Team Internet Group (LSE:TIG) — Q1 Results Investor Presentation

0:00 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, I would just like

0:31 to submit the following poll. And if you'd 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 executive management team from TEAM INTERNET GROUP PLC. Michael, good afternoon, sir. Good afternoon, everyone, and thank you for joining us today for our q one results update. And I'm here today with Billy Green, our group CFO, and let us jump straight in.

1:03 So today, we are we're going through, three items, a business profile describing what TEAM INTERNET does and what makes it great. Then Billy will present the financial highlights of the quarter just ended to you, and, I will then take back over to guide you through our strategy and outlook for the future. So what does TEAM INTERNET do? TEAM INTERNET has two operating segments, online marketing and online presence. And in online marketing, we are we are creating privacy safe AI generated consumer journeys that convert general interest users into highly confident consumers.

1:53 And in this business, we have generated $146,000,000 of revenue in the first quarter of this year and $30,500,000 of net revenue respectively gross profit. And when we take a slightly longer operational view, in the in the twelve months just ended on the thirty first of March this year, we had 6,000,000,000 users embarking on one of our consumer journeys. And on average, we extracted 91 US dollars of revenue from each of each thousand such consumer journeys. And in online presence, we also have exciting numbers to present.

2:40 So in online presence where we are a critical constituent of the global online presence and productivity tool ecosystem, in particular by supplying all kinds of domain names, in particular exotic domain names to not only largest web hosting companies in the world, but also some of the largest brands in the world. Here, we generated $50,000,000 of revenue in the first quarter, yielding more than $17,000,000 of gross profit. And also here, when we take a twelve month view, we see that the number of domain names that we have processed has increased slightly, but we've also extracted notably more money out of it.

3:29 And this comes this this comes not only from from us having been able to get fair compensation for the fantastic services that we provide to our customers. It is also testament to to higher price points as we shift away from .com domain names to more exotic domain names, but we'll come to that a few slides down the road.

4:01 Talking about talking about our online marketing business. People people have asked us, okay. How did you come up with how did you come up with this model that that we first presented in our year end road show just a couple of weeks ago? So as a reminder, OM Square stands for online media, omni monetization, meaning we we take people from any kind of traffic source and match them with the right advertiser from any kind of demand side platform. And so here, just like in domain names, we have a supply site, which domains is is so called top level domains, like nominetfor.uk or for.com.

4:55 Here, in online marketing, we have different platforms, either social media platforms like Meta, TikTok, content discovery networks like Taboola and Outbrain, search engines like Google and Bing, and many others. And, again, we have a lot of demand side platforms like, again, search engines like Google Ads, ecommerce marketers like Amazon or Walmart, and and all kinds of other people. Here, we already see the the the similarity between both industry. You have a larger fragmented supply and demand side. And just like in in domains where we build a clearing house to bring the two together to to make connections that without us would never happen, we are now doing the same thing that we've done successfully over the last two decades in domain names.

5:47 We are now doing the exact same thing in online marketing. Just that there's one very big difference in between the two that is that the total addressable market in online marketing is roughly 100 times as large as the total addressable market in domains. And this is also the reason why we were able within only four years to to come to a revenue number that is almost three times the revenue number in domain names, which makes us hopeful for the future as we continue building our online marketing business along the same lines and success factors that we applied in the domain business.

6:35 So coming from this from this abstract model to a more concrete level, so the three main models that we operate today in which we build consumer journeys, taking them from one supply platform and matching them with the advertisers on the demand platform are the following. So in 2019, we started with Tonic. Tonic takes users mostly of social media, Facebook, Instagram, TikTok, but also native networks like Taboola and Outbrain and matches them skillfully with with the Google Ads program, extracting clicks that are much more valuable than the clicks that we buy.

