TEAM INTERNET GROUP PLC (TIG) — Investment Research Note

Executive summary

TIG operates three segments: Domains/Identity/Software (DIS, a subscription-based domain-name & digital-products distributor), Comparison (product-review advertorial sites, primarily German), and Search (AI-monetised content/domain traffic, formerly reliant on Google's AdSense-for-Domains). The 5-year trajectory shows a dramatic bifurcation: DIS + Comparison have compounded EBITDA at ~26% CAGR since 2023, while Search collapsed from $56.4m EBITDA in FY24 to a loss in H1 2026 as Google sunset AdSense for Domains earlier than anticipated 2025-11-11 strategic review; 2026-06-26 FY25 AR. The single most important valuation point today is the strategic review of DIS, where the Board has consistently guided (since 11/11/2025) to disposal proceeds materially above the then-£120m market cap 2026-04-24 strategic review update; 2026-06-15 trading update.

Fair value estimate

Methodology: Sum-of-the-parts driven by the DIS strategic review outcome, plus RemainCo EBITDA multiple.

Key inputs (translating from USD → GBP at ~1.30):

• DIS disposal: management has repeatedly guided proceeds "materially in excess" of $160m (£123m), reinforced in April 2026 despite share-price weakness 2026-04-24. DIS FY25 EBITDA $21.4m growing 28% YoY in H1 2026 2026-07-24. Assume disposal at $175m–$220m (~8–10x forward EBITDA), i.e. £135m–£169m gross.
• Net debt to be settled: $117.5m at 30 June 2026 (£90m), expected to reduce in H2 2026-07-24.
• RemainCo (Comparison + Search): Comparison FY25 EBITDA $12.3m growing >20%; Search losses transitioning to modest profitability from June 2026. Combined run-rate EBITDA ~$25–30m post-transition 2026-07-24. At 6–8x = $150m–$240m (£115m–£185m). Apply a holdco/transition discount → £75m–£150m.
• Antitrust claim against a "major technology company" flagged as potentially material to market cap — assign minimal value pending clarity 2026-06-15.

Bridge to equity value:

• DIS proceeds £135–£169m − Net debt £90m + Existing cash freed = net £75m–£115m
• • RemainCo equity £75m–£150m
• Fair value equity range: £150m – £265m
• Fair value per share: 62p – 110p (mid ≈ 86p, mid-mcap ≈ £207m)
• vs current mcap £101.3m at 42p → absolute upside +105% at midpoint (range +48% to +160%)

The wide range reflects deal execution risk. If the strategic review fails and TIG operates as-is, a 6x EBITDA multiple on $45m normalised group EBITDA (£210m EV − £90m net debt = £120m equity ≈ 50p) suggests limited downside from here on fundamentals — but covenant risk is real.

Sector context

Sector classification (Technology) is accurate but crude — TIG is really digital marketing / domain-registry hybrid. Quality profile is below typical peers: revenue mix is heavily Google-dependent (particularly Search), leverage is elevated (2.9x FY25), and Q4 2025/Q1 2026 covenant breaches were only resolved via lender waivers and renegotiation 2026-06-26 AR. Peer set: GoDaddy (GDDY) and VeriSign (VRSN) for the DIS side; Trustpilot (TRST.L) for consumer review/comparison media; Perion (PERI) for the ad-tech monetisation piece. All trade at higher-quality multiples than TIG.

Investment thesis

1. DIS disposal catalyst provides a hard, near-term valuation anchor. Board guidance consistently reiterated that DIS proceeds would materially exceed £120m mcap; the process is advanced with "selected parties" and expected to conclude by Q3 2026 2026-07-24 H1 update; 2026-06-15. Even a modestly successful outcome fully de-risks the balance sheet and leaves a call option on Comparison + Search.
2. Comparison segment is a genuine compounder trading inside a distressed wrapper. Comparison H1 2026 EBITDA +54% YoY, Net revenue +36%, international expansion (France/Italy/Spain/UK) now positive 2026-07-24; 2026-06-26. Standalone worth well more than the market implies inside the group.
3. Balance-sheet rehabilitation has occurred. June 2026 refinancing extended maturities to October 2027 with wider covenant headroom (leverage step-down from 4.0x to 2.5x by Sep-2027), and management expects material H2 deleveraging 2026-06-26 AR; 2026-07-24.

