12th Aug 2024 12:59
(Alliance News) - Team Internet Group PLC delivered resilient first-half results and has plenty of firepower left for acquisitions, an analyst on Monday said.
In the six months ended June 30, the London-based internet services company said pretax profit rose 8.3% to USD14.4 million USD13.3 million.
Adjusted earnings before interest, tax, depreciation and amortisation rose 4.5% to USD46.6 million from USD44.6 million.
Revenue rose 3.4% to USD409.7 million from USD396.4 million.
Team Internet said it remains "confident" that strategic investments 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."
In the Online Marketing segment, the number of visitor sessions increased by 16% to 6.1 billion from 5.3 billion a year prior, Team Internet said. But revenue per thousand sessions decreased by 12% from USD100 to USD88.
Revenue increased 2.7% to USD312.5 million from USD304.4 million.
Revenue in the Online Presence unit rose by 5.7% to USD97.2 million from USD92.0 million.
Team Internet said it intends to declare an interim dividend of 1.0 pence per share. It paid no interim dividend last year but later paid a 2.0p final dividend for 2023.
Berenberg said the results showed the resilience of the Online Marketing division.
The key driver of growth was a 16% increase in customer journeys but price, measured as revenue per thousand, remain challenged, decreasing by 12% year-on-year, the broker noted.
"This performance highlights the resilience of [Online Marketing] in that it can deliver growth in a period where [revenue per thousand sessions] are declining," Berenberg stated.
In Online Presence, growth was driven by pricing, the broker explained.
The organic performance was driven by a 13.3% increase in average price per domain registrations which was partially offset by a 3% decrease in domain registrations. The latter reflects an increase in churn as pricing has increased, Berenberg noted.
With net debt at the period-end of USD109.9 million, M&A remains on the agenda for management, Berenberg thinks. The broker estimates Team Internet has around USD190 million of firepower based on a 4.5x enterprise value to earnings before interest, taxes, depreciation and amortisation multiple.
Berenberg reiterated a 'buy' rating. Despite being up 52% year-to-date, the shares are trading on a 25% discount relative to the five-year average 12-month forward PE, the broker noted.
Berenberg raised its price target to 220 pence each from 205p.
Despite the solid looking results and positive broker comment, Team Internet shares were down 8.4% to 174.00p each in London on Monday.
By Jeremy Cutler, Alliance News reporter
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