7:23 This we've already now scaled up to a number of somewhere around 500,000,000,000. That's $500,000,000 annually. Then in 2022, we expanded this model, basically creating new consumer journeys that start where the tonic journey ends. Basically, advertising on search engines and and taking the user from there through a highly performance comparison table that helps the consumer very quickly make quickly making up their mind and and and purchasing whatever they need. Here, we transform a click on the search engine into an actual action on Amazon or one of our other partners earning us commission income.

8:13 So here, we have now got a new model going from so called PPC to so called PPA. And now with Shines, an acquisition that has just closed two weeks ago, we're now inverting this principle with Shines. We're again acquiring or engaging with users on social media and search engines and native networks, Again, running them to our own websites. But here, other than just showing them ads or a comparison table, we show them long articles in which in which there's place for a lot of different of different advertisers that might be relevant to these users. Here, basically, whereas the first two models, we have to buy several clicks to gen to have one revenue generating event.

8:59 Here, it is the other way around. Out of every click, we would have many revenue generating events even though each of these events might then only yield a small amount of money. And and why is it so important to have all the three models under one roof? In online marketing, people speak about the conversion funnel, And the conversion funnel has, in principle, three layers. The awareness layer, where where brands actually wants to implant their brand into the consumer's brain. The conservation layer where consumers would consider several options before they before they make a final purchase decision, and then the conversion layer, which then is ultimately time to not closing the deal, actually buying the product.

9:53 And, TIG very firmly sits in the consideration layer. .Org is very clearly in the conversion layer. And now with Shines, we are adding we are adding the awareness layer on the top of the entire funnel. And why is this relevant? It is relevant because each of each advertiser typically has different budgets for all the three phases in the conversion funnel. And by by now also having a product that that addresses the needs of those spending money in the awareness phase of the conversion process. We now also have a product to tap the budgets effectively increasing the total addressable market of TEAM INTERNET GROUP.

10:43 So then looking at then looking at the at the prospects of these businesses. So our online marketing business is is benefiting from two megatrends. First, the ascendance of social media. Social media and with it, user generated content has become the main form of online content consumption. And at the bottom of this table, you see you see some fascinating numbers like Facebook doubling the number of its users every five years or TikTok coming from nowhere to half the number of users of TikTok in almost at all of Facebook in almost no time. What's what is what is helping us here is that at the same time, there was the advent of data privacy with different stages with first Safari and Firefox blocking third party cookies, later Apple and and and Android, reducing the the tracking capabilities on on their phones.

11:48 And this this is this is this is great this great for us because our process is very much built contextually and interact it's it's act it's interactive with the user, and this is why why our process does need all the data that that other advertisers were used to and which they are not deprived of, which which has which has given us this opportunity and those who follow our share for a longer while. Years in which, for example, IPFA and AID were changed to to opt in for the for the years with the highest growth rate that the company has seen. So we are a net beneficiary of the trend towards data privacy.

12:36 Then in in online presence, here, it is very much about the efficiency. So by have built by having built this this clearinghouse, we have material to reduce the complexity of the industry, and this clearinghouse also puts us very firmly into one corner of the market, which is exotic domain names. Because here, when when the procurement of domain names becomes complicated, we deliver the most value. And .com is one of the biggest successes on the Internet. However, by now, almost every reasonable combination of letters and numbers has been registered. Prices for the comp domain names are constantly on the rise, and this is why more and more companies choose to either take a local top level domain. So, like, an English company taking a .uk domain name, a German company taking a .c domain name, a French company taking a .fr domain name.

13:39 But on top of that, we also see another trend, which is that top level domains like .ai, which is actually for the British Indian for the British oversea territories of Anglia, but now being understood as artificial intelligence, sell like hotcakes, and we are just in the right spot to benefit of that trend. The same applies to the British and in ocean territories, which are IO, which could either be input, output, or resemble

14:07 the one and the zero being digital, another extreme success, or dot c o for Columbia, which is justinhip, short alternativefor.com. And we adjust we're we're just in the in the very best spot you could be in in this industry and our our decade old commitment to excellence, which has given us an average trust pilot rating of 4.6 over all our brands in this business, makes that a lot of this opportunity that actually walks through our door and to a lesser degree through the doors of our peers. So this was, in a nutshell, what's the Internet does and what and why we are so great at what we do. And Billy will now run you through how all of this has stacked up in financial terms.

