Team Internet Group – is it now time to buy back into this global domain ‘cash machine’ business, with 50% of its revenues US Based? I now set a 65p Target Price

10.04.2025

For so long I was a proponent of this group, shouting out about its ability to just generate loads of cash through its business.

Last August its shares were up to 207.50p.

But then last November I spied a suggested dose of ‘insider dealing’ that ran ahead of the group announcing a hiccup in its business flow, dropping its shares from 135.20p to 86p very swiftly.

Massive Buy-Back

I could not and still don’t understand the reasoning behind the group’s CFO Billy Green continuing to borrow money on behalf of the group to ‘buy-back’ the group’s shares over the last year or two.

Whilst paying to take stock out at up 147p a share on behalf of the group as part of its buy-back programmes, might suggest that not enough eyes were on just how the business was trading, which may well result in market disappointment and the subsequent sharer price drop.

Could it have more of a beneficial effect upon Executive Options, I wonder?

The £920,000 a year CEO Michael Riedl and the £423,000 a year CFO Billy Green are ending up with a load of ‘egg on their faces’ – especially considering that for the last couple of years the group has been borrowing shed loads of money to ‘buy-back’ its own stock.

However!

I now wonder whether the group’s shares have dropped too much in price to be ignored at the current level?

Yesterday they fell to just 48.45p at one stage, before bouncing back this morning to trade at around 50.30p.

Is this now too low a level that Private Equity players will find hard to resist?

PE Bidders?

We already know that the group has been under the microscope of at least two Private Equity houses,

On the 7th January this year, the group announced that it had received two separate approaches – from TowerBrook Capital Partners and also from Verdane Fund Manager AB.

Each proposal was for 125p cash per Team Internet share.

Both houses subsequently backed away from firming up on such proposals.

Management Comment

The last comment from CEO Michael Riedl, at the end of March, stated that:

"With our audited 2024 results now confirmed, we can look back on a year of strategic realignment and operational resilience.

Headwinds in the Search segment led to reduced earnings but record adjusted operating cash flow, improving margin quality, and outperformance in our DIS and Comparison segments underscore the strength of our diversified model.

As we continue the disciplined execution of our strategy in 2025, we remain focused on innovation, efficiency, and value creation - positioning Team Internet to return to double-digit EBITDA growth from 2026 onwards."

My View

I now wonder whether other possible PE buyers are out there ready to pounce when the shares are 60% lower than other companies were prepared to offer just three months or so ago?

For real risk-intolerant gamblers, ahead of the group’s AGM on Monday 28th April, I would suggest that the group’s shares, now at just 50.30p, could have some real appeal right now.

Accordingly, I now set a new Target Price of 65p.