Digitalbox (LSE:DBOX) — FY24 Results

0:01 Good morning and welcome to the DIGITALBOX PLC Investor Presentation. Throughout this quarter presentation, will be in listen only mode. Questions are encouraged and they can be submitted at any time by the Q and A tab situated in the right corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company can review the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll.

0:27 I'd now like to hand you over to Marcus Rich, chair. Good morning to you, sir. Good morning. Thank you. Good morning, everyone, and welcome to the DIGITALBOX twenty twenty four annual results presentation. I am Marcus Rich, the nonexecutive chairman. I will be joined by James Carter, CEO Jim Douglas, COO and Richard Spillsbury, CFO, who will take you through the 2024 results. The digital media landscape has changed significantly since 2022. Along with other notable consumer listed media companies, it has taken a while to navigate the turbulence caused by the major platforms, Google and Meta, as they respond to the threat of AI by reducing the audiences to media owners for both advertising and affiliate marketing.

1:29 Under Google's EEAT, which is experience, expertise, authoritativeness, and trustworthiness, we have now seen how specialist content can rank better than generalist. And we've shifted our focus to subdividing the entertainment space into niches with launches such as Emmerdale Insider and Royal Insider. We have essentially worked through the process of these platform changes to see a path for growth moving forward. The team will update on success to date, but an accelerated strategy of organic launches and bolt on acquisitions to reflect the platform's change of sentiment will, we believe, grow the business faster.

2:24 The strategic review in the year helped us to evaluate all alternatives, but also to confirm the existing proven business model can deliver greater shareholder value as we execute on what we have labeled the vertical strategy, which the team will go through in some detail. I'm pleased that we have delivered a positive set of results this year, seeing revenue grow by 31% whilst growing audience and scaling the portfolio at the same time to put DIGITALBOX in a fantastic position to deliver future growth. I'm just gonna frame now with this slide the six areas the team will talk through before I hand over to James.

3:14 Firstly, portfolio growth through buy and build. An important part of the journey to date has been the seven acquisitions since listing, with Walford News being the latest, all as highlighted, have paid back between eighteen and twenty four months. The challenges post '22 that we've talked about have killed off some of the targets who haven't been able to adapt to the platform changes. And therefore, build or launches has become even more of a priority for us as we understand how specialist content can rank high with Google. Audience growth. We highlighted in the RNS significant audience growth on TV Guide, The Tab, and The Poke, and subscription growth on the MASH.

4:04 The team will talk through the opportunity for editorial investment to build further audience in 2025, particularly TV Guide. If we look at the market beyond Radio Times, nobody is doing a particularly good job marrying listings with outstanding TV content. Improved ad market. Digital box is always dependent on the macroeconomic backdrop. The positive forecast for digital advertising in 2025 and continued growth in mobile as part of The UK advertising mix means we enter 2025 well positioned. Rapid return on acquisitions. We talked a bit about previous acquisition, but recently, we've acquired large but understimulated dormant social audiences that we've been able to add new content and brands to that have grown very quickly.

5:02 The team will talk about how this differentiated approach to acquiring audiences is working. Continued profitability. Revenue for '24 is 3,645,000, up 31%. And adjusted EBITDA is 624 k, up from 20 k in 2023. Richard will take you through the final high financial highlights. And finally, growing our cash position. Net cash has grown again, and as at the end of '24, is 2,015,000. I will now hand you over to James Carter, the CEO of DIGITALBOX, to take you through the year end results.

5:49 Thank you, Marcus. And, again, welcome to the DIGITALBOX, 2024 results presentation. We're glad you're able to join us. To recap, for anyone unfamiliar with DIGITALBOX, DIGITALBOX is a pure play digital media company with a pedigree in emerging publishing technologies. We're a 100% digital and mobile focused with our core editorial delivery the entertainment sector. We've grown through a buy and build strategy and transforming the acquisitions, as Markus pointed out, that we've made along the way, delivering very fast returns on investment. Our historical model is simple.

6:35 We publish great content that drives audiences to our website that we then monetize through commercial solutions across a number of areas. We started off very much around display, but we're now reaching out and generating revenue through four key commercial areas, in fact, five key commercial areas, display advertising, video advertising, ecommerce, subscriptions direct to consumers, and on platform revenue. It's a significant change from where we were.

7:08 We operate, the eight brands that you can see on the screen. Entertainment Daily, entertainment TV celebrity news site, Daily Mash, The UK's leading news satire site, TAB, The UK's leading student youth culture site driven by an army of student journalists across more than 30 campuses across The UK. The Poke, which is best described as a humor aggregator serving some of the funniest moments to hit the web. TV Guide, which was in fact a sort of very early stage Internet business, a linear TV Guide that was launched over twenty years ago, which we've now modernized and made more relevant for today.

7:54 Emmerdale Insider, that is part of our vertical strategy that we'll go into more in detail later, but delivering the the best content around the Emmerdale soap opera for fans of that particular show. And Royal Insider, that is exactly what it says. It's for those who want to keep up with the latest on The UK royal family. And Reality Shrine, which is basically a destination for all those that want the latest twists and turns from the world's biggest reality TV shows. Two of those have been launched outside the period that we're reporting on, which are Royal Insider and Reality Shrine.

