Online marketing and domain name services provider Team Internet (LON: TIG) has released unaudited figures for 2024. The share price has been recovering since the warning about the underperformance of the search division. It dipped 0.05p to 67.55p today.
The new auditor has not completed its audit, but there should not be any changes in the numbers, which are in line with expectations. The audited figures will be available later this month.
In 2024, revenues fell from $837m to $803m with growth in comparison and domains divisions more than offset by the initial decline in the search division due to changes at Google. EBITDA fell from $96.4m to $91.9m. Search EBITDA declined from $74.3m to $56.4m.
An acceleration by Google of the move from Adsense for Domains (AFD), set for 19 March, is going to hit revenues and profit of the search division. Team Internet has to adjust to the switch to Related Search on Content (RSOC) and start to optimise the results.
There was an exceptional charge of $36m, mainly down to Shinez, which was acquired last year. The book value of the Shinez acquisition has been written off. Team Internet believes it was misled by the sellers and litigation is planned. There is potential for at least some of the write down to be clawed back. It cost $41.8m, but there is around $4m in escrow.
Shinez creates and promotes content across social media and search engines. Most importantly, it does have important technology that will help with the transition to RSOC. So it does still have some value to the group.
Elsewhere, trading is going well. Comparison rebounded last year, and new platforms are being launched in additional countries, including France, Italy and Germany, so it should continue to grow. The domain name division continues to provide steady growth in revenues, although there was a large jump in profit last year. The profit improvement may be at a slower rate this year.
There was an interim dividend of 1p/share but no final dividend. The company says that it hopes to return to dividends soon, but the immediate focus is reducing borrowings. Share buybacks continue, though.
Net debt was $96.6m at the end of 2024 and that should fall to around $75m by the end of this year. There is no current plan to make acquisitions. Disposals are a possibility, and this could unlock value in the company.
The 2025 EBITDA guidance is $60m-$65m. Management believes that it can rebuild the revenues of the search business, but investors will remain cautious until there are signs of that happening. The underlying value of the non-search business should provide a floor for the share price.