TIDMTIG
RNS Number : 1633T
Team Internet Group PLC
13 November 2023
13 November 2023
TEAM INTERNET GROUP PLC
("Team Internet" or the "Company" or the "Group")
UNAUDITED FINANCIAL RESULTS FOR THE NINE MONTHSED 30 SEPTEMBER
2023
Continued delivery with 16% year-on-year increase in Revenue,
11% rise in Adjusted EBITDA,
and a confident outlook for FY23
Team Internet Group Plc (AIM: TIG), 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 nine months ended 30 September 2023
("September 2023 YTD").
September 2023 YTD Financial Summary:
-- Gross revenue increased by 16% to USD 611.7m (nine months
ended September 2022 ("September 2022 YTD"): USD 526.7m)
-- Organic revenue growth(*) for the trailing twelve months
ended 30 September 2023 ("TTM 2023") of approximately 19%
-- Net revenue (Gross profit) increased by 8% to USD 138.5m (September 2022 YTD: USD 128.3m)
-- Adjusted EBITDA(**) increased by 11% to USD 68.8m (September 2022 YTD: USD 62.0m)
-- Adjusted EPS increased by 28% to USD 17.56 cents (September 2022 YTD: USD 13.68 cents)
-- Net debt(***) of USD 81.7m (31 December 2022: USD 56.6m) and
Leverage(****) of 1.1x pro forma EBITDA TTM 2023, following
non-operating cash outflows in respect of the Group acquiring its
own shares USD 30.2m (Share buyback: USD 24.9m, Employee Benefit
Trust: USD 5.3m), dividend of USD 3.6m, reflecting the Group's
choice to return cash to shareholders, and non-recurring settlement
of deferred consideration of USD 17.9m
-- Adjusted operating cash conversion of 95% (FY2022: 110%) . We
expect this to continue to normalise nearer to 100% over the
remainder of the year
Q3 highlights:
-- On 4 September 2023, the Group announced its rebranding from
CentralNic Group to Team Internet Group and effective that same
day, the Group's shares commenced trading under the ticker "TIG".
At a general meeting held on 28 September 2023, a resolution was
passed to change the Company's name from CentralNic Group Plc to
Team Internet Group Plc, a change which has now been confirmed by
Companies House
-- The Group continued to trade at least in line with current
market expectations during the period, driven by ongoing market
share gains of its proprietary privacy-safe, AI-based customer
journeys which address a multi-billion-dollar opportunity
-- In the Online Marketing segment, the number of visitor
sessions increased by 36% to 5.6 billion for TTM 2023 from 4.1
billion for the trailing twelve-month period ended 30 September
2022 ("TTM 2022"). Revenue per thousand sessions ("RPM") decreased
by 7% from USD 104 to USD 97, continuing to outperform the
market
-- The Online Presence segment again posted its highest ever
organic revenue growth, 17% TTM 2023 compared to 4% for TTM
2022
-- Adjusted EBITDA as a percentage of Net revenue has increased
to 50% for September 2023 YTD from 48% for September 2022 YTD,
demonstrating that Team Internet's growth continues to translate
into operating leverage
-- Zeropark, Team Internet's Commerce Media Tech business,
announced three strategic partnerships: First, becoming a Tier 1
Demand Partner of Sovrn, a leading publisher technology platform.
