Digitalbox (LSE:DBOX) — Full Year Results

0:01 Good morning, ladies and gentlemen, and welcome to the DIGITALBOX PLC Full Year Results 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, we'll publish those responses where it's appropriate to do so on the investor meet company platform. Before we begin, I would just like to

0:33 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 DIGITALBOX PLC. Marcus, good morning, sir. Good morning. Thank you.

0:48 Good morning, everyone, and welcome to the DIGITALBOX twenty twenty three annual results presentation. I am Marcus Rich, the nonexecutive chairman. I will be joined by James Carter, CEO Jim Douglas, COO and David Joseph, CFO, who will take you through the 2023 results in detail. 2023 has highlighted the changing landscape for ad funded digital content businesses. Audiences being squeezed by Google and Facebook has been well documented in the trade press as had a difficult advertising market created by external economic factors.

1:31 As the platforms fight to maintain share given the imminent growth of AI, we can expect continued programs of algorithmic updates. The good news, though, is the team at DIGITALBOX have an outstanding record of quickly finding the appropriate solutions to regain audience. And with the implementation of the graphene ad stack, they monetize this audience better than their competitors. The team will show examples of how both were implemented in 2023. Next slide, please. Thank you, James. The results highlight today will show firstly how, continuing to execute on the stated buy and build plan, DIGITALBOX is generating greater shareholder value over time.

2:27 Secondly, after a difficult advertising market in 2023, how we see forecasts improving and how the graphene ad stack can take advantage of any advertising uptick. Thirdly, our working methodology for bouncing back from algorithm impacts on audience. Fourthly, the improving return on investment on all recent acquisitions. And fifthly and finally, the opportunity DIGITALBOX sees in the current disruption to make further acquisitions. I will now hand over to CEO, James Carter. Over to you, James. Thank you, Marcus. And, again, welcome to everyone. Thanks for joining us for the DIGITALBOX twenty twenty three results presentation.

3:21 To recap, for anyone unfamiliar, DIGITALBOX is a pure play digital media company with a pedigree in emerging technologies publishing technologies. We're a 100% digital and mobile focused, and we've grown through a buy and build strategy and transforming the acquisitions that we've made along that journey. Our historical model is simple. We publish great content that drives audiences to our websites, which we then monetize through serving advertising solutions across all areas, branding, video, ecommerce, and more. We operate a number of five brands, Entertainment Daily, entertainment and TV celebrity news site, The Daily Mash, The UK's leading news satire site, The TAB, The UK's leading student youth culture site that's driven by an army of students across more than 30 campuses in The UK The Poke that we acquired in 2022, which is best described as a humor aggregator, serving some of the funniest moments to go viral on the web.

4:36 And most recently, TV Guide, a linear TV Guide product that was established over twenty years ago and remains as strong today as perhaps it was then. So the presentation breaks down into five areas. I'll take you through the market backdrop and key headlines and what the future is looking like, whilst David Joseph will drill down into the financial detail and Jim Douglas into the operational detail around our brands. And it should be complete within about forty five minutes, after which we can fill questions.

5:17 So the board brings significant experience to the business through success delivered within major institutions like EMAP PLC, Future PLC, Unilever, Reach PLC, and more. In addition, the executive has experience of driving editorial strategy at the highest level and delivering VC backed roll ups to exit and are well invested with a stake of over 20%.

5:48 So the market backdrop. This first slide presents a chart, which is the advertising index for UK digital advertising programmatic advertising over the last four years. A typical advertising year represented pretty much by the last twenty years within advertising in The UK is represented by the 2021 pattern, as you can see there. The year typically starts off at a very low point in January, builds towards the end of H1, has a bit of a summer recess and then builds heavily into Q4. And that's obviously, as you can see there, what we saw in 2021.

6:38 However, if you look at the previous year, you can see the impact and the crater caused by COVID nineteen and the pandemic before the 2021 recovery. And what you can see in 2022 is the year starts off buoyant way before the there's nervousness that hits the market, and the second half of the year is actually lower than the first half. And we've seen that trend continue into 2023 as the nervousness has stuck. The 2023 year is actually slightly smaller than 2022. So it's been a pretty tough advertising market to operate in over the past twelve months.

