REG - Digitalbox PLC - Final Audited Results
26/03/2024 07:00
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RNS Number : 2308I Digitalbox PLC 26 March 2024
26 March 2024
Digitalbox plc
("Digitalbox", the "Group" or the "Company")
Final Audited Results for the year ended 31 December 2023
Digitalbox plc, the mobile-first digital media business, which owns leading
websites Entertainment Daily, The Daily Mash, The Poke, The Tab and TV Guide,
today publishes its final audited results for the year ended 31 December 2023.
The Company will host a live investor presentation through the Investor Meet
Company platform today at 10.00am (further details below).
Financial Highlights
2023 2022 Variance
£'000 £'000
Group revenue 2,790 3,578 -22.0%
Gross profit 2,184 3,044 -28.3%
Adjusted EBITDA((1)) 20 1,081 -98.1%
Adjusted EBTDA margin((1)) 0.7% 30.2% -29.5ppts
Cash generated by operations 193 1,418 -86.4%
Gross cash 1,913 2,827 -32.3%
Net Cash 1,670 2,509 -33.4%
(1) Adjusted EBITDA is defined as the operating profit after adding back
depreciation, amortisation, impairment, share based payments, acquisition
costs and direct costs associated with business combinations.
Operational Highlights
· Expansion of the portfolio from four to five operating brands
· Completed the acquisition of tvguide.co.uk and onboarded to
Graphene platform
· Acquired Media Chain assets in August growing the Group's social
follower base to over 20m
· G.A.S. (Graphene Ad Stack) now powering Entertainment Daily, The
Daily Mash, The Tab, The Poke and TV Guide enabling what the Directors believe
could be market-leading monetisation performance
· The Poke successfully repaid 50% of its purchase costs within the
period
· The Daily Mash premium ad-free subscription experience continues
to grow with an uplift of over 180% taking our current base to over 4,000
· Overall session values grew by 25% on The Tab in a highly
challenging ad market, further demonstrating the value of G.A.S.
· The Poke delivered over 300% growth in session values in December
2023 compared to the same month in the previous year
· Significant diversification of audience sourcing model, helping
to lessen the impact of algorithmic changes made by the major platforms
Current trading and outlook
· Performance of acquired properties The Daily Mash, The Tab, The
Poke and TV Guide has proved the potential of the Digitalbox operating model
and its Graphene platform, giving continued confidence in the Group's ability
to build a larger portfolio of successful profitable digital brands
· Trading for the current financial year remains in line with
expectations with the Company expecting advertising markets to bounce back as
we head into 2025
James Carter, CEO, Digitalbox plc, said: "Digitalbox traded profitably and
generated £193k in operating cash in 2023, while experiencing some very
challenging market conditions. Despite these conditions, it is a testament to
the agility and hard work of our teams that enabled us to further scale the
Digitalbox portfolio to five operational brands.
The major platform operators, Alphabet and Meta, created some obstacles that
we overcame during the year, and we expect further algorithm changes - most
notably from Google in the spring of 2024 - to affect all publishers. However,
the knowledge we developed navigating the platforms in 2023 will further equip
us for all we expect to face in the current year.
The Company has built a position of significant strength in the entertainment
market, now servicing consumers across a broad demographic, from students all
the way through to older generations traditionally aligned with linear TV
consumption. As we further enhance our offering, we will look to build an
expanded level of services to further tap into the evolving on-demand
behaviours too.
Having successfully built a larger portfolio from our cash reserves, we
continue to remain vigilant for fresh acquisitions that not only suit our
model, but also could offer a quick return on our investment (ROI). With a
strong track record of achieving a relatively quick ROI, we expect the general
market conditions in 2024 to present further opportunities.
Current trading remains in line with market expectations, our expanded
portfolio is primed for future growth and we will continue to investigate both
bolt-on and organic growth opportunities."
Investor Presentation - Investor Meet Company
Digitalbox will also provide a live investor presentation through the Investor
Meet Company platform today at 10.00am. The presentation is open to all
existing and potential shareholders. Questions can be submitted at any time
during the live presentation. Investors can sign up to Investor Meet Company
for free and add to meet Digitalbox plc via
https://www.investormeetcompany.com/digitalbox-plc/register-investor
(https://www.investormeetcompany.com/digitalbox-plc/register-investor) .
Investors who have already registered and added to meet the Company will be
automatically invited.
Market abuse regulation
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 (MAR).
Enquiries:
Digitalbox c/o SEC Newgate
James Carter, CEO
Panmure Gordon (Financial Adviser, Nominated Adviser & Joint Broker) Tel: 020 7886 2500
James Sinclair-Ford
Rupert Dearden
Leander Capital Partners (Joint Broker) Tel: 07786150915
Alex Davies
SEC Newgate (Financial PR) Tel: 07540 106 366
Robin Tozer / Molly Gretton / Harry Handyside digitalbox@secnewgate.co.uk
About Digitalbox plc
Based in the UK, Digitalbox is a 'pure-play' digital media business with the
aim of profitable publishing at scale on mobile platforms.
Digitalbox operates the following trading brands, "Entertainment Daily", "The
Daily Mash", "The Tab", "The Poke" and TV Guide". Entertainment
Daily produces and publishes online UK entertainment news covering TV,
showbiz and celebrity news. The Daily Mash produces and publishes satirical
news content. The Tab is the UK's biggest youth culture site fuelled by
students. The Poke expertly curates and editorialises the funniest content
from around the web and social media. TV Guide serves as the definitive guide
to what is on TV.
Digitalbox primarily generates revenue from the sale of advertising in and
around the content it publishes. The Group's optimisation for mobile enables
it to achieve revenues per session significantly ahead of market norms for
publishers on mobile.
CHAIRMAN'S STATEMENT
After a challenging year for many media businesses, with audience volatility
created by algorithm updates on key platforms and wider economic factors, I am
pleased to report that Digitalbox plc ('Digitalbox') successfully delivered a
positive Adjusted EBITDA* for 2023. While this represents a reduction on
previous years, it marks the fifth consecutive year of profitable trading
since being listed in 2019.
The business maintained its strategic focus on delivering a 'mobile first'
media operation at scale, using leading technologies to optimise both audience
engagement and commercial performance, while integrating bolt-on acquisitions
that complement its operating model.
During the year, the management team focused on the delivery of this strategy,
and successfully navigated a mix of macro and micro challenges.
Specifically, the UK economy was subdued by high interest rates, the
cost-of-living crisis and geo-political issues that impacted international
markets. These issues had a knock-on effect on the global advertising market.
Also, dominant platform owners Alphabet and Meta reported challenges resulting
from these conditions. The result was a highly difficult trading environment.
We reported the local headwinds facing the business in the middle of the year
as our biggest brand ,Entertainment Daily remained blocked by Google and our
second biggest, The Tab, suffered a content strike that reduced the reach on
one of its biggest Facebook pages. Despite these headwinds, the team adapted
and made headway with dealing with these issues in the latter part of the
year. Digitalbox delivered full year revenue of £2.8m (2022: £3.6m) and
positive Adjusted EBITDA* which were within market guidance.
Digitalbox ended the year with gross cash of £1.9m, which is £0.9m down on
the prior year, and with net cash (gross cash less bank debt) of £1.7m, which
is £0.7m less than the prior year. This is chiefly due to the strategic
value-enhancing bolt-on opportunities the team completed during the year. In
accordance with Digitalbox's stated buy and build strategy, we added 12m
followers from the four Media Chain Group pages we acquired, completed the
purchase of tvguide.co.uk, while successfully integrating The Poke that we had
acquired a few weeks prior to the start of 2023.
With an enlarged brand portfolio comprising Entertainment Daily, The Daily
Mash, The Tab, The Poke and tvguide.co.uk and a doubling our social media
follower base, the business is well placed to grow into 2024. We can
potentially take advantage of further acquisition opportunities that the
Directors believe trading conditions will likely bring to the fore.
Marcus Rich
Chairman
25 March 2024
*Adjusted EBITDA is defined as operating profit after adding back
depreciation, amortisation, impairment, share based payments, acquisition
costs and direct costs associated with business combinations.
CHIEF EXECUTIVE'S STATEMENT
FINANCIAL HIGHLIGHTS
REVENUE ADJUSTED
EBITDA
£2.8m vs £3.6m in 2022 £0.02m vs £1.1m in 2022
ADJUSTED EBITDA MARGIN ADJUSTED EBITDA PER SHARE
0.7% vs 30.2% in 2022 0.02p vs 0.92p in
2022
*Adjusted EBITDA is defined as the operating profit after adding back
depreciation, amortisation, impairment, share based payments, acquisition
costs and direct costs associated with business combinations.
Chief Executive's Statement
2023 was another important year for Digitalbox, as we expanded the portfolio
of trading brands against a backdrop of challenging market conditions. With
the first full year of trading of The Poke, which we acquired in December
2022, we can report the brand has already repaid 50% of its acquisition cost
and is well positioned to benefit from a recovering advertising market. While
tvguide.co.uk took longer than expected to complete, the tech solution we
rolled out has seen traffic improve and produce a better-than-expected
advertising performance. This performance is a solid foundation for future
development.
The year saw economic uncertainty stemming from a mix of post-pandemic
structural changes, the war in Ukraine, high interest rates and the UK cost of
living crisis which impacted consumer spending. Marketers continue to favour
mobile digital media, which presents the most accountable and relevant
commercial solution within the marketing mix. However, marketers acted and
spent with much greater caution as the cost of living basics like heating and
food significantly eroded household incomes.
Against this backdrop we developed our audience positions; the Directors
believe the Company is now one of the most significant online publishers in
the UK entertainment space and will benefit from the demand for quality mobile
advertising inventory at scale.
Our positive year-end position of an expanded, profitable portfolio of trading
brands has resulted from our knowledge, focus and agility. These attributes
have allowed us to tackle the challenges we faced, while remaining focused on
the positive macro trends attached to advertising within the mobile channel
which we anticipate will grow ahead of the market.
Financial review
Full year revenue of £2.8m is 22% down on 2022. This headline is masking the
volatility within this overall movement due to a challenging macro trading
environment. The trading environment saw a 40% growth in the Group's
underlying revenues in H1 2022 and a 27% reduction in H2 2022. Although we are
disappointed to deliver a reduction in Adjusted EBITDA* compared to 2022, we
are pleased to continue the trend of being consistently profitable with
Adjusted EBITDA* of £20k, despite the aggressive market conditions.
Cash generation is a key feature of this business and, despite the challenging
trading conditions leading to a year-on-year revenue reduction of £0.8m, the
cash generated by operations was £0.2m. The business ended the year with
gross cash at the bank of £1.9m, which is £0.9m lower than last year. This
is despite having invested £1.0m in intangible assets, via the two
acquisition of assets made, and spending £0.1m in loan and lease repayments.