Key risks

1. DIS disposal fails or completes below guidance. Every trading update reiterates disposal ambition, but market cap has fallen from £120m (Nov 2025) to £101m — suggesting the market is discounting execution 2026-04-24. If no deal is agreed by end-2026, refinancing pressure returns before Oct-2027 maturity 2026-06-26 AR.
2. Search segment is structurally exposed to Google policy and AI substitution. FY25 Search revenue fell 59% and $41.7m impairment was booked; Related Search on Content ramp has been slower than expected 2026-06-26; 2025-11-11. Even after "transition complete", the business is a downstream taker of Google economics.
3. Governance/quality flags. FY25 covenant breaches in Q4 2025 and Q1 2026 (waived by lenders), material Shinez acquisition impairment ($33m of $36m FY24 total), and repeated restatements of prior-period accounts 2025-03-31 AR; 2024-08-12 interim. History of paying up on M&A and later writing it down.

Operating leverage

The group has a moderately fixed cost structure: Adjusted EBITDA margin on net revenue was 49% in FY24, 31% in FY25 (compressed by Search transition), rebounding to 32% in H1 2026 2026-06-26. DIS demonstrated genuine operating leverage — FY25 revenue -4% but EBITDA +10% as Unity integration benefits flowed. Comparison in H1 2026 showed classic leverage: net revenue +36% delivered EBITDA +54% 2026-07-24. However, the group is not a pure fixed-cost platform: cost of sales (revenue-share to publishers, registry fees) is ~72% of gross revenue, so incremental gross-revenue "beats" mostly pass through. The 10–20% upside revenue scenario would translate to perhaps 30–50% EBITDA uplift — meaningful but not multiplicative. The best pockets of leverage sit inside Comparison (scaled DACH platform absorbing new geographies at low incremental cost).

Value-trap signals

• Repeated impairment charges ($36m FY24, $41.7m FY25) suggest capital allocation quality is weaker than headline growth implied.
• Guidance downgrades: FY25 EBITDA consensus was cut from ~$92m (FY24 run-rate) to ~$42m over the course of 2025.
• Covenant breaches in Q4 2025 and Q1 2026, resolved only via lender waivers.
• Revenue concentration: in FY23, a single customer represented ~68% of group revenue ($566.9m) 2024-03-18 AR. This concentration underpins the Search vulnerability.
• Prior-period restatements on contingent consideration and IAS 1 classification identified in FY24 accounts.
• Strategic review has dragged: initiated Nov 2025, now expected to conclude by H1 Q3 2026 — a 9+ month process that has weighed on the equity.

Earnings vs. expectations

Prior to Nov 2025, TIG consistently beat: FY23 results (18 March 2024) came in "record" ahead of expectations; H1 2024 was ahead; FY24 revenue landed near mid-consensus but was cut heavily mid-2025. November 2025 was the profit warning: FY25 EBITDA guided to $40–45m vs. prior expectations of $75m+, driven by Search collapse. Subsequent updates (Jan-2026, Mar-2026, Jun-2026) have progressively confirmed the reset numbers with FY25 actual $42.7m landing at/above the reset consensus of $42m 2026-03-16; 2026-06-15. Pattern: strong beat cadence 2022-2024, one large miss/reset late 2025, subsequent quarters in-line to modestly ahead of reset expectations.

Conviction

3 — moderate.

Anchors: (1) The strategic review provides an explicit, board-guided valuation floor for the DIS asset; (2) segmented FY25 disclosure allows a genuine SOTP; (3) H1 2026 trading pattern is now consistent with reset expectations.

Limits: (1) The DIS deal is not yet signed — a transaction failure would fundamentally change the equity; (2) RemainCo valuation is highly sensitive to Search's transition to next-generation monetisation, which has moving parts still resolving; (3) governance/impairment history reduces confidence in reported adjusted numbers.