Although the weak advertising market hindered growth in Online Marketing during the seasonally quiet first quarter, Online Presence continued to demonstrate robust performance, contributing to the expansion of group margins. The acquisition of Shinez is now complete, which is expected to enhance Team Internet’s revenue profile by diversifying its partnership base and creating valuable opportunities to capture more value in the conversion funnel. While our standalone estimates remain unchanged, we are revising our earnings per share (EPS) estimates for the financial years 2024 and 2025 upwards by 5% and 7%, respectively, to reflect the impact of the Shinez acquisition.
Team Internet’s first-quarter results illustrate a strategic shift towards the company’s higher-margin businesses. Gross revenues increased by 1% to $195.9 million, with Online Marketing experiencing a 2.5% year-on-year decline to $145.9 million, due to the weak advertising market, while Online Presence grew by 10.6% to $50.0 million. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose by 4% to $22.2 million, representing an 11.3% margin compared to 10.9% in Q1 2023. Operating profit saw a significant increase of 44% to $11.1 million.
Operating cash conversion stood at 80%, impacted by cash receipts from a major customer being collected in April; however, it is expected to normalise to 100% for the remainder of the year. During the quarter, shares worth $11.5 million were repurchased, resulting in a net debt of $80.6 million, compared to $74.1 million at the end of the financial year 2023.
Team Internet plc (LON:TIG) – formerly CentralNic – is a global internet solutions group headquartered in London. Leveraging world-class technologies and industry leading teams, they have been transforming the way organisations, brands, publishers and consumers connect and thrive online.