7:30 The other challenges that we've been faced with, and we've expressed these challenges before, have been with the major platforms, Google Google and and Facebook. And I think we discussed this at our interim results last September. Firstly, the Google algorithms that impacted Entertainment Daily and basically blocked audience coming through to that site. You can see the chart to the right that is basically us unlocking the audience. And as Markus alluded to, we've got many more skills dealing with these kind of algorithmic impacts now than we had a year ago. But you can see in November 2023, we unblocked the traffic. And part of the process that helped us achieve that was moving domains from .co.uk to a.com, which gives us much greater visibility and significant improvements that we made along the way in our core web vitals, I.

8:34 Audience consumption of the technology and how efficient and quick that is. So we did make progress there, and we continue to face challenges with Google as they will change their algorithms this year. They've got a new algorithm coming out to combat spam in May and also third party content in May, and they're also introducing

9:05 an AI driven search model, I think, from May or June onwards. So so we're much better equipped than previously, and we'll face those challenges coming down the line. Meta, I. E, Facebook, blocked about 20,000,000 sessions on the tab as they had flagged our holy church of Netflix page for dangerous content. And effectively, all we did here was publish an article around serial killer, Jeffrey Dahmer, American serial killer. And it was considered to be dangerous content, and it was it was essentially us writing about a Netflix show.

9:53 And that really closed off September, our reach via that Facebook page. But as you can see there, it reemerged between September and October, and the Netflix page is now doing better than at any time in the past twelve months.

10:14 So our focus on delivering the strategy, we've expanded the portfolio to five operating brands now, which are all on the graphene platform. We've managed to diversify, which I'll go into more detail later, our traffic sourcing and grown our social followers by over a 150% to over 20,000,000. And And we we remain very mobile focused with 91% of our users coming via that channel. We delivered strategy through deploying cash that we've built up over previous years and and deployed that most significantly on TV guide and media chain assets, finished the year with 1,900,000 of gross cash and continued to pursue a direct to consumer relationship via The Daily Mash, growing its subs base by more than double in the past twelve months.

11:17 So now for the financial detail, and I'd like to hand over to David Joseph. Thanks, James, and good morning, everybody. Before I begin, let's be clear that we can't control or influence the global advertising markets nor the global tech platforms. I think we're all very well aware of the causes of the very aggressive trading environment everybody is operating in. These conditions have led to the global advertising market continuing to be in a deep and sustained depression, resulting in a 20% year on year decline. If the global advertising markets are down 20%, we'll be down 20%. Further, in order for the global tech platforms to navigate their way through the geopolitical storms in their path, they need to update their algorithms.

12:08 Each time they do this, there are unintended consequences, and the temporary disruption in the distribution of our content is one of them. This is business as usual for us now and something we're factoring into our forecasting and into our operating model. Whilst we can't control or influence the global ad markets nor the global tech platforms, as stewards of this company, we are expected to navigate our way through these adverse conditions successfully, and we have three key aims. One, don't incur trading losses. Two, conserve cash. And three, position the business in the best possible way in order to capitalize fully when the global advertising markets do recover, which they will.

12:56 So on to the slides. I've got five for you. Number one. Thank you, James. Income statement. Remember, three includes the results of all five products, so includes TV Guide for three months. The 22 includes only one month of the poke and nothing for the TV Guide. I'll unpick this shortly. Despite the very aggressive trading environment and the disruption caused by the global tech platforms, the business performed slightly ahead of management's expectation, delivering revenues of 2,800,000, which is 22% down year on year, and delivering an adjusted EBITDA profit of £20,000, which is a significant change in the prior period of 1,100,000, but it is not a loss.

13:43 With a business that has high operational gearing, this inevitably impacts on the gross profit margin percentage, which decreased by 6.8 percentage points to 78.3. And the converse is true. When the global advertising market returns, which it will, the tap will turn back on and 80% of the additional revenue will drop through to EBITDA.

14:08 This is still an ultra high gross margin, though, and results from the market continuing to value our audience highly, keeping our yields or rate per thousand ahead of the market. The next slide, please. Thank you. Segmental. The headline here is revenue decline of 22%, but it needs a little unpacking. The underlying like for like, excluding the PLC TV Guide and the Mashupur TV programme, is a reduction of 28.7%. This being caused by the combination of global advertising market decline plus the distribution disruption caused by the algorithm changes. Within this, we can see that Entertainment Daily was hit hardest by the state of the ad market and by the algorithm changes, although the quarter on quarter rate decline slows, as you can see on the right hand side, as the business learned to adapt to the algorithm changes.