The challenging conditions within capital markets, coupled with the increased
base rate, has led the Board to consider the weighted average cost of capital
discount rate when considering the carrying value of goodwill and intangible
assets in the balance sheet. This, together with a significantly reduced cash
generation from Entertainment Daily due to the prevailing economic conditions
and the content distribution issues caused by Meta and Google policy and
algorithm changes, has led to an impairment charge of £6.4m against the
carrying value of goodwill in relation to Entertainment Daily, plus a
consequent £5.0m impairment charge on the carrying value of the investments
in the Company balance sheet.
Operating review
Digitalbox owns and operates five trading brands - Entertainment Daily, The
Daily Mash, The Tab, The Poke and TV Guide. Entertainment Daily produces and
publishes online UK entertainment news covering TV, showbusiness, and
celebrities. The Tab is the UK's leading student and youth culture site
fuelled by a London-based core team and a national network of 30 local
university sites. The Daily Mash delivers online satirical news articles in
its own distinctive style and The Poke expertly curates the funniest content
from around the web and social media. TV Guide delivers the latest information
to UK consumers about what to watch and when, ensuring they don't miss out.
All five brands generate revenue from advertising in and around the content
they publish, and the Daily Mash has also diversified into a paid subscription
model.
While 2023 was a year of uncertainty, it demonstrated the effectiveness of the
digital advertising medium as its share grew to 67% of global ad spend.
Post-pandemic trends continue to evolve and the adoption of ecommerce via the
most personal of channels, the mobile device, will continue to drive demand
for quality inventory.
With Digitalbox's lean operating model, the Company believes it is well
positioned to push forward with our strategy and remain well placed to benefit
from for the forecast growth in mobile ad spending over coming years. Above
and beyond the macro conditions that impacted most industries in 2023,
Digitalbox was impacted by two specific issues aligned to Alphabet (Google)
and Meta (Facebook). Google algorithms blocked our biggest brand Entertainment
Daily and Facebook - unjustly in our view - sanctioned a key social page for
The Tab's coverage of a popular Netflix documentary about the serial killer
Jeffrey Dahmer, deeming it as 'promoting a dangerous individual'. Both issues
are showing signs of a potential resolution.
Despite the challenges thrown up by the two platforms, our publishing
operations for the year saw 239m visits to our websites. As well as
successfully integrating The Poke and TV Guide, we established some very
strong engagement with the Media Chain Group assets that we acquired and plan
to build this further into 2024. Further, there was underlying commercial
success as we saw significant year-on-year growth in the Poke and Tab session
values over the 12 months and the whole portfolio of trading brands performed
ahead of the market.
Compelling content remains at the core of the Digitalbox offering, created by
talented teams with an expert understanding of their respective audiences'
needs. As part of this being an increasingly important factor in website
ranking, we have invested in greater visibility of our teams across expanded
author pages on the respective websites. We marry the expertise of these
highly valued staff members with our proprietary mobile-first tech stack,
Graphene. Named after the incredibly fast, light, super-conductive material,
Graphene has been developed to deliver the best user experience through the
fastest and lightest page load speeds on mobile.
Alongside this highly optimised, low-friction content delivery, the commercial
element of the Graphene suite, the Graphene Ad Stack (GAS) now powers the
advertising monetisation of Entertainment Daily, The Daily Mash, The Tab, The
Poke and TV Guide. We are seeing significant value creation here on The Poke
and TV Guide as improved data from our deployment of GAS has enabled it to
significantly grow advertising session values since the early stages of our
ownership of both brands. As our portfolio expands, GAS's role in optimising
revenue performance across the business and speeding the route to enhanced
profitability for acquired properties is key for us.
The Tab has proved to be a great success since its acquisition at the end of
2020 having fully paid back its purchase costs within the first two years. We
are tracking to achieve similar results on The Poke and hope to do the same on
TV Guide. We continue to evaluate further acquisition opportunities and have
seen an increase in opportunities as other publishers with lower margin
headroom endured the challenging trading conditions of 2023. We remain ready
to move quickly where we can realise the appropriate value.
The Digitalbox team was maintained in scale during a turbulent 2023 to ensure
capacity for growth on our existing brands and to ensure any acquisitions can
be quickly integrated, whilst operational efficiencies will remain strong.
Leading as a mobile-first business
Our strategy to create a mobile-first business has helped position us as a
leader in the market for both audience engagement and monetisation. Push media
skills remain critical, and our brands engage consumers at scale through this
channel with 91% of our audience across the portfolio visiting on mobile
devices. With an average of 20m monthly user visits to our sites, we present
truly significant user scale to the market especially when combined with our
capacity to engage.
Mobile advertising spend was growing well ahead of the economic issues that
emerged in H2 2022 and we anticipate its acceleration as we emerge from this
challenging period in 2024. As part of our Graphene technology suite that
supports our mobile-first strategy, we are building a single site template for
all our brands which enables optimisations to be rapidly applied across the
portfolio. As previously reported, our GAS set up on The Poke quickly drove it
to profitability and we are seeing similar results on TV Guide. This will give
Digitalbox a distinct advantage as we look to further optimise our existing
portfolio, complete more acquisitions, build new sites and benefit from the
forecast growth in the digital ad market.
PROJECTED GLOBAL DIGITAL / MOBILE AD SPEND
2023 2024 2025 2026 2027
Forecast global digital ad spend $bn* 601 667 734 802 870
Forecast market growth 10.9% 10% 9.2% 8.6%
*Source: eMarketer, March 2023
https://www.insiderintelligence.com/content/digital-ad-spend-worldwide-pass-600-billion-this-year
Portfolio growth
Television listings site TV Guide is the most recent addition to the
Digitalbox portfolio, with its acquisition completing in October 2023. We feel
the site is an excellent stablemate for Entertainment Daily with a distinct
proposition and relationship with Entertainment Daily's regular editorial
output. It brings over 1m monthly users.
The Poke, as detailed previously acquired at the end of 2022, had a strong
first year of full trading with a focus on unlocking the brand's commercial
potential, with like-for-like revenues growing by over 80%.
Entertainment Daily saw an overall reduction in sessions (visits) of 27%
year-on-year largely as result of Google algorithms drastically reducing its
appearance in their search and Discover feeds. Google accounted for 25m
sessions in 2022 so it is good to be making headway towards a resolution in
2024. Facebook performed comparatively well across the year given the reported
challenges faced by other publishers. The editorial team continued to hit all
the TV and showbiz stories as the news broke, maximising traffic and social
engagement around moments that caught the nation's imagination. This year also
saw the second annual Entertainment Daily Awards, along with expanded social
amplification through the new Soap Daily page and the acquired Media Chain
Group pages.
The Tab continues to make a consistent positive contribution and is growing
its advertising session values significantly ahead of the market. There was
strong growth of 25% year-on-year. Editorial campaigning for key issues
connecting with the student demographic continued to produce national media
pick-ups, alongside its established output of entertainment and culture
coverage. While the site had to ride out the challenge of the Facebook strike,
this has been resolved for 2024. We continue to leverage the existing Tab
portfolio of Facebook pages, the newly acquired Media Chain Group pages and
are growing our TikTok and Instagram followers.
The Daily Mash had a year of transition as we progressed our consumer-revenues
strategy, informed by the brand's loyal audience and genuinely unique content.
Subscription sign-ups grew by over 180% across the year. Although the TV
show was not continued by UK TV due to challenges faced by its Dave channel,
we managed to create some significant engagement testing short form video
content across multiple social channels including Tik Tok and Facebook and
this informs how we move forwards.
Culture and people
We remain focused on creating a culture that enables talented people to do
their best work. Even before the pandemic that meant being flexible and agile
rather than harbouring traditional views of office culture or adopting a
one-size-fits-all approach. We continue to mix office-based roles and remote
working arrangements, full-time and part-time positions, staff and freelance
contributor agreements to marry the needs of the business with those of our
people. A hybrid scenario of both home and office working is what we have
found most successful.
Good communication and a sense of inclusion are important to us, so we
continue to publish monthly all-staff updates on progress and stage weekly
leadership sessions alongside daily team meetings. Alongside this, we hold two
annual all-staff gatherings, with this year's summer event a murder mystery
themed conference at Oakley Hall in Hampshire and literary themed event in
London's Bloomsbury for Christmas.
Recruiting and retaining great people is crucial to our growth. Our success
hiring younger talent on Entertainment Daily through its apprentice programme
has continued along with training and development for more senior staff. The
Daily Mash and the Poke brought on new contributors and The Tab continues to
offer free and highly relevant training initiatives for its network of student
journalists.
Everyone at Digitalbox benefits from the company's life assurance and pension
schemes and we aim to ensure our staff are rewarded fairly and have
opportunities to progress within the business. All team members and their
dependents have access to our free wellbeing and support programme including
personalised healthy eating and exercise plans, mental health support, legal
and medical advice and ways to prevent burnout. A share options scheme also
exists for senior staff.
I would like to take the opportunity to thank all Digitalbox staff for their
incredible hard work and enthusiasm during a challenging last year and their
valuable contribution to enable us to position the building blocks for future
growth. As the company continues to expand its portfolio it's a pleasure to be
working with such a talented and committed team.
Business outlook
Since listing on the AIM market of the London Stock Exchange in 2019,
Digitalbox has continued to develop as a profitable UK digital media business
positioned squarely in the mobile space.
Despite the highly challenging macroeconomic environment of 2023, global
digital advertising spend is forecast to grow by more than 40% in the next
four years. The consumer and market reaction to both economic and
health-related turbulence of the last few years has accelerated the trends
which benefit Digitalbox, pushing the business to the forefront as mobile
devices' share is forecast to shift from 67% of all digital ad spend in 2023
to 73% in 2027 and our content and tech teams continue to strengthen delivery
through this channel.
Beyond the advertising market, TV continues to be highly competitive with the
battle for share pushing all participants towards higher quality content. The
streamers' optimum operating models have yet to settle and the terrestrial
channels face the pressure of this changing landscape, yet the quality of the
output continues to grow to benefit our audiences and fuel the information
they crave from publishers like Digitalbox. This increasingly competitive
market stimulates our various audiences leading to big shows like I'm a
Celebrity Get Me Out Of Here and Love Island showing strong engagement across
our properties in 2023.
The four acquisitions completed since being listed on AIM - The Daily Mash,
The Tab, The Poke and TV Guide - have all proved the potential of our model,
giving us confidence we can continue to create growth within the portfolio and
make further acquisitions when the fit is right.
While H1 2022 saw a strong recovery from the pandemic, the markets adjusted to
work with the new realities of the economic landscape in mid-year and
continued throughout 2023. The trend towards a more cautious approach to
marketing spend was stimulated by the previously mentioned macro international
uncertainty driven by war and spiralling interest rates alongside the UK's
cost of living crisis. As consumer spending power recovers in line with
declining interest rates and greater political certainty is installed, we
expect the advertising market will bounce back.
Our view is that Digitalbox's position in the open advertising market is a
good place to be as it can adapt in real time, with high-quality inventory
always in demand. Global commentary points towards a measured market recovery
in 2024 with a full return forecast for 2025. We have no reason to doubt these
predicted improving conditions and are confident the business is very well
placed to benefit from the returning market.
