Team Internet Group (LSE:TIG) — Annual results

0:01 Good afternoon, ladies and gentlemen, and welcome to the TEAM INTERNET GROUP PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so on the investor meet company platform. And before we begin, as usual, I would like to submit the following poll. And if you would give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the management team from TEAM INTERNET GROUP PLC. Michael, Billy, good afternoon. Thank you, Jake.

0:47 So welcome everybody to the TEAM INTERNET GROUP two thousand twenty three year end investor presentation. And I'm here today with Billy Green, our group CFO. And in the following, we are going to

1:02 run you through this agenda. First, I will introduce you to the business profile of TEAM INTERNET GROUP, then Billy will highlight or present the highlights of the year just ended and then do a deep dive into the financial results, whereas I will then, at the end, take you on a journey through our strategy and outlook for the future.

1:29 So TEAM INTERNET does two things. So we have this operating segment online marketing and the operating segment online presence. And in online marketing, we create privacy safe AI generated consumer journeys that convert general interest media users into highly confident consumers. And in this business, in 2023, we've done a stunning $657,000,000 of revenue from around 6,000,000,000 visitors coming to one of our 100 thousands of micro websites that we operate. And at the at the bottom of the left hand box, you see some of the largest brands that constitute this business.

2:19 On the right hand, you see our online presence business where we are a critical constituent of the global online presence ecosystem where we serve as a primary distribution channel for a wide range of digital products, most importantly, exotic domain names, and we will come to that in a few minutes. Here, we've done a $180,000,000 of revenue from nearly 14,000,000 domain years that we processed in the twelve months to the December 31. And, again, on the bottom, you'll see some of the leading brands that are part of our online presence business. So why is now a good time to consider investing in TEAM INTERNET? And there are three reasons, growth, value, and timing.

3:13 In terms of growth, we've ended the year again with double digit growth, 15 to be more precise. And we are also very happy to report that both segments have almost perfectly equally contributed to the to the growth of the business. And and still both businesses address the multibillion market opportunity, supported by industry megatrends. Then value. So for many years, we've we've consistently delivered high cash conversion of around 100%. We have a strong and well capitalized balance sheet, and we've also more lately introduced a progressive dividend policy and started capital returns to shareholders also by means of share buybacks.

4:08 And last but not least, in terms of timing, after a few years of build up time, we have now firmly positioned our online marketing business in markets as mark as a market leader in the in the carefully curated niches that we have selected in this in this big industry, and the same also remains true for the domain business or the online presence business if you want so. And going going forward in both businesses, we will become more diversified and more vertically and these are aspects that we will address in the last section, and outlook. Before we get there, let me back up our our claims on growth and value with some data. So on the top of the slide, you see our pro form a revenue back to 2,018.

5:00 So for your for your convenience, we've added back all the acquisitions that we've done as if you would have owned them as of the 01/01/2018 to demonstrate a true underlying organic growth of the business, which reads as 25% over the last five years. It's, of course, 25% annually for the last five years. And at the bottom of the slide, you see that our free cash flow yield has materially improved from 6% in 2020 to now 14% in the year just ended. Again, these two these two facts together being being testament to us being a growth stock and to value stock at the same time just for the price of one.

5:48 When we then when we then come to the to the megatrends that that float our business. In online marketing, it is it is three. First, the ascendance of social media. Secondly, data privacy, and third, risk transformation. So how does this all play together? As as you all know, today, literally everyone has an account on Facebook, TikTok, x, Instagram, you name it. And below, we are showing some some of the of the user numbers that these platforms have amassed over over time. And, so today, we can consider social media and with it, user generated content as the main form of media consumption on the Internet. Yet, at the same time, the advent of data privacy is trend that we strongly endorse.

6:39 Monetizing monetizing visitors to social media websites has become incredibly challenging. And this is this is where our secret key comes in to unlock this opportunity, which is risk transformation. So where we where we convert clicks on social media into into more valuable clicks related to search ad campaigns and clicks on search ad campaigns into actual ecommerce transactions, and and we'll we'll show we we will present to you how we intend to build this business further in the last part of this presentation, so please stay tuned.

7:21 Then on the online presence side, it is again three three mega trends. First, optimizing for efficiency, then the move towards exotic domain names, and last but not least, our commitment to excellence. And efficiency is is the the reason to be of our our business. So just imagine 4,000 companies being licensed to sell domain names to the general public and 1,500 different top level domains. Like, of course, everyone knows .com, .net, .org, .uk, .te, .ch, but there's 1,500. If not every registrar wants to sell all the top level domains, you would need 6,000,000 technical integrations, 6,000,000 contracts, 6,000,000 monthly bills.

8:06 So here, there is a clearly a case for a clearinghouse, which dramatically decreases the complexity of this industry or augments or and enhances its efficiency. And we are we are a firmly established part of this very small oligopoly of such clearing houses, number one in Europe, number two in the world. And why why is this so relevant? This these clearing houses naturally have a particular role to play in the in the ream of country code top level domains. And country code country code top level domains are the fastest growing segment in the market.