15:11 The daily mash is still in transition to its subscription based model, hence, the segmental information reveals very little. The impact of all these external forces on the tab worsened throughout the three quarters, as you can see on the right, before improving in Q4, again, as the business learned to adapt the algorithm changes. The reassuring aspects of these two slides are that, one, this is a little better than we anticipated. Two, the business made a small profit. Three, the poke has proven just like the tab to be a shrewd buy. And four, we now have another addition to the portfolio in TV Guide. Next slide, please, James.

16:01 Cash generation. Despite all these challenging conditions, cash performed well as usual. I restated the statement of cash flows in order to highlight the cash generated from operations because this is what's really going on in the business, the conversion of adjusted EBITDA into cash at the bank. You'll see that '23 saw cash generated from operations total a £193,000, which amounted to 965 percent of adjusted EBITDA. Well, that's just an anomaly, of course. And a more sensible view is to look at the aggregate performance to the right, taking both '23 and '22, which shows cash generated from operations averaging at 146 percent of adjusted EBITDA.

16:48 Overall, again, I would expect this conversion rate to average around 95%. The next slide. So this is a pro form a summary. It's about cash utilization. It's pro form a, but it's helpful. At the year end, gross cash at the bank was 1,900,000, which compares to 2.8 in the previous year. More importantly, at the year end, net cash in the bank was 1,700,000, which compares to GBP 2,500,000 in the previous year. Yes, this represents an GBP 800,000 reduction in the net bank balance, but it's important to understand how this money was used. This slide shows that the business created 193 at the trading level, but spent over 1,000,000 on accretive acquisitions and paid down £75,000 worth of debt.

17:42 My final slide, thanks, James, draw your attention to four points of note here. The largest item on this balance sheet is intangible assets, largely goodwill. As hinted at the interims, we've taken the view that the carrying value of goodwill relating to Entertainment Daily required an impairment. This impairment is £6,300,000, and this view has been formed due to three key factors. One, Entertainment Daily's anticipated earnings are lower than previous estimates. Two, the discount rate or WACC has increased from 10% to 20% as a result of the stubbornly high interest rates plus the risk premium attached to small cap companies trading on AIM.

18:29 And three, we have reduced the time horizon for DCF calculations from fifteen years previously to only ten years now. None of the other intangible assets were felt to require impairment despite the increase in WACC and despite the reduction in the time horizon. The second item is gross cash at the bank, 1,900,000, performing well as described already. Net cash of GBP 1.7 as compared to 2.5 last year.

18:59 The third item, the business is highly liquid, having 2,300,000 of net current assets, which for a business of this size is very substantial, down from 3,300,000 in the prior year. And the fourth item, capital and reserves, pounds 6,300,000 impairment has taken the distributable reserves into a substantial negative.

19:23 And finally, despite the aggressive trading environment and the challenges brought by the tech platforms, we have managed to steer this business successfully and achieved our three key aims. We didn't incur any trading losses. We conserved cash. In fact, we generated cash. And we have positioned the business in the best possible way in order to capitalize fully when the global advertising markets recover. As we now have five products and we have improved our tech stack. That's it for me. Back to you, James. Thank you very much, DJ. Right. It's my role now to take you through some of the headlines and perhaps some of the more positive things that happened throughout last year.

20:10 Firstly, graphene. Graphene is the name that we've applied to our technology stack, and it continues to evolve to help us serve the best publishing process and best user experience on our platforms. It enables us to push content

20:30 at the optimum level, serve advertising at the best density in order to optimize our monetization, and it helps deliver the best user experience, which we've recently pushed through on TV Guide, which is a huge difference on that platform since it's been rebased. Gas, as we call it, the graphene ad stack. Gas has been driving success over the past year on the POKE. And these are, in fact, the daily session values that the POKE has delivered over the past thirteen months.