Our audience sourcing is now more diverse and balanced than at any time in the
Company's history, which offers greater stability. We enter 2024 with an
expanded trading brand portfolio primed for future growth, alongside a
returning economy and a confident digital advertising sector expected to
significantly increase its share of global ad spend over coming years.
James Carter
Chief Executive
25 March 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Year ended Year ended
31 December 31 December
2023 2022
Note £'000 £'000
Revenue 7 2,790 3,578
Cost of sales (606) (534)
------------ ------------
Gross profit 2,184 3,044
Administrative expenses (8,957) (2,999)
-------------- --------------
Operating (loss)/profit 8 (6,773) 45
Memorandum:
Adjusted EBITDA(1) 20 1,081
Depreciation (14) (7)
Amortisation (265) (191)
Impairment of goodwill and intangible assets (6,384) (716)
Share based payments (96) (62)
Direct costs of business combinations - (60)
Direct costs of intangible asset acquisitions (34) -
-------------- --------------
(Loss)/profit from operations (6,773) 45
Finance costs 10 (6) (8)
Finance income 44 8
------------ ------------
(Loss)/profit before taxation and attributable to equity holders of the parent (6,735) 45
Taxation 11 58 759
------------ ------------
(Loss)/profit after tax (6,677) 804
------------ ------------
All profits and losses after taxation arise from continuing operations.
There was no other comprehensive income for 2023 (2022: £NIL).
(1)Adjusted EBITDA is defined as the operating profit after adding back
depreciation, amortisation, impairment, share based payments, acquisition
costs and direct costs associated with business combinations
£ £
(Loss)/Earnings per share
Basic (continuing) 12 (0.05662) 0.00683
========= =========
(Loss)/Earnings per share
Diluted (continuing) 12 (0.05662) 0.00670
========= =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share capital Share premium Share based payment Retained earnings/ (deficit) Total equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 1,163 11,149 464 297 13,073
Issue of new shares 16 20 - - 36
Equity settled share-based payments - - 62 - 62
Reserves transfer in respect of lapsed options - - (330) 330 -
Profit after tax - - - 804 804
-------------- -------------- -------------- -------------- --------------
Balance at 31 December 2022 1,179 11,169 196 1,431 13,975
-------------- -------------- -------------- -------------- --------------
Equity settled share-based payments - - 96 - 96
Reserves transfer in respect of lapsed options - - (104) 104 -
Loss after tax - - - (6,677) (6,677)
-------------- -------------- -------------- -------------- --------------
Balance at 31 December 2023 1,179 11,169 188 (5,142) 7,394
-------------- -------------- -------------- -------------- --------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023 31 December 2022
ASSETS Note £'000 £'000
Non-current assets
Property, plant and equipment 13 46 52
Intangible fixed assets 14 4,594 10,194
Deferred tax asset 19 547 617
----------------- -----------------
Total non-current assets 5,187 10,863
Current assets
Trade and other receivables 15 946 952
Cash and cash equivalents 16 1,913 2,827
----------------- -----------------
Total current assets 2,859 3,779
----------------- -----------------
Total assets 8,046 14,642
========= =========
LIABILITIES
Current liabilities
Trade and other payables 17 (409) (288)
Bank loans and overdrafts 17 (149) (112)
Corporation tax 17 - (61)
----------------- -----------------
Total current liabilities (558) (461)
----------------- -----------------
Non-current liabilities
Bank loans 17 (94) (206)
------------------ ------------------
(94) (206)
------------------ ------------------
Total liabilities (652) (667)
------------------ ------------------
Total net current assets 2,301 3,318
------------------ ------------------
Total net assets 7,394 13,975
========= =========
Capital and reserves attributable to owners of the parent
Share capital 21 1,179 1,179
Share premium 23 11,169 11,169
Share based payment reserve 23 188 196
Retained (deficit)/earnings 23 (5,142) 1,431
------------------ ------------------
Total equity 7,394 13,975
========= =========
The financial statements were approved by the Board and authorised for issue
on 25 March 2024.
James
Carter
David Joseph
CEO
CFO
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Year ended Year ended
31 December 2023 31 December
£'000 2022
£'000
Cash flows from operating activities
(Loss)/profit from ordinary activities (6,677) 804
Adjustments for:
Income tax credit (58) (759)
Share based payments 96 62
Depreciation on property plant and equipment 14 7
Amortisation of intangible assets 265 191
Impairment on goodwill and intangible assets 6,384 716
Loss on disposal of property, plant and equipment - 30
Finance costs 6 8
Finance income (44) (8)
----------------- -----------------
Cash flows (used in)/from operating activities before changes in working (14) 1,051
capital
Decrease in trade and other receivables 86 818
Increase/(decrease) in trade and other payables 121 (451)
----------------- -----------------
Cash generated by operations 193 1,418
Income tax paid (13) (235)
----------------- -----------------
Net cash from operating activities 180 1,183
Investing activities
Purchase of property, plant and equipment (8) (43)
Purchase of intangibles (1,049) (391)
Interest received 44 8
----------------- -----------------
Net cash used in investing activities (1,013) (426)
Financing activities
Finance costs (44) (8)
Bank overdraft 38 -
Loan and lease repayments (75) (144)
Issue of new share capital - 36
----------------- -----------------
Net cash used in financing activities (81) (116)
----------------- -----------------
Net (decrease)/increase in cash and cash equivalents (914) 641
Cash and cash equivalents at beginning of the period 2,827 2,186
------------------ ------------------
Cash and cash equivalents at end of the period 1,913 2,827
========= =========
Reconciliation of net cash flow to movement in net funds:
Year ended Year ended
31 December 31 December 2022
2023
£000 £000
Net (decrease)/increase in cash and cash equivalents (914) 641
Repayment of loans and leases 75 144
----------------- -----------------
Movement in net funds in the year (839) 785
Net funds at 1 January 2,509 1,724
----------------- -----------------
Net funds at 31 December 1,670 2,509
========= =========
Breakdown of net funds
Cash and cash equivalents 1,913 2,827
Bank loans (243) (318)
----------------- -----------------
Net funds at 31 December 1,670 2,509
========= =========
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1. GENERAL INFORMATION
Digitalbox Plc is a public limited company incorporated and domiciled in the
United Kingdom. The address of the registered office is Jubilee House, 92
Lincoln Road, Peterborough, England, PE1 2SN. The Company is listed on AIM of
the London Stock Exchange.
The principal activity of the Group and of the Company are disclosed in the
Directors' Report.
These financial statements are presented in pounds sterling because that is
the currency of the primary economic environment in which the Group operates.
2. STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED IN
THE CURRENT FINANCIAL YEAR ENDED 31 DECEMBER 2023
The following IFRS standards, amendments or interpretations became effective
during the year ended 31 December 2023 but have not had a material effect on
this Consolidated Financial Information:
Standard
Amendments to IAS 1 (Presentation of Financial Statements and IFRS Practice
Statement 2 Making Materiality Judgements): Disclosure of Accounting Policies.
Amendments to IAS 8 (Accounting Policies, Changes in Accounting Estimates and
Errors): Definition of Accounting Estimates
Amendments to IAS 12 (Income taxes): Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
Amendments to IAS 12 (Income taxes): International Tax Reform - Pillar Two
Model Rules
All new standards and amendments to standards and interpretations effective
for annual periods beginning on or after 1 January 2023 that are applicable to
the Group have been applied in preparing these Consolidated Financial
Statements.
3. NEW AND REVISED IFRS STANDARDS IN ISSUE BUT NOT
YET EFFECTIVE
The standards and interpretations that are issued, but not yet effective, up
to the date of issuance of the Consolidated Financial Statements are disclosed
below. The Group intends to adopt these standards, if applicable, when they
become effective.
Standard Effective date
Amendments to IFRS 16: Lease Liability in a Sale and Leaseback 1 January 2024
Amendments to IAS 1: Classification of Liabilities as Current or Non-Current, 1 January 2024
Non-current Liabilities with Covenants
Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements 1 January 2024
The Directors are continuing to assess the potential impact that the adoption
of the standards listed above will have on the Consolidated Financial
Statements for the year ended 31 December 2024.
4. ACCOUNTING POLICIES
Principal accounting policies
The Group is a public Group incorporated and domiciled in the United Kingdom.
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
4. ACCOUNTING POLICIES (continued)
Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards, International Accounting Standards and
Interpretations (collectively IFRS) issued by the International Accounting
Standards Board (IASB) as adopted by the United Kingdom ("adopted IFRSs") and
those parts of the Companies Act 2006 which apply to companies preparing their
financial statements under IFRSs. The financial statements are presented to
the nearest round thousand (£'000) except where otherwise indicated.
Basis of Consolidation
The Group comprises the parent company and its subsidiaries, as detailed in
note III to the company financial statements. All of these have been included
in the consolidated financial statements in accordance with the principles of
acquisition accounting as laid out by IFRS 3 Business Combinations.
Going concern
The Group generated a loss during the year of £6,677k (2022: profit of
£804k), the Group had closing net assets of £7,394k (2022: £13,975k), net
current assets of £2,301k (2022: £3,318k) and cash at bank and in hand of
£1,913k (2022: £2,827k).
The Group generated net cash from operating activities of £180k during the
year (2022: £1,183k). The Group has remained cash generative during a
difficult economic period which saw the impact of the war in Ukraine inflating
global food and energy prices which, in turn, has driven consumer spending
power down driving a consequent downturn in global advertising spend. This,
together with the adverse changes in the distribution models of the global
tech platforms led to a challenging year for media businesses worldwide.
In considering going concern, the Directors consider the current financial
position and performance of the business, as well as reviewing financial
information for a period of at least 12 months from the date of approval of
the financial statements. Given the strong and liquid balance sheet position,
the ability of the Group to generate operating cash in a challenging market,
the full year effect of the successful acquisition of The Poke and the
completion of the acquisition of tvguide.co.uk, the Directors have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. The going concern basis of
accounting has therefore been adopted in preparing the financial statements.
Business combinations and goodwill
Acquisitions of subsidiaries and business are accounted for using the
acquisition method. On acquisition of a subsidiary, the Directors determine
whether substantially all of the fair value is concentrated into a single
asset or group of assets. When applicable, the Directors elect to apply the
optional concentration test and recognise the acquisition as an asset
acquisition, rather than a business combination. The assets and liabilities
and contingent liabilities of the subsidiaries are measured at their fair
value at the date of acquisition. Any excess of acquisition over fair values
of the identifiable net assets acquired is recognised as goodwill. Goodwill
arising on consolidation is recognised as an asset and reviewed for impairment
at least annually. Any impairment is recognised immediately in profit or loss
accounts and is not subsequently reversed. Acquisition related costs are
recognised in the income statement as incurred.