Second, a significant deal with booking.com, the global online
travel agency. Third, Klarna, the Buy Now Pay Later platform has
become a direct publisher on the Zeropark network
-- Voluum, Team Internet's flagship ad tracker, announced the
launch of a new integration with popular e-commerce platform
Shopify, allowing customers to directly feed conversion data from
their Shopify stores into Voluum, bolstering their ad, product, and
page performance
-- On 31 August 2023, Adrenalads LLC was acquired for an initial
consideration of USD 2.1m. The acquisition included deferred
consideration of USD 0.2m payable in February 2025. This business
has a rich history of collaboration with Zeropark
-- One of the Group's largest Retail brands OnlyDomains entered
into a partnership with business email provider Titan to offer new
and existing customers premium business email with every domain
name
Post period end highlights:
-- Launch of Team Internet AG's Adsolutely product, seamlessly
integrating tailored ad feeds into the digital space, discarding
the intrusive nature of native ads. Adsolutely's state-of-the-art
technology resonates with the target audience's interests through
advanced keyword pairing, offering users total control over
contextual ads and related terms, while handling the intricacies of
optimisation
-- The Group's performance marketing business Codewise has been
rebranded to "Commerce Media Tech", reflecting our mission to help
advertisers connect with their ideal customers
-- Simon McCalla joined Team Internet as the new CEO of our
Online Presence division. Simon's experience as a senior leader at
blue chip companies both within and beyond the domain name industry
make him a great fit to lead Online Presence into the future
-- Team Internet initiated an ESG alliance between leading
partners along the domain name value chain at ICANN78 in Hamburg in
October 2023
Outlook:
Team Internet delivered another strong performance during
September 2023 YTD across both its Online Marketing and Online
Presence segments, delivering organic revenue growth of 19% on a
TTM 2023 pro forma basis. The Group has maintained its strong
operating leverage, as demonstrated by Adjusted EBITDA as a
percentage of Net revenue being 50% for September 2023 YTD (48%
September 2022 YTD).
The material expansion of the Company's share buyback programme
announced on 3 July 2023, alongside the cash flow waterfall model
as described on page 14 in the 2022 Annual Report, is primarily
being funded by continued strong operating cash generation. To
date, the Company has bought back 16.7m shares under its programme
at a cumulative cost of GBP 20.7m. GBP 13.3m remains available for
the remainder of the programme.
The Group looks ahead with confidence to Q4, which is typically
its strongest quarter, and the Directors expect that the Group will
continue to deliver results at least in line with current market
expectations for the full year.(*****)
Results presentation:
There will be a webinar/conference call for equity analysts at
09.30am GMT today, and for private client investment managers at
11am GMT. Both events will be hosted by CEO Michael Riedl and CFO
William Green.
Anybody wishing to register should contact
teaminternet@secnewgate.co.uk , where further details will be
provided.
Further, an Investor Meet Company session will be held at 1pm
GMT today: https://investormeetcompany.com/Team
Internet-group-plc/register-investor
Michael Riedl, CEO of Team Internet, commented: " I am pleased
to report that the Group has continued its strong organic revenue
growth in Q3 2023, building on the record results achieved in 2022.
This growth was driven by both operating segments, reflecting the
strength of our product portfolio. Leveraging this position, the
Group is primed for a strong finish in Q4, traditionally our
highest revenue quarter of the year.
The Group's new brand launched in the quarter goes beyond
aesthetics. It's a manifestation of our purpose: to forge
meaningful and successful connections. We aim to connect domains
with businesses, businesses with consumers, and publishers with
advertisers, propelling them towards their digital aspirations.
Our aspirations for Team Internet are clear: diversification,
global outreach, deeper vertical integration, and an unyielding
allegiance to our core values."
(*) Pro forma revenue, adjusted for; acquired revenue, constant
currency foreign exchange impact and non-recurring revenues is USD
817m for TTM 2023 and at USD 687m for TTM 2022
(**) 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 30 September 2023 (cash of USD 83.7m and bank debt and
prepaid finance costs of USD 166.7m); includes gross cash, bank
debt, prepaid finance costs and hedging assets of USD 1.4m (31
December 2022 cash of 94.8m, bond debt, bank debt and prepaid
finance costs of USD 151.2m 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 are within a range of USD 783m
and USD 834m for FY23 revenue and USD 91m and USD 98m for FY23
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 nterne t@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) 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
MANAGEMENT COMMENTARY ON PERFORMANCE
Introduction
Team Internet's organic growth, combined with the acquisition
strategy pursued through the end of 2022, substantially increased
the scale and capabilities of the Group. The effect of this is
demonstrated in our unaudited September 2023 YTD results which show
increases in both Revenue and Adjusted EBITDA of 16% and 11%
respectively, compared to September 2022 YTD.