21:16 So you can see in December 22, the area in blue with the daily session values before we rebased the poke onto the graphene ad stack. And you can see it was running around three pounds or just over three pounds. And if you move to the right of the chart, you can see how 2023 performed at around 300% or perhaps a little more at an average of around GBP 12 to GBP 14 over the whole of the December period. So significant difference made there by the graphene ad stack being applied to the poke and a pretty strong year that I'll go into later around repaying the acquisition costs.

22:12 We also rebased our audience sourcing. And this chart or this this cluster of charts helps illustrate that. So if you look at the left hand side of the slide, you will see the blue represents typically Facebook traffic, but social traffic that was being delivered by DIGITALBOX PLC when we first floated in in December 2019. And you can see that we're running at 80% ish traffic across our business being sourced from Facebook. If you look to the right, you can see the sourcing profile is now very, very different.

23:00 You can see we've grown in the red search traffic, which is typically Google, which is much more significant now for us than it ever was, and direct traffic, which is the green segments of the charts. So that is really important to us as a business because it gives us stability as it's inevitable that the platforms will continue to twist and change their algorithms and having diversity of audience sourcing is the best way to navigate that. We also grew our social audience base. And this chart shows again from the year we floated in 2019. We had around 3,000,000 followers social followers, And we've now got over 20,000,000 following the the social chain AG or or media chain acquisition that we've made last August.

23:59 And the important thing here is having a bigger social footprint will enable over time much greater audience engagement and much greater traffic to our websites. We've been disciplined in our approach to m and a, and this chart helps again to illustrate that we paid £200,000 for the poke in December 2022. The product made a contribution of just over £100,000 for the year ending December 23. So in a difficult advertising year for an ad funded business to repay 50% of its acquisition costs is a pretty good result. And we think if there's a better ad market around the corner, then that could have well been eighteen months.

24:57 But nonetheless, we're targeting as we have targeted or as we have achieved on the tab previously, an eighteen month return on investment. We're targeting on the poke twenty four months. And And TV Guide is showing signs that it will deliver in eighteen months. And Social Chain, our target is twenty four months. So pretty impressive returns around acquisitions that we've made. And that comes on the back of being very disciplined about what we have acquired. We've acquired, as we've said before, those assets out of cash. And this chart really shows how important the cash has been to us since we floated with GBP $05,000,000 and finishing the year in 2023 whilst we've with GBP 1,900,000, whilst we've made acquisitions throughout that journey.

25:55 I'd now like to hand over to Jim Douglas, who will take us through some highlights on our individual brands. Thank you, James. Yeah. I'll run through our portfolio of five sites and talk about some of the progress we saw in 2023. So the first brand, Guide, which is, as James mentioned, our most recent addition to the group with our completion of the acquisition in October of last year. As the name suggests, the core proposition here is helping users find the best shows to watch, either what's on now, later tonight, or next week, or allowing them to search by specific shows, by channel, type of shows, movies, or sport.

26:47 Many of you may remember that this deal was a long time in the making, that's really because while this brand was launched more than twenty years ago, and so over time has established real recognition and a really valuable loyal audience, The age just meant that the underlying tech needed an extensive rebuild prior to completion. So that work is now done. The site is ours. We have a progressive web app serving users however they choose to access the site either directly or via the via apps in the App Store. And we've seen improved performance as a result of that. We've seen improved search performance.

27:33 Also, crucially, commercially, we've seen the move onto the graphene ad stack deliver an 18% uplift in session values. And we also have further plans for the site, which we'll touch on in a few slides time. Moving on to the poke. As James mentioned, the brand has just completed its first year with us, and we think it's really a great addition to the group. There's obviously a good portfolio fit with the Daily Mash, but beyond that, it's really a great property in and of itself. The poke is a curation of the funniest stuff on the Internet, whether that's reaction to breaking news, Twitter takedowns, or unearthing hidden gems from the weird and wonderful depths of Reddit.

28:23 Because James mentioned earlier, the brand is delivering really well in terms of payback, so it's on track. It's already repaid 50 of its acquisition cost within its first year of ownership. This year, we increased editorial output, and we saw hits from the likes of Eamonn Holmes having a hot mic meltdown on GB News, Louis Theroux making Piers Morgan look even more stupid than normal, and quite a few great moments featuring, as you can see on the right here, comedy legend and national treasure, Bob Mortimer. And, again, it's a bit of a recurring theme. The power of the graphene ad stack in December session values rose by more than 300% year on year. So a pretty significant indication of the ability to bring a title into the into the portfolio and improve its performance.