8:53 Why is that? Under .com, the most popular top level domain, most reasonable combinations of letters and number have already been taken. This is why the operator is is switching to price increases for further revenue growth. Yet from a customer perspective, this makes that there's less attractive inventory for higher prices. This is why more and more often customers opt for the local top level domain, like an English business might go for .uk, or they opt for so called repurposed top level domains like a.ai, which stands for the Island Of Angia, but, of course, is now being understood as artificial intelligence and is selling like hotcakes.

9:39 The other examples like .io for the British and the Ocean territories, which resemble one and zero or input and output, so attracting any kind of digital business or simply .co for Colombia as a hip alternative to .com. And so so we are we are, by nature, firmly positioned in this most attractive subsegment of the domain industry. However, we we are we are so so successful in this business because of our commitment to excellence where we have clearly set out and publicly communicated service level agreements and customer success KPIs, which we not only consistently track, but we also consistently surpass them. And our our trust pilot rating of 4.6 out of five is testament to this fact, putting us very firmly at the very top end in in terms of customer perception in this industry.

10:38 And then over these two segments, we created this vibrant and symbiotic ecosystem connecting companies on the supply and on the demand side. And we are truly in the fabric of the Internet economy with having the most reputable and leading companies on both sides of the equation. So on the on the demand on the supply side, we have companies like ByteDance, Amita, a Taboola, an Outbrain, or if you go to the domain business, companies like like Verizign or Nominet. And then on the demand side, we we then have, again, the top brands on this planet, like the Google, the Bing, the Yahoo, and Amazon, or if you go to the to the online presence side of the business, companies like a GoDaddy, a WordPress, or if you go into the corporate subsegment companies like Johnson and Johnson or Mercedes Benz, again, being being testament to our stellar and pristine reputation in the in the industry allowing us to trade with literally everybody on both sides of defense.

11:55 So this this is this is what this is what TEAM INTERNET GROUP does, and my colleague, Billy, will now present to you how this has translated into financial success. Thank you, Billy. Thank you, Michael. So just giving you a brief overview of the main financial highlights of 2023 for us as a group. You'll see across the top row of boxes there that we continue to deliver as we've consistently delivered before, double digit growth in a lot in in many revenue and profit metrics, the growth of 15% in gross revenue right through to the growth of 26% in operating profit being testament to the sustainability of the of of of the revenue and profit journey that we we as a company continue to pursue.

12:50 One factor that's particularly important to us when it comes to not only looking at being able to drive the company's revenue forward, but also being able to convert that revenue into, an an ever higher level of operating profit. We set ourselves a metric internally of monitoring our EBITDA conversion. So that's adjusted EBITDA divided by net revenue. And you'll see that whilst for 2022, we still remained at lower than 50% conversion of net revenue into adjusted EBITDA, we the the 86,000,000 divided by the 177,000,000 you'll see in front of you here, for the first time in 2023, we achieved a higher than 50% conversion of net revenue into adjusted EBITDA, 96,400,000 of adjusted EBITDA being generated from the 191,100,000 of net revenue.

13:42 And, naturally, having now got through a 50% level, the bar is raised for us both internally and externally, and we expect an aim to deliver a higher than 50% EBITDA conversion every year prospectively. And that profitability flows right the way down the p and l. We'll we'll have a look at slightly deeper dive on the income statement in a few slides time, and you'll see that that profit story goes right the way down the p and l. At the bottom left hand corner of the screen, you'll see our adjusted earnings per share increased by a factor of 34% from 2022 into 2023. That EPS growth being driven, of course, not only by the higher earnings year on year, but also the reduction in share count that we successfully executed during 2023 as a result of our two share buyback programs that we ran during 2023.

14:37 The net debt of the of the company continues to be at a very manageable level, having delevered significantly and and rapidly in 2022 to a level whereby we we we got to 56,600,000 net debt as of our as of the end of twenty twenty two, and that was significantly less than our adjusted EBITDA for the year. We remain in 2023 at a less than one to one ratio, less than one turn of net debt compared to adjusted EBITDA at 74,100,000 net debt compared to 96,400,000 annual adjusted EBITDA. And therefore, that's a level at which the net debt remains very We we we we consider that we're we're quite, moderately levered, and we're certainly nowhere near the levels of leverage we were at in 2020, 2021 when we had more like two, two and a half, sometimes even higher terms of net debt compared to adjusted EBITDA.

