for the purpose of complying with the AIM Rules for Companies
and for no other purpose. We do not, in giving this conclusion, accept or
assume responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
12 August 2024
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.
Organic revenue growth
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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