Transactions between wholly owned group members involving the hive-up or
hive-across of trade and / or assets and liabilities are outside the scope of
IFRS 3 on the grounds that they represent common control business
combinations. The group has elected to apply IFRS 3 in accounting for all such
transactions, which involves a full fair value exercise at the date of the
transaction. This accounting policy has been consistently applied to all such
transactions, and has been chosen on the grounds that the nature of these
transactions is
4. ACCOUNTING POLICIES (continued)
the amalgamation of acquired businesses into the existing trading business,
which generally takes place shortly after the original acquisition.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group. and the revenue can be reliably measured.
Revenue is measured as the fair value of the consideration received or
receivable, excluding discounts, rebates, value added tax and other sales
taxes.
The Group does not expect to have any contracts where the period between the
transfer of the promised goods or services to the customer and payment exceeds
one year. As a consequence, the Company does not adjust any of the transaction
prices for the time value of money.
The Group monitors the performance obligations in accordance with IFRS 15
considering that the performance obligations are met upon the Group delivering
the advertisement to the customer.
A receivable is recognised when the services are delivered at this is the
point in time that the consideration is unconditional because only the passage
of time is required before the payment is due.
Rendering of services
Revenue from providing services is recognised in the accounting period in
which the services are rendered.
Revenue from the sale of advertising space is recognised upon the
advertisement being generated and the Group delivering the advertisement to
the customer. The Group recognises revenue when the amount of revenue can be
reliably measured, it is probable future economic benefits will flow to the
entity and the Group has satisfied the performance obligations. Revenue is not
received in advance and therefore the Group does not account for contract
liabilities.
Foreign currency
The individual financial statements of each group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each group company are
expressed in pound sterling, which is the functional currency of the Group,
and the presentational currency for the consolidated financial statements.
In preparing the financial statements of the individual companies,
transactions in currencies other than the individual company's functional
currency (foreign currencies) are recorded at rates of exchange prevailing on
the dates of the transactions. At the reporting date, monetary assets and
liabilities that are denominated in foreign currencies are retranslated at the
rates prevailing on the reporting date. Non-monetary items carried at fair
value that are denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Non-monetary items
that are measured in terms of historical cost in foreign currency are not
retranslated. Exchange differences arising on the settlement of monetary
items, and on the retranslation of monetary items, are included in profit or
loss for the period. Exchange differences arising on the retranslation of
non-monetary items carried at fair value are included in profit or loss for
the period except for differences arising on the retranslation of non-monetary
items in respect of which gains and losses are recognised directly in equity.
For such non-monetary items, any exchange component of the gain or loss is
also recognised directly in equity.
4. ACCOUNTING POLICIES (continued)
Intangible assets
Intangible assets include goodwill arising on the acquisition of subsidiaries
and represents the difference between the fair value of the consideration
payable and the fair value of the net assets that have been acquired. The
residual element of goodwill is not being amortised but is subject to an
annual impairment review.
Also included within intangible assets are various assets separately
identified in business combinations (such as brand value) to which the
Directors have ascribed a fair value and a useful economic life. The ascribed
value of these intangible assets is being amortised on a straight-line basis
over their estimated useful economic life, which is considered to be 7 years.
Other intangible assets purchased by the Group are initially recognised at
cost. After recognition, under the cost model, intangible assets are measured
at cost less any accumulated amortisation and any accumulated impairment
losses.
Amortisation is recognised so as to write off the cost less their residual
values over their useful lives, which is considered to be 3 years straight
line for development costs and between 3-7 years straight line for other
intangible assets.
Financial instruments
The Group classifies financial instruments, or their component parts, on
initial recognition as a financial asset, a financial liability or an equity
instrument.
Contract liabilities
Contract liabilities comprise payments in advance of revenue recognition and
revenue deferred due to contract performance obligation not being completed.
They are classified as current liabilities if the contract performance
obligations payments are due to be completed within one year or less (or in
the normal operating cycle of the business if longer). If not, they are
presented as non-current liabilities. Contract liabilities are recognised
initially at fair value and subsequently at amortised cost.
Trade and other receivables
Trade and other receivables are measured at initial recognition at fair value,
and subsequently measured at amortised cost using the effective interest
method. A provision is established when there is objective evidence that the
Group will not be able to collect all amounts due. The amount of any provision
is recognised in profit or loss.
The Group always recognises lifetime expected credit losses (ECL) for trade
receivables and amounts due on contracts with customers. The expected credit
losses on these financial assets are estimated based on the Group's historical
credit loss experience, adjusted for facts that are specific to the debtors,
general economic conditions and an assessment of both the current as well as
the forecast director of conditions at the reporting date, including time
value of money where appropriate. Lifetime ECL represents the expected credit
losses that will result from all possible default events over the expected
life of a financial instrument.
Cash and cash equivalents
Cash and cash equivalents are recognised as financial assets. They comprise
cash held by the Group and short-term bank deposits with an original maturity
date of three months or less.
4. ACCOUNTING POLICIES (continued)
Trade payables
Trade payables are initially recognised as financial liabilities measured at
fair value, and subsequent to initial recognition measured at amortised cost.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of an entity after deduction of all its liabilities. Equity instruments
issued by the Group are recorded at the proceeds received net of direct issue
costs.
Share based payments
Where share options are awarded to employees, the fair value of the options at
the date of grant is charged to the statement of comprehensive income on a
straight-line basis over the vesting period.
Non-market vesting conditions are taken into account by adjusting the number
of options expected to vest at each statement of financial position date so
that, ultimately, the cumulative amount recognised over the vesting period is
based on the number of options that eventually vest. Market vesting conditions
are factored into the fair value of the options granted. The cumulative
expense is not adjusted for failure to achieve a market vesting condition.
Fair value is calculated using the Black-Scholes model, details of which are
given in note 22.
Pensions
The pension schemes operated by the Group are defined contribution schemes.
The pension cost charge represents the contributions payable by the Group.
Property, plant and equipment
Property, plant and equipment are stated at cost net of accumulated
depreciation and provision for impairment. Depreciation is provided on all
property plant and equipment, at rates calculated to write off the cost less
estimated residual value, of each asset on a straight-line basis over its
expected useful life. The residual value is the estimated amount that would
currently be obtained from disposal of the asset if the asset were already of
the age and in the condition expected at the end of its useful economic life.
The method of depreciation for each class of depreciable asset is:
Office
equipment
- 25% reducing balance
Impairment of Assets
Impairment tests on goodwill are undertaken annually at the balance sheet
date. The recoverable value of goodwill is estimated on the basis of value in
use, defined as the present value of the cash generating units with which the
goodwill is associated. This is computed by applying an appropriate discount
rate to the estimated value of future cash flows. When value in use is less
than the book value, an impairment is recorded and is irreversible.
4. ACCOUNTING POLICIES (continued)
Impairment of Assets (continued)
Other non-financial assets are subject to impairment tests whenever
circumstances indicate that their carrying amount may not be recoverable.
Where the carrying value of an asset exceeds its estimated recoverable value
(i.e. the higher of value in use and fair value less costs to sell), the asset
is written down accordingly. Where it is not possible to estimate the
recoverable value of an individual asset, the impairment test is carried out
on the asset's cash-generating unit. The carrying value of property, plant and
equipment is assessed in order to determine if there is an indication of
impairment. Any impairment is charged to the statement of comprehensive
income. Impairment charges are included under administrative expenses within
the consolidated statement of comprehensive income.
Taxation and deferred taxation
Corporation tax payable is provided on taxable
profits at prevailing rates.
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the balance sheet differs from its tax base,
except for differences arising on:
· the initial recognition of goodwill; and
· the initial recognition of an asset or liability in a transaction
which is not a business combination and at the time of the transaction affects
neither accounting nor taxable profit.
Recognition of deferred tax assets is restricted to those instances where it
is probable that future taxable profit will be available against which the
asset can be utilised. The amount of the asset or liability is determined
using tax rates that have been enacted or substantively enacted by the balance
sheet date and are expected to apply when the deferred tax
liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either:
· the same taxable Group company; or
· different Group entities which intend either to settle current
tax assets and liabilities on a net basis, or to realise the assets and settle
the liabilities simultaneously, in each future period in which significant
amounts of deferred tax assets or liabilities are expected to be settled or
recovered.
There were unused tax losses at 31 December 2023 amounting to £3,610k. In the
majority, these were restricted for use for 5 years from the date of
acquisition of Tab Media Limited against future taxable profits arising from
the trade formerly carried on in Tab Media Limited and now carried on in
Digitalbox Publishing Limited. A deferred tax asset was recognised in
relation to these losses for the first time in 2022, as the losses were
considered to be highly likely to be recoverable against future profits. It is
still the view that these losses will be highly likely to be recoverable
against future profits.
Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the Executive Directors, who are responsible for
allocating resources and assessing performance of the operating segments.
A business segment is a group of assets and operations, engaged in providing
products or services that are subject to risks and returns that are different
from those of other operating segments.
4. ACCOUNTING POLICIES (continued)
Segmental reporting (continued)
A geographical segment is engaged in providing products or services within a
particular economic environment that are subject to risks and returns that are
different from those of segments operating in other economic environments. The
Executive Directors assess the performance of the operating segments based on
the measures of revenue, profit before taxation and profit after taxation.
Central overheads are not allocated to business segments.
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
In the application of the Group's accounting policies, which are described in
note 4, the Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions
are based on experience and other factors considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
The following are the critical judgements and estimations that the Directors
have made in the process of applying the Group's accounting policies and that
have the most significant effect on the amounts recognised in the financial
statements.
Critical accounting judgements
Impairment of goodwill and other intangible assets
Impairment of the valuation of the goodwill relating to the acquisition of
subsidiaries is considered annually for indicators of impairment to ensure
that the asset is not overstated within the financial statements. The annual
impairment assessment in respect of goodwill requires estimates of the value
in use (or fair value less costs to sell) of subsidiaries to which goodwill
has been allocated.
This requires the Directors to estimate the future cash flows and an
appropriate discount factor, in order that the net present value of those cash
flows can be determined. Discounted cash flow forecasts are stress tested
under a range of scenarios. The headroom was deemed insufficient and therefore
an impairment has been recognised against goodwill and intangible assets
relating to Entertainment Daily in the year of £6,384k (2022: nil).
Critical accounting estimates
Amortisation of intangible assets
The periods of amortisation adopted to write down capitalised intangible
assets requires estimates to be made in respect of the useful lives of the
intangible assets, to determine an appropriate amortisation rate. Development
costs (domain names and website costs) are being amortised on a straight-line
basis over the period during which the economic benefits are expected to be
received, which has been estimated at 3 years. Intangible assets recognised in
relation to the brand names are being amortised straight-line over 7 years.
Share based payment expense
Non-market performance and service conditions are included in the assumptions
about the number of options that are expected to vest. At the end of each
reporting period the Group revises its estimates of the number of options that
are expected to vest based on the non-market vesting conditions. It recognises
the impact of
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
the revision to the original estimates, if any, in the consolidated statement
of comprehensive income, with a corresponding adjustment to equity.
This requires an estimate as to how many options will meet the future vesting
criteria as well as the judgements required in estimating the fair value of
the options at the date of grant for equity-settled options.
Provision for bad and doubtful debts
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss provision for trade receivables.