15:31 So in a couple of slides time, I'll take you through the component parts of what the 74,100,000 consists of or or or where where it's come from, but it remains at the level at which we targeted, which is to remain well below two two times net debt to adjusted EBITDA. In fact, it's below one times net debt to adjusted EBITDA. So confident are we in the strength of the balance sheet and the continued financial maturity of the group that having declared our and paid our inaugural dividend of a penny per share in q two of last year, we're proposing to our to our annual general meeting this time next month that the shareholders vote to double the size

16:11 of that dividend to 2p per share payable in q two twenty four in respect of twenty twenty three's financial performance, reflective of the company's continued profitable growth. Taking a slightly deeper dive on the organic revenue growth for fiscal year twenty twenty three. You'll have seen the as reported growth growth levels continue to continue to be at a very pleasing level. It's important to us that we stay we stay in tune with the actual real underlying organic growth levels of the business. And those of you who've seen this graphic before, you'll know that the the very small green sliver at the top of the blue bars represents an adjustment to pro form a the results both for 2022 and for 2023 as if all the constituent parts of the group were present consistently throughout the entire period from January 22 through to December 23 and also at a constant currency rate as if the as if there had been no foreign exchange fluctuations in our numbers. So it gives you a true like for like comparison of the business indicating the true real underlying organic growth rate.

17:24 And you'll see that even after adding back for acquisitions and constant currency adjustments, mainly mainly, of course, impacting the 2022 numbers because we have been somewhat less acquisitive over the course of late twenty twenty two and into 2023, and therefore, there is a smaller delta between reported figures and pro form a organic figures than than you may have seen in previous quarters. But we're still showing organic growth of 12% on the online marketing segment and of 16% in the online presence segment, a testament to the underlying strength and health of the business. On the right hand side of this screen, you'll see some of the key performance indicators that we have become accustomed to presenting to enable people to understand a little more about which parts of the business are really flying and which, where the profitable growth is coming from.

18:18 You'll see that our volume metrics continue to trend in a very positive direction both on the online marketing and on the online presence side of the group. So that even in a year where RPMs, so revenue per thousand clicks, which is a metric sorry, revenue per thousand views. Even in a year when that price metric on the online marketing side of the group is lower in the current year 2023 than it was in the prior year 2022, which was a real boom year for for click prices and for advertiser competition, even in a year where we're seeing lower click prices and quite objectively lower consumer confidence and and lower, competition between advertisers. We're still able to take the group forward profitably. We're still able to grow revenue and indeed grow all financial metrics so that we're showing that even in a time when many of our peers and business partners, unfortunately, are are are experiencing difficult times economically, We still go from strength to strength, and we still grow both in terms of revenue and profitability.

19:24 So there is nothing for us to be afraid of in terms of future, seasonality or or or other macroeconomic trends that impact the online marketing industry, we can trade profitably whatever the market conditions show. And indeed, we're not directly reliant on RPMs increasing in 2024, although, of course, any factors within our power that we can we can do to increase to to to improve, click prices, we we will, of course, take. But the growth in volumes of our business, the commitment to excellence, the launching of new products and technological innovation all point towards a business that is able to trade through whatever the market conditions are so that even in even when the when the online marketing industry is cyclical, we continue to grow and to be successful.

20:16 I alluded earlier to the second share buyback program, which we launched in q two of last year. There was a smaller buyback program launched on 12/30/2022, which then concluded toward the end of January twenty twenty three. Following the success and popularity of that share buy of of that more modest share buybacks scheme earlier in the year, we then launched a more expansive program in q two of last year, and we're now reaching the conclusion of that second program. And it has again been very, very successful in achieving its its its goals, its aims. Taking a slightly deeper dive in respect of the the income statement of the business, most of the the top two thirds of the p and l from revenue down to operating profit, we've already highlighted in terms of very clear and strong, financial metrics. But right the way down the p and l, right down to delivering a profit after tax of $24,300,000, we're very, very pleased to be able to report such a significant profit after tax. The company has gradually over many years moved away from, losses before tax into a position where we nearly achieved a profit after tax in 2022.

21:33 We we had a slightly higher level of amortization of intangible assets in 2022 as a result of, of of of, of the acquisitions that we had carried out. So we we we were at nearly a breakeven position after tax in 2022. So from now to to convert then to a a mega double digit million, profit after tax in twenty twenty three of twenty four point three million, that's a good position to be in, and it indicates the financial robustness of the company. Naturally, though, the next challenge for the business is every year we post good results. We then need to grow and record even better

22:10 results in in the successive year. And I'm very happy as CFO, we're very happy as a leadership and a management team to grasp the mantle and to ensure that we we we set ourselves the target that having achieved 24,300,000 profit after tax for 2023, we then need to to to deliver even higher profits after tax in successive years.

22:34 Moving on to the balance sheet strength, I did say we'd come back to net debt in a little more detail. And as a reminder, following quite rapid delevering in 2022, so we arrived at 56,600,000 of net debt at the end of twenty twenty two, which was significantly lower than the the adjusted EBITDA for that year. Most of certainly, greater than 50% of the free cash flow that was generated in 2023 was then used to return cash to shareholders in 2023 by way of the share buyback programs that we've described and also the inaugural dividend, which was paid in June 2023. So that's a combined $44,000,000 of cash returned to shareholders in 2023 alone.

