Team Internet Share Discussion Threads

[davebowler] 13/5/2024 14:28

........The net debt/EBITA rating of 1x means the company has plenty of scope to deliver further accretion through further buybacks or additional accretive acquisitions or dividend increases, while a market recovery or revenue synergies could drive organic upside. Management’s upper threshold for Net debt / EBITDA is 2x. The valuation is a substantial discount to the company’s global ad-tech peers, which trade at a median forward year EV/EBITDA of 8.4x and a P/E of 12x. The relative outperformance of Online Presence is also interesting given the higher peer multiples of this segment, at 16.5x EBITDA and 25x P/E on a one-year forward basis.

[davebowler] 13/5/2024 14:26

Edison-
On our revised estimates, Team Internet trades at an FY24 EV/EBITDA multiple of 5.2x and a P/E of 7x, with the shares re-rating upwards only slightly, as earning upgrades have offset the 21% rally in the shares since the start of FY24. On a fundamental basis, we believe that this remains too low for a business with Team Internet’s track record, prospects and cash generation. The estimated FY24 unlevered free cash flow yield is 16%.

[hsduk101] 13/5/2024 13:43

(Alliance News)
Team Internet Group PLC on Monday announced "substantial growth" in profit following the release of unaudited first quarter 2024 results.

The London-based internet services company said during the three months ended March 31, pretax profit rose 65% to USD7.1 million from USD4.3 million the year prior.

Revenue increased marginally to USD195.9 million from USD194.9 million.

"The directors remain confident in the group's strategic investments in product innovation, vertical integration, and international expansion....Given these strong foundations, the directors are confident that the group will meet market expectations for the full year," said Team Internet.

Revenue for the year as a whole is forecast to improve from USD836.9 million reported in 2023, landing within the range of USD857 million to USD910 million.

Team Internet shares were down 0.3% to 152.69 pence each in London on Monday morning.

By Elijah Dale, Alliance News reporter

Comments and questions to [e-mail]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

[davebowler] 13/5/2024 09:41

Zeus
Team Internet Group is a nomad and broker client of Zeus

Q1 results
Revenue grew 8% organically in the trailing twelve months (TTM) to March. The Online Presence division continued to benefit from price rises and the shift toward alternative Top Level Domains (TLD), whilst the Online Marketing division continued to see declining click prices offset by visitor volumes. The company remains confident in meeting expectations for 2024, supported by new products, vertical integration initiatives and international expansion plans. We update our forecasts for the acquisition of Shinez, completed on 26 April, and lower tax rate assumptions marginally, which increases FY24 Adjusted basic EPS by 12%. Team Internet shares trade at a very attractive 5.3x FY24 EV/EBITDA, 6.7x P/E with a 15.1% FCFF yield. We believe the Group is considerably undervalued for its levels of earnings quality, growth, and cash generation.

Q1 revenue: Group revenue grew 1% to $195.9m from $194.9m in Q1 2023 in a seasonally quiet quarter. Organically, group revenue grew 8% in the TTM (2023: 13%). The Online Presence division led growth, with Q1 revenue up 10.6% (Organic TTM growth: 14%) due to the shift towards alternative TLD where Team Internet is focused. Pricing was a key driver, with average revenue per domain year up 16% from $10.1 to $11.7 in the TTM. The number of processed domain registration years was fairly flat, rising by 1% from 13.5m for TTM 2023 to 13.6m for TTM 2024. The larger Online Marketing division fell 2.5% but organic TTM revenue growth was 7%, driven by the TONIC platform. The division saw continued decline in click prices by 10% to $91 revenue per thousand sessions (RPM) from $102 a year ago, but this was more than offset by TTM visitor sessions that were up 19% to 6.0bn from 5.0bn a year ago.

Q1 profits and cash: The company’s focus on holistically managing profits and cashflow helped drive profit growth and cash flow. Gross profit (Net revenue) grew 4% to $47.6m. Gross margins rose to 24.3% from 23.5% due to the stronger mix of Online Presence revenue. Adjusted EBITDA increased by 4% to $22.2m from $21.3m a year ago and Adjusted EBITDA margin rose to 11.3% from 10.9%. Adjusted EPS rose strongly at 20% to $5.35 due to share buybacks and the company increased its final dividend to 2.0p for 2023 from 1.0p last year. Net debt was $80.6m, which represented a decline of $5.0m excluding $11.5m of share repurchases. Q1 cash conversion was lower at 80% due to delayed cash collections from a significant business partner during the Easter Holidays at quarter end. The company expects cash conversion to normalise to about 100% over the remainder of the year.

Shinez acquisition and forecast upgrade: On 26 April, Team Internet Group completed the acquisition of Shinez I.O. Ltd. The deal diversifies Online Marketing division revenue and expands its traffic monetisation options and capabilities (discussed on pages 4-5). The $43.2m initial consideration, funded with existing cash reserves and debt from its RCF, is equivalent to 4.2x adjusted FY23 EBITDA of $10.4m. An additional $12.3m of contingent consideration is tied to ambitious financial targets over two years, which we would expect to enhance earnings accretion if met. The deal is expected to create high-single digit percentage EPS accretion on combined pro-forma numbers for FY23, before accounting for potential synergies. As a result, we upgrade Adjusted EBITDA forecasts by 7% to $105m for FY24, by 10% to $115m for FY25, and by 16% to $131m for FY26, not including any impact of potential synergies. We also reduce effective tax rate assumptions in all years from 27.5% to 25%, driving an even greater uplift in EPS.