14:59 Thank you for now.

15:04 Thank you, Michael. Turning to the the company's q one financials. As Michael alluded to earlier, the company experienced revenue and profitability growth in q one of this year. We continue to deliver ever higher results each year. And if you look across the the top half of the screen there, you'll see that gross revenue grew at a rate of 1% compared to 2023. And then net revenue, so gross profit, after cost of sales grew at a rate of 4% compared to the same quarter in 2023. And then the further you get down the p and l towards operating profit and even lower, the story just gets better and better in terms of the percentage growth year on year. So those of you who have followed TEAM INTERNET or Centronic as it's formerly known for many many years, will have seen that some years, revenue growth outstripped profit growth. We've seen the say we've seen the opposite trend so far this year. Profit growth has outstripped revenue growth, and it's it's helpful to be able to demonstrate that even in a time when the company is facing macroeconomic headwinds in the advertising industry that we can still deliver more and more profit and grow profit at a double digit rate.

16:20 That, of course, translates into increased EPS year on year. The bottom left hand corner of the screen, you'll see that EPS grew year on year, which is, of course, not just a function of higher earnings, but also of the reduced share count following the share buyback programs we have engaged in over the last sixteen to seventeen months, nearly eighteen months. And that has, of course, reduced the share count of the company as well as returning cash to shareholders. I'll come back to net debt on the balance sheet slide, which follows in a couple of slides time. Most of you will have already seen that our annual dividend increased, doubled from a rate of 1p per share paid last year to 2p per share, which is being paid later this quarter. And, also, our PE ratio continues to show room for growth and good value.

17:14 Taking a look at the income statement in slightly more detail, as I mentioned earlier, the the the top half of the statement there, revenue, EBITDA, operating profit, showing growth. But the further down the p and l, as I said,

17:29 down down through operating profit growing at 44% year on year to profit profit before tax, profit after tax. So right the way down the p and l, we're demonstrating double digit levels of profit in in terms of profit before tax, profit after tax. So demonstrating the financial robustness of the company, the the continued mature financial growth of the company.

17:52 I did say I would come back to net debt. Just as a reminder, we as a group delevered rapidly during 2022, And, eventually, we arrived at a level of net debt of $76,100,000 at the end of twenty twenty three, and that was less than one turn of adjusted EBITDA. So keeping net debt at a level of less than one turn of full year annual adjusted EBITDA is a an aspiration of the company. We've continued in much the same vein in q one twenty twenty four. Although net debt has increased to just over 80,000,000 at the end of the 03/31/2024, the increase in net debt is primarily driven by 11,500,000 of cash generated being returned to shareholders as we move through the execution of our share buyback program.

18:44 So absent that managed cash outflow, we would have experienced a deep deep in net debts during 2024 to date. So the net debt of the company,

18:56 the ability to decrease it is fully within the company's power and control to to manage and do as we see best in terms of allocation of of capital and of cash. The last comment I'll make in terms of financials is our operating cash conversion was slightly lower for the first quarter of twenty twenty four than we've seen in previous years. It's not often that in our group, we are subject to material fluctuations in cash conversion as a result of the payments of one material customer or or our payment of one material supplier. But we did have a case at the end of q one this year where Good Friday, a a public holiday in many countries, fell on the last working day of the month, and therefore, a payment that regular as clockwork is paid to us on the last working day of each month. That actually just slipped into the first working day of the following month.