23:19 So that that that excludes the start of the first share buyback program in 2022 and also excludes the the continuing share buyback program we've we've been running into 2024. The increase in net debt is is basically primarily the result of us experiencing in 2023 a higher than usual and unprecedented and never to be repeated based on the current portfolio of businesses that we we own, a high level of earn out payments, deferred contingent consideration payments, which we've paid to the the former owners, founders of businesses we've acquired in recognition of the absolutely stellar growth of those businesses since they joined our group. So they have, in most cases, overachieved the targets we set when we acquired them, and therefore, we had fairly material payments of $22,000,000 in q three of twenty twenty three. But it is worth reiterating that is not a recurring cash outflow.

24:16 We do not expect to experience anywhere near the same level of earn out payments based on the current portfolio within the group. So if you were to add together as a as a mathematical exercise, the $44,000,000 of cash return to shareholders and the nonrecurring level of deferred contingent consideration, you'd get to $66,000,000. And you'll see that absent those two factors, $74,100,000 of net debt at the end of twenty twenty three could quite conceivably have been much closer to a zero, I. A net cash situation at the end of twenty twenty three. So it is perfectly within the company's control to manage that net debt level and to

24:56 to get close net to net debt if that is the wish and the will of the market. At the current time, we've seen it as particularly good value to return cash to shareholders by way of the share buyback, but we do have it completely within our control to either return cash to shareholders or to to to to manage the net debt levels depending on what we as a board conclude is the most appropriate way to take the business' capital structure forward and in line with and very clearly consistently with the cash the cash waterfall, the cash allocation program, which we announced this time last year and continue to stick to absolutely consistently.

25:34 The final comment I'll make on the financials before I hand back to Michael is those of you who followed TEAM INTERNET, or Central NIC as it used to be known for many years, will have seen that we consistently strive to convert operating profit to operating cash at a level of at least 100%, so higher than 100%. And having overachieved that goal in 2022 and achieving a 110% cash conversion operating cash conversion in 2022, we achieved slightly lower than that target in 2023 of 96%. So close to 100%, but not the level at which I would I I would task the business to perform in 2024 and beyond. So we go again in 2024.

26:19 We have set ourselves a target of a 100% plus in 2024, and I'm very confident that we will achieve cash conversion of more like more like a 100% plus in 2024 and in prospective years. And with that final comment on cash, I'll hand back to Michael for an update on our strategic outlook. Thank you, Billy, and I hope everyone on this call is just as excited about these results as I am. And let's now have a look at what we intend to do to keep it that way. And our main strategic priority is creating a virtuous circle. The virtuous circle starts with laser focus on organic growth, winning new customers, and constantly launching new products that exceed our customers' expectations.

27:10 That organic growth combined with our disciplined approach to cost then leads to operating leverage. Billy just mentioned that for the first time, we've converted more than 50% of our net revenue into EBITDA. And just for memory, only in 2021, that ratio was only 39%, just demonstrating the huge levels of operating leverage that we've already demonstrated. And the operating the operating leverage with the leverage then again translates into more competitive cost of capital. So here, we had the major crystallization event back in 2022 when it refines our bonds. It was also on one of Billy's slides where we've cut our the credit spread applicable to us by more than 50% from 7% to 3%, and this is also the reason why in 2023 and also this year, we are turning our attention to the cost of equity, hence, the progressive dividend policy and the share buyback program.

28:13 And then the competitive cost of capital allows us to do focused and highly accretive both on m and a. And while in 2023, we've taken a bit of a hiatus from from m and a, it is still a strategic priority of our company because then each acquisition leads to new adjacencies on the demand and on the supply side and then adding adding new fuel to the organic growth engine, which then becomes a virtual circuit. So how can we how can we further how how can we further enhance our our business model?

28:58 So in the online marketing business, which has, within a very short period of time, grown into our largest business, everything starts with a click. So today, our two main businesses are

29:14 taking that social media click and converting it into a more valuable click in a search ad campaign. And then through the then through the acquisition of .org in 2022, we added another skill, which is taking a taking a search ad campaign click and converting it into an ecommerce transaction and earning the commission income on on it.

29:44 Our plan now for '24 and later is then to add another model, basically inversing the principle rather than converting one click into a more a singular, more valuable event. We want to take clicks and convert them into a stream of revenue generating events by by building content websites with highly captivating content on them. A typical example could be the best 100 US colleges where you start on rank 100 and then have to scroll through. And as you scroll through, we we then constantly deliver new ads to the to the to the user, basically going from a one to one model, going to a one to many model. And these kind of models work particularly well in in verticals in which TEAM INTERNET is currently underrepresented, and this is why why this step will enhance our total addressable market and also introduce a new a new tool in order to extract even more revenue and and both for our customers and for all shareholders.