8:40 So the presentation will break down into five areas. I'll take you through the market backdrop, the key headlines from the business, and what the future is looking like, whilst Richard will drill down into the financial detail, and Jim Douglas will explore the portfolio development that we've delivered over the past year. Firstly, the leadership team. The board brings significant experience to the business through success delivered within the major institutions like EMAP PLC, Future PLC, Reach PLC, in addition to Bauer and the Guardian Media Group. The executive has experience in editorial strategy at the highest level, delivering and also delivering VC backed roll ups to exit, and are well invested with a stake of around 20%.

9:38 So first slide around the market backdrop. As you can see, this slide has two very similar charts, and they are the share prices of two public media companies, one being Future PLC, the other being DIGITALBOX PLC. And it's a very similar pattern over the five years that we're showing you here. And it dates back really to a point in 2022 when both were at their peak. We've obviously seen a lot of macro effect macro factors affecting the market since 2022, mostly Ukraine war, energy prices soaring, inflation spiraling, and general economic uncertainty since that period.

10:28 But combined with that, media companies have had to deal with the significant changes that have been thrown into the marketplace, partly induced by the emerging AI tools, but also being delivered by Google in particular through its parasite update that was there really to police against site abuse and people using great domains to deliver unrelated values. So as an example, maybe the independent news site might be

11:04 delivering content around best barbecues and abusing, really, in the eyes of Google, how that domain should be ranking. There was also the EAT algorithm that Markus mentioned, a helpful content update that was really trying to push users towards highly valuable content as opposed to content that was there to generate transactions, and the link spam update. So two sort of perfect storms, one being the macro market and the other being platform changes that took place. But we've got through this period in a positive shape. Many haven't, but we've got through this period in a positive shape and come out with a great growth plan.

11:54 The algorithm changes that we mentioned have seen a move away, as Markus also said, from generalist sites to specialist sites being favored by the platforms. Sites that can really deliver around trust authority metrics often framed as buy fans for fans, where sites deliver very high levels of of consumer engagement. It's a very high visit frequency, comment frequency, etcetera, all contributing to that engagement that is prized by the platforms. Looking at traffic across the market, there's been lots of commentary about audience trends.

12:42 The lower black line shows a fairly typical and widely reported trend across digital news media in The UK over the last couple of years. So it runs from 2023 to the end of twenty four. And this one is one of the more popular news brands in The UK, which is showing a 35% reduction. And it's probably fairly typical of news media in general. Top chart shows digital DBOX total traffic over the same period. And you'll see we've maintained a similar seasonal pattern, but grown our audience by 10% in total over the 2324 period.

13:32 So outperforming the market against audience. Let's take a look at the ad market. The lower chart shows the global digital advertising index across 2023 and 2024. And you'll note steady improvement, which again maintains similar seasonal patterns but rose by around 10% in '24.

13:58 The chart on top shows DIGITALBOX revenues across the same period with a very strong q one and a much more robust q four contributing to a 31% year on year increase in income for the business. So, again, outperformance of the market.

14:20 Looking at the global advertising market further, worth noting we're focused around two of the best ad markets on the planet. The light blue bars show the advertising spend per head of population, whilst the dark blue, the amount channeled into digital spend, with The UK showing the highest share of the total ad budget going into this medium. And you can see that there's a two to threefold return per head of population in The UK and US compared to other g seven countries. So it's a good place to be operating.

15:00 Just looking at a summary, really, of the year. Early in the year, we decided to focus on the biggest strengths in our business, our editorial knowledge of the entertainment market, and grew our business to the eight operating assets that you see each day. We maintained acquisitive we remained acquisitive buying a further five properties, which will all contribute to our growth plan, and have ended up with much more diverse operation that injects greater stability to our growth plans. So the highlights for the year were 10% traffic growth, bucking the market, cash deployed to both buy and build, 624,000 adjusted EBITDA, which is 31 times the previous year, and finishing the year with £2,100,000 in gross cash.

15:59 Now I'd like to hand over to Richard Spilsbury. Think, Richard, your microphone is on. We can hear your papers shuffling. I think you're ready to go. Yes. Thank you, James, and good morning to everyone joining us. As you're aware, the trading environment for many digital publishers has remained very tough, with many seeing significant declines in engagement due to algorithm changes and uncertain macroeconomic environment in 2024. Last year, my predecessor highlighted three key aims, namely, and I quote, one, don't incur trading losses. Two, conserve cash. Three, position the business in the best way in order to capitalize fully when global advertising markets recover, which they will.

16:52 I'm pleased to be able to report that DIGITALBOX has demonstrated it has a resilient business model and the insights and ambition to find growth even in a challenging market context. Now we'll therefore be able to report that the group has not only not made losses, but returned to its historically high gross profit margins. Secondly, can demonstrate increased cash and invested in target accelerated growth. And three, diversify the portfolio to take advantage of market trends. I'll explain that further over the following slides.

17:36 Onto the income statement in front of you. The income statement represents the trading performance of the enlarged group, the first full year of TV Guide, and I will later show the like for like performance too. In overall terms, revenue increased by 31%, which is ahead of many comparable businesses Due to good cost agility to reallocate resources to the most productive operations, direct costs were reduced to improve gross profits gross profit margins back to 85%, being nearly seven percentage points higher than last year and double the gross profit margin of many comparable businesses. Administrative costs were up 14%, with 60% of the increase due to higher head office costs.

18:28 So the contribution before head office costs are GBP 1,800,000, up 80% on prior year. Head office costs, as a reminder, include governance costs associated with our listing on AIM. As a result, adjusted EBITDA increased to $624,000 with a respectable margin of 17%. The adjusted EBITDA encapsulates the underlying profitability of the Group, giving you greater visibility of trading once we take into account the following: first, value measurement changes such as depreciation, amortization and impairment, although there were no impairment charges this year, and share based payments.