19:51 So that leads to cash conversion adjusted operating cash conversion rather being 80% of adjusted EBITDA for q one. But, of course, that that that ratio then improves in April because in April, we then got paid for two months' worth of activity by that customer. So the cash conversion normalizes very quickly, and we continue to aim for close to 100% or in excess of 100% for the full year. So all systems go still in terms of cash generation. No systematic change to the company's policies or protocols, just purely a timing difference. And it's the first time I've ever had to refer to a timing difference that's that's impacted our cash conversion, and we don't expect to have to refer to individual timing differences in future. With that, I will pass back to Michael for an update on the company's strategy.

20:46 Thank you, Billy, and hope you're all just as excited as me about these great results. And let's see what we can do about keeping it that way. So this is a good old friend in terms of the slides. So our main priority is to create a virtuous circle that starts with organic growth, winning new customers, growing the customers, launching new products, adding new suppliers, and that organic growth combined with our disciplined approach to cost then leads to operating leverage. So in 2021, we still converted less than 40% of our our net revenue into EBITDA.

21:26 And in the last year, we already made more than 50% of our net revenue into EBITDA. And this operating leverage then again translates into more competitive cost of capital. So here, we had a major crystallization event in in October 2022 when we lowered our when we refinanced our bonds, and we're able to to reduce the the interest spread by more than 4% from 7% to 2.75%. And this is why in 2023, we changed our focus to optimize the cost of equity, hence the buyback program and the dividend policy. And last but not least, the more competitive cost of capital will then help us doing focused and highly accretive bolt on m and a.

22:21 And that bolt on m and a will then again, when you think about this old square model, create new adjacencies on both the supply and demand side and then help us adding new fuel to the growth engine. So if we operate if we operate this model consistently for for a few years, what will we then see? First, we will see a TEAM INTERNET GROUP that has more that has more diversified revenue streams and supply sources becoming more predictable and less dependent on specific on specific permutations in this in this in this model. Secondly, we would be more vertically integrated. So wherever possible, we are we're taking out middleman out of the process to keep more of the value that we create to ourselves.

23:18 Third, you will see that we have consistently lived up to our global leadership ambitions. While as a group of less than $1,000,000,000 of revenue, we are still modest in size. In each business that we operate in, we are either among a small set of global market leaders or a national champion, and we will keep it that way. So all the markets in which we engage, we want to be the number one. And this is also one of our of our company values, winning the game, and these values will will guide us on our journey as we manage towards the three goals above.

24:06 So another another value in our set of values is is to work is to work smart. And work to work smart, today, you need AI. And, luckily, AI has always been seamlessly woven into the fabric of our daily operations. As you can imagine, you can't match 6,000,000,000 visitors coming to websites with millions of advertisers manually. So everything has been built around machine and deep learning processes. And yet, we have we have set up a formal program based on three pillars that will make that our that that our organization will always be up to date with the new technology, and the the three pillars are raising the floor, raising the ceiling, and raising awareness.

24:59 Raising the floor is basically about productivity, teaching all staff how to use tools like or others to do the work that they've always done more efficiently, more error free, quicker in order to gain to realize efficiency gains. Raising the ceiling then is about training our engineers and and and having the right data scientists inside to build products that not only meet but exceed customer expectations.

25:32 And raising awareness is then the program where we where we nurture critical and creative thinking among the senior leaders of the organization so that they would identify opportunities or risks of disruption and then act proactively, either acting first or trying to eat the lunch of others who might not have the same the same level of awareness. With this with this with this training program, which will give us will give us the the most AI educated team in the industry. We are we are looking forward to to the years to come, and the directors in the report that they're in all this morning have confirmed their confidence in our ability to meet market expectations.

26:28 I would like to add that the high cash reserves that we have as well as the strong cash generation and the committed credit facilities make that we are fully funded to simultaneously invest in the future of the business and return cash to shareholders. And as I said before, you should expect that the group going forward will be more diversified, more vertically integrated, and that in everything that we touch, we will we will pursue global leadership. 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's situated 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.

