Team Internet Group plc (TIG) Earnings Call Transcript & Summary

Okay. I think that should cover. If there's any further elaboration you acquire and feel free to put it in the chart. So we now have a question from Michael, I think this is definitely 1 for me. The question is there have been several strategic errors over the past few years, leverage, shy and foresight of the AFD changes that have been value-disruptive. Why should we as shareholders trust this management team are the right people to lead the future? Yes, look, a degree of understandable frustration in that question. And you believe me, the Board feel it as much as also very material shareholders. I think in terms of leverage, look, I guess we got a strong desire from our shareholders to see cash coming back. At the time, the business was highly profitable and cash generative and good afford to give that money back I guess with 2020 hindsight, I understand the point that and possibly we wouldn't have leverage go so high. But actually, I think given the profitability of the business and its fundamental cash generation, we don't -- I don't foresee any issues from a leverage perspective. We'll bring the debt down in the second half. The reasons mentioned. We have good support from banks. We've recently renewed our banking, as you all know. And I think that's a big vote of confidence. And just in terms of the other points that come in there about shines look very difficult. Our view as a fraud took place from the vendors, and we're pursuing them. So very, very difficult to foresee that kind of thing. And in terms of the 4 sites of the AFD changes, I mean, look, I think the management team did foresee that and we're already changing the model of the business towards the new RSO model. I think what may be caught everybody by surprise in the market was the sudden out of glue change in policy from Google. That definitely came earlier than we'd expected. But what I would say is that really in that space now, we're very much the last man standing. So the management team have moved very aggressively to take cost up. We've changed the model and actually, as you've heard earlier, that business is now profitable again. And that really was no mean feat. We had to move extremely quickly, and most people in that market have given up the [indiscernible]. So look, let's see going forward. I mean it's -- obviously, it is a market that can be volatile. We know that Google obviously dominate that market and control that market. But we believe we've got a good relationship with Google. We've got a good market because now we've got a good product. And also, we've got a cost base appropriate to the size of the business, which we'll deploy an AI technology, all the process to kind of take that variable labor cost out. So I think -- and look, in terms of your general point about is this the right management team to run the business, I mean I guess there comes a point when we as a Board, have to just take our best view on what's the best thing for the business. I happen to believe that we've got an excellent management team. I've seen how they've reacted and pivoted in incredibly difficult market conditions. So yes, 1 or 2 pieces of M&A haven't gone our way. But the search business just chopped off cash for years, and that was a decision taken by this management team. So even though it's suffered a decline in profitability, that was a lot of cash that came into the business. And so look, I mean, the Board fully support our management team and if you kind of look at the businesses that we have now are profitable, all heading in the right direction. So yes, look, it's been a difficult year for all of us, difficult 18 months for all of us I very much believe that we've got the right team going forward. Hopefully, that answers your question, Matthew. And look, thanks for your support. We appreciate it. Another question from Chris A. Thanks for your question, Chris. So this 1 is AIM has consistently failed to value TIG appropriately, which has clearly impacted shareholder value. Given that many members of the Board are economically aligned with shareholders, does not the Board have a long-term view on whether a move to the main moms, better support valuation liquidity and what milestones would need to be in place before such a transition could be considered? And look, I'll take that one. Because obviously, in my day job, I'm managing a fund. And so I guess I've got some views on -- I mean quite right, the A market has been really, really difficult. That market is substantial outflows. I mean, look, I don't think it helps that our kind of government doesn't support the U.K. stock market by encouraging pension funds to invest more money in U.K. equities. Look, is it an aim problem or a London problem, probably a bit of both. Would a move to the main market help? In my opinion, no, not right now. I don't think we're big enough. But look, maybe that will change in due course. And as you know, we're assessing structural options for the business right now. Are we likely to move from AIM to the main market, not in the next 12 months. Now, I really don't see that. I mean, there are quite material costs associated with the move from a to the main market. And look, as to name stocks and in listed stocks and look quite frankly. I don't necessarily notice a valuation gap for a like-for-like business versus main market. I think London in general has got just structural market problems to address. I'm not sure it's necessarily a name problem of names but really, really difficult. And look, again, the point is that we have a very low rate, I think for the quality of