29:15 Next, we have Entertainment Daily. So this is our longest brand, and many of us, I think, will be familiar with it. But just as a reminder, the site's editorial remit is the delivery of fast paced TV and showbiz news with a strong UK focus. As James mentioned, we experienced a really challenging period for traffic for a significant portion of the year, but we did see a pleasing return in q four following our move to the.com domain, as James mentioned. We continue to see key shows like I'm a celebrity, the three big soaps, strictly come dancing performed really well. And also this year, we saw good traffic from our coverage of big ITV dramas like, mister Bates versus the post office and also, the Philip Schofield saga.

30:14 And, also, Entertainment Daily is now benefiting from a bigger social following as we've aligned and rebranded part of the media chain portfolio with Entertainment Daily to increase its audience by 1,300,000 followers. The Daily Mash is The UK's favorite satirical news site. So since we made this strategic decision to shift to a paid model, we've been seeing really good progress. And we've now more than 4,000 paying subscribers, and it's this subs growth that we see as key to unlocking the Mash's return to profitability. So the next stage here will be to add more reader benefits in terms of offering free trials for existing subscribers to gift to their friends, very much like the Telegraph have used to great effect, potentially partnering with third parties like comedy streaming service, NextUp, to include a bundle deal.

31:14 Also this year, we tested some video content via Meta and TikTok based around AI generated videos, repurposing existing articles, pieces fronted by on camera talent like those you can see on the screen bottom left here. And that activity delivered us more than 25,000,000 views. And finally, on the MASH, even though we are a digital business, we've recently partnered with a book publisher to create the daily MASH guides to the class system, which will be out just in time for Christmas. And then, rounding out the portfolio, we have the TAB, which is The UK's largest student and youth culture site. It's powered by a London hub with journalists working at 30 campuses all across The UK.

32:03 So the consistent theme here in terms of increase in session values plays out on the tab as well with Graphene Adstack helping elevate session value performance by 25% year on year, as well as hit editorial stories in the entertainment space covering youth favorites like Love Island, Married at First Sight, and more recently, Celebrity Big Brother. The editorial team are always finding ways to spin adjacent content from big entertainment IP. So there's an example here on the right hand side of the slide where the hit Netflix romance one day, which is about, a couple who fall in love at university, that inspired the team to take that idea and create a TikTok video rundown of universities where you're more likely to find a partner.

32:53 So quite a nice editorial twist in showing the innovation in the editorial team. And and finally, for the tab, as you can see on the left hand side, a picture of the tabs Facebook page. And the tabs Facebook following has now grown to almost 10,000,000 followers as a result of our integration of the largest of the media chain assets into the tab main page. So that means that the tab content can now regularly reach a social audience of more than 14,000,000, which we think gives us great potential for the future. That's it from me. Thank you very much, Jim. Okay. I would just like to take you through some forward looking opportunities that we'll be focused on before summing up and then taking some questions.

33:50 So The UK adults spend four times as much time online via a mobile device compared to a desktop device. Mobile advertising is still playing catch up. Digital advertising spend is forecast to grow to over $800,000,000,000 in 2026, but the mobile segment within the lighter pink part of the chart is expected grow by over 40% over the next three years as it accounts for the greater share of the total digital spend. So that's a positive place for us to be as we move forwards. Can I just check the because I've lost my sound? I can't tell whether or not people people can hear me or not. James, we we can hear you, sir. You can hear me. Okay. Thank you. Thank you.

34:56 Okay. The next the next sorry. The next slide. Chart shows the growth of UK ecommerce over the last four years. What's interesting again about this is perhaps the impact of COVID nineteen. So if we look at the change in the volume of goods or the value of goods bought online, which is the bright pink part of the chart, you can see as we moved into q two twenty twenty and q three and '4 and then q one twenty twenty one. The percentage of ecommerce that they accounted for was was growing significantly.

35:48 But since those days of the pandemic and lockdowns have departed us, you can see so has the reliance on the purchase of online goods. And it's normalized. And as you move to more recent times in 2023, you can see it's actually reduced since the heady days of the pandemic. But overall, ecommerce has continued to grow. And the important thing we're looking at here is the services aspect of the ecommerce pie. And this accounts for things like digital subscriptions, so Disney plus, for example, Netflix, etcetera.