To measure expected credit losses on a collective basis, trade receivables are
grouped based on similar ageing. The expected loss rates are based on the
Group's historical credit losses experience over the twelve month period prior
to the period end. Forward looking issues have been considered, including in
relation to the ongoing impact of the hostile global trading conditions driven
by the impact of the war in Europe. This has had an immaterial effect on the
expected credit loss rate.
6. SEGMENTAL INFORMATION
A segmental analysis of revenue and expenditure is as follows:
2023 Entertainment Daily Mashed Productions The The Poke Head Office Total 2023
Tab TV
Guide
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 1,440 117 921 219 93 - 2,790
Cost of sales (305) (147) (110) (40) (4) - (606)
Administrative expenses* (484) (122) (444) (87) (9) (1,018) (2,164)
Adjusted EBITDA* 651 (152) 367 92 80 (1,018) 20
Amortisation, depreciation, and impairment - - - - - (6,663) (6,663)
Direct costs of intangible asset additions - - - - - (34) (34)
Share based payments - - - - - (96) (96)
Finance income - - - - - 44 44
Finance costs - - - - - (6) (6)
Tax - - - - - 58 58
------------- ------------- ------------- ------------- ------------- ------------- -------------
Profit/(loss) for the year 651 (152) 367 92 80 (7,715) (6,677)
====== ====== ====== ====== ====== ====== ======
6. SEGMENTAL INFORMATION (continued)
2022 Entertainment Daily Mashed Productions The The Poke Head Office Total 2022
Tab
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 2,261 243 1,059 15 - 3,578
Cost of sales (224) (190) (118) (2) - (534)
Administrative expenses* (529) (111) (398) (6) (919) (1,963)
Adjusted EBITDA* 1,508 (58) 543 7 (919) 1,081
Amortisation, depreciation, and impairment - - - - (914) (914)
Acquisition costs - - - - (57) (57)
Capital restructure costs - - - - (3) (3)
Share based payments - - - - (62) (62)
Finance income - - - - 8 8
Finance costs - - - - (8) (8)
Tax - - - - 759 759
------------- ------------- ------------- ------------- ------------- -------------
Profit/(loss) for the year 1,508 (58) 543 7 (1,196) 804
====== ====== ====== ====== ====== ======
*Adjusted EBITDA is defined as the operating profit after adding back
depreciation, amortisation, impairment, share based payments, acquisition
costs and direct costs associated with business combinations.
The segmental analysis above reflects the parameters applied by the Board when
considering the Group's monthly management accounts.
External revenue by location of customer Total assets by location Net tangible capital expenditure by location
31 December 2023 31 December 2022 Continuing 31 December 2023 31 December 2022 31 December 2023 31 December 2022
Continuing
£'000 £'000 £'000 £'000 £'000 £'000
United Kingdom 477 759 7,511 14,097 8 43
Europe 1,249 1,381 307 284 - -
Rest of World 1,064 1,438 228 261 - -
------------- ------------- ------------- ------------- ------------- -------------
2,790 3,578 8,046 14,642 8 43
====== ====== ======= ======= ====== ======
7. REVENUE
2023 2022
Revenue by stream is split: £'000 £'000
Advertising space 2,790 3,578
------------- -------------
2,790 3,578
====== ======
Revenue by location is split:
United Kingdom 477 759
Europe 1,249 1,381
Rest of world 1,064 1,438
------------- -------------
2,790 3,578
====== ======
The Group had two (2022: four) customers whose revenue individually
represented 10% or more of the Group's total revenue, being 17.21% and 14.22%
respectively (2022: 19.70%, 13.65%, 12.33% and 11.03% respectively).
8. PROFIT FROM OPERATIONS
2023 2022
£'000 £'000
This is arrived at after charging/(crediting):
Continuing operations
Staff costs (see note 9) 1,620 1,384
Direct costs of business combinations - 57
Depreciation of property, plant & equipment 14 7
Amortisation of intangible fixed assets 265 191
Impairment on goodwill and intangible assets 6,384 716
====== ======
Auditors' remuneration in respect of the Company 20 18
Audit of the Group and subsidiary undertakings 42 37
Review of interim financial information 5 4
-------------
-------------
67 59
======= ======
9. STAFF COSTS
2023 2022
£'000 £'000
Staff costs for all employees, including Directors consist of:
Wages and salaries 1,357 1,176
Social security costs 149 134
Pensions 18 12
----------- -----------
1,524 1,322
Share based payment charge 96 62
----------- -----------
1,620 1,384
====== ======
2023 2022
The average number of employees of the group during the year was as follows: Number Number
Directors 5 6
Management and administration 5 4
Content 22 22
----------- -----------
32 32
====== ======
Directors' Detailed Emoluments
Details of individual Directors' emoluments for the year are as follows:
Salary Consultancy Bonus Pension Total Total
2023 2023 2023 2023 2023 2022
£'000 £'000 £'000 £'000 £'000 £'000
J Carter 154 - - 1 155 138
J Douglas 154 - - 1 155 138
M Higginson (resigned 30 April 2023) 2 6 - - 8 25
D Joseph 50 - - - 50 45
P Machray 26 - - - 26 25
M Rich 37 - - - 37 35
----------- ----------- ----------- ----------- ----------- -----------
Total 423 6 - 2 431 406
( ) ===== ===== ===== ===== ===== =====
9. STAFF COSTS (continued)
All pension contributions represent payments into defined contribution
schemes.
The Executive Directors have service contracts with the Company which are
terminable by the Company or relevant director after a fixed term of 12 months
followed by 6 months' notice.
The Directors' interests in the issued ordinary share capital of the Company
was as follows:
Shares of £0.01 Shares of £0.01
Director 31/12/2023 31/12/2022
James Carter 10,908,078 9.3% 10,908,078 9.3%
Jim Douglas 10,908,078 9.3% 10,908,078 9.3%
David Joseph* 1,150,000 1.0% 600,000 0.5%
*David Joseph acquired shares through Integral 2 Limited, a company controlled
by him.
There is a share-based payment charge attributable to options held by the
directors during the year amounting to £46k (2022: £17k). The options held
in the prior year lapsed on 28 February 2022. New options were issued in the
year that lapse on 5 April 2026.
Effective options in Digitalbox plc exist due to two directors having warrants
in its subsidiary company, Digital Publishing (Holdings) Limited, which, when
exercised, are satisfied by issuing shares in Digitalbox plc.
These are set out in the table below,
'Effective Option' Holder Number of Shares
James Carter 681,958
Jim Douglas 681,958
1,363,916
The warrants had vested prior to admission onto AIM on 28 February 2019 and
carry an effective exercise price of 2.28 pence per share issued in Digitalbox
plc.
A full breakdown of options in issue are shown at page 24. Further information
on share options is included in note 22.
The market price of the shares at 31 December 2023 was 3.35p with a quoted
range from throughout 2023 of 3.35p to 8.75p. The options vest based on
performance criteria detailed in note 22.
10. FINANCE COSTS
2023 2022
£'000 £'000
Interest on bank loans 6 8
------------ ------------
6 8
====== ======
11. TAXATION ON PROFIT/LOSS FROM ORDINARY ACTIVITIES
2023 2022
£'000 £'000
Current tax
UK corporation tax on profits for the current period - 132
Adjustment in respect of prior periods (127) 1
Deferred tax
Origination and reversal of temporary differences 97 (96)
Changes in tax rates - (3)
Benefit arising from previously unrecognised tax losses - (793)
Adjustment in respect of prior periods (28) -
------------ ------------
Total tax credit (58) (759)
====== ======
The tax assessed for the year differs from the standard rate of corporation
tax in the UK applied to profit/(loss) before tax.
2023 2022
£'000 £'000
Total profit/(loss) on ordinary activities before tax (6,734) 45
------------ ------------
Profit/(loss) on ordinary activities at the standard rate of corporation tax (1,584) 9
in the UK of 23.52% (2022: 19%)
Effects of:
Expenses not deductible for tax purposes 40 24
Income not taxable - (6)
Impairment on goodwill 1,491 61
Adjustments to prior periods (155) 1
Fixed asset differences - (2)
Deferred tax asset not previously recognised 42 (793)
Deferred tax not recognised - loss relief in current period - (50)
Effect of changes in tax rates on deferred tax 3 (3)
Losses carried back 105 -
------------- -------------
Tax credit for the year (58) (759)
====== ======
In the Budget on 3 March 2021, the Chancellor announced the intention to
increase the main rate of UK corporation tax to 25% for the financial year
beginning 1 April 2023. This was substantively enacted on 24 May 2021.Deferred
tax at the balance sheet date has therefore been measured using the enacted
tax rate of 25% (2022: 25%) in these financial statements.
There were unused tax losses at 31 December 2023 amounting to £3,610k. In the
majority, these were restricted for use for 5 years from the date of
acquisition of Tab Media Limited against future taxable profits arising from
the trade formerly carried on in Tab Media Limited and now carried on in
Digitalbox Publishing Limited. A deferred tax asset was recognised in
relation to these losses for the first time in 2022, as the losses were
considered to be highly likely to be recoverable against future profits. It is
still the view that these losses will be highly likely to be recoverable
against future profits.
12. EARNINGS PER SHARE
2023 2022
£'000 £'000
The earnings per share is based on the following:
Continuing (loss)/earnings post tax attributable to shareholders (6,677) 804
=============== ===============
Basic weighted average number of shares 117,923,393 117,718,533
Diluted weighted average number of shares 118,809,024 120,002,622
=============== ===============
Basic earnings/(loss) per share (£) (0.05662) 0.00683
Diluted earnings/(loss) per share (£) (0.05662) 0.00670
=============== ==============
Earnings per ordinary share has been calculated using the weighted average
number of shares in issue during the relevant financial periods. IAS 33
requires presentation of diluted EPS when a company could be called upon to
issue shares that would decrease earnings per share or increase the loss per
share. The exercise price of the outstanding share options is significantly
more than the average and closing share price. Therefore, as per IAS33 the
potential ordinary shares which could arise from exercised share options are
disregarded in the calculation of diluted EPS.
13. TANGIBLE FIXED ASSETS
IFRS 16 Office Total
Right-of-Use equipment
Asset
£'000 £'000 £'000
Cost
Balance at 1 January 2022 56 29 85
Additions - 43 43
Disposals (56) (14) (70)
--------------- --------------- ---------------
Balance at 1 January 2023 - 58 58
Additions - 8 8
--------------- --------------- ---------------
Balance at 31 December 2023 - 66 66
--------------- --------------- ---------------
Accumulated depreciation
Balance at 1 January 2022 25 14 39
Depreciation charge - 7 7
Depreciation eliminated on disposal (25) (15) (40)
--------------- --------------- ---------------
Balance at 1 January 2023 - 6 6
Depreciation charge - 14 14
--------------- --------------- ---------------
Balance at 31 December 2023 - 20 20
--------------- --------------- ---------------
Net Book Value
At 31 December 2023 - 46 46
====== ====== ======
At 31 December 2022 - 52 52
====== ====== ======
All tangible fixed assets held in the current and prior year were owned
assets.