30:53 So this is now the immediate step that that that we plan to implement in 2024. If you think there's a little bit more long term, it becomes our OM SQUARE vision. The OM SQUARE vision stands for online media, online monetization, where where we intend to build an ecosystem that can absorb traffic from any kind of source, whether it is a social media website, a search engine, or a content discovery network, and feed every user into the right monetization channel, whether it be it our main search engine partner, a direct advertiser, or an e commerce affiliate. And new product announcements that we would make or any acquisition that we would make in the online marketing division should be should be understandable even to a layman how they fit into into this scheme.

31:51 So you will always you can always use this as a compass to to to understand how a specific strategic action have you been taking fits into our long term strategy. If we then if we then elevate this one level higher to the entire group level and to take an even longer perspective, let's say, ten years, how will TEAM INTERNET then look like? First, it will be more diversified in terms of its revenue streams and its supply sources. Secondly, it will be more vertically integrated with the with the objective to keep more of the value that we create in this industry to ourselves and also and also reduce friction losses in the industry.

32:41 Third, in everything that we in everything that we do, we aspire for global leadership. And in the carefully curated segments in which we operate, we we stand up very well to that to that claim. And in everything that we do, we remain firmly rooted in our core values and beliefs that we presented at our Capital Market Day in September last year.

33:07 And one of these beliefs is to build products that we are proud of, to build products that exceed our customer expectations. And here, AI comes into play. AI has always been seamlessly evolved into the fabric of our daily operations. However, we have we have now more created a more formal program with three main pillars, raising the floor, raising the ceiling, and raising awareness. Raising the floor stands mostly for doing the things that we have always done, but notably more efficient, whether that's in in HR, in in sales, or any other internal function.

33:55 Raising the ceiling then means allowing our senior engineers to harness the power of AI to build augmented products, which which exceeds our customer expectations even further. Let's take the process we have today in making them even more powerful. And then last but not least, raising awareness stands for getting understanding how artificial intelligence could actually disrupt business model that exists today and to build the products that were simply inconceivable before the advent of of AI. And here, some recent examples are our new advertising product, Absolutely, which is which is an ad format that automatically learns in which in which kind of content it has been placed and optimize it itself for it, or our fully automated content publishing business that understands the the the the topics associated with the domain name, writing articles, matching that domain name, and even subscribing to news feeds to to then later write new articles based on on news around the topics the website is about to constantly stay stay alive.

35:15 And it wouldn't even go so far to publish these these these articles on social media. So, basically, everything that everything that a classical media business would do, just being run out of a box. And with this with with the with the strong financial results of 2023 and this culture of excellence and innovation that we that we are instilling at TEAM INTERNET, the directors are pleased to confirm that they are confident in the company's ability to meet its market expectations. And as as Billy has laid out with the high cash reserves that we have, the strong operating cash flow, and the committed credit facilities, the company is fully funded to simultaneously execute a strategy to invest into its future and also to return cash to its shareholders.

36:16 Hashtag doubling the dividend, hashtag share buyback program. And yet again, as as a as a as a commitment of the executive committee, the group aims to become more diversified, more integrated, and incessantly pursue its global leadership aspirations. Thank you very much, and we are now open for q and a. Perfect. Michael, Billy, if I may just jump back in there. And thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that on the right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard.

37:08 Billy, Michael, as you can see there in the Q and A tab, we have received a number of questions from investors. And thank you to all of those on the call for taking the time to submit their questions. But Michael, Billy, if I may just hand back to you to read out those questions and give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Yeah. That's appreciated. Thanks. Thanks, Jake. I'm starting to see the questions coming through on quite a few topics which we which we alluded to in the deck, and now people are people want us to expand on, which is good. So the first question I can see here is whether we expect to see more share buybacks in 2024. Taking you from the very objective fact that in 2024, we are buying back more shares right now as we complete the second buyback program, which we launched in q two of last year.

37:57 But then taking you from from the most objective to then what we aspire to do, we will also, as as a board and as a management team, we will propose at the company's forthcoming annual general meeting next month, we'll propose that for this for for for another year. The company shareholders give the company authority to buy back up to 10% of its share capital, which will then allow us it will give us the capacity to engage in more share share buyback activity subject to availability of funds and subject to us us us ensuring that that's balanced against all the other needs of the business. So once we once we receive that authority, one one should anticipate that share buybacks will be another high priority again for the company in 2024.

38:45 But, naturally, we can't commit today as to what the level the materiality of that of that share buyback program will be in 2024. Only that we commit, we continue to commit that we our share capital our allocation will remain completely consistent with the the the waterfall, the cash allocation waterfall, which we initially published this time last year and reiterate and republish today in the annual report we released that our our allocation priorities will be to pay our dividend, to reinvest in the business, to engage in m and a activity where it makes sense as a business and where there are opportunities that are available, and then to allow cash to be available for buying back shares and, ultimately, once once the share buyback activity also to manage our debt as well.