Performance Overview
The Group has performed strongly during the period with the key
financial metrics listed below:
Nine months Nine months
ended ended
30 September 30 September
2023 2022 Change
USD m USD m %
-------------- -------------- ---------
Revenue 611.7 526.7 16%
-------------- -------------- ---------
Net revenue/gross profit 138.5 128.3 8%
-------------- -------------- ---------
Adjusted EBITDA 68.8 62.0 11%
-------------- -------------- ---------
Operating profit 29.8 35.1 (15%)
-------------- -------------- ---------
Adjusted operating cash
conversion (note 8) 95% 105% (9%)
-------------- -------------- ---------
Profit after tax 13.8 6.5 112%
-------------- -------------- ---------
EPS - Basic (cents) 5.10 2.48 106%
-------------- -------------- ---------
EPS - Adjusted earnings
- Basic (cents) (note 7) 17.56 13.68 28%
-------------- -------------- ---------
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
The Online Marketing segment continued to outperform the market,
with revenues increasing by USD 62.1m, or 15%, from USD 412.6m to
USD 474.7m. Organic revenue grew at a rate of 20% for TTM 2023,
predominantly driven by Team Internet's TONIC platform. Inorganic
growth was a result of the full period impact of the VGL
acquisition, which was acquired in March 2022, and Adrenalads in
August 2023.
The number of visitor sessions increased by 36% from 4.1 billion
for TTM 2022 to 5.6 billion for TTM 2023 and the RPM decreased by
7% from USD 104 to USD 97(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 long-term vision aims to harness
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 revenue in this segment increased by 20% from USD
114.1m in September 2022 YTD to USD 137.0m in September 2023 YTD.
Organic growth for the Online Presence segment was 17% for TTM
2023, the highest growth rate since the segment's establishment,
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
11% from 12.7m for TTM 2022 to 14.1m for TTM 2023 and the average
revenue per domain year increased by 8% from USD 10.03 to USD
10.81. The share of Value-Added Service revenue TTM 2023 was
11.2%(3) .
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.85% of the search 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 Unaudited Unaudited
COMPREHENSIVE INCOME Nine months Nine months Audited
ended ended Year ended
30 September 30 September 31 December
2023 2022 2022
Note USD m USD m USD m
-------------- -------------- --------------
Revenue 4 611.7 526.7 728.2
Cost of sales (473.2) (398.4) (550.5)
Net revenue/gross profit 138.5 128.3 177.7
Operating expenses (105.2) (89.4) (138.4)
Share-based payments expense (3.5) (3.8) (5.7)
Operating profit 29.8 35.1 33.6
Adjusted EBITDA (a) 68.8 62.0 86.0
Depreciation of property, plant
and equipment (2.3) (2.1) (3.0)
Amortisation and impairment
of intangible assets (28.1) (21.1) (36.4)
Non-core operating expenses(b) 5 (5.0) (6.0) (8.2)
Foreign exchange (loss)/gain (0.1) 6.1 0.9
Share-based payment expenses (3.5) (3.8) (5.7)
-------------- -------------- --------------
Operating profit 29.8 35.1 33.6
--------------------------------------- ----- -------------- -------------- --------------
Finance income less finance
costs 6 (8.8) (9.4) (13.2)
Foreign exchange loss on borrowings - (4.7) (5.6)
Net finance costs (8.8) (14.1) (18.8)
Profit before taxation 21.0 21.0 14.8
Income tax expense (7.2) (14.5) (16.9)
-------------- -------------- --------------
Profit/(loss) after taxation 13.8 6.5 (2.1)
Items that may be reclassified
subsequently to profit and
loss
Exchange difference on translation
of foreign operations (4.2) (30.5) (13.7)
Movement arising on changes
in fair value of hedging instruments 1.6 6.4 6.2
-------------- -------------- --------------
Total comprehensive income/(loss)
for the period/year 11.2 (17.6) (9.6)
Profit/(loss) is attributable
to:
Owners of Team Internet Group
Plc 13.8 6.5 (2.1)
-------------- -------------- --------------
Total comprehensive income/(loss)
is attributable to:
Owners of Team Internet Group
Plc 11.2 (17.6) (9.6)
-------------- -------------- --------------
Earnings per share:
Basic (cents) 5.10 2.48 (0.78)
Diluted (cents) 5.07 2.41 (0.78)
Adjusted earnings - Basic (cents) 17.56 13.68 20.01