14. INTANGIBLE FIXED ASSETS
Goodwill Other Development Total
GROUP Arising on Intangible costs
Consolidation Assets
£'000 £'000 £'000 £'000
Cost
Balance at 1 January 2022 9,610 1,476 121 11,207
Additions - 18 171 189
Business combinations - 202 - 202
----------- ----------- ----------- ---------------
Balance at 1 January 2023 9,610 1,696 292 11,598
Additions - 937 112 1,049
----------- ----------- ----------- ---------------
Balance at 31 December 2023 9,610 2,633 404 12,647
----------- ----------- ----------- ---------------
Accumulated amortisation
Balance at 1 January 2022 - 457 40 497
Amortisation - 159 32 191
Impairment 321 395 - 716
----------- ----------- ----------- ---------------
Balance at 1 January 2023 321 1,011 72 1,404
Amortisation - 178 87 265
Impairment 6,341 - 43 6,384
----------- ------------ ------------ ---------------
Balance at 31 December 2023 6,662 1,189 202 8,053
------------ ------------ ------------ ---------------
Net Book Value
At 31 December 2023 2,948 1,444 202 4,594
====== ====== ====== ======
At 31 December 2022 9,289 684 221 10,194
====== ====== ====== ======
At 31 December 2021 9,610 1,018 82 10,710
====== ====== ====== ======
During the year, the Group acquired the website tvguide.co.uk which has a
carrying value in the financial statements of £453,214. The Group also
capitalised development costs of £84k relating to development activities
performed in respect of the tvguide.co.uk platform. These assets will be
amortised over the same period. This is considered to have a useful economic
life of 7 years and will be amortised over this period.
The Group subsequently purchased a collection of social media platforms from
Media Chain Group Limited, which have a carrying value of £450,726. These
assets have been subsumed within Entertainment Daily and The Tab split
equally. The portion attributable to Entertainment Daily is being written off
over 7 years. The portion attributable to The Tab is being written off over
the unexpired portion of the 7 year write off period relating to the original
acquisition of The Tab.
14. INTANGIBLE FIXED ASSETS (continued)
Amortisation is charged to administrative expenses in the Statement of
Comprehensive Income.
GOODWILL AND IMPAIRMENT
The carrying value of goodwill in respect of each cash generating unit is as
follows:
31 December 31 December
2023 2022
£'000 £'000
Digitalbox Publishing (Holdings) Limited 2,830 9,171
Mashed Productions Limited - -
Tab Media Limited 118 118
------------- -------------
2,948 9,289
====== =======
The Group is obliged to test goodwill annually for impairment, or more
frequently if there are indications that goodwill and indefinite life
intangibles might be impaired, as the goodwill is deemed to have an indefinite
useful life. In order to perform this test, management is required to compare
the carrying value of the relevant cash generating unit ("CGU") including the
goodwill with its recoverable amount. The recoverable amount of the CGU is
determined from a value in use calculation.
Digitalbox Publishing (Holdings) Limited
The recoverable amount of Digitalbox Publishing (Holdings) Limited relates to
the Entertainment Daily segment and has been determined from a review of the
current and anticipated performance of this unit. In preparing this
projection, a discount rate of 20% (2022: 10%) has been used based on the
weighted average cost of capital and a future growth rate of 3% has been
assumed. It has been assumed investment in capital equipment will equate to
depreciation over the year. The discount rate was based on the Group's
weighted average cost of capital as estimated by management. After applying
sensitivity analysis in respect of the results and future cash flows, in
particular for presumed growth rates and discount rates, management concluded
that it was probable that such a change in key assumptions would reduce the
recoverable amount below book value. The impairment loss being recognised
amounts to £6,341k which results in a carrying value of £2,948k. The asset
is considered to have a value in use of £3,894k over a 10 year period.
Management consider that the discount rate used is a key assumption. A 5%
increase in that rate would result in a further impairment of £496k. A 5%
reduction in that rate would result in a reduction in the impairment of
£665k.
Mashed Productions Limited
The recoverable amount of Mashed Productions Limited has been determined with
reference to the trade and assets hived across to Digitalbox Publishing
Limited in 2020. Due to a change in the revenue model for this CGU the
recoverable amount was deemed to be £nil in 2022 and therefore, a full
impairment of Mashed Productions Limited was made.
Tab Media Limited
The recoverable amount of the Tab Media segment, which was hived up from Tab
Media Limited to Digitalbox Publishing Limited on 1 October 2020, has been
determined from a review of the current and anticipated performance of this
unit. In preparing this projection, a discount rate of 20% (2022: 10%) has
been used based on the weighted average cost of capital and a future growth
rate of 3% has been assumed. It has been assumed investment in capital
equipment will equate to depreciation over the year. The discount rate was
based on the Group's weighted average cost of capital as estimated by
management. After applying sensitivity analysis in respect of the results
and future cash flows, in particular for presumed growth rates and discount
rates, management is satisfied that it is highly improbable that such a change
in key assumptions would reduce the recoverable amount below book value.
Management consider that the discount rate used is a key assumption, however,
a 5% increase in that rate would not result in the requirement for an
impairment.
15. TRADE AND OTHER RECEIVABLES 31 December 2023 31 December 2022
£'000 £'000
Trade receivables 757 784
Prepayments and accrued income 84 100
Corporation tax 80 -
Other receivables 25 68
------------- -------------
946 952
====== ======
16. CASH AND CASH EQUIVALENTS 31 December 31 December
2023 2022
£'000 £'000
Cash at bank and in hand 1,913 2,827
------------- -------------
1,913 2,827
====== ======
17. LIABILITIES 31 December 31 December
2023 2022
£'000 £'000
Current liabilities
Trade payables 78 124
Social security and other taxes 81 84
Accruals 69 76
Other payables* 181 4
Bank loans and overdrafts 149 112
Corporation tax payable - 61
------------- -------------
558 461
====== ======
Non-current liabilities
Bank loans 94 206
----------- ------------
94 206
====== ======
*During the year, the Group acquired the website tvguide.co.uk which has a
carrying value in the financial statements of £453,214. Of this sum, 180,000
was deferred until 2024 hence this is recorded within current liabilities.
18. LOANS AND OVERDRAFTS 31 December 31 December
2023 2022
£'000 £'000
Bank overdrafts
Due in less than one year 37 -
Bank loans
Due in less than one year 112 112
Due in between one and two years 94 122
Due in between two and five years - 84
------------- -------------
243 318
====== ======
On 7 October 2020, Digitalbox Publishing Limited drew down a loan facility
amounting to £450k under the CBILS scheme. The present value of the loan at
inception discounted at a market rate of interest was £440k. The loan is for
a term of five years and is repayable in equal monthly instalments which
commenced in 2021. Interest is charged at a fixed rate of 2.43% per annum,
with the cost being fully subsidised by central Government for the first 12
months.
The loan is secured by a debenture over the assets of the Digitalbox
Publishing Limited and a £450k guarantee granted by Digitalbox plc. The
outstanding balance at 31 December 2023 was £206k (2022: £318k).
19. DEFERRED TAX
Total
£'000
Balance at 1 January 2023 (617)
Deferred tax charge for the year 70
-------------
Balance at 31 December 2023 (547)
=======
The deferred tax provision comprises: 31 December 31 December
2023 2022
£'000 £'000
Intangible asset timing differences 257 176
Tax losses (804) (793)
------------- -------------
(547) (617)
====== ======
The expected net reversal of deferred tax in 2024 is £41k.
20. FINANCIAL RISK MANAGEMENT
The Group is exposed to risks that arise from its use of financial
instruments. These financial instruments are within the current assets and
current liabilities shown on the face of the statement of financial position
and comprise the following:
Credit risk
The Group is exposed to credit risk primarily on its trade receivables. The
Group maintains its cash reserves at a reputable bank. It is group policy to
assess the credit risk of each new customer before entering into binding
contracts.
The maximum exposure to credit risk is represented by the carrying value in
the statement of financial position. The credit risk on liquid funds is low as
the funds are held at a bank with a high credit rating assigned by
international credit agencies.
31 December 2023 31 December 2022
£'000 £'000
Current financial assets
Trade receivables 757 784
Other receivables 189 67
Cash and cash equivalents 1,913 2,827
------------- -------------
2,859 3,678
====== ======
The table below illustrates the due date of trade receivables:
31 December 2023 31 December 2022
£'000 £'000
Current 330 286
31 - 60 days 250 215
61 - 90 days 155 158
91 - 120 days 10 68
121 and over 12 57
------------- -----------
757 784
====== ======
The table below illustrates the geographical location of trade receivables:
31 December 2023 31 December 2022
£'000 £'000
United Kingdom 226 252
Europe 307 270
Rest of world 224 262
------------- -----------
757 784
====== ======
The directors have considered expected credit losses under IFRS9 and have
adopted the simplified approach to their evaluation as the Group has limited
exposure to them. The Directors have provided for expected credit losses on a
specific basis and this has led to the Group carrying a specific provision
against trade debtors of £4k (2022: £20k). The Group experienced one bad
debt write off in 2023 amounting to £4k.
Liquidity risk
Liquidity risk arises from the Group's management of working capital and the
finance charges and repayments of its liabilities.
The Group's policy is to ensure that it will have sufficient cash to allow it
to meet its liabilities when they become due and so cash holdings may be high
during certain periods throughout the period.
The Group's policy in respect of cash and cash equivalents is to limit its
exposure by reducing cash holding in the operating units and investing amounts
that are not immediately required in funds that have low risk and are placed
with a reputable bank.
Cash at bank and cash equivalents
31 December 2023 31 December
2022
£'000 £'000
At the year end the Group had the following cash balances: 1,913 2,827
====== ======
Cash at bank comprises Sterling and US Dollar cash deposits.
All monetary assets and liabilities within the group are denominated in the
functional currency of the operating unit in which they are held. All amounts
stated at carrying value equate to fair value.
31 December 2023 31 December 2022
£'000 £'000
Financial liabilities at amortised cost
Trade payables 78 124
Accruals 69 76
Bank loans and overdrafts 244 318
Other payables 180 4
------------- -------------
571 522
======= =======
31 December 2022
£'000
Financial liabilities at amortised cost
Trade payables
78
124
Accruals
69
76
Bank loans and overdrafts
244
318
Other payables
180
4
-------------
-------------
571
522
=======
=======
The table below illustrates the maturities of trade payables:
31 December 2023 31 December
2022
£'000 £'000
Current 62 93
31 - 60 days 1 21
61 - 90 days - -
91 - 120 days - -
121 and over 15 10
---------------- ---------------
78 124
======== ========
The table below shows the maturities of financial liabilities:
2023 Carrying amount 6 months or less 6-12 months 1 or more year
£'000 £'000 £'000 £'000
Trade payables 78 78 - -
Accruals 69 69 - -
Loans 244 94 56 94
Other payables 180 180 - -
---------------- ---------------
--------------- ---------------
571 421 56 94
======== ======== ======== ========
2022 Carrying amount 6 months or less 6-12 months 1 or more year
£'000 £'000 £'000 £'000
Trade payables 124 114 - 10
Accruals 76 76 - -
Loans 318 56 56 206
Other payables 4 4 - -
---------------- -
--------------- --------------- --------------
522 250 56 216
======== ======== ======== ========
Capital Disclosures and Risk Management
The Group's management define capital as the Group's equity
share capital and reserves.