19:16 Secondly, investments in new product development being the vertical strategy and platform improvements to TB Guide. And three, one off projects not related to trading, such as costs for the share capital reduction, acquisition costs and the strategy review, which was undertaken in accordance with the takeover code after clear representations from a key shareholder. On to the segmental revenue. The segmental analysis demonstrates revenue growth in all our assets and our reduced reliance on Entertainment Daily, still our largest brand, but now only 40% of revenues.

20:02 Its growth rate was healthy and lower than other brands due to the current calibration of search algorithms. Other brands show significant growth with our next largest brand, the TAB, growing 27 and the incredible growth of 355% of TV Guide, which we acquired in Q4 twenty twenty three and underscores our ability to extract value from acquisitions. Quarterly revenue changes demonstrate that the trading environment continues to evolve. Despite the headwinds faced for individual brands within specific quarters, the diversity of our portfolio helped deliver growth in every quarter, and Q4 shows that we have the agility to adapt and take advantage of market opportunities.

20:57 On to our cash generation. Cash generation remains strong, with net working capital cash inflow and continued strong track record in debtor recovery. As a result, cash conversion as a percentage of adjusted EBITDA was 90% after investments in new product development and investments in one off projects. Last year, we reported aggregate cash flows over the last two years to better understand underlying cash conversion, and I've done so again to be consistent given that the prior year comparative is still not normal. This shows average cash conversion of 117%, continued growth, investment in growth and in other investments to underpin shareholder value.

21:55 Cash utilization. This slide summarizes how we have managed our cash reserves, which were £1,900,000 at the start of the year and have grown to £2,100,000 We have used cash generation for three purposes: one, to repay loans and we will fully repay our existing COVID bounce back loan in 2025. Secondly, investing growth for new product development 79,000, CapEx 3,000,

22:30 acquisitions including the payment of deferred consideration 347,000, totaling 429,000.

22:41 Thirdly, to underpin shareholder value in the reduction of share premium that creates a channel for dividends and also the shareholder review. We hold significant cash reserves at year end and are mindful of the need for robust working capital management, so we can continue to invest in growth both acquisitively and organically.

23:06 While a significant proportion of our revenues earned are in U. S. Dollars, we convert U. S. Dollar funds to sterling every quarter to manage foreign currency risk, and we continue to review receivable interest rates regularly to obtain competitive rates.

23:25 And so to conclude with our financial position. Our financial position continues to be strong, which puts us in good position to exploit market opportunities for growth. Our largest asset category are the intangible assets, mainly arising from consolidation accounting for acquisitions. Along with all our intangible assets, we have performed a sensitised impairment review and no additional impairments are required this year.

23:56 Our approach to assessing the impairment review has been consistent with prior year and we continue to consider the assumptions applied to be appropriate. We are not a capital intensive business and that is seen in the low value of our fixed assets. Our deferred tax asset represents the highly likely recovery of tax losses in future trading periods from 2025 onwards, which will benefit our effective rate of tax. Net current assets have increased and are healthy, and the bank loan is due to be repaid this year.

24:33 The share premium has been reduced following shareholder approval and court confirmation and credited to the distributable reserves. So, this strong financial position has given us the opportunity to undertake a number of acquisitions in the last few months, namely GRV Entertainment Group, Bullford News, and as a post balance sheet event which is not adjusting, Media Chain, as well as two new launches, Embedale Insider and Royal Insider.

25:05 Your Board will continue to focus on maximizing value through the expansion of the current model. We will continue to develop its business through launching new products and we remain alive to acquisition and merger opportunities that can maximize shareholder value.

25:27 Thank you, Richard, for that comprehensive overview. Let's take a look now at some of the areas that we've developed over the previous year.

25:40 When looking forwards, it's always important to reflect on your strengths, and here are a few that we've surfaced. Engaging content, we create amazingly engaging content that people really want to read and brings us very efficient editorial teams, as I've mentioned before. We're very good at efficient revenue generation. Our graphene ad stack drives great results with limited resource.

26:08 We're good at adapting to platform changes with a strong track record of dealing with the challenges thrown up by the major platforms is a key ingredient to developing our business since its inception.

26:22 Our push media skills are strong. Our teams have some of the best skills in social media. And our return on acquisitions, as already mentioned, have typically delivered payback in less than two years. So that's a real strength. And we're good at generating cash, highly cash generative, which will help fund our growth plans. One of this year's big success stories has been TV Guide. After buying the site in October 2023, we've repaid over 70% of its costs and are on track to fully repay probably within twenty months, further demonstrating our ability to breathe new life into properties that have stalled.

27:12 And that's a repeat process of what you can see on the right here with the tab taking eighteen months, the pope twenty months.

27:20 The the 480,000 that we spent on TB guide looks at the moment to be pretty good value. Social. So we're up to 21,000,000 followers. We entered the market in 2019 on the left hand chart at around three and a half million followers and have since grown to 21,000,000 by 2024. Some of that has been through acquisition. And as I previously mentioned, the media chain acquisition of the 99 problems page that we attached to the tab can be demonstrated by the reach chart, since we bought it in August 23. The blue line, to the right shows around 500,000 reach per day being delivered by the site when we first bought it, and it's now up to an average of around 10,000,000 per day.