Adjusted earnings - Diluted
(cents) 17.45 13.29 19.81
All amounts relate to continuing activities
(a) E arnings 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 Unaudited Unaudited
FINANCIAL POSITION Nine months Nine months Audited
ended ended Year ended
30 September 30 September 31 December
2023 2022 2022
USD m USD m USD m
-------------- -------------- -------------
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 2.7 1.8 1.8
Right-of-use assets 4.7 5.6 5.5
Intangible assets 327.0 314.1 347.9
Deferred receivables 0.2 0.4 0.3
Deferred tax assets 9.7 7.9 9.5
Derivative financial instruments 1.4 - -
-------------- -------------- -------------
345.7 329.8 365.0
CURRENT ASSETS
Inventory 0.5 0.8 0.6
Trade and other receivables 99.8 93.4 98.2
Cash and bank balances 83.7 83.8 94.8
184.0 178.0 193.6
TOTAL ASSETS 529.7 507.8 558.6
EQUITY AND LIABILITIES
EQUITY
Share capital 0.3 0.3 0.3
Share premium 98.3 98.3 98.3
Merger relief reserve 5.3 5.3 5.3
Share-based payments reserve 27.4 22.1 24.1
Cash flow hedging reserve 1.4 - (0.2)
Foreign exchange translation
reserve (15.0) (27.6) (10.8)
Retained earnings 30.0 59.1 50.0
-------------- -------------- -------------
TOTAL EQUITY 147.7 157.5 167.0
NON-CURRENT LIABILITIES
Other payables 5.7 11.5 13.9
Lease liabilities 3.1 1.9 3.8
Deferred tax liabilities 26.5 26.8 30.2
Borrowings 147.7 0.5 145.9
Derivative financial instruments - - 0.2
-------------- -------------- -------------
183.0 40.7 194.0
CURRENT LIABILITIES
Trade and other payables and
accruals 178.2 159.0 190.3
Lease liabilities 1.7 3.9 1.9
Borrowings 19.1 141.7 5.3
Derivative financial instruments - 5.0 0.1
-------------- -------------- -------------
199.0 309.6 197.6
-------------- -------------- -------------
TOTAL LIABILITIES 382.0 350.3 391.6
TOTAL EQUITY AND LIABILITIES 529.7 507.8 558.6
-------------- -------------- -------------
Equity
CONSOLIDATED Share- Foreign attributable
STATEMENT OF Merger based Cash exchange to owners
CHANGES IN Share Share relief payments flow translation Retained of the
EQUITY capitalUSD premium reserve reserve hedging reserve earnings Parent
m USD m USD m USD m Reserve USD m USD m Company
USD m USD m
Balance as at
1 January
2022 0.3 39.8 5.3 19.5 (6.4) 2.9 52.6 114.0
Profit for the
period - - - - - - 6.5 6.5
Translation of
foreign
operations - - - - - (30.5) - (30.5)
Other
comprehensive
income -
changes in
fair value of
hedging
instruments - - - - 6.4 - - 6.4
Total
comprehensive
income for
the period - - - - 6.4 (30.5) 6.5 (17.6)
Issue of share
capital - 59.6 - - - - - 59.6
Share issue
costs - (1.1) - - - - - (1.1)
Share-based
payments - - - 3.8 - - - 3.8
Share-based
payments -
deferred tax
asset - - - (0.4) - - - (0.4)
Share-based
payments -
exercised and
lapsed - - - (0.8) - - - (0.8)
Balance as at
30 September
2022 0.3 98.3 5.3 22.1 - (27.6) 59.1 157.5
Loss for the
period - - - - - - (8.6) (8.6)
Translation of
foreign
operations - - - - - 16.8 - 16.8
Other
comprehensive
income -
changes in
fair value of
hedging
instruments - - - - (0.2) - - (0.2)
Total
comprehensive
income for
the period - - - - (0.2) 16.8 (8.6) 8.0
Repurchase of
shares - - - - - - (0.5) (0.5)
Share-based
payments - - - 4.3 - - - 4.3
Share-based
payments -
deferred tax
asset - - - 0.5 - - - 0.5
Share-based
payments -
exercised and
lapsed - - - (2.8) - - - (2.8)
------------ ---------- --------- ---------- ---------- ------------- ---------- -------------
Balance as at
31 December
2022 0.3 98.3 5.3 24.1 (0.2) (10.8) 50.0 167.0
------------ ---------- --------- ---------- ---------- ------------- ---------- -------------
Profit for the
period - - - - - - 13.8 13.8
Translation of
foreign
operations - - - - - (4.2) - (4.2)
Other
comprehensive
income -
changes in
fair value of
hedging
instruments - - - - 1.6 - - 1.6
Total
comprehensive
income for
the period - - - - 1.6 (4.2) 13.8 11.2
Dividends paid
on equity
shares - - - - - - (3.6) (3.6)
Repurchase of
shares - - - - - - (30.2) (30.2)
Share-based
payments - - - 7.3 - - - 7.3
Share-based
payments -
deferred tax
asset - - - 1.2 - - - 1.2
Share-based
payments -
exercised and
lapsed - - - (5.2) - - - (5.2)
Balance as at
30 September
2023 0.3 98.3 5.3 27.4 1.4 (15.0) 30.0 147.7
-- 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.