The Group's objective when maintaining capital is to safeguard its ability to
continue as a going concern, so that in due course it can provide returns for
shareholders and benefits for other stakeholders.
The Group manages its capital structure and makes adjustments to it in the
light of changes in the business and in economic conditions. In order to
maintain or adjust the capital structure, the Group may from time to time
issue new shares, based on working capital and product development
requirements and current and future expectations of the Company's share price.
Share capital is used to raise cash and as direct payments to third parties
for assets or services acquired.
Market risk
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will
fluctuate due to changes in market interest rates. The Group considers the
interest rates available when deciding where to place cash balances.
Foreign currency risk
Foreign exchange transaction risk arises when individual Group operations
enter into transactions denominated in a currency other than the functional
currency. The principal risk arises from the Group's reliance on US Dollar
denominated annual revenues which amounted to $1.2m (2022: $1.8m) with a trade
debtor balance at the year-end of $228k (2022: $11k). The Group mitigates
foreign exchange risk by selling forward US Dollars on a quarterly basis.
21. SHARE CAPITAL No. Value No. Value
31 December 2023 £'000 31 December 2022 £'000
Called up share capital
Allotted, called up and fully paid
Ordinary shares of £0.01 each 117,923,393 1,179 117,923,393 1,179
--------------------------- ------------ --------------------------- ------------
117,923,393 1,179 117,923,393 1,179
============= ====== ============== ======
22. SHARE BASED PAYMENTS
During the year, the Group incurred a £96k share based payment charge (2022:
£62k). Of this total, £46k (2022: £17k) was recorded as an expense in
Digitalbox plc and £50k (2022: £45k) was recorded as an expense in
Digitalbox Publishing Limited.
2023 Weighted average exercise price 2022 Weighted average exercise price
No. of No. of
share
share
options
options
Outstanding at beginning of year 4,541,919 5.51p 9,141,663 7.74p
Granted during the year 4,513,322 6.07p - -
Exercised during the year - - (1,590,936) 5.51p
Expired during the year (2,005,812) 5.20p (3,008,808) 9.95p
Outstanding at the end of the year 7,049,429 6.68p 4,541,919 5.51p
5,516,228 options are exercisable after 3 years (see page 24), or an exit
event.
169,285 options are exercisable immediately.
1,363,916 options relates to Warrants issued prior to the group's admission by
Digitalbox Publishing (Holdings) Limited, a subsidiary of the company. These
are exercisable upon the exercise of those warrants in a share for share
exchange arrangement, under which the company acquires all shares issued in
Digitalbox Publishing (Holdings) Limited and in consideration, issues shares
to the warrant holders.
A Black-Scholes model has been used to determine the fair value of the share
options on the date of grant. The fair value is expensed to the income
statement on a straight-line basis over the vesting period, which is
determined annually. The model assesses a number of factors in calculating
the fair value. These include the market price on the date of grant, the
exercise price of the share options, the expected share price volatility of
the Company's share price, the expected life of the options, the risk-free
rate of interest and the expected level of dividends in future periods.
A Black-Scholes model has been used to determine the fair value of the share
options on the date of grant. The fair value is expensed to the income
statement on a straight-line basis over the vesting period, which is
determined annually. The model assesses a number of factors in calculating
the fair value. These include the market price on the date of grant, the
exercise price of the share options, the expected share price volatility of
the Company's share price, the expected life of the options, the risk-free
rate of interest and the expected level of dividends in future periods.
22. SHARE BASED PAYMENTS (continued)
The inputs into the models of options previously granted which have
contributed to the share-based payment arising in the year are:
Date of grant 17/04/2020 24/02/2021 06/04/2023
Model type Black Scholes Black Scholes Black Scholes
Vesting date 16/04/2023 23/02/2024 05/04/2026
Number of options granted 2,005,812 1,002,906 4,513,322
Share price at date of grant 6.75p 6.00p 7.88p
Exercise price 6.75p 6.00p 7.88p
Option life in years 10 10 10
Risk-free rate 10% 10% 5.25%
Expected volatility 65% 65% 65%
Expected dividend yield 0% 0% 0%
Fair value of options 4.62p 5.20p 6.07p
23. RESERVES
Full details of movements in reserves are set out in the consolidated
statement of changes in equity. The following describes the nature and purpose
of each reserve within owners' equity:
Share premium: Amount subscribed for share capital in excess of nominal value.
Retained earnings: Cumulative net gains and losses recognised in the
consolidated statement of comprehensive income.
Share based payment reserve: Cumulative charges recognised in the consolidated
statement of comprehensive income in relation to share based payments.
24. CAPITAL COMMITMENTS
At 31 December 2023 and 31 December 2022 there were no capital commitments.
25. RELATED PARTY TRANSACTIONS
During the year, Integral2 Limited billed £73k (2022: £65k) to the Group, a
company related by virtue of David Joseph, a member of key management
personnel, having control over the entity. As at 31 December 2023, £7k (2022:
£6k) was owed to Integral2 Limited. During the year, David Joseph acquired
550,000 shares in Digitalbox plc at 8 pence per share through Integral 2
Limited.
During the year, M Capital Investment Partners (Holdings) Limited billed £6k
(2022: £25k) to the Group, a company related by virtue of Martin Higginson, a
member of key management personnel for part of the year, having control over
the entity. As at 31 December 2023, £nil (2022: £3k), was accrued as owing
to M Capital Investment Partners (Holdings) Limited. The balances stated here
were for transactions up to the point that Martin Higginson resigned as a
director and was therefore no longer a related party.
The key management personnel are considered to be the Board of Directors.
Their remuneration is disclosed in detail in note 9. Key management were
remunerated £431k in the year ended 31 December 2023 (2022: £406k).
The key management personnel have been provided with a total of 1,363,916
effective share options resulting in a charge of £46k in the period (2022:
£17k).
At 31 December 2023 At 31 December 2022
£'000 £'000
Fixed assets
Investments III 6,226 11,209
Deferred tax asset IV 17 -
----------------- -----------------
6,243 11,209
Current assets
Trade and other receivables V 1,213 1,286
Cash and cash equivalents VI - 1
----------------- -----------------
1,213 1,287
Current liabilities
Bank overdrafts and loans VII (38) -
Trade and other payables VII (31) (73)
---------------- ----------------
Total current liabilities (69) (73)
---------------- ----------------
Total liabilities (69) (73)
Net current assets 1,144 1,214
--------------- ---------------
Total assets less total liabilities 7,387 12,423
======= =======
Capital and reserves
Called up share capital VIII 1,179 1,179
Share premium account IX 11,169 11,169
Share-based payment reserve IX 138 196
Retained deficit IX (5,099) (121)
------------------ ------------------
Shareholders' funds 7,387 12,423
========= =========
The Company has taken advantage of the exemptions allowed under section
408 of the Companies Act 2006 and has not presented its income statement in
these financial statements. The Group profit for the year included a loss on
ordinary activities after tax of £5,082k (2022: £102k loss) in respect of
the Company.
The financial statements were approved by the Board and authorised for
issue on 25 March 2024.
James
Carter
David Joseph
CEO
CFO
Company registration number: 04606754
Share Share Share-based Retained deficit Total
Capital Premium payment
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 1,163 11,149 464 (349) 12,427
Loss after tax - - - (102) (102)
Issue of new shares 16 20 - - 36
Share-based payments - - 62 - 62
Reserves transfer in respect of lapsed options - - (330) 330 -
------------- ------------- ------------- ------------- -------------
Balance at 31 December 2022 1,179 11,169 196 (121) 12,423
------------- -------------- ------------- ------------- -------------
Loss after tax - - - (5,082) (5,082)
Share-based payments - - 46 - 46
Reserves transfer in respect of lapsed options - - (104) 104 -
------------- -------------- -------------- -------------- --------------
Balance at 31 December 2023 1,179 11,169 138 (5,099) 7,387
------------- -------------- ------------- ------------- -------------
I. ACCOUNTING POLICIES
The separate financial statements of the Company are presented as required by
the Companies Act 2006. As permitted by the Act the separate financial
statements have been prepared in accordance with Financial Reporting Standard
101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable
accounting standards.
The company has taken advantage of the following disclosure exemptions under
FRS 101:
· the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2
Share-based Payment
· the requirements of paragraphs 62, B64(d), B64(e), B64(g),
B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and
B67 of IFRS 3 Business Combinations;
· the requirements IFRS 7 Financial Instruments: Disclosures;
· the requirements of the second sentence of paragraph 110 and
paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15
Revenue from Contracts with Customers;
· the requirements of paragraph 58 of IFRS 16, provided that the
disclosure of details of indebtedness required by paragraph 61(1) of Schedule
1 to the Regulations is presented separately for lease liabilities and other
liabilities, and in total;
· the requirement in paragraph 38 of IAS 1 'Presentation of
Financial Statements' to present comparative information in respect of: (i)
paragraph 79(a) (iv) of IAS 1, (ii) paragraph 73(e) of IAS 16 Property Plant
and Equipment and (iii) paragraph 118 (e) of IAS 38 Intangible Assets
· the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 40A
to 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements;
· the requirements of IAS 7 Statement of Cash Flows;
· the requirements of paragraphs 30 and 31 of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors;
· the requirements of paragraph 17 and 18a of IAS 24 Related Party
Disclosures; and
· the requirements in IAS 24 Related Party Disclosures to disclose
related party transactions entered into between two or more members of a
group, provided that any subsidiary which is a party to the transaction is
wholly owned by such a member.
Where required, equivalent disclosures are given in the group financial
statements of Digitalbox plc.
The principal accounting policies adopted are the same as those set out in
note 4 to the consolidated financial statements except as noted below:
Valuation of investments
Investments in subsidiaries are stated at cost less any provision for
impairment in value.
II. OPERATING PROFIT
The auditor remuneration for audit and other services is disclosed in note 8
to the consolidated financial statements.
The average number of employees of the company during the year was 5 (2022: 6)
and total staff costs were £477k (2022: £468k). Directors' remuneration is
disclosed in note 9 to the consolidated financial statements.