business that we've got, a very fair point to work exceptionally hard and trying to market this business to investors and we'll continue to do so. So hopefully, that answers your question, Chris, if not pop it in the chat. A similar-ish question from Eduardo. Maybe I've addressed some of the points already. Thanks for your question, Eduardo. In this morning's update, you mentioned that the Board is evaluating the structure any potential transaction. without commenting on any specific discussion, what structural options are you weighing in principle. For example, the sale of DIS versus a transaction involving the wider group, cash versus part consideration and stock and how do you view the alternatives that affect your thinking on maximizing value per share? I'll take this 1, Eduardo. And obviously, I'm going to be super careful what I say. I can imagine we're kind of tied up and non. It comes to speaking about the deal. And really, all we can do is reiterate what we're set in public. Look, as we've said before, we received approaches for our DIS business. from a number of different parties, some of them trade, some of them financial. And we're in the fortunate position of having a brilliant business that's highly profitable. And so we would only consider a sale of that business if we think that that's the right thing to do for the business to deleverage and/or be able to hand cash back to shareholders, we weigh that up against the asset that we're selling, which is profitable and it's got a good market position. So in terms of different structures, look, the kind of structures that have been proposed to us involved in selling the business for cash, how will we sell the business for cash completely depends on what those offers end up being. Now obviously, we have a ballpark the way we think a deal could happen. We will see. Like I said, we're in a brilliant position of actually the profitability of that business during the process has gone up. And the financial position of the business has got stronger because we've extended our banking deal. So look at what -- I don't think I can add more to that really. We will only sell that business if we think it's value enhancing. Clearly, I do think that we've got a brilliant rump of the business, particularly in our comparison which is a fantastic business, growing super quickly and should be highly rated. But look, again, to kind of chime in on the previous question, that is obviously challenging for small cap companies on aim in London. So hopefully, that answers your question, Eduardo. I mean, again, thanks for your support of the business. At the moment, I don't have any other questions in the chat. I don't know if there are questions in the room or anyone else wants to ask any. Okay. I'll consider that the meeting is done then. Thanks for your questions. Onto the formal proceedings. Notice of the AGM, together with explanatory notes was posted to shareholders on the 30th of June 2026. Accordingly, the requisite notice of the meeting has been given. And I propose that, therefore, with your consent, the notice of the meeting should be taken as read, is that agreed? Okay. Thank you. Voting procedures to accurately reflect the views of shareholders of the company, voted will be done by way of a poll on each of the resolutions put to the meeting. This is seen as best practice as it gives all shareholders the opportunity to participate in the decision-making of the company and have their votes recorded in proportion to the number of shares they hold. I'm appointing Maria Abraham from MUFG corporate markets, the company's registrar or active scrutineers. Summary of each resolution will be shown on the screen before each resolution to the vote. As it will take some time to complete the poll procedure, the results are voting, including the proxy votes on each of the resolutions will be announced through our regulatory information service and published on our website as soon as reasonably practicable. When you registered before the meeting today, each shareholder, proxy and corporate representative will have been issued in the poll card. If there's anyone who thinks they should have a poly card, but doesn't please raise your hand and our registrars will attend to you. I should mention for those shareholders who have already launched a proxy, they do not, of course, need to complete a poll card unless they want to change their vote. We have 3 options for each resolution for or against the resolution. So for those that applies to, will you please complete your poll card by ticking box next to the relevant resolution depending on how you wish to cash your vote. Once all votes have been taken on the resolutions, please if you signed the polar handed to our registrars. Should you require any further assistance, our registrars or the [indiscernible], will be happy to assist you. Okay. So let's move on to the resolutions. I'll formally propose each of these to the meeting. The full text of the resolutions in the notice of the meeting and you have a copy of it. Resolutions 1 to 6 are ordinary resolutions. They require a simple majority. Resolution 7 and 8 are special resolutions, which to be passed by a majority of 75% to vote in favor of the resolution. Okay. So the first resolution is to receive and adopt the annual report and accounts for the year ended 2025. I now propose that the annual report and accounts for the year end of 2025 being received and adopted. As I explained, to vote, would you please tick the appropriate box on hold card, both for the resolution or against the resolution or you may withhold your votes. Thank you. You please vote now? [Voting]