36:35 Your subscription to the Telegraph or your subscription indeed to the Daily Mash premium offering are all accounted for in this part of the graph. And so really, what it's demonstrating is there's a much greater appetite to pay for services via digital devices than ever before. And we're seeing it across the media landscape as well. We've seen the mail introduce a paywall with mail plus. And we think we're right to be looking and continuing to look at this area as a significant future opportunity for the business. Just drilling down into what we're doing on each brand.

37:22 The subscription drive, as Jim mentioned, on the daily mash will continue. We're now standing at a position of just approaching 4,200 subscribers today. As the Google algorithms continue to change, we think there's an opportunity really around entertainment daily content in very specific content verticals because these will stand for much greater levels of trust and authority, having experts writing for very specific content areas. And we'll release more information on this as we move throughout through the year and potentially launch more product.

38:08 The tab, we're exploring US content, potentially publishing around very US centric shows. We've had a very successful period in the past month or so around maths Australia, married at first sight Australia, and we'll continue to explore the international opportunity around the tab. And a key reason for that or one of the key drivers for that is we had great success on tab session values last year, which were partly as a result of being visible in The US ad market, which is in a much stronger position than The UK. That was certainly a contributing factor behind our growth on the tab of 25% concession values.

39:01 The poke, we are looking appointing a series of guest editors. So the advantage here is, potentially, the guest editor has a pool of followers on Twitter or Facebook, and we can tap into their pool of followers with the content that they're producing for us, and they can tap into our pool of followers. So it's a kind of win win opportunity that we're exploring there. And we think there's certainly room for growth. And certainly, around the elections in both The US and The UK this year, there'll be further opportunity. TV Guide, we're about to release a cross linking project between TV Guide and Entertainment Daily, which we hope help hope will drive, direct traffic, and certainly help, source more, organic search traffic as well.

39:56 And we're considering at the moment moving further into the streaming market alongside the linear programming market that we're currently servicing. And there'll be a further variant of graphene released in the middle of this year as we look to build an interface that makes it a lot simpler and quicker for us to overlaying overlay our advertising technology onto acquisitions. And as far as acquisitions are concerned, really, the key focus is the central part of this chart. We look at opportunities across the board, but the hotspots we've identified consistently is first wave digital media businesses that are probably struggling to evolve their models for today. So things that are probably invented products that were invented in in the the naughties struggling to apply a mobile first model in today's market.

41:00 Examples of that are really the last three things that we bought. The tab certainly falls into that category, the poke and TV guide definitely does. So in summary, 2023 was definitely challenging through a combination of Google and Facebook algorithm changes plus a depressed ad markets. We've managed to maintain profitable operations for the fifth consecutive year, which we are absolutely focused on doing going forwards. Our social following is now over 20,000,000, doubling the number of followers that we can push our content to, which is a big, big advantage.

41:46 And our our cash generation is funding our growth with GBP 1,900,000 in the bank at the end of twenty twenty three. It puts us in a really strong position. And we feel we've really set the business up to make the most of the opportunities as we move forward towards a much better economy and a stronger ad market in 2025. That's it for me. Thank you very much for spending the time listening. We'll now move towards the questions. Perfect. James, Marcus, David, Jim, thank you very much indeed for your presentation this morning. And what I'll do is I'll just bring back up your cameras before we move to Q and A. 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.

42:46 Guys, as you can see there in the q and a tab, we have received a number of questions throughout your presentation this morning. And thank you to all of those on the call for taking the time to submit their questions. But, James, perhaps at this point, sir, if I may now hand over to you just to share the q and a with the team, and then I'll pick up from you at the end, that'd be great. Thank you. Okay. Thank you. I'll I'll take the first couple. But the first couple are given the challenges faced other publishers in 2023, has DIGITALBOX identified potential acquisition targets and what criteria are being used to evaluate these opportunities? We continue to eye opportunities. And, really, the the hotspot, as I think I said on on the second from last slide, is looking at businesses that were engineered around desktop, initially desktop publishing.

