Interim Results - Correction

The following amendment has been made to the 'Interim Results' announcement released on 24th September 2024 at 7:00 under RNS No 3241F.

The second column of the financial highlights on page 1 should be H12023 not H12024.

All other details remain unchanged.

The full amended text is shown below.

Digitalbox plc

("Digitalbox", the "Group" or the "Company")

Unaudited interim results for the six months ended 30 June 2024

Digitalbox plc, the mobile-first digital media business, which owns leading websites Entertainment Daily, The Daily Mash, The Tab, The Poke and tvguide.co.uk today publishes its interim results for six months to 30 June 2024 (the "First Half", the "Period", or "H1 2024").

Financial Highlights:

Cash at bank on 20 September 2024 was £2.2m, up 13% since 31 December 2023.

*Adjusted EBITDA is stated before depreciation, amortization, impairment of goodwill and intangible assets and share based payment charges.

Highlights

• Group revenue up 32% to £1.6m (H1 2023: £1.2m)
• Buoyant January and February Entertainment Daily session volumes (traffic) via Facebook and Google
• The Tab session volume growth of 3%
• The Poke session volume growth of 21%
• The Daily Mash Premium content offering reaches over 4,200 paying subscribers
• Daily Mash signs book deal to publish "The Daily Mash Class Wars - A Field Guide to Being British" in Q4
• Development of Emmerdale Insider
• Session value growth on Entertainment Daily and the Poke, up 29% and 39% year on year respectively
• Delivered an 18 month pay-back period for The Poke
• Generated 31% of the cost to acquire TV Guide in the period keeping it on track for an 18-24 month pay-back timescale

Outlook

• The Board expects Group to be in line with market expectations for the full year and grow in 2025.

James Carter, CEO, Digitalbox, said: This performance has exceeded our expectations during a strong first half of 2024, providing evidence of a strong operating model dealing with a fast-evolving media landscape. The success is in part due to the commercial transformation of the latest addition to our portfolio, TV Guide. Also, our strategic focus on mobile publishing, success of established brands Entertainment Daily, The Tab and The Poke, and good progress with the pivot to a paid subscription model on the Daily Mash. The combination of this performance and Digitalbox's optimised operating model gives us confidence that we are well placed to embrace challenges and seize opportunities to further strengthen the Company's position."

"We anticipate further consolidation across the market as media companies look to grow audience and extract cost synergies. Digitalbox is alive to all strategic options these opportunities present and has the tools and technology to further grow brands it is engaged with."

Commenting on the Group's performance and prospects for the year, Chairman Marcus Rich said: "We exceeded our expectations in H1 and continued to offer further evidence of a resilient operating model and agile leadership. The performance of TV Guide further validates our strategy of buy and build as we report full pay-back of The Poke investment after 18 months. The global digital advertising market continued to move cautiously in the first half of the year whilst both publishers and major platforms continued to plot their journeys through the AI opportunity."

InteriM Statement

Overview

The performance of the Group in the first six months has been strong and exceeded our expectations. With a focus on becoming an entertainment powerhouse, we delivered significant volumes of Google-sourced traffic on Entertainment Daily in January and February and saw continued improvement in the monetisation of Entertainment Daily and The Poke.

Revenue increased 32% year on year to £1.6 million. Importantly, Digitalbox reported Adjusted EBITDA of £0.2 million which was ahead of management expectations. Further, the gross cash balance has increased from £1.9 million as at 31 December 2023 to £2.0 million as at 30 June 2024.

Operating Review

The two main factors that drive the Group's revenue are the volume of traffic and value of advertising. The volume is reflected in the number of visits (or sessions) that the Group's websites receive from users that come to read our content. The value is the price paid by advertisers to reach these users during these sessions. The number of visits to the Group's websites increased year on year in H1, chiefly due to the organic growth at the Tab and The Poke alongside the acquisition of TV Guide. Entertainment Daily had a very strong start to the year with significant traffic volumes from Google but was then impacted by the Google Core Update to its algorithm in March. While we anticipated broadly stable advertiser demand across the period, we did not anticipate Google's algorithm blocking our biggest brand.