Okay. That poll is closed. Resolution to approve the annual report from directors' remuneration. So that import can be found on just 73% to 78% of our reported accounts. So I now propose that the direct remuneration as set out in the annual report and accounts for the year in financial year 2023 be approved. Will you please vote now. [Voting]

Okay? Poll all closed. Resolutions 3 to 5 concerns the reelection of myself, William Green and San Dayani, each of whom retires in accordance with the Articles of Association and be eligible offer themselves from real action at this AGM. The Board is recommending that each director be reelected as a director. I now propose that all myself be reelected as a Director. Please vote now. [Voting]

Okay, poll closed. I now propose that William Green be reelected as a Director. Please vote now. [Voting]

Poll closed. Now I propose that Sam Diane be reelected as a Director. Please vote now. [Voting]

Okay. Poll closed. Now to Resolution 6, that's the authorities that issue shares before the directors are able to issue shares, they must just be authorized by shareholders to do so. In keeping with market practice and the guidelines established by organizations representing institutional shareholders, the maximum number of shares that may be allotted under this authority is limited to 1/3 the present issued share capital, which equates to 81.983 million ordinary shares. The authority will expire at next year's AGM or 15 months after passing this resolution, which Everest earlier. A more detailed explanation of this resolution is set out in the notice of the meeting. So I suppose that directors be authorized to lock shares in accordance with the terms set out in the resolution. Would you please vote now. [Voting]

Okay. Poll closed. Resolution 7 will give the directors authority to unlock shares for cash, including the reissue of shares held in treasury without first offering them to existing shareholders. in proportion to their existing holdings of shares in keeping with market practices and institutional guidelines. The number of shares to which this proposed authority relates is it the current issued share capital. That authority expires at next year's AGM or 15 months after passing this resolution was earlier. Again, a more detailed explanation in the notice of the meeting. So I now propose that directors be authorized to disapply the statutory preemption provisions in accordance with the resolution. As this is a special resolution, a 75% majority will be required. Would you please vote now. [Voting]

Okay. Paul closed. Resolution 8 is to authorize the company to purchase some of its own ordinary shares on such terms and in such manner as the directors make time from time to time to term. The authority sort limits the maximum number of shares purchased to 24.594 million. The minimum and maximum prices that may be paid for the shares was set out of the resolution. I would like to emphasize that [indiscernible] would only purchase shares in the market if they're satisfied that any such purchase is in the best interest of shareholders and could be reasonably expected to result in an increase in earnings per share. The authority will expire at next year's AGM or 15 months after passing is resolution, which ever as seen earlier. Again, more detailed explanations in the notice of meeting. Again, it's a special resolution requires a 75% majority. So I propose that the company be authorized to purchase its own shares. Please vote now. [Voting]

Poll closed. Okay. So concluding remarks. I think the through all the resolutions and that concludes the business of the meeting. Thanks very much for attending. Thanks very much for your interest. Thanks very much for your support of the business. We very much value that. We'll announce the results of the meeting on the RNS and on our website as we possibly can. So before we go, anybody got any more questions that they want to ask, I think we've hopefully covered it. I don't if anyone in the room is there. And on the basis that don't appear to be any more questions, once again, I thank you all for your support and attendance and wish you a very good day.

That's great. Thank you for updating attending today. On behalf of the Board, we'd like to thank you for attending today's Annual General Meeting, and good afternoon to you all.

Thanks.