28:19 So that's a real signal of how we've managed to create value around that particular acquisition that is delivering great traffic results to the tab site and also great on platform revenues from within Meta. We've diversified our revenue sources. The two charts on the left show us in December 2019, and the blue pie chart represents programmatic revenue. So in December 2019, you can see we're a 100% programmatic revenue against two brands, Entertainment Daily and The Daily Match.

29:04 So fast forward December 2024, and you can see a very different mix in our revenue makeup driven part by subscriptions in the green, on the Daily Mash, which has been a big success since we've started to deliver that a couple of years ago. And in the red, the direct revenues and on platform revenues that we've started to develop over the past year. So this really is a result of the platform changes that have taken place and the fact that Meta has had to respond to TikTok and start to reward content creators for engagement on platform. And we've created new products.

29:53 So this, image that you can see on the screen really pieces together how we created Reality Shrine that we launched about four weeks ago. So as you would have all seen, we bought Reality Tidbit from GRV Media in November 24. We took the best bits of Reality Tidbit, fused it with some of the best reality TV content that we had in the archive on our parked website called Babe, and blended that with pop culture shrine, which was a social page that we had been developing in the background around youth audiences within the TAB group, and bolted these things together to create Raequality Shrine.

30:42 And that illustrates really how our approach to buying and building has changed over the time. If there aren't fully formed assets, we're absolutely on the lookout for things that we can extract value from as we are doing here with Reality Shrine. And that really is a way of fast forwarding any launches. So if we consider on day one of Reality Shrine being published, we had Google traffic. This would normally take some time to deliver for the sites to be pulled. So that's the fast track way to delivering value. We've labeled it our vertical strategy, and this really is around us congregating around very specific content areas with highly invested audiences.

31:36 So people that are very, very committed to certain areas of subject matter. Emmerdale Insider is an example of that with a high frequency showing of the TV during the week and people in demand for content on that with a high frequency. That's a good example. That collectively generates super engagement where people are highly engaged delivering comments, delivering feedback, likes, and reading relatively long articles on subject matter. This all combines to generate value around the deep algorithm that Markus mentioned. So, really, what we've done is built around our core strengths, first and foremost, Emadale Insider, Reality, Shrine, Royal Insider are the ones that we've launched to date, and we'll continue to launch more product as we move throughout the year around this vertical strategy.

32:39 And that's really how we plan to deliver greater platform engagement as these venues that we're talking about will rank higher than more generalist delivery. As you could see, as we've developed over the last five years, you can see how we've grown our cash position. So we entered the market in 2019 with around a £500,000 of cash. And over time, whilst growing the number of assets that we're operating, we've managed to hold to a cash position of 2,100,000 at the end of twenty twenty four. Now I'd like to pass over to Jim Douglas to talk through some of the significant developments that we've made within the portfolio.

33:33 Thank you, James. Yes. So in terms of portfolio development, I'll start with an update on the development of TV Guide, which has been one of the big successes of the year, as James and Richard have mentioned. Just completed its full first year of since we acquired in October 23. As the name suggests, the core proposition here is helping users find the best shows to watch, whether that's what's on now, later or next week, or allowing them to search by specific shows, by channel, by types of show, movies, sport, film. And the path we're pursuing this year is to transform essentially being a linear only listings product into a richer and better experience for users with more editorial content, and I'll expand more on that on on the next slide. And the results of this work, as you can see here, and as we we've mentioned, have been pretty spectacular, to be honest. We've seen a 90% increase in q four traffic, which is traditionally the peak season for the brand.

34:43 And as James and Richard have mentioned, that's helped put on track to being another acquisition that's paying back within twenty four months. We think potentially twenty months as it shows on the slide here. So on this next slide, we give a little bit more detail about the development and growth of the TV Guide brand. It's played out since since ownership. We did some stabilization work to the platform prior to completion. So on the left hand side of this, timeline back in, October 23. In December that year, we rebuilt the main listings grid view to be more which is obviously better for users and better for Google. And we saw the benefits of that work begin to come through in q one twenty twenty four as you can start to see the line, which is the traffic line, begin to increase.

35:40 And then in q two, we pushed on again with automated streaming content being added. We also rebuilt the iOS and Android apps. We introduced a light mode to make the site more readable and more friendly. And then in September, we increased our editorial content. We felt that we'd done a lot of good housekeeping work, and potentially, we could then add more content into this framework. And we added best of lists, show previews, and episode recaps. And then then on the right hand side, you can see the culmination of all this work wherein the peak q four period, we saw traffic increase year on year to 16,000,000 sessions, 8,400,000 in 2023. And we think there's more opportunity for expanding the brand further, and we're planning a further phase of development of editorial and tech work in q two and q three, and that's going to offer more content and more functionality for users.

36:39 Moving on now to Entertainment Daily, which is our longest standing brand, and I'd imagine many of you are familiar with it. Just as a reminder, the site's editorial remit is the delivery of fast paced TV and showbiz news with a strong UK focus. We saw a very good q one with traffic around a number of key stories giving us a real uplift. So we saw the Christian Horner, Jerry Hallowell scandal playing out. We saw TV related coverage like mister Bates and the post office traffic trafficking very well. One of the favorite EastEnders characters was axed, and that gave us gave us some great traffic. Interestingly, we're also managing to deliver a decent proportion of our traffic from, timely resurfacing of some stories, and internal recirculation too saw some growth. So we've been working on improving this area, and, we saw a 22% uplift in traffic from internal recirculation as we're able to surface even more relevant and engaging stories for readers. So once they're on the site, they keep reading.