-- Retained earnings represents the cumulative value of the
profits not distributed to Shareholders but retained to finance the
future capital requirements of the Group.
-- Share-based payments reserve represents the cumulative value
of share-based payments recognised through equity and deferred tax
assets arising thereon, net of exercised and lapsed options.
-- 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.
Unaudited Unaudited
Nine months Nine months Audited
ended ended Year ended
CONSOLIDATED STATEMENT OF CASH 31 September 30 September 31 December
FLOWS 2023 2022 2022
USD m USD m USD m
-------------- -------------- -------------
Cash flow from operating activities
Profit before taxation 21.0 21.0 14.8
Adjustments for:
Depreciation of property, plant
and equipment 2.3 2.1 3.0
Amortisation and impairment of
intangible assets 28.1 21.1 36.4
Finance cost (net) 8.8 14.0 18.8
Share-based payments 3.5 3.8 5.7
Increase in trade and other receivables (1.1) (5.3) (9.8)
Increase/(decrease) in trade and
other payables (8.3) 1.7 16.9
Decrease in inventories 0.2 - 0.2
Cash flow generated from operations 54.5 58.4 86.0
-------------- -------------- -------------
Income tax paid (4.3) (4.4) (8.4)
-------------- -------------- -------------
Net cash flow generated from
operating activities 50.2 54.0 77.6
Cash flow used in investing activities
Purchase of property, plant and
equipment (1.7) (0.6) (1.3)
Purchase of intangible assets (6.7) (3.6) (5.2)
Payment of deferred consideration (17.9) (2.5) (2.7)
Proceeds from disposals of investments - 0.1 0.1
Acquisition of subsidiaries and
related assets, net of cash acquired (5.6) (66.9) (81.5)
Net cash flow used in investing
activities (31.9) (73.5) (90.6)
Cash flow generated from/(used
in) financing activities
Proceeds from borrowings 15.0 30.5 185.5
Settlement of forward foreign
exchange contracts - (21.0) (25.5)
Repayment of bond financing - - (128.6)
Repayment of revolving credit
facility - - (18.8)
Bank finance arrangement fees (0.2) - (3.4)
Accrued interest on bond tap - 0.4 0.4
Bond arrangement fees - (0.8) (0.8)
Proceeds from issuance of ordinary
shares (net) - 58.5 58.6
Repurchase of ordinary shares (30.2) - (0.4)
Dividends paid on equity shares (3.6) - -
Payment of lease liability (1.1) (1.6) (2.2)
Bank loan capital repayments (0.2) - -
Interest paid (9.0) (7.0) (7.8)
Net cash flow generated from/(used
in) financing activities (29.3) 59.0 57.0
-------------- -------------- -------------
Net increase/(decrease) in cash
and cash equivalents (11.0) 39.5 44.0
Cash and cash equivalents at beginning
of the period/year 94.8 56.1 56.1
Exchange losses on cash and cash
equivalents (0.1) (11.8) (5.3)
-------------- -------------- -------------
Cash and cash equivalents at
end of the period/year 83.7 83.8 94.8
NOTES TO THE UNAUDITED FINANCIAL RESULTS
1. General information
Team Internet Group Plc is the UK holding company of a group of
companies which operate a global internet platform that derives
recurring revenue from Online Marketing and Online Presence
services. 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 nine months ended 30 September
2023 are unaudited and have been prepared on the basis of the
accounting policies set out in the Group's 2022 statutory accounts
and, for all periods presented, in line with the principal
disclosure requirements of IAS 34: Interim Financial Reporting.