39:38 So sorry if that's a rather long winded answer, but we have to be careful that we don't that we don't give a definitive answer when it is it is it is not our place. It is the role of the shareholders, first of all, to give authority for the company to continue buying back shares after the current program. And then there is a broader board beyond Michael and myself who will then determine the actual detailed strategy. The next question I can see here is also share related. What have Kestrel informed us of their long term plans as a major shareholder, and how much influence do Kestrel Kestrel currently have. In terms of Kestrel's long term plans as a major shareholder, those of you who follow the stock in detail will see that Kestrel have continued to add to their shareholding over the last over the last year. So Kestrel continued to be a a welcome and and and and part of our shareholder base.

40:36 In terms of the influence that Kestrel have as a business, as you'd expect with any shareholder that owns more than 10% of the business, Kestrel are active in terms of guidance and advice that they give to the remainder of the board and to the management team. But it is also worth bearing in mind that Kestrel are are quite a long way from being from being anywhere near a majority shareholder of the business. We, you know, we we we we have good liquidity as a group, and Kestrel exercise no more influence than any other major shareholder. The next question I can see is is is slightly more related to the financials. Why does the company continue to endure significant interest expense if as it appears it is it is possible to reduce the borrowing level, which it is. We we we can reduce the borrowing level by repaying some of our revolving credit facility.

41:31 The share buyback has no such immediate saving of costs. So this this is a really interesting one for us strategically. We we consider during 2023 and continue to consider that from a a cost of capital point of view, buying back shares represents better shareholder value than paying back some of our debt, particularly when our net debt and our leverage remain at at considerably lower levels than we experienced in 2020 and 2021. We do recognize that there's gonna be a variety of market views on the relative value of buying back shares versus paying down debt. While debt remains at at what we believe to be relatively low levels compared to what we've seen in the past, buying back shares has represented very good shareholder value in the last year or so. And whilst that doesn't necessarily save p and l cost, we have to consider the the overall perspective of what's gonna generate the the the the most additional shareholder value, which we consider to be buying back shares.

42:31 And as that share buyback program continues, we naturally take on board the the tenor of this question when we when we consider what our capital allocation strategy is and how it's gonna be how it's gonna be executed in 2024 in line with our cash flow waterfall. The next question that's come up is, do you expect the number of visitor sessions in the online marketing segment growing at the same rates in 2024 as those seen in 2023? This this is this is quite subjective in terms of how how we expect the volume metric to grow. I don't know, Michael, if you might have a have a closer view on that than than mine. Yes. And the the expectation should be that the the number of visitors will systematically grow faster than than the than the dollar amounts given that given that we're also seeking growth in emerging countries. So and, for example, in a country like Indonesia, click prices are notably lower than, for example, in United States.

43:39 And if you see growth in emerging markets, you will always see an over proportional growth of visitors as compared compared to The US market. Certainly. Certainly. So the next question that's come up is why is the share price so depressed and range bound given the growth future opportunities and free cash flow yield? It seems very low. That's that that's that's an observation that is obviously quite subjective. In terms of the share price, I I don't feel that it's either Michael or my place to give too many subjective and opinionated views, eve even though, of course, every individual will have views as to what drives the share price.

44:31 All we can do as a management team is to continue to execute very well on our business plan and deliver excellent results. There are a couple of factors that that I would imagine, a range of investors will look at in terms of the the performance of a company. For me, the fact that we declared and paid our inaugural dividend in 2023, and we have not only in 2024 growing that progressive dividend policy, but indeed doubling the dividend. I think that's a sign of the company's financial maturity, financial stability, and I I hope that the market will respond well to that. Likewise for me, the achievement of a significant profit after tax, I. E, real objective bottom line profitability that is that is objectively adding shareholder value, that's also something that there will have been parts of the market that did not like that about the company in the past, that the company didn't necessarily generate a bottom line profit.

45:26 So now that we have generated, not not just a small breakeven bottom line profit, but $24,300,000, a huge amount of money. I mean, you know, the entire adjusted EBITDA of the group was less than that when I joined the group in 2019. And Michael and I, as a management team and as a director team today, we started talking many years ago about the company's journey towards achieving sustainable profit after tax. So now that we are now that we are in a in a a more objective place in terms of delivery of profits, I think there's much more for all levels of investors from from right up to the very sophisticated investors to really like about this stock. And I I will also reiterate and draw people's attention back to the growth and value and timing aspects that Michael presented earlier, which is available in this investor deck regarding what it is about the company that's great to like.

46:19 There's a lot in there, and there's obviously a lot more that we're we're happy to talk to individuals about, in order to make that those those growth value and timing factors even clearer. The next question that I can see here is one that we have been asked in the past. Is there any benefit in splitting the online marketing and online presence segments into separate listed businesses? And it's another quite subjective question, I I would say. The online marketing online presence businesses look quite different in 2023 and into 2024 than they look this time last year because this time last year, we were seeing online marketing continue to grow at progressively higher rates and becoming a much larger proportion of the group than online presence.