27:30 Billy, Michael, as you can see there in the q and a tab, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions. But, Michael, Billy, at this point, if I may just hand back to you just 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. That's that's great. Yes. And and, indeed, there are plenty of of questions. Not sure whether we will we can make it through the entire set of of them. I'll just I'll just take them in in in the order that I see them on screen. So do you see the environment being as harsh as it was in q one for the next quarters to come?

28:20 That's a difficult one. So q q one was definitely not an easy one. And but if you would compare our numbers to our peers, you will see that in both online marketing and online presence, we've both killed it and demonstrated highest growth rates of of all our direct peers. And the next quarters should be better as they all but I should add as they always are. Q one and q two are normally pretty much the trough of the year. And then in q three, it slightly kicks off as, as the industry prepares for the festive season, which you could also call a commercial season, in all countries or most countries around the world.

29:14 We have all these events like Thanksgiving with Black Friday, Cyber Monday, Christmas. And even in China, you have single day on the November 11 and double twelve on the December 12. So q four is basically it. Q three is already a bit of an anticipation for it. So, yes, the next quarters must be better than the first quarter, else something would not be right with this industry. So here here's in the question. We are being applauded for our cost management, and the question is what our mark EBIT margins are for the online marketing and the online presence.

30:05 I should say at the stage that we have for we've we've never, in our segment reporting, reported down to to EBIT by by segment. It is something that the board considers. We've actually not done it because in order to create synergies, we have notable shared resources that would make any kind of segmental EBIT number a little bit judgmental, but it's something that the board deliberates on from time to time. And we might change our we might change our policy or not. I should just I should just say that the both the both businesses have also similar EBIT margins when when comparing them to the to the gross revenue that we report.

30:59 Then there's a question around around price hikes. Yes. In 2023, we reviewed the pricing of our in particular, of our online presence products, but also some some of our products online marketing. We also have but our biggest businesses we just described, like like Tonic, dot org, or in the future shines. Also operate products like volume tracker, which is software as a service tool that helps other people to do more efficient marketing campaigns. And in all these products, in all these product based businesses, we've reviewed the pricing. And, actually, we're very successful implementing price hikes because the value that our that our products deliver is still way higher than the prices that we are charging now.

31:52 And we will review in the course of this year depending on how the economy goes and when we see the first anniversary of the most price increases, whether we will add another layer or not. So then the question is what's going on in the comparison business for .org. Yes. So here, we still have plans for internalization. Actually, very bold plans. We, last year, went into one country, France. However, we are we are thinking about a different approach to internationalization, which we are currently implementing on the technical level. And would then expect that starting in q four this year, the international rollout will happen at a very different pace than it has done in in the in the past. So we are talking talking about percentage increases, but full intigger multiples in acceleration of pace.

32:57 However, I will need to ask for your patience to come up with a more detailed plan of what countries we are going to address in which sequence. And, well and then INTERNET, the question is, should we have more direct customers? Yes. At some stage, that's certainly the case. However, we are very happy with our sets setup with our main partner that allows us to scale very quickly across all the globe to each and every vertical because there are always enough demand. So, yes, something on the road map, but nothing for this year. And then the last question is a nest egg listing after a few more quarters, the final goal in The US.

33:47 And I should first of all, I should not comment on that. If there was if if there was a con if if there was a concrete plan, it would, of course, be would have been announced. We've now taken the first step or, let's say, we we dipped a toe into the water by by starting to trade on OTC OTCQX. But deriving from here, that would directly go to a nest egg listing would would probably be a bit too daring claim. So then the then then we continue about the about the revenue evolution in online marketing from q one to q four, but I think we already addressed this in the in the in the other when addressing the other questions.