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 2022, 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
Team Internet is an independent global service provider building
and managing platforms that sell Online Marketing and Online
Presence services. 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 Online Marketing segment creates privacy-safe, AI-generated
online customer 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 the wide range of digital products.
Management reviews the activities of the Team Internet Group in
the segments disclosed below up to a Net revenue/gross profit level
only:
Unaudited Unaudited
Nine months Nine months Audited
ended ended Year ended
30 September 30 September 31 December
2023 2022 2022
USD m USD m USD m
-------------- -------------- ----------------
Online Marketing
Revenue 474.7 412.6 574.7
Cost of sales (380.4) (323.7) (449.6)
-------------- ----------------
Net revenue/gross profit 94.3 88.9 125.1
-------------- ----------------
Online Presence
Revenue 137.0 114.1 153.5
Cost of sales (92.8) (74.7) (100.9)
-------------- -------------- ----------------
Net revenue/gross profit 44.2 39.4 52.6
----------------
Total revenue 611.7 526.7 728.2
Total cost of sales (473.2) (398.4) (550.5)
-------------- ----------------
Net revenue/gross profit 138.5 128.3 177.7
-------------- -------------- ----------------
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
Nine months Nine months Audited
ended ended Year
30 September 30 September ended
2023 2022 31 December
USD m % USD m % 2022 %
USD m
-------------- -------------- --------------
Americas 314.6 51% 279.2 53% 389.0 53%
APAC 53.8 9% 55.8 11% 73.5 10%
EMEA 210.9 35% 169.9 32% 234.5 33%
UK 32.4 5% 21.8 4% 31.2 4%
-------------- -------------- --------------
611.7 100% 526.7 100% 728.2 100%
-------------- -------------- --------------
The Group's revenue is invoiced directly to the following
geographical areas:
Unaudited Unaudited
Nine months Nine months Audited
ended ended Year
30 September 30 September ended
2023 2022 31 December
USD m % USD m % 2022 %
USD m
-------------- -------------- --------------
Online Marketing
Americas 14.4 3% 14.0 3% 19.5 3%
APAC 7.9 1% 5.4 1% 7.8 1%
EMEA 449.3 73% 391.5 74% 544.5 75%
UK 3.1 1% 1.7 - 2.9 -
-------------- -------------- --------------
474.7 78% 412.6 78% 574.7 79%
-------------- -------------- --------------
Online Presence
Americas 51.4 8% 33.4 6% 51.7 7%
APAC 17.4 3% 16.2 3% 22.3 3%
EMEA 62.5 10% 61.6 12% 75.4 10%
UK 5.7 1% 2.9 1% 4.1 1%
--------------
137.0 22% 114.1 22% 153.5 21%
-------------- -------------- --------------
Total revenue 611.7 100% 526.7 100% 728.2 100%
-------------- -------------- --------------
5. Non-core operating expenses
Unaudited Unaudited
Nine months Nine months Audited
ended ended Year ended
30 September 30 September 31 December
2023 2022 2022
USD m USD m USD m
-------------- -------------- -------------
Acquisition related costs 0.7 3.1 3.5
Integration and streamlining
costs 2.6 2.8 4.0
Other costs (1) 1.7 0.1 0.7
5.0 6.0 8.2
-------------- -------------- -------------
(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
Nine months Nine months Audited
ended ended Year ended
30 September 30 September 31 December
2023 2022 2022
USD m USD m USD m
-------------- -------------- -------------
Finance income (0.3) - -
Impact of unwinding of discount
on net present value of deferred
consideration 1.1 0.4 1.0
Reappraisal of deferred consideration (2.8) (1.4) (1.3)
Arrangement fees on borrowings 1.0 2.9 3.0
Interest on bank borrowings
and bond interest 9.9 7.4 10.2
Interest expense on leases 0.1 0.1 0.2
(Gain)/loss arising on derivatives
classified
as fair value hedges (0.2) - 0.1
Foreign exchange loss on borrowings - 4.7 5.6
Net finance costs 8.8 14.1 18.8
-------------- -------------- -------------
7. Earnings per share
Earnings per share has been calculated by dividing the
consolidated profit/(loss) after taxation attributable to ordinary
shareholders by the weighted average number of ordinary shares in
issue during the year. Diluted earnings per share have 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 all the dilutive potential ordinary shares (arising
from the Group's share option scheme and warrants) into ordinary
shares has been added to the denominator. In 2022, there is no
change to the loss numerator of the dilutive calculation. Due to
the loss made in the year, the impact of the potential shares to be
issued on exercise of share options and warrants would be
anti-dilutive and therefore diluted earnings per share is reported
on the same basis on earnings per share.