37:52 And then on this next slide on entertainment daily, we see another area where we've been concentrating, which is in driving engagement and exclusives. So on this example here, which is around on the left hand side, which is around the fallout of the Giovanni Panicci, Amanda Abingdon story around Strictly Come Dancing. So Giovanni was partially cleared by the BBC investigation. So we write an article around that news moment. And then at the end of that article, we'll run an end of article poll, as you can see in the middle of the slide, asking readers to vote to tell us what they think about the story. And that enables us to then generate an exclusive story on the right hand side, in this case, saying that 72% of our readers felt he should return to the show. So this enables us to tap into a major story, take the temperature in terms of reader opinion, and then recycle this back to an audience in a way that we know will chime views. So we're rolling out this polling editorial product across more widely across Entertainment Daily and across the other sites. We're running at around about 25,000 monthly votes. So we see this as potentially a really useful content for really useful tool for generating engagement and generating exclusive content.

39:18 Moving on now to Emmerdale Insider, which is also managed as part of the Entertainment Daily Group, and as James mentioned, is the first of our sites. So it launched in August. And the idea, as James mentioned previously, is to take a streamlined, templated approach that enables us to bring new brands to market more quickly and focus on delivering hyper relevant content that resonates with the audience. So Emmerdale, the legendary ITV soap, has been running for more than fifty years. One of the appeal of shows like this, it's just worth mentioning, is that because they're on all the time, they are constantly presenting us with content opportunities, whether that be fan speculation about what's going to be happening in the show, spoilers of forthcoming episodes and previews, episode recaps.

40:13 And a highly focused site like this allows us to go even deeper. So we have a great archive around the characters and history of the show as well as coverage of classic Emma Dow episodes. A huge depth of knowledge in the editorial team, and we're really confident that genuine fans will appreciate this level of credibility and expertise. We've seen some good early traction. The site reached around a million views in November, and we're really optimistic about how we can continue to develop and expand this site going forward. Next up, we have the last of the properties I'm gonna talk around in the Entertainment Daily Group, which is Royal Insider, another of our vertical sites, which launched post period, launched in January.

41:06 As you can imagine, the site is a 100% focused on delivering coverage of the royal family, which is a mix of breaking news and longer reads, historical information, essential guides to lines of succession, the royal residences, the royal diary, and also, extensive picture based features. The site uses the same template as Emmerdale Insider with different branding, obviously, and as well as fresh content from our own team. We've brought over an archive of really good content from the incoming GRV acquisition to kick start the site, And the intention is to see what kind of potential the brand has in The UK, but also beyond. The signs are really in with around a million page views per month.

41:53 In terms of audience, we're seeing a touch more than half the traffic coming from outside The UK, primarily The US. As well as our use of an acquired asset in terms of the GRV content archive from an audience point of view. We're also using the recently acquired Facebook audience from media chain to expand further. So it's a good example of us blending our own talent, a common template, and assets from two acquisitions to develop a new brand. Moving on to our two humor brands. First of all, the Poke, which has had a really great year. So the Poke's remit is to curate and offer commentary on the biggest, most entertaining stories and how they play out on the Internet, TV, and social media, including satirical takes on current affairs and politics.

42:42 We knew that given the US election cycle, it was gonna be a fertile year. So we extended our editorial output to cover more stories and publish fresh content seven days a week. And beyond that newsier content, which is understandably skewed heavily into the political arena, we also went back to the archives and had some with reposted reposted traffic from broader content that we know the audience also likes. So 18 examples of remarkably polite graffiti or the most British phrases of all time as a little bit of light for relief from some of that some of the political content. The result was a 22% traffic growth, which along with the values that we've seen on this site, has seen a 63% year on year revenue increase.

43:31 Now moving on to The Daily Mash, which is The UK's favorite satirical news site. Since we made the strategic decision to shift to a paid model, we've been making really good progress. And it's this subs growth that we see as the key to unlocking the Mash's return to profitability. So we passed 4,200 subscribers towards the end of the year and have driven around a £130,000 worth in consumer revenues. Part of the development this year is about moving readers up the value chain into an annual subscription, pricing incentives, and other activity like bundle deals. So the Daily Mash book licensing deal that we did, which was profitable in and of itself, but it's also now working added value item to incentivize readers to choose an annual or lifetime plan as they subscribe.

44:25 And this position where 60% of our subscribers are on annual plans, which obviously protects us to a degree from ongoing monthly churn. The next phase for the Mash is to make it easier for users to gift subscriptions and share sample articles easily to further encourage sign ups, and we're hoping to get that in place for h two. Now moving on to the TAB, which is The UK's largest student and youth culture. It's powered by the London hub, as James mentioned, with work journalists working at campuses all across The UK. There's been plenty going on on this brand during the year. It's really pleasing to be able to report on it. At a headline level, we saw 15% growth in traffic.

45:14 And as you've seen in segmental reporting, that has now helped the brand pass a million pounds of revenue in Part of this has been driven, as James showed, by our combining the existing tab social presence with some of the social assets we acquired from Media Chain back in '23 and that traffic flowing through in the year. That process is a core follower base across all of the tab properties of more than 14,000,000 followers. And then to feed that expanded audience, we've invested in editorial. We've hired new team members, and we've also welcomed some of the writing team for from GRV into the TAB group with great success. Also, the tech group, the tech team, excuse me, working alongside, the editorial team rebuilt the sites too. And we've sharpened up some of the design. We've done a lot of work behind the scenes, meaning the site is more resilient, easier for the teams to use faster, and we're seeing savings of more than 25% in our server costs.