The delivery of the Group's strategy has progressed. H1 2024 represents the first period we have been operating five brands, and we remain open to further acquisition opportunities that may enable faster scaling of the business. As well as considering bolt-on acquisitions, we have been focused on organic expansion through investment in the existing portfolio, alongside launching new products as evidenced by our new site, Emmerdale Insider (further details below).

Product Review

Entertainment Daily - which is focused on TV and showbusiness news - had a superb first two months in the period with the number of visits up 42% on the same period last year. This performance reflected the site regaining visibility with Google in November 2023, but this was removed again in March. The team worked hard to regain visibility and had success reinstating Google Search and News traffic but not Discover. We remain focused on tactics to get the site reinstated across all three key channels after a further Google Core Update in August.

The Daily Mash saw its subscription model strengthen with the 'Mash Premium' offering moving from £20 p.a. to £30. The paid subscriber base has now reached over 4,200 in total as we adjusted the metered paywall to allow one free article a month. As well as the focus on the Mash Premium subscribers, we entered into a contract to publish "The Daily Mash Class Wars - A Field Guide to Being British" which is due to hit the shelves of UK bookstores in Q4.

The Tab has continued to perform well, with session volumes up year on year and delivering a positive contribution every month since achieving its full repayment after an 18 month period, following its acquisition in 2020. Our 30 university campus teams deliver c.3000 articles a year, providing engagement across student communities, while the central team's entertainment output has increased traction with US youth audiences.

The Poke had a strong six months as it engaged through further political absurdity in both the UK and US. Audiences grew and session values increased as a result of Digitalbox's Graphene Ad Stack (G.A.S.) being in place for 12 months. Having joined the Group in December 2022, the site has now fully repaid its acquisition costs after 18 months.

Whilst the acquisition of TV Guide took longer than expected, we are very pleased to have this brand as a highly complementary part of the portfolio. We have delivered a series of technical improvements since we acquired it with the introduction of a seamless experience across Mobile, Desktop, Tablet and App. These changes have resulted in a 30% uplift in web traffic whilst we have also introduced Streaming content and plan to expand its output further in Q4. Especially pleasing is the site repaying one third of its acquisition cost during H1 2024.

Looking ahead, further acquisition opportunities continue to be considered as the pace of change in the market continues at a rapid rate. With a close eye on the future, we have decided to launch a number of sites around our core competence; entertainment. We have labelled this our "Verticals strategy" as we aim to deliver highly targeted sites that benefit from fan bases delivering super engagement which is increasingly favoured by the platforms. Our first to launch is Emmerdale Insider and we plan further releases this year.

Outlook

Looking ahead, the tough macro-economic conditions are expected to ease with the global advertising market likely to strengthen in Q4. The primary platforms - Facebook and Google - will continue to be challenged by the volume of content being created by the AI boom, with Google focusing on its pivot away from pure Search to a Search Generative Experience. In this time of seismic change for media businesses globally, there are expected to be challenges and opportunities in equal measure for companies like Digitalbox. The Board holds the view that after a very strong first half alongside a proven operating model, Digitalbox expects to be in line with market expectations for the full year and continue to build into 2025.

Financial review

The Directors are pleased to report strong absolute growth in revenues with a period-on-period uplift of 32% to £1.6 million, driven by the additional inventory brought by the two new products, The Poke and tvguide.co.uk.

Further, gross margins are up from 77% last period to 84% this period serving to highlight the high efficiency of successful digital media businesses like Digitalbox. This efficiency is growing due to the low scaling costs of servicing the new products added to the portfolio.

With Adjusted EBITDA of £0.2 million, which is the true cash generating indicator for the business, plus strong working capital management, cash flow from operations amounted to £0.3 million which compares very favourably to the outflow of £0.1 million in the comparable period last year. Net cash at the bank reduced by £0.5m period on period despite the business investing over £1m in intangible assets since 30 June 2023.