Unaudited Unaudited
Nine months Nine months Audited
ended ended Year ended
30 September 30 September 31 December
2023 2022 2022
USD m USD m USD m
-------------- -------------- -------------
Profit/(loss) after tax attributable
to owners 13.8 6.5 (2.1)
-------------- -------------- -------------
Operating profit 29.8 35.1 33.6
Depreciation of property, plant
and equipment 2.3 2.1 3.0
Amortisation and impairment of
intangible assets 28.1 21.1 36.4
Non-core operating expenses 5.0 6.0 8.2
Foreign exchange loss/(gain) 0.1 (6.1) (0.9)
Share-based payment expenses 3.5 3.8 5.7
-------------- -------------- -------------
Adjusted EBITDA 68.8 62.0 86.0
Depreciation (2.3) (2.1) (3.0)
Net finance costs (excluding deferred
consideration amounts, foreign
exchange loss on borrowings and
write off of arrangement fees on
borrowing - note 7) (11.8) (9.5) (13.1)
Taxation (7.2) (14.5) (16.9)
-------------- -------------- -------------
Adjusted earnings 47.5 35.9 53.0
Weighted average number
of shares:
Basic 270,543,200 262,399,797 265,623,278
Effect of dilutive potential
ordinary shares 1,600,095 7,708,732 2,584,385
-------------- -------------- -------------
Diluted average number
of shares 272,143,295 270,108,529 268,207,663
-------------- -------------- -------------
Earnings per share:
Basic (cents) 5.10 2.48 (0.78)
Diluted (cents) 5.07 2.41 (0.78)
-------------- -------------- -------------
Adjusted earnings - Basic
(cents) 17.56 13.68 20.01
Adjusted earnings - Diluted
(cents) 17.45 13.29 19.81
-------------- -------------- -------------
Basic and diluted earnings per share of 5.10 and 5.07 cents
(2022: 2.48 and 2.41 cents) have been impacted by depreciation,
amortisation, impairment, non-core operating expenses, foreign
exchange gains and losses and share-based payment expenses.
NOTES TO THE UNAUDITED FINANCIAL RESULTS (continued)
8. Financial instruments
The Team Internet 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 for the nine-month periods ended 30 September
2023, 30 September 2022 and for the year ended 31 December 2022 was
as follows:
Unaudited Unaudited
Nine months Nine months Audited
ended ended Year ended
30 September 30 September 31 December
2023 2022 2022
USD m USD m USD m
-------------- -------------- --------------
Cash conversion
Cash flow from operations 54.5 58.4 86.0
Exceptional costs incurred and
paid during the year 5.1 5.4 7.8
Settlement of one-off working capital
items from the prior year 6.0 1.2 1.2
-------------- -------------- --------------
Adjusted cash flow from operations 65.6 65.0 95.0
Adjusted EBITDA 68.8 62.0 86.0
Conversion % 95% 105% 110%
Net debt as at 30 September 2023 and 31 December 2022 is shown
in the table below.
