Edison Investment Research - CentralNic Group (CNIC) Team Internet Group - Solid on all fronts

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Edison Investment Research

Richard Williamson

Team Internet Group - Solid on all fronts

Team Internet’s FY23 trading update confirmed that trading has remained robust with double-digit sales growth across Online Marketing and Online Presence. The total revenue and EBITDA margin were slightly ahead of market consensus and our forecasts, both of which were upgraded in November 2023. Estimated FY23 net debt of US$74m was lower than our US$80.9m forecast, with operating cash conversion reverting to close to 100%. We maintain our FY24 estimates, but these could prove conservative, especially if advertising spend recovers. At 4.8x FY24e EV/EBITDA and 6.4x FY24e P/E, Team Internet's rating looks low given the company’s growth profile, diversity and growing track record.

29/01/2024 1 EN

Underlying

CentralNic Group

CentralNic Group is a holding company which provides global domain name services. Co. provides Wholesale, Retail and Enterprise services and consultancy for new Top Level Domains (TLDs), Country Code TLD's and Second-Level Domains and it is the owner and registrant of a portfolio of domain names, which it uses as SLD domain extensions and for resale on the domain name aftermarket. The Wholesale Division powers domain names and sells them via an integrated network of third party retailers; the Retail Division sells domain names and related services to end users; and the Enterprise Division sells domain names and related services, consultancy services and licenses software to corporations.

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GB00BCCW4X83 London Stock Exchange United Kingdom

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Richard Williamson

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Team Internet Group - Stability amid setbacks

In the face of an advertising market that has not picked up in Q324, Team Internet’s core business has performed creditably. However, Shinez has significantly underperformed expectations and is unlikely to contribute materially to profits in our forecast period. Combined with a moderation in our forecasts for the core business, we now expect earnings to remain broadly flat in FY24 and FY25, which results in a 17.6% reduction to FY25e EPS. The FY25e P/E rating of 5.6x with a 20% free cash flow (FCF) yield looks overly discounted.

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Team Internet Group (TIG LN) - Q3 results - Corporate

Revenue and profit growth slowed in Q3 due to recent acquisition, Shinez, experiencing reduced demand from key partners and Team Internet’s core business seeing continued decline in ad pricing. Whilst the company is repositioning Shinez towards gradually improving profitability, we conservatively lower our estimates for this business to break even for FY24 and FY25 and reduce core business growth, prudently assuming continued pricing headwinds. As a result, we lower underlying EBITDA by 8% and 13% in FY24 and FY25, respectively. Despite this, EBITDA and FCF generation continues to grow through...

November 11, 2024 November 11, 2024 1 EN

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Team Internet Group - Earnings remain resilient

Team Internet’s H1 earnings showed resilience despite continued headwinds in online marketing. Going into the typically seasonally stronger H2, we expect the company’s initiatives in product innovation, vertical integration and international to increasingly influence growth and margin expansion. At 8.2x FY24 earnings, Team Internet continues to trade at a significant discount to peers on our unchanged earnings estimates. We believe this rating remains attractive given the company’s track record, prospects and cash generation.

August 12, 2024 August 12, 2024 1 EN

The Platform Group - Significant acceleration in growth in Q324

The Platform Group (TPG) reported a strong acceleration in revenue growth and profitability in Q324 as its growing industry presence and subsequent underlying growth provided an increase in most KPIs during the period. Its valuation continues to look attractive versus its online peers if management delivers on its expected growth rates.

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Theon International - Clear vision for growth

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Care REIT (Care), formerly Impact Healthcare REIT, and its tenants continued to perform strongly in Q324. The quarterly EPRA net tangible assets (NTA) return of 2.1% took the year-to-date total to 7.8%, while rent cover increased to 2.3x. Care is well on track to meet its FY24 DPS target of 6.95p (+2.7%), fully covered by adjusted ‘cash’ earnings, with a yield of 8.3%. The company has also announced two new investments, including forward funding the development of a new, high-quality home, at an accretive blended yield in excess of 8% with strong valuation potential.

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Team Internet Group - Solid on all fronts

Team Internet Group - Stability amid setbacks

Team Internet Group (TIG LN) - Q3 results - Corporate

Team Internet Group - Earnings remain resilient

The Platform Group - Significant acceleration in growth in Q324

Theon International - Clear vision for growth

Care REIT - Strong Q324 and accretive growth

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