34:41 There's a question. If I if I may take the next one, Michael, there's a question about the about the cash flow statement and the the jump in the decrease of trade and other payables, that again goes back to sometimes there are individual timing fluctuations in the in in the timing of when we pay our key suppliers. We have a number of key suppliers from whom we we acquire traffic. We naturally are very, very careful to always pay those providers of traffic and indeed all our suppliers on time in line with in line in line with our accounts payable policies. So there's no underlying systematic change in trade and other payables. It will just be a question of a material payment slipping into a future quarter. So you can expect the decrease in trade and other payables to be reasonably comparable year on year even if quarter over quarter, there are some fluctuations.

35:38 That's great. Thank you, Billy. So yet another question about the trend in online marketing. Yes. But you've that also online marketing, we've been more conscious about margin management in the first in the first quarter against against a challenging a challenging backdrop. But, again, we we we all we all believe that there are slides coming at the end of the tunnel. And as I mentioned before, simply just from the seasonal seasonal pattern, we should see better better quarters as we as we go through this year.

36:34 So that is another question on on main listing. Again, a listing question. Same same same answer here. If you would have made any resolution to do it, it would now it would now be public knowledge. We are but when comparing the AIM listing, I mean, when you when you leave the AIM, you lose one clientele, which is inheritance wealth inheritance inheritance tax investors. So it would be good to have another clientele, which would be index funds on the other end. So this is probably something that's more for a time when we are a more guaranteed FTSE to 50 candidate, which which then might take us a couple of quarters or years to firmly establish ourselves as as such.

37:31 The the next the next question relates to the distinction between gross revenue and net revenue. The the question is, would we consider simplifying the terms gross revenue and net revenue to revenue and gross profit? And that's that's a very fair question because I think you you could argue either way. We deliberately moved away from presenting gross revenue and gross profit or or using the term gross profit as our primary term for for our revenue less cost of sales, mainly because most of our peers in the online marketing space also use the term net revenue for gross profit. The two are essentially interchangeable, and the companies we're comparable to generally refer to net revenue. So we're trying to be as helpful and comparable as possible. I do note, though, of course, that for a lot of particularly UK investors, the term gross profit would be some people's individual preference.

38:25 So I think it's important that when we're when we're opening our presentations and when we're drafting external reporting, we should always remind people that net revenue is the same as gross profit. There's no there's no there's no magic behind it. Gross revenue is is revenue. Net revenue is the same as gross profit. And from from there on, you move down the p and l, and we we we're trying to be as clear and transparent in our reporting. So in term in terms of that part of the question, we're comfortable with what we're doing. The second part of the question here is, will you keep buying back shares if share prices stay at current levels? In our 2022 annual report, we published for the first time a a cash flow water flow model sorry, a waterfall model, capital a allocation model, which very clearly stated in writing the company's priorities in allocating capital and cash.

39:20 We we reiterated that exact same set of priorities in our 2023 annual report released last month well, sorry, two months ago. And and and that, in in brief, indicates to everybody that our first priority is to ensure whether we we continue to continue to to pay a progressive dividend. Our next priority is to reinvest in the business, so CapEx and other ways in which we can reinvest in the continued excellence of the platforms we operate on. The third priority would be m and a activity, where there is cash left over from the first two activities, which, of course, there is given the amount of free cash flow we generate. So this year, we have already been been more active in the m and a space than we were last year in the second half of twenty twenty two.

40:06 And where there's cash left over from dividends, reinvestment in the business, and m and a activity, that's when our our our our next two priorities would be returning cash to shareholders via share buybacks or paying down debt. And over the last eighteen months, we have prioritized returning cash to shareholders, and it is it is a use of capital that we are we continue to be open to as a company. I should be careful to state, though, that until we and and until we until we see the impact on the last month or two of recent m and a activity, and we we we reforecast our cash flow for the year, and we're not committing to buying back shares in the same volume and value that we did last year. But it is but it is important that share buybacks are something that are still regularly considered by the board and what one can expect to to hear more about share buyback activity at some stage. So can't can't guarantee it will be in the short term, but it is still a a high priority cash allocation capital allocation for the company.