46:20 We also love the on this slide, we saw a return in our Netflix Facebook page, which, as we reported last year, was sent into the wilderness by Facebook, but has now returned and contributed around 2,000,000 pages in h '2. And then briefly, this next slide gives a bit more detail about how we approach the brand. It's really a brand of two sides, which is the global aspect on the left hand side where you see higher profile, youth friendly content, like the coverage, the ever popular married at first sight, which delivered a huge chunk of traffic during the year, almost 10,000,000 page views, and the team's take on global pop culture stories. These stories helped grow The UK or helped grow the sites beyond The UK audience and brought US traffic to represent more than percent of sessions in h two. So that's really encouraging for a global basis.

47:18 And then on the other side, local is where the university teams, as we've mentioned, do such a brilliant job of grassroots reporting, often around quite serious issues around campuses, and they deliver that on the site itself, but also through their local Instagram and TikTok pages. And these are the stories that regularly get picked up by the nationals helping the brand's credibility. So it's been a great year for the TAB, and we'll keep working here. We'll add more strength to the group in terms of investing in the core brands. But, also, under the TAB group, we have, bringing us right up to date, our most recent launch on the next slide, which is a brand new property. Again, this is using the template that we have developed as part of the verticals plan reality shrine.

48:14 It's managed as part of the group, as I said, and the aim is to create a super focused project of the biggest and wildest reality shows with a strong US emphasis. So this is about a combination of factors. We're taking the expertise that we've developed up to a lot of the tab team's success in delivering very sharp, fast, opinionated editorial takes from the big shows. We've been able to use some of the assets of the GRV portfolio to give us a content archive from them, and we've staffed the brand with talent from the TAB and also GRV. We also have come the popular page, and we think there's an opportunity to further enhance the traffic potential of the by bringing in the other repo previously acquired media main social page social pages to expand the reach of the brand further.

49:08 So it's really early stages, and the traffic is looking promising. Again, we're seeing the majority of the traffic being international on this brand, which is what we set out to do. Around 60% of the traffic is coming from US, 15% from Canada, and so on. So it's been a really exciting and positive year with lots of activity right across the group, and we'll be able to update more on the development of this brand on a wide as the year progresses. That's it from me. Thank you, Jim. Plenty going on there and plenty being delivered by the staff that are now around 40 full time members with the company now. So looking towards the future, we've got momentum, and we're gonna continue to scale the business over the coming years.

50:02 This chart shows the number of operating assets within the portfolio, and we'll have at least 10 by the end of twenty twenty five and continue continue the process of launching and acquiring over future years as illustrated by the larger bars going towards 2027. We'll continue to create operational diversity with more brands and more revenue sources to create greater stability as we grow. We'll continue to focus on bolt on acquisitions, looking across the market at the sweet spots being really typically first stage, first wave digital media businesses where they failed to modernize the current market in digital.

50:56 These represent the sweet spot as typified by the TAD, TV Guide, the Pope, and the typically businesses that were formed in the noughties with great foundations that have struggled to evolve, as I said before, their model would be relevant today. We think the current economic conditions will continue to apply pressure for more opportunities to emerge. We'll continue to consider both fully formed and what I've labeled fractional assets as we move forwards. We're playing in the positive space. UK adults spend four times as much time online via mobile devices compared to desktop. Mobile advertising revenue is still playing catch up.

51:44 Digital advertising spend is forecast to grow to over 900,000,000,000 in 2028, making it 251,000,000,000 bigger than that that was delivered in 2024. So positive place to be operating. And finally, in summary, the media market has had a bit of a reset, in '23 and '24. The combination of Google algorithms did change the market, in fact, as Mark suggested, put some out of business. Audience and revenue outperformance of the market are really positive against both metrics, and we aim to continue that process of building the company's audience volume as we progress with launching and expansion.

52:42 We've had profitable operations again. It's the sixth consecutive year of profit at EBITDA level, and the plans for growth are positive with 10 assets being ready for delivery by the end of twenty twenty five and positive early signs around those that we've learned at the beginning of this year. And we're generating cash, which will fund our growth. We have an ability to build and make further bolt on acquisitions as the opportunities unfold. And the final point is we have momentum, and that's a key point, really, that we're progressing. We're progressing well. We're building the assets, building the revenues, and building a bigger future for the business.

53:28 So thank you. I'd now like to move on to the q and a, if that's possible. But could I request one of our team, I think, or someone is shuffling papers and that's causing quite a lot of noise on the system that I can pick up. So it'd be quite good if we could stop the shuffling for a moment as we move into the q and a. Thank you, James. That was great. And thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the top right hand corner of your screen. Just while the company take a few moments to review the questions that have been submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboards.

54:15 As you can see, we have received a number of questions throughout today's presentation. And, James, if I can hand over to you, I'll pick up from you at the end. Okay. Are you putting the cameras back on, Mark? Is is the team? Right. Thank you. The cash position had strengthened, this is the first question, by Tom m. How is cash being allocated for future growth? Richard, do you want to pick up on that one? Cash for future growth, we we we as James has explained, we're looking to be able to move opportunistically, certainly with acquisitions.

55:04 We've done some quite small acquisitions in the last six months, each individually being quite small. So either accelerating the rate of acquisition or increasing the size of acquisition are one of the opportunities that we are alert to. K. Thanks, Richard. Another question from Tom m. You plan to double the size of the business. Can you outline the key drivers for this? Well, the key drivers are fairly simple. If we can double our audience over a period of two to three years, we will double the size of the business more than double the size of the business. So it's about overall audience growth being delivered, and we plan to do that through delivering more brands and operating more assets as we move into the next couple of years.