III. FIXED ASSET INVESTMENTS 31 December
2023
£'000
Subsidiary undertakings
Cost
Balance at 31 December 2022 and 31 December 2023 11,209
Provisions
Balance at 1 January 2023 -
Impairment charge for the year* (4,983)
--------------
Balance at 31 December 2023 (4,983)
--------------
Carrying value of investments 6,226
=======
At the year end the Company had the following subsidiaries:
Subsidiary name Class of shares Proportion of ownership Registered office
Digitalbox Publishing Limited Ordinary 100% Indirect Jubilee House, 92 Lincoln Road, Peterborough, PE1 2SN
Digitalbox Publishing (Holdings) Limited Ordinary 100% Direct Jubilee House, 92 Lincoln Road, Peterborough, PE1 2SN
Subsidiary name Principal activity
Digitalbox Publishing Limited Sale of digital advertising space
Digitalbox Publishing (Holdings) Limited Holding company
* In determining the required level of impairment on the investment held by
the Company in Digitalbox Publishing Limited, via its investment in Digitalbox
Publishing (Holdings) Limited, the directors considered the aggregate
contribution of the cash generating units held in that subsidiary, using the
same forecasts, Weighted average cost of capital and lifetime term as that
provided for the goodwill and intangible asset impairment assessment. This
demonstrated a required impairment of £4,983k.
IV. DEFERRED TAX
Total
£'000
Balance at 1 January 2023 -
Deferred tax charge for the year (17)
-------------
Balance at 31 December 2023 (17)
=======
The deferred tax provision comprises: 31 December
2023
£'000
Tax losses (17)
-------------
(17)
-------------
V. RECEIVABLES: due within one year 31 December 31 December
2023 2022
£'000 £'000
Amounts owed by group undertakings 1,177 1,261
Prepayments and accrued income 36 25
------------ ------------
1,213 1,286
===== =====
VI. CASH AND CASH EQUIVALENTS
31 December 31 December
2023 2022
£'000 £'000
Cash at bank and in hand - 1
------------- -------------
- 1
====== ======
VII. PAYABLES: amounts falling due within one year
31 December 31 December
2023 2022
£'000 £'000
Bank overdrafts and loans 38 -
Trade payables 8 10
Accruals 3 45
Other tax and social security 20 18
------------ ------------
69 73
====== ======
VIII. SHARE CAPITAL
Details of the Company's share capital can be found in Note 21 to the
consolidated financial statements.
IX. RESERVES
Full details of movements in reserves are set out in the company statement of
changes in equity. The following describes the nature and purpose of each
reserve within owners' equity:
Share premium: Amount subscribed for share capital in excess of nominal value.
Retained deficit: Cumulative net losses recognised in the company statement of
comprehensive income.
Share based payment reserve: Cumulative charges recognised in the company
statement of comprehensive income in relation to share based payments.
X. RELATED PARTY TRANSACTIONS
During the year, M Capital Investment Partners (Holdings) Limited billed £6k
(2022: £25k) to the Group, a company related by virtue of Martin Higginson, a
member of key management personnel for part of the year, having control over
the entity. As at 31 December 2023, £nilk (2022: £3k), was accrued as owing
to M Capital Investment Partners (Holdings) Limited. The balances stated here
were for transactions up to the point that Martin Higginson resigned as a
director and was therefore no longer a related party.
The key management personnel are considered to be the Board of Directors.
Their remuneration is disclosed in detail in note 9. Key management were
remunerated £431k in the year ended 31 December 2023 (2022: £406k).
The key management personnel have been provided with a total of 1,363,916
effective share options resulting in a charge of £46k in the period (2022:
£17k).
COMPANY STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER 2023
At 31 December 2023 At 31 December 2022
£'000 £'000
Fixed assets
Investments III 6,226 11,209
Deferred tax asset IV 17 -
----------------- -----------------
6,243 11,209
Current assets
Trade and other receivables V 1,213 1,286
Cash and cash equivalents VI - 1
----------------- -----------------
1,213 1,287
Current liabilities
Bank overdrafts and loans VII (38) -
Trade and other payables VII (31) (73)
---------------- ----------------
Total current liabilities (69) (73)
---------------- ----------------
Total liabilities (69) (73)
Net current assets 1,144 1,214
--------------- ---------------
Total assets less total liabilities 7,387 12,423
======= =======
Capital and reserves
Called up share capital VIII 1,179 1,179
Share premium account IX 11,169 11,169
Share-based payment reserve IX 138 196
Retained deficit IX (5,099) (121)
------------------ ------------------
Shareholders' funds 7,387 12,423
========= =========
The Company has taken advantage of the exemptions allowed under section
408 of the Companies Act 2006 and has not presented its income statement in
these financial statements. The Group profit for the year included a loss on
ordinary activities after tax of £5,082k (2022: £102k loss) in respect of
the Company.
The financial statements were approved by the Board and authorised for
issue on 25 March 2024.
James
Carter
David Joseph
CEO
CFO
Company registration number: 04606754
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share Share Share-based Retained deficit Total
Capital Premium payment
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 1,163 11,149 464 (349) 12,427
Loss after tax - - - (102) (102)
Issue of new shares 16 20 - - 36
Share-based payments - - 62 - 62
Reserves transfer in respect of lapsed options - - (330) 330 -
------------- ------------- ------------- ------------- -------------
Balance at 31 December 2022 1,179 11,169 196 (121) 12,423
------------- -------------- ------------- ------------- -------------
Loss after tax - - - (5,082) (5,082)
Share-based payments - - 46 - 46
Reserves transfer in respect of lapsed options - - (104) 104 -
------------- -------------- -------------- -------------- --------------
Balance at 31 December 2023 1,179 11,169 138 (5,099) 7,387
------------- -------------- ------------- ------------- -------------
The notes on pages 66 to 69 form part of the Company financial statements.
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
II. ACCOUNTING POLICIES
The separate financial statements of the Company are presented as required by
the Companies Act 2006. As permitted by the Act the separate financial
statements have been prepared in accordance with Financial Reporting Standard
101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable
accounting standards.
The company has taken advantage of the following disclosure exemptions under
FRS 101:
· the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2
Share-based Payment
· the requirements of paragraphs 62, B64(d), B64(e), B64(g),
B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and
B67 of IFRS 3 Business Combinations;
· the requirements IFRS 7 Financial Instruments: Disclosures;
· the requirements of the second sentence of paragraph 110 and
paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15
Revenue from Contracts with Customers;
· the requirements of paragraph 58 of IFRS 16, provided that the
disclosure of details of indebtedness required by paragraph 61(1) of Schedule
1 to the Regulations is presented separately for lease liabilities and other
liabilities, and in total;
· the requirement in paragraph 38 of IAS 1 'Presentation of
Financial Statements' to present comparative information in respect of: (i)
paragraph 79(a) (iv) of IAS 1, (ii) paragraph 73(e) of IAS 16 Property Plant
and Equipment and (iii) paragraph 118 (e) of IAS 38 Intangible Assets
· the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 40A
to 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements;
· the requirements of IAS 7 Statement of Cash Flows;
· the requirements of paragraphs 30 and 31 of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors;
· the requirements of paragraph 17 and 18a of IAS 24 Related Party
Disclosures; and
· the requirements in IAS 24 Related Party Disclosures to disclose
related party transactions entered into between two or more members of a
group, provided that any subsidiary which is a party to the transaction is
wholly owned by such a member.
Where required, equivalent disclosures are given in the group financial
statements of Digitalbox plc.
The principal accounting policies adopted are the same as those set out in
note 4 to the consolidated financial statements except as noted below:
Valuation of investments
Investments in subsidiaries are stated at cost less any provision for
impairment in value.
II. OPERATING PROFIT
The auditor remuneration for audit and other services is disclosed in note 8
to the consolidated financial statements.
The average number of employees of the company during the year was 5 (2022: 6)
and total staff costs were £477k (2022: £468k). Directors' remuneration is
disclosed in note 9 to the consolidated financial statements.
III. FIXED ASSET INVESTMENTS 31 December
2023
£'000
Subsidiary undertakings
Cost
Balance at 31 December 2022 and 31 December 2023 11,209
Provisions
Balance at 1 January 2023 -
Impairment charge for the year* (4,983)
--------------
Balance at 31 December 2023 (4,983)
--------------
Carrying value of investments 6,226
=======
At the year end the Company had the following subsidiaries:
Subsidiary name Class of shares Proportion of ownership Registered office
Digitalbox Publishing Limited Ordinary 100% Indirect Jubilee House, 92 Lincoln Road, Peterborough, PE1 2SN
Digitalbox Publishing (Holdings) Limited Ordinary 100% Direct Jubilee House, 92 Lincoln Road, Peterborough, PE1 2SN
Subsidiary name Principal activity
Digitalbox Publishing Limited Sale of digital advertising space
Digitalbox Publishing (Holdings) Limited Holding company
* In determining the required level of impairment on the investment held by
the Company in Digitalbox Publishing Limited, via its investment in Digitalbox
Publishing (Holdings) Limited, the directors considered the aggregate
contribution of the cash generating units held in that subsidiary, using the
same forecasts, Weighted average cost of capital and lifetime term as that
provided for the goodwill and intangible asset impairment assessment. This
demonstrated a required impairment of £4,983k.
IV. DEFERRED TAX
Total
£'000
Balance at 1 January 2023 -
Deferred tax charge for the year (17)
-------------
Balance at 31 December 2023 (17)
=======
The deferred tax provision comprises: 31 December
2023
£'000
Tax losses (17)
-------------
(17)
-------------
V. RECEIVABLES: due within one year 31 December 31 December
2023 2022
£'000 £'000
Amounts owed by group undertakings 1,177 1,261
Prepayments and accrued income 36 25
------------ ------------
1,213 1,286
===== =====
VI. CASH AND CASH EQUIVALENTS
31 December 31 December
2023 2022
£'000 £'000
Cash at bank and in hand - 1
------------- -------------
- 1
====== ======
VII. PAYABLES: amounts falling due within one year
31 December 31 December
2023 2022
£'000 £'000
Bank overdrafts and loans 38 -
Trade payables 8 10
Accruals 3 45
Other tax and social security 20 18
------------ ------------
69 73
====== ======
VIII. SHARE CAPITAL
Details of the Company's share capital can be found in Note 21 to the
consolidated financial statements.
IX. RESERVES
Full details of movements in reserves are set out in the company statement of
changes in equity. The following describes the nature and purpose of each
reserve within owners' equity:
Share premium: Amount subscribed for share capital in excess of nominal value.
Retained deficit: Cumulative net losses recognised in the company statement of
comprehensive income.
Share based payment reserve: Cumulative charges recognised in the company
statement of comprehensive income in relation to share based payments.
X. RELATED PARTY TRANSACTIONS
During the year, M Capital Investment Partners (Holdings) Limited billed £6k
(2022: £25k) to the Group, a company related by virtue of Martin Higginson, a
member of key management personnel for part of the year, having control over
the entity. As at 31 December 2023, £nilk (2022: £3k), was accrued as owing
to M Capital Investment Partners (Holdings) Limited. The balances stated here
were for transactions up to the point that Martin Higginson resigned as a
director and was therefore no longer a related party.
The key management personnel are considered to be the Board of Directors.
Their remuneration is disclosed in detail in note 9. Key management were
remunerated £431k in the year ended 31 December 2023 (2022: £406k).
The key management personnel have been provided with a total of 1,363,916
effective share options resulting in a charge of £46k in the period (2022:
£17k).
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