Valuation: Team Internet is well positioned to take market share with a full suite of products that uniquely addresses all stages of the advertising funnel from ‘AwarenessR17; (Shinez) to ‘Consideration’ (TONIC) to ‘Conversion217; (VGL). Despite its strong market position, its shares trade at only 5.3x EV/ EBITDA 2024 and 6.7x PE, with a 15.1% FCFF yield. In comparison, Online Presence peers trade at 10.3x EV/EBITDA 2024 and Online Marketing peers trade at 6.5x, 94% and 22% valuation premiums to Team Internet.

[adamb1978] 13/5/2024 07:29

Yes, good results overall. THe online marketing revenue was disappointing however offset but the very nice increase in that division's gross margins. Presumably there's a linkage between the two? (i.e. stopping very low margin work)

Cashflow still very good. I continue to expect more cash/debt financed M&A this year given taht they haven't re-started the buyback programme despite it being authorised.

Happy to continue holding

[rivaldo] 13/5/2024 06:37

Very encouraging Q1 results just out, with Q1 EPS up 20% to 5.35c, or around 4.3p.

Plus organic revenue growth up 8%, and a huge 19% increase in Online Marketing visitor sessions mitigating a predictable 10% decline in revenue per thousand sessions.

Above all, the outlook is confident in terms of at least meeting expectations for the year, and EBITDA margins have increased nicely by 4%.

Zeus have now incorporated the Shinez acquisition into their forecasts.

They've raised this year's forecast to 28.5c EPS, or 22.7p EPS. That's still a crazy low P/E of just 6.7.....

[davidosh] 11/5/2024 20:01

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For more info:

[diesel] 10/5/2024 21:29

Good point Bodie the huge volumes that seem to appear and suppress any rises was a bit odd.

[boadicea] 10/5/2024 13:32

Where are the profit-takers who would normally bring us back down.... or those pesistent sellers - are they now out or have they just worked out that patience may get them a better price?

Whatever, it's strange to see the price here beginning to look a litlle less illogical.

[hsduk101] 09/5/2024 08:12

Nicely up to the 150's now

[azaman] 08/5/2024 18:45

Thank you boadicea.

[boadicea] 08/5/2024 17:44

azaman - Apart from the fact that ordinary (O) trades may be mis-diagnosed for a variety of reasons as commented previously (delayed reporting, sells above or buys below the nominal mid-price etc), AT trades are effectively meaningless as they move shares directly and anonymously from buyer to seller with no "shop-keeper" middle man.
One therefor doesn't know which side of the trade may be an investor (or his agent) and who may be a transitory trader. The party acquiring the shares sold has put a bid into the market which will execute as a 'sell'. If he doesn't get what he wants he may make a higher bid, pushing up the price - but the deal will still execute as a sell. If he does so aggressively the book may get crossed, which I believe will trigger an auction.
Hence a majority of AT sells does not indicate much about the level of demand - for that you need more sophisticated analysis involving the depth of support etc which I am told can be disguised by trading 'bots'.

[davebowler] 08/5/2024 10:34

This has recently come onto on of the Stockopedia screens as a Golden Cross chart signal to buy.

[diesel] 08/5/2024 09:37

Purely an observation on how often shares bounce off or get support around round numbers, I’ve presumed that investors/traders set these as limits for buying/selling.

[azaman] 08/5/2024 09:11

Hi Diesel,

Why would you expect a pause at £1.50 ?

[diesel] 08/5/2024 08:20

This does feel like a shortage of stock this am, trying to tempt sellers, I’d expect a pause at 150p.

[indiestu] 07/5/2024 20:07

Volume up, price up equals more buyers than sellers.

[martinc] 07/5/2024 17:32

It's easy to explain. The identification as a buy or sell is a pure guess based on the price. It's easily followed by late reported trades etc.

[azaman] 07/5/2024 16:44

The trade volume breakdown of today is as follows:

Buy= 1, 043,838
Sell=1, 713 764

So,there has been more sells than buy; yet, the share price is up.
Can someone explain this please ?

[azaman] 07/5/2024 16:26

The no of shares traded today is 2,139,350.
So what can we deduce from this?

[ali47fish] 07/5/2024 12:22

wyh dont we leave this one dormant until we recieve a lovely annoucement for a takeover

[hsduk101] 07/5/2024 12:09

Rising well today

[rivaldo] 07/5/2024 07:42

Cheers davebowler. Given TIG's multi-year outperformance in terms of financials and cash generation the comment about the quality of the online marketing earnings seems somewhat harsh imo - but TIG remains one of the outstanding candidates on the market as regards the likelihood of being acquired.

Especially at the current bargain rating:

"Team Internet Group (TIG)

Share price: 138.6p
Market cap: £346.7 million

Domain name and online marketing business Team Internet Group remains modestly rated despite the strong growth exhibited in the past couple of years. Most of that growth has come from the online marketing division, and it may be that the earnings are not thought to be high quality. Even if that is so, a prospective multiple of seven appears mean, particularly given the strong cash generation.

Acquisitions have been important in accelerating growth, but there is organic growth. In 2023, revenues were 15% ahead at $836.9 million, including organic growth of 13%. Underlying pre-tax profit improved from $70 million to $77.2 million. Net debt increased to $95.3 million because of share buy backs and acquisition payments. The company has also commenced paying dividends.

This year nearly $90 million in cash is likely to be generated by operations. Team Internet has spent $41.8 million acquisition of Shinez, which creates and promotes content across social media and search engines.

First-quarter figures will be published on 13 May. These are expected to show continued growth. The acquisition of Shinez was not completed until the end of April so will not be included. If the valuation does not improve then Team Internet’s strong position in the domain names sector and the cash generative growth of the business would make it an attractive bid candidate for a private equity firm."

[davebowler] 04/5/2024 08:43

htTPs://www.ii.co.uk/analysis-commentary/four-aim-shares-are-potential-bid-targets-ii531587?