Bank debt Cash Financial Net debt
instruments
USD m USD m USD m USD m
----------- ------- ------------- ----------
At 31 December 2022 (151.2) 94.8 (0.2) (56.6)
Drawdown (15.0) 15.0 - -
Capital repayments 0.2 (0.2) - -
Prepaid finance costs 0.2 (0.2) - -
Amortisation of prepaid finance
costs (1.0) - - (1.0)
Mark-to-market revaluation - - 1.6 1.6
Other cash movements - (25.6) - (25.6)
Foreign exchange differences - (0.1) - (0.1)
----------- ------- ------------- ----------
At 30 September 2023 (166.8) 83.7 1.4 (81.7)
----------- ------- ------------- ----------
Financial instruments included in net debt represent the
mark-to-market valuation of interest rate swaps, which fix the
variable interest component of USD 75.0m of the bank debt.
8. Business combinations
Acquisition of Adrenalads LLC
On 31 August 2023, Team Internet acquired Adrenalads LLC, a Los
Angeles based online marketing company that has a rich history of
collaboration with Zeropark. Consideration included initial
consideration USD 2.1m and deferred consideration of USD 0.2m
payable in February 2025. The acquisition will be immediately
earnings accretive. The acquisition aims to seamlessly integrate
Adrenalads into the Zeropark ecosystem. This move is anticipated to
strengthen Zeropark's ties with ecommerce stakeholders, improve
efficiency of internal media-buying processes, open new supply
channels for Zeropark and establish a presence in strategic Pacific
time zone.
In FY2022, Adrenalads generated unaudited revenue of USD 2.7m,
unaudited Net revenue/gross profit of USD 1.1m and unaudited EBITDA
of USD 0.7m.
The purchase price allocation exercise for the acquisition of
Adrenalads has not yet been completed as at the date of signing
this report, and it is therefore not possible to provide further
details of the fair value estimates of the assets and liabilities
at the acquisition date.
Deferred consideration payments
During the nine month period ended 30 September 2023 the
following deferred consideration payments were made:
-- Deferred contingent consideration payments for the
acquisition of VGL Publishing AG was settled in cash for EUR 13.7
(USD 14.9m), which includes EUR 12.4m (USD 13.6m) in respect of
performance in 2022
-- The first deferred contingent consideration payment for the
acquisition of M.A Aporia was cash settled for USD 2.3m in two
instalments USD 0.8m paid on 13 July 2023 and USD 1.5m paid on 24
August 2023
-- On 27 July 2023 , the final deferred contingent consideration
payment for the acquisition of InterNexum GmbH was settled in cash
for EUR 0.6m (USD 0.6m)
NOTES TO THE UNAUDITED FINANCIAL RESULTS (continued)
9. Share buyback programme and Employee Benefit Trust
During the period the Company repurchased 15,878,125 shares
under its share buyback programme at an average share price of
GBP1.28 (FY2022: 220,000 shares at a share price of GBP1.54). These
shares are held in treasury by the Company.
During the period the Group's Employee Benefit Trust purchased
3,648,587 shares at an average share price of GBP1.16. At 30
September 2023 the Employee Benefit Trust held 9,199,521 shares (31
December 2022: 11,232,599 shares, 30 September 2022: 16,519,280
shares).
The total share repurchase in the period is USD 30.9m of which
USD 30.2m was settled in cash in the period, with USD 0.7m settled
in cash after the period end.
The number of shares held and outstanding share options is as
follows:
Unaudited Unaudited Audited
30 September 30 September 31 December
2023 2022 2022
Number Number Number
-------------- -------------- -------------
Issued share capital 288,660,084 288,660,084 288,660,084
Shares held by the Employee Benefit
Trust (9,199,521) (16,519,280) (11,232,599)
Shares held in Treasury (16,098,125) - (220,000)
Share capital 263,362,438 272,140,804 277,207,485
Outstanding share options 11,525,831 18,372,001 12,985,926
-------------- -------------- -------------
Share capital plus outstanding
share options 274,888,269 290,512,805 290,193,411
-------------- -------------- -------------
10. Events occurring after the period end
The following significant event occurred after the Group's
period end date of 30 September 2023 and before the signing of
these Unaudited Financial Results on 13 November 2023:
-- On 19 October 2023, a deferred consideration payment in
relation to the acquisition of M.A Aporia was made for USD 2.8m
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END
QRTEAFFAFEADFAA
(END) Dow Jones Newswires
November 13, 2023 02:00 ET (07:00 GMT)
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