56:00 There are there is a question about which I'll pass to Marcus, which is around the share price this morning and limited number of transactions, but £12,000 worth of shares being traded across the market. Okay. It's from Gareth Jay, actually. So, Gareth, I mean, I've got a lot of sympathy, actually, for shareholders of all media stocks at the moment because post COVID, there was a rebound in 2223. And then we've had the changes with the platforms, which has reduced the audience. And also a lot of sympathy, which is there's some short term trading, particularly around AIM.

56:46 However, still fundamentally believe all shares and all companies should be considered on their long term opportunity. And I think the biggest difference with DIGITALBOX and some of the largest players currently is the our agility to understand what's required from a search engine optimization standpoint and proving it, not just talking about it theoretically with the launches of Emmerdale Insider and Royal Insider. And there will always be a free to air ad funded media business, and I think we can take advantage of the opportunity quicker than some of the bigger media organizations. And, ultimately, we should be judged on our growth over '25 and '26, in which case, I think the share price will significantly come back.

57:41 Thank you, Marcus. A question from Christopher t. The poke and the tap have repaid their acquisition costs quickly. When do you see the other assets such as TV Guide achieving similar profitability? Well, tracking at the moment would suggest that we'll almost fully repay by possibly the end of April TV Guide. So that will be down to about twenty months since we acquired it. It's not not essential that we repay it in that period, but it's a very strong indicator around things that we've managed to turn around. There's a question from Peter D that I think I'm going to have to pass to Richard, but could you explain how admin expenses have decreased from 9,000,000 in 2023 to just over 3,000,000 in 2024?

58:41 And I think it's related to a write down. But, Richard, are you Yes. Is. If you look at the income statement, then what you'll see on that is you'll see admin expenses last year rounded to 9,000,000. This year, they're 3,200,000. And then the memorandum box below, you'll see that last year, there was a charge of 6,400,000 for impairment of goodwill and intangible assets. So that was a reduction in the estimated value last year. As mentioned earlier in the talk, we have reviewed our goodwill and intangible assets and considered that there is no adjustment needed to their carrying value.

59:27 So, there is no impairment charge this year, which primarily explains the reduction in administrative expenses. Thank you, Richard. There's a question from Mark S. Haven't published an updated note, meaning that the last note was prior to the strategic review. In the absence of updated guidance from the broker, how should we view trading so far in 2025 compared to the previous p and l forecasts, which were plus 10% revenue plus 50% EBITDA in versus 2024. I wouldn't panic. I have been on the phone to the broker this morning, and there will be a note coming out very shortly. In fact, it's probably out now. I haven't had a chance to look, but I think it it'd be out any moment.

1:00:23 In terms of how we've started 2025, absolutely in line with expectations, and there's no reason to question the rest of the year at this point at all. We're in line with how we've modeled and budgeted. So I can't really add much more than that. There's a question on the stockypedia from Peter D. The consensus forecast for 2024 was for a net profit of 437,000, whereas the actual outcome was around breakeven. Could you explain the difference?

1:01:15 There's a question around net profits. Richard, is that one for you? So I haven't seen the Wikipedia post, but the figure looks as though there's a difference between commenting on the total operating loss and the adjusted EBITDA. The adjusted EBITDA that we've disclosed is 624,000. There's a reconciliation which has been audited on the face of the profit and loss account, which shows the difference between the operating loss of 78,000 and the adjusted EBITDA. We show a adjusted EBITDA figure to give a better representation of underlying profits after we've added back items like depreciation, amortization, share based payment charge, and also new product development investment, and costs relating to one off projects, which relates to the capital reduction to acquisitions and also to the strategic review.

1:02:27 So taking those elements out is a better representation, we believe, of the underlying profitability of the group and its ability to generate cash flows. Thank you, Richard. Another question from Peter D. Could you explain the kind of testing that's required to complete the acquisition of media chain assets and how long this is expected to take. Jim, do you wanna pick that one up? Yes. Yeah. I will. It's really I I mean, I suppose it's it's in some ways, we've touched on it a little bit when we were talking about the contribution to the tab traffic of the previously acquired page that was on the graph that James showed in the in the in the site. So the process really will be we'll engage with the page, begin posting into the page, gauge the audience response. And so that response will be around looking at overall reach levels and engagement on the post itself and then the traffic that we're able to generate and then get a sense of how that may play out over time.

1:03:39 And, really, it's a question of Richard, James, myself looking at it in terms of the the clear financial results that we're seeing during the period and then working with the editorial team to think about the the potential for further growth because it may not be that you see the full performance during the testing during the testing period. And that's that's exactly what happened on the prior acquisition where we we had reasonable degree of confidence, but the true upside played through post acquisition. So I think because we are acquiring brands from the same sources we have before, we've got a reasonable understanding of how they manage their brands and their audiences.

1:04:25 And one of the things that we think that the editorial teams are very good at is getting a very good indication of how well the audience are responding. So that's really the process that we'll that we'll take. If we feel confident, we'll move ahead. If we won't, then we won't complete. Thank you, Jim. Right. A question from Sally H. Over the last five years, this DBOX PLC has spent sort of 1,500,000 being a public company. Estimated and former CFO, what value has the company gained from this 1,500,000? Marcus, do you wanna pick that one up?

