Team Internet revenue rises, profit before tax falls

(Sharecast News) - Team Internet reported a 1% improvement in gross revenue in the first three quarters of the financial year on Monday, to $615.1m, while net revenue increased 4% to $143.6m, bolstered by a rise in gross margins from 22.6% to 23.3%. The AIM-traded firm said adjusted EBITDA grew 2% to $70.1m, maintaining an adjusted EBITDA margin of around 49%, in line with previous periods.

Adjusted earnings per share also rose, by 7% to 16.83 cents.

Despite a 9% decline in profit before tax to $18.3m, Team Internet continued to be cash generative, reducing net debt to $99.7m by the end of the third quarter.

The group incurred cash outflows of $31.8m for the acquisition of Shinez, $13.8m for share repurchases, and $6.4m for dividends.

Adjusted operating cash conversion stood at 91%, with expectations for further normalisation toward 100% by year-end.

In the online marketing segment, visitor sessions for core products Tonic and ParkingCrew rose by 15% over the trailing 12 months, although revenue per thousand sessions (RPM) fell by 18%.

The online presence segment experienced 5% organic revenue growth, and overall third quarter EBITDA remained stable year-on-year with an EBITDA margin of 51%.

Following the period, Team Internet paid an interim dividend and completed a contingent payment for its acquisition of MA Aporia, with management expecting no further material acquisition-related payments.

The group now anticipated about $97m in adjusted EBITDA for 2024, supported by the ongoing optimisation of Shinez's operating model.

Looking ahead, Team Internet said it intended to maximise shareholder returns by exploring options such as share buybacks, dividends, and a review of its asset ownership.

"Team Internet has delivered a resilient performance in our core businesses within a dynamic market environment and the group is poised to maintain record levels of profitability," said chief executive officer Michael Riedl.

"Although our recent acquisition has not yet contributed to EBITDA, I am confident in its strategic value to our long-term objectives. In contrast, our comparison business, created from the acquisition of VGL Publishing, has grown significantly, demonstrating the success of our acquisition strategy."

Riedl said the company's focus was now "more than ever" on realising synergies through strategic integration, enhancing value across the sum of the parts of its established assets and accelerating shareholder returns.

"With our ongoing commitment to innovation and operational excellence, we are well-positioned to return to higher growth in profit and cash flow."

At 1344 GMT, shares in Team Internet Group were down 21.39% at 93.7p.

Reporting by Josh White for Sharecast.com.