41:16 That's that's great. Yes. And so this this cash flow allocation waterfall that we've presented for the first time in the 2022 accounts is is evergreen. So just take that as as a guidance at the board depending on the circumstances. We'll use this to resolve on all these all these matters. So what is your hottest domain prediction? Well, currently, at this stage, .ai is certainly the superstar in the arena, but there is one there's there's one big thing coming up in 2026.

42:02 Most likely, I personally believe it will happen in 2026, which is the next I can round where new top level domains will be admitted. So this was basically the event around which Centrelink was born and and floated back in 2013. And so now there will be now there will be a second time after 2012 that parties all around the world can apply for new top level domains. There's still plenty plenty left over. There are seventeen thousand five hundred and sixty seven three letter combinations from triple a to triple zed, and only 70 of them have been taken so far. So there's still more than more than 17,000 very good combinations of new domain names to be created or someone maybe has longer ideas.

42:59 So we we believe this will give the industry yet another major impulse in in about two years. So that's that's, I think, currently the hottest domain prediction we can make. So there's another another question on buybacks, but we've we've answered that already. And then the following question is about the strategy as as regards debt. So is our is it a part of our strategy to maintain debt as a component of our of our financing structure, or would we consider moving towards a net cash position, I. Eradicate debt? In practice, right now, it's efficient to have debt as a component of our of our capital structure.

43:47 We those of you who will have seen this equivalent presentation a couple of months ago when we presented our annual 2023 results will remember that with with some different decisions, we could have pretty much eradicated moved from a net debt to a to a net cash position by the end of twenty twenty three. We decided to return cash to shareholders in material volumes. We had a particularly high nonrecurring level of of of earn out payments to founders and former owners of businesses we'd acquired last year. So that meant that we retain net debt in our structure. As it stands for this year, it's hard to it's hard to envisage a scenario in which we would we would eliminate, eradicate debt from our structure this year.

44:33 We we do still feel it's sufficient to have a balance of equity and debt financing, but I think it's also important to state that we've been very clear that we don't expect to see the levels of net debt compared to adjusted EBITDA increase to the levels that we were seeing two, three years ago when there were two or two and a half levels of net debt, two and a two or two and a half turns of net debt to adjusted EBITDA. So the debt is while the debt is well controlled, we're very happy to retain it as part of our structure, at least for this year. Then there's a question about dividend yield. Dividend doubling to 2p sounds impressive, but this is a yield of 1.3. So, yes, the dividend yield of of of of the group, we expect to we expect to develop over the years. 1.3% is a start. When you go back to even eighteen months ago, TEAM INTERNET had had never paid a dividend. So the fact that we declared and paid our first dividend of a penny per share this time last year, the fact that we're just about to pay our the the dividend doubling does indicate that we're committed to developing a truly progressive dividend policy.

45:48 And depending on how one compares the 1.3% dividend yield to other digital marketing companies, 1.3% is quite a reasonable yield. I don't think it would be fair to compare us to to sort of main market listed companies where the dividend is where they have their sort of dividend stocks, not growth stocks. We hopefully deliver both growth and value. So there is more to come in terms of the dividend, but we feel very comfortable with the yield where it is at the moment. A couple more questions. Did you see any impact in q one from Google algorithm changes? In short, we saw less less impact and less activity in q one of this year respect of Google algorithm changes. As a reminder, Google algorithm changes do not impact the vast majority of our business because we are a supplier of traffic to Google, and therefore, we're not reliant on on the Google search engine. We are actually reliant on using Google as a an aggregator of advertisers to access their advertiser base.