INTERIM CONSOLIDATED INCOME STATEMENT

for the six months ended 30 June 2024

NOTES TO THE INTERIM REPORT

for the six months ended 30 June 2024

• Corporate information
• Statement of Accounting policies

2.1 Basis of Preparation

The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements.

The directors are satisfied that, at the time of approving the consolidated interim financial statements, it is appropriate to adopt a going concern basis of accounting and in accordance with the recognition and measurement principles of International Financial Reporting Standards adopted for use in the United Kingdom ("IFRS"). In reaching this conclusion the directors have considered the financial position of the Group, its cash, liquidity position and borrowing facilities together with its forecasts and projections for a period in excess of 12 months from the date of approval. At the reporting date the Group had £1,967k of cash at bank and in hand providing a strong position to support the continued and future success of the Group.

2.2 Accounting Policies

Segment Information

The Group's primary reporting format for segment information is business segments which reflect the management reporting structure in the Group and of its core media assets.

Unaudited six months to 30 June 2024

* Admin expenses exclude share based payment charges, amortisation, depreciation, impairment charges and acquisition and listing costs.

External revenue by location of customer

Earnings per ordinary share has been calculated using the weighted average number of shares in issue during the relevant financial periods. IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease earnings per share or increase the loss per share.

Tangible Assets

• Office equipment £'000 Cost At 1 January 2024 76 Disposals (3) _____ At 30 June 2024 73 Depreciation At 1 January 2024 30 Charge for the period 7 Disposal (1) _____ At 30 June 2024 36 _____ Net book value 30 June 2024 37 _____ 31 December 2023 46 _____

6. Intangible Assets

• Goodwill arising on consolidation Other Intangible Assets Development costs Total £'000 £'000 £'000 £'000 Cost At 1 January 2024 9,610 2,633 404 12,647 Additions - - 27 27 _____ _____ _____ _____ At 30 June 2024 9,610 2,633 431 12,674 Amortisation & impairment At 1 January 2024 6,662 1,189 202 8,053 Charge for the period - 133 48 181 _____ _____ _____ _____ At 30 June 2024 6,662 1,322 250 8,234 _____ _____ _____ _____ Net book value 30 June 2024 2,948 1,311 181 4,440 _____ _____ _____ _____ 31 December 2023 2,948 1,444 202 4,594 _____ _____ _____ _____

The other intangible assets are being amortised over a period of 7 years and development costs are being amortised over 3 years on completion of the project.

Amortisation is charged to administrative costs in the Statement of Comprehensive Income.

Share capital

There were no shares issued in the 6 months to 30 June 2024 (6 months to 30 June 2023: nil).

Related party transactions

During the period, Integral 2 Limited, a company related by virtue of David Joseph, a member of key management personnel, having control over the entity, charged £32k (6 months to 30 June 2023: £36k, 12 months to 31 December 2023: £73k) to the Group. As at 30 June 2024, £6.5k (30 June 2023: £6k, 31 December 2023: £7k) was owed to Integral 2 Limited.

During the period, M Capital Investment Partners (Holdings) Limited, a company related by virtue of Martin Higginson, a former member of key management personnel, having control over the entity, billed £0 (6 months to 30 June 2023: £6k, 12 months to 31 December 2023: £6k) to the Group. As at 30 June 2024, £nil (30 June 2023: £nil, 31 December 2023: £nil) was owed to M Capital Investment Partners (Holdings) Limited.

The key management personnel are considered to be the Board of Directors. Key management were remunerated £228k in the period ended 30 June 2024 (6 months to 30 June 2023: £211k, 12 months to 31 December 2023: £431k).

The key management personnel have been provided with a total of 1,363,916 effective share options resulting in a charge of £28k in the period (6 months to June 2023: £14k, 12 months to 31 December 2023: £46k).

• Seasonality