1:05:11 Yeah. We're we're an AIM listed company. The first raise we raised money through AIM in the first pass that allowed us to acquire the tab, which has been a very successful asset. We retained the opportunity to raise further capital by being a publicly listed company. But because of the high cash generation of the business, we've been able to fund all of the acquisitions out of current cash. But it remains an opportunity, I think, in moving forward should we see some bigger acquisition requirements beyond the the current cash that we have. Thank you. See if there's any more questions. Question from John I've not seen the letters AI anywhere in the presentation.

1:06:05 Where does that sit on your risk register? I'll pick that one up. Our thoughts about AI have really developed over time, and clearly, these tools are presenting challenges to are presenting challenges to publishers as they have changed the way people are behaving with search and change the way people are looking to gather information. The optimistic view of this is for for news media, we think it's likely to have a less significant impact due to the fact that these these tools are quite slow. You can get news quicker through search rather than through through AI tool delivering them.

1:07:11 And these tools are better suited to doing sort of research lean forward type information. So if you wanna buy a new car with a certain criteria, you're probably quite well served using an AI tool to go and research that for you and provide you with an answer in in thirty seconds. If you want to know what's happened on Coronation Street last night, it's a completely different matter, and there's not a kind of financial reward for the AI operator in that kind of search behavior. So so we see sort of deep dive AI usage progressing more heavily than news related AI from a consumer perspective. From a production perspective, we're absolutely using AI tools to refine our production processes. We're not actually using them to deliver content straight to the page, but they are a very valuable tool for researching and delivering human articles to our websites.

1:08:16 And there's always sort of the hint of an AI article being replaced when you read it, certainly in some instances with inaccuracies. One notable one was on the sun where I read about someone having viewed Wells Cathedral in Wells next to sea in Norfolk, which is quite some achievement given it's about 250 miles away. But it is prone to problems around news content. So we're we're using the tools effectively, and we're learning and looking to use them more heavily to assist production but not deliver production. Right. Another question from Marcus. In the results, James spoke about plans to double organic revenue in three years.

1:09:12 Where does he see the greatest opportunities to achieve this? Does the company have a target for acquisition growth on top of this? Absolutely open to acquiring as well as launching. And really, our plans to double can be achieved through both launching and buying. But at the moment, we're assuring things that are in our control, which are things like delivering new products as we have in the first quarter of this year, and we'll continue to do so as we move through the rest of the year and into next year. Well, there's one question from Patrick B. Is it possible for management to switch to just share based bonus schemes rather than cash in order to fully align with shareholders?

1:10:09 Thanks for the question. The board board absolutely believe that the executive management should be incentivized by share price improvements as a component of their total package, which includes salary and some in year cash based payments. The current or the previous EMI option scheme actually vested at the beginning of this year, so it's now redundant, It vested below the share price targets. And Remcon led by have a draft proposal for the introduction of a new share based option scheme linked to share price performance against peer group to bring to the board at the beginning of the second quarter.

1:10:56 Thank you, Marcus. One last question, I think, from Sally H. Reuters Institute for Journalism has stated that the percentage of people reading long form articles is down from 70% to 50%, whilst video content is on the way up. Is DIGITALBOX's strategy in secular decline? And is there any plans to increase video content? I can answer that with yourself, Jim. I think what you're alluding to here is probably the move towards short form TikTok content. TikTok is having a significant impact in the youth markets against the likes of Meta, and it's becoming a new source for lots of 20 and millennials.

1:11:55 So the youth audience is heading in that direction for short form video content to replace perhaps some articles. So the demographics we're serving, we are not seeing this switch to video consumption over over more typical flat content as we globally. Jim, do you wanna pick up on that as well? Yes. I mean, I suppose the only other thing to the only other thing to add is, yeah, we're very mindful of consumer habits and the and the riser video, but we're but we're also very keen on ensuring that we can continue to publish content at a positive margin. And we previously experimented to an extent around the daily mash and looked very carefully at the ROI on some video content.

1:12:47 We away from that because having really looked very carefully at it, we realized that it was very difficult to actually make that make sense. The difference potentially this year, touching on a point that James mentioned is when we're look when we're looking to do some of our r and d and potentially with the with the uses and AI tools, it may well be that that brings the cost of production down to an extent where that can begin to work. So we're definitely looking at the space. But as James as James says, at the moment, we see our audiences our audiences at least and particularly around news content, very happy to consume the type of content we're generating in the form that it is.

1:13:37 Thank you, Jim. And that finishes, I think, the questions. Exhaust the questions that are in the feed, so nothing left to answer. Perfect. Thank you very much for answering those questions from investors. Of course, the company can review all the questions submitted today. We will publish those responses out on the investor meet company platform. Just before redirecting investors, provide you their feedback, which is particularly important to the company, James, could I just ask you for a few closing comments? Thank you. Yes. So 2024 was a pleasing year, really, to see a return to more significant profitability. And the important thing really about the year is not only did we return to profitability, we did it by sticking to the strategy that we had in place at the beginning of that year, expanding the business, launching more products, and really infusing our teams with the opportunity for future growth.

1:14:37 And I think at this point, it's fair to say the teams have real momentum in place, and we're looking with great excitement to grow the business as we move through the rest of this year and into next year. And look forward really to celebrating that with the staff for their next annual gathering in July, which is gonna be staged in Cambridge. Thank you very much. Thank you. That's great. And thank you once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. On behalf of the management team of DIGITALBOX PLC, we'd like to thank you for attending today's presentation, and good morning to you all.