Team Internet shares slide despite first-half growth

Shares in Team Internet Group were in the red on Monday afternoon, even after it reported year-on-year growth across key financial metrics for the first half of the year.

The AIM-traded company reported a 7% increase in net revenue and a 13% rise in operating profit compared to the same period last year.

It posted 9% growth in organic gross revenue over the trailing 12 months to 30 June, bringing gross revenue to $409.7m - up 3% from the first half of 2023.

Net revenue, or gross profit, grew 7% to $97.7m, with the gross margin improving to 23.8%.

Adjusted EBITDA rose 4% to $46.6m, maintaining a healthy EBITDA margin of 11.4%.

Operating profit increased to $22.9m, a 13% improvement, while profit before tax saw an 8% increase to $14.4m.

Profit after tax was $9.8m, up 4% from the prior year.

The company also reported an increase in adjusted earnings per share, with diluted earnings per share rising 12% to 10.74 cents.

However, net debt increased to $109.9m, attributed to significant cash outflows, including the acquisition of Shinez IO for $31.8m, share repurchases, and dividend payments.

The board said the first half saw substantial growth in the online marketing segment, with visitor sessions increasing 16% year-on-year, though revenue per thousand sessions decreased 12%.

It said its online presence segment recorded 8% organic revenue growth.

The acquisition of Shinez in April for an initial $31.8m further strengthened the group’s portfolio, with additional contingent payments linked to future performance.

Team Internet said it was continuing to pursue its progressive dividend policy, doubling the final dividend for 2023 to 2p per share, paid in May.

The group also enhanced its market presence by listing its shares on the OTCQX Best Market in the US, broadening its visibility and investor base.

Looking ahead, the board said it planned to declare an interim dividend of 1p per share, pending bank approval, adding that it remained confident in meeting market expectations for the full year, supported by strategic investments in product innovation and international expansion.

“Team Internet has delivered another strong set of trading results for the first half of the year,” said chief executive officer Michael Riedl.

“Year-on-year growth in trading results for the second quarter was slightly ahead of that seen in Q1 2024, with growth across revenue, net revenue and adjusted EBITDA, demonstrating momentum as we move into the second half of the year.

“The addition of Shinez to the group has introduced platform capability that addresses the 'awareness' stage of the advertising funnel, complementing our existing solutions: TONIC for 'consideration' and comparison platforms for 'conversion'.”

Riedl said the company’s vision was to strategically integrate Shinez, TONIC and VGL into a “synergistic platform” designed to enhance advertising revenue.

“By doing so, we will drive future profitability through improved targeting, increased RPM, and the accumulation of valuable first-party data.”

At 1343 BST, shares in Team Internet Group were down 10.53% at 170p.

Reporting by Josh White for Sharecast.com.