47:11 We've seen a a slight narrowing of the of the comp the internal competition. It re you know, it really is a competitive management set we have internally, and we've seen online marketing, online presence grow at at quite similar mid mid teen rates from 2022 into '23. And certainly, our forecasts and estimates show those businesses growing at more similar rates in '24 than we experienced in previous years. So right now, it looks like the growth rates of those businesses are quite complementary. We would also feel that although although there may, at some point in the in the group's future, be more objective benefit in looking at these businesses separately, this would not be a good time to split off either part of the business. It's not a particularly it's it's not a particularly welcoming time to to to to to to list to IPO at the moment. So from a timing point of view, it's probably not a very good time at the moment to split online marketing and online presence. But as a management team and as a board, we have to be responsible to the shareholders and have to be open to that possibility at some stage in the future. So I would not rule it out, but the timing isn't right at the moment.

48:26 The next question I can see here, growth has been very impressive. And don't get me wrong, it's it's still impressive, the question says, but it also has been slowing at a net revenue level even if even if gross revenue continues to to increase. And the ultimate question is, what will drive future growth and what levels of growth should we be expecting in future? It's quite important that we are fair we remain fairly conservative in our forecasting as we have been in the past, and we certainly would not claim that we are likely to see material increases or we wouldn't guarantee to see material increases in click rates and and and therefore wouldn't guarantee that one could see more like mega double digit growth in the online marketing segment in in 2024.

49:17 But we do expect and should see continued growth, continued double digit percentage growth in in online marketing and online presence in 2024. That that has been the consistent delivery of the company over the last several years. And even though there may be macroeconomic factors which we are waiting for them to turn into our favor, there are many, many actions we're taking on the product development, technological expertise side of side of things that are indicating that the levels of growth in future should be not materially out of step with the very impressive levels of growth we've delivered in the past. But to reiterate what I said at first, we continue to be very prudent and conservative in our forecasts, and we certainly wouldn't wouldn't, want to guarantee that future performance will be in line with with with previous levels of growth. It's just we have a plan as a business to, to to continue to deliver at that rate.

50:17 The next question I can see is is more related to the financials. Why was the tax charge so high in 2022? I do remember answering questions a few times about the 2022 tax charge when we had these equivalent calls this time last year. There are a couple of factors, one of which is a permanent factor in the business, one of which was temporary in 2022. In order to look at the tax charge as a percentage of profit before tax or rather to look at the tax charge as a percentage of, earnings subject to tax, you really need to add back most of the intangible asset amortization because that is that generally relates to amortization of, of of businesses we acquired over the years through m and a activity, and therefore, that's not deductible for tax in most jurisdictions.

51:08 So if you're gonna look at the effective tax rate, you should you should add back that intangible asset charge. And you'll see from that point, if you have the tax charge, whilst it was higher in 2022 than other years, it's not out of step with other years. The other point I would make in terms of the tax charge as we see it at the moment, it's important that anybody who's looking for an indicator as to what the future tax charge is gonna be, look at the note look at the tax note in the accounts and decouple the current tax charge from the deferred tax charge because we experience and and, obviously, we're quite happy to pay tax in the jurisdictions that we operate as we generate profits. And as a responsible employer and a responsible part of the tax ecosystem, we we we we do pay taxes as they fall due. But the current tax is slightly offset by deferred tax credits, and one cannot guarantee that the deferred tax credits will recur in the same value in future years. So please do decouple the current and the deferred tax, and we can obviously help people to do that in order to arrive at a sustainable level of effective tax rate for for for future years.

52:17 The next question is one which I'll pass over to to Michael, and that question is, who are your main competitors in terms of your pursuit of global leadership? Right. And so in our in our TIG business, this would be this would be names like the System One Incorporated or the the CEO division of IONOS who are or the or the ask media unit of of IAC. So these would be probably the the largest companies. And in in our org business, we would we would then rather compete with with other national champions, like, for example, in in the German market. But, again, here, our ambition is very much growing the business through internationalization.

53:10 And in 2024, we plan to enter way more markets than we did in in 2023. And then again, in the online presence segment, it is it is Toucaus, respectively, the Toucaus domains division of Toucaus Incorporated who are today the number one on a global scale. However, as we've shown in in in prior investor decks, we are catching up to the position at a relatively fast pace and clearly have the ambition to take the number one spot in only a couple of years from today. Thanks, Michael. The the next question I can see is, please, can you comment on the 2023 amortization of intangibles and tax charge figures and how we might see these items develop over the next year or two?