46:53 For the part of our business, which is less than 10% of our business, which is potentially impacted by Google algorithm changes, that that that is our product comparison business for glyph.org. That was not materially impacted by Google algorithm changes in q one of this year. So we're we we we still value Google, a, as a material customer for our search business, but also as a material supplier of traffic on our in our comparison business for Glike. The next question, you are showing significant adjustments on a regular basis. Can you please explain the rationale for those adjustments? That's a very fair challenge and one that we one that we hear. For me, I hope people are noticing that we are starting to increase the prominence of statutory GAAP financial metrics on the same page as, even if not on on the exact same line as the adjusted EBITDA metric.

47:54 That way, we give the market a choice whether they choose to use the adjusted EBITDA metric. And the the reason we continue to show adjusted EBITDA, and that's our primary financial metric, is because it gives you an undiluted view of the performance of the business. So it excludes amortization, which is not reflective of the underlying performance of the business. It excludes depreciation, noncore operating expenses, FX, share based payments. These are all excluded from that adjusted EBITDA metric because that's how you get to a pure view as to whether the business is business performance is trending up, which it is, or trending down. So I'm very happy to continue including more and more metrics relating to operating profit, profit before tax, profit after tax, the classic statutory GAAP IFRS metrics, but we will almost always present adjusted EBITDA as well because on balance, most people focus on adjusted EBITDA, but I do have strong sympathy with those of us who also like to see a bottom line profit. And indeed, the statutory, the gap metrics are even more impressive than the adjusted metrics at the moment. So it's clear that we're being transparent, and I I would certainly encourage people to look out for increasing disclosure of GAAP operating profit in future periods. It's a real highlight for us.

49:21 The next question is I think we've I think we've covered already. And then we come to slightly longer question. Hopefully, we'll have time to to get through this and one or two others. Do you foresee any issues with your reliance on Google, whether contract duration, price change, etcetera, despite your intention to diversify, e g acquisition of Shines? This is a a reasonable debate that we that we we we we are accustomed to to talking through. We're very comfortable with our with the with the amount of revenue that we generate for Google and that Google provides to us via via providing us an avenue to to its hundreds of thousands of advertisers.

50:07 It is there is a there is a there is a path of development towards diversification and a burgeoning volume of business partners. If you go back to March 2022 when we acquired the glycol.org or VGL, the product comparison business, that's opened up an entirely new source of customers, ecommerce companies such as Amazon, eBay. So that was that was one step in diversification. Absolutely right to indicate that the acquisition of Shines then then diversifies the revenue base still further by access to direct advertisers. So whilst we're very we're we're very comfortable providing providing traffic via our Tonic platform to to large business partners such as Google and Microsoft, Bing, and Yahoo, we also have a a a increasingly diverse customer base. So we are hopefully having our cake and eating it in that we can we can continue providing as much traffic to Google as as as as as we can find traffic to acquire at the right price, frankly.

51:15 But we can also then open up new avenues of of of revenue as well. So a very comfortable mix. And I think anybody who might have had concerns about the revenue diversification, say, two years ago, the acquisition of VGL, the addition of Microsoft Bing as a business partner, and the acquisition of of of Shines now should demonstrate that diversification is something that we don't consider to be to be trivial. I think that brings us pretty much to the end of the questions unless I've missed any have I missed anything, Michael? No. Well, there there's some questions that obviously we can't answer, like, what our commission rates are. But Mike Michael Billy at this point, then if I may 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.

52:11 And, of course, we will give you back all of the questions that were submitted today just for you to review to then add any additional responses, and, 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'd be great. Right. When when when Billy and and I started our journey, one of the most frequently asked questions was great set of results, but what do we actually do? I think now people understand more what we do, and now the now the questions pivot more towards why what we do is sustainable and and why the why there's a growth market. And I hope we've effectively addressed this, why we are so enthusiastic about our industry, and why we see a prosperous long term perspective for this for this business.

53:12 And I'm and we're looking forward to to meeting you at our h one results update, which is going to follow in mid August. Thank you all. Perfect, Michael. That's great. And 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 that 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'll 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.

54:00 Thank you all.