43:43 Really, our ability to move them into a mobile focused world, create very efficient editorial teams driving audience, and a very efficient monetization model is the opportunity for us. So I can't tell you obviously what we're looking at, but there are increasing numbers of of websites that are coming under pressure and and looking for an alternative model. And if we really believe we can overlay our and are confident that we can overlay our model as we did believe on the tab, the poke and TV guide, then we'll move forwards with the opportunity. Next question was how significant were the impacts of Google algorithm changes and Facebook sanction on the tab? And what steps are being taken to prevent such issues affecting your traffic and revenue in the future?

44:42 We continue to follow best practice and which by no means prevents these issues arising, but it limits the chances of these things happening. But in terms of the volumes, we estimate we probably lost around 50,000,000 sessions in the whole of 2023 on the Entertainment Daily and around 20,000,000 on the tab. So really, that is the difference between total session volumes that we delivered last year and the previous year. Right. There's another question.

45:32 Downing Microcap owe 19.5% of the shares and currently in wind down representing a large share overhang. Given the current valuation of this these is just £900,000 and the company holds 1,900,000 cash, Would you consider buying these back from Downing? So I pass that to you, Marcus, as a question. Yeah. So we're in regular contact with Downing, and in fact, they have a an observer seat on the board. Last conversations were they're happy to hold the shares. They still see upside and value, and the wind down is gonna take a reasonable amount of time. Having said that, it's the board's responsibility to maximize shareholder value. So, regularly, at each board meeting, we discuss whether we should consider doing a share buyback, whether the cash, which it currently is, is best used on a buy and build strategy.

46:31 So and we have a board meeting to come up in the next month, and we'll discuss those options again. Okay. Thank you, Marcus. DJ, there's one here for you. EBITDA is not a measure of profit, especially when it's adjusted EBITDA. The bottom of the income statement is the only measure of profit or, in brackets, significant loss losses in your case. Okay. I I would take issue with that. I think EBITDA for a business that doesn't have a high degree of working capital suck. It doesn't have a high degree of CapEx or investment needed to go into the business Like ours, EBITDA is exactly the right metric to be looking at.

47:25 As a testament to how the business generates its cash, below that adjusted EBITDA of £20,000 is noncash, nonrecurring financial accounting entries. So I I would disagree with that respectfully. Okay. I have another one for you, DJ. Days sales receivables has jumped from 97 to a 124. Why the jump? It's the increased bad debt risk. So that's that's from Mark. Thanks thanks for the question, Mark. I think you've probably made that calculation based on the annual sales and then a track back over 365 days.

48:16 Ordinarily, a perfectly sensible approach. However, when you've got a business that's got very highly seasonal sales that are very heavily skewed towards November and December, Unfortunately, it doesn't work out very well as a calculation. The true DSO at the end of December was fifty nine days. So quite the converse actually when you take the seasonal revenues into account, big November, big December, then that explains the resultant trade debtor position at the end of the year. So this business has always enjoyed very good DSO and very good debt recovery because it only really trades with global platforms.

49:05 Thank you, DJ. One final question. The company has said they're currently trading in line with expectations. However, they've chosen a broker who doesn't make their research available to retail holders. I will discuss with our broker how we can get the note out to a broader audience, which I can see would be of value. Because, you I guess, there's there's no formal acknowledgment to what that guidance is in this instance. I don't think there are any more questions that I've got to answer at this stage.

49:56 Perfect. James, Marcus, David, if I may just jump back in there. Thank you very much indeed for addressing all of those questions that came in from investors this morning. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review, to then add any additional responses, of course, where it's appropriate to do so, and we'll publish all those responses out on the platform. But, James, 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. Yes. Thank you. I mean, there's no hiding from the fact that 2023 was a tough year, but I think the team performed very well to navigate those challenges that were put in front of it.

50:46 And the result of that hard work over the past twelve months has really set us up to be in a much, much stronger position for the future. We've now got five assets compared to the one assets that we were operating when we first floated. We've got a greater diversity of audience sources that gives us going forwards. And we've got a set of skills or a toolkit to help us much better navigate the platform challenges that will be in place for all publishers. So with the ad market forecast to return as we head towards the back end of 2025, we think we're in a pretty strong position to perform better going forwards.

51:32 Thank you very much for attending. Thank you, James. That's great. And thank you once again for updating investors this morning. 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 all 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 management team of DIGITALBOX PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all. Thank you.