54:05 So the tax charge I briefly alluded to in in in the previous answer I gave that I'd I'd be very I'd be very careful to guide people towards looking at the current tax charge and looking at the deferred tax charge separately. So one can't guarantee that the relatively low level of tax charge experienced in 2023 will replicate in future years in terms of applying that as an as an effective tax rate because the deferred tax credits that we benefited from in 2023 will not necessarily recur in '24 and beyond. So with the with the tax charge, I would expect to guide all users of the financial statements to to look at current and deferred tax separately. In terms of the amortization of intangibles, that number has gradually trended up certainly since I joined the company in 2019 and even before.

54:58 But based on the current portfolio of companies within the group, I until and unless we are more acquisitive again, one might see a drop off, a gradual tail off of that amortization of intangibles numbers over the next year or two as some of the businesses we bought five, six, seven years ago reached the point where they're at the the intangible assets, which were set up when they required become fully amortized. And, therefore, when we've had some fairly significant chunks of amortization each year for businesses we bought dating right back to the the acquisition of Key Drive in 2018, so nearly six years ago now, one one one could see and in fact, of course, we model out our amortization charge. One could see a reduction in that charge absent any subsequent m and a activity which we might engage in, which would, of course, then add to to a higher level of intangibles.

55:53 So based on the current portfolio, I would not expect an increase, but that that can obviously change depending on how active we are in the m and a market this year. The next question is about, can we provide some information on trading so far this year, please? And, generally, the answer is we we are not able to provide much information about trading so far this year. Reaching the q one point of each each year when we release our annual report, we typically we're we're pleased and confident to state that we'll be meeting market expectations, and and we continue to to find ways in which we can sustainably grow the business. But q one trading information will have to wait until we release our q one results in May well, two month two months from now. In fact in fact, by two months from now, we will release our q one results. The financial calendar comes around very quickly this time of year because by the time you get your annual report out, which for us is a a week earlier earlier than we've ever released before, it still is quite a quite a quite a narrow time frame until our q one results are out. So people won't have to wait too long to actually see how q one has been and how we're how we're trading as a business moving into 2024.

57:10 Right. And, again, we deliberately, by choice, report quarterly, which which, basically, just adds to our commitment to transparency. And people should should also remember that that that that q one is not really the decisive quarter. It's we make most every year. We make most of the money in q four. So that's really the the quarter to watch to watch out for. And, again, today, in eight weeks, you will have a q one report in your hands. Absolutely. I think that pretty much brings us up to time, Jake. Do we have time for another question, or are we are we are we likely to overrun? You have the floor for as long as you need, sir. If you do want to address those final questions, then please feel free.

57:58 If not, we can give you all of the questions back immediately after the presentation has ended for you to review as well. Okay. Well, let let's let's do one let's answer one more question then. There's question about about the share price, which we we alluded to earlier. I think the final question then that we'll answer, there's a question here. What drove online presence growth, and is this sustainable into 2024? And in short well, the drivers of online presence growth, I I would refer you back to the megatrends that Michael went through, particularly the online presence slide there. There were three bars indicating why online presence or the domain name industry as a whole is is is benefiting from macroeconomic megatrends, which we then take advantage of. And then specifically, our commitment to excellence within online presence and, as as reflected quite objectively in our 4.6 out of five trust pilot score indicate why we are successful within that space.

58:59 So please do revisit that megatrend slide, when you have the opportunity to do so. The investor deck will be available. Is this sustainable into '24? More subjectively, we we we do strongly believe that we can continue to grow online presence at a a double digit percent growth rate, which hasn't which hasn't necessarily been the case in the years 2022 and prior, but having demonstrated in 2023 in in in in the face of quite a few commentators who could not believe that an already successful established steady state online presence business could be grown at a double digit rate. We did so in '23. The same factors are in place to deliver into '24 as well. There's a full year impact in '24 of some very successful launches and business decisions we made in mid twenty three. So that gives us good good tailwind into '24.

59:54 And, naturally, it's our responsibility as a management team to ensure that carries on beyond '24. So very bright times ahead for online presence and online marketing, likewise. We we continue to to provide revenue and profitable growth and look forward to continuing to deliver and hopefully delight all all sectors of the market in 2024 and beyond. Perfect. Michael, if I just jump back in there, thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors. And, of course, we will be able to give you back all of the questions that were submitted today as well as any further ones that do come through back, immediately after the presentation has ended. Just for you to review to then add any additional responses, of course, where it's appropriate to do so, and we'll publish all those responses out on the platform. But, Michael, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments to wrap up with, that would be great.

1:00:50 Yes. Thank you. And, again, we are delighted to to end to have ended the year 2023 on such a high note. And we're also we're also excited by the amount of interest that our company draws just being just seeing the number of questions coming in as as a token of evidence. And we've we've we've made a particular amount of effort to really have a very comprehensive annual report, which is available for download, where we talk at length about the specific strategic trends that we're addressing, how we're addressing them, what's what's the what the drivers for success are. So I hope I can motivate you to download a copy of the annual report and and read through it.

1:01:39 I believe it is one of the more interesting reads being published by public companies. Perfect. Michael, Billy, thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of TEAM INTERNET GROUP PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.