TIDMDNM
RNS Number : 9875M
Dianomi PLC
20 September 2023
Dianomi plc
("Dianomi", the "Company" or the "Group")
Interim Results
Dianomi, a leading provider of native digital advertising
services to premium clients in the Business, Finance and Lifestyle
sectors, announces its unaudited interim results for the six months
ending 30 June 2023.
Financial Headlines
-- Revenue decreased 17.6% to GBP14.8 million (H1 2022: GBP18.0
million) reflecting decline in traffic volumes across the Group's
direct publisher inventory
-- Gross margin of 20.9% (H1 2022: 27.9%) as a result of the
contract amendment with a major publisher partner as announced
separately today
-- Adjusted loss at EBITDA* level of GBP1.0 million (H1 2022: profit of GBP1.1 million)
-- Adjusted loss per share** of 4.69 pence per share (H1 2022: profit of 3.55 pence per share)
-- As at 30 June 2023 the Company had no borrowings and cash of
GBP7.1 million (31 December 2022: cash of GBP11.7 million, 30 June
2022: GBP10.4 million), a reflection of working capital movements,
restructuring costs and forex.
Operating Headlines
-- Strong retention of publishers and advertisers with churn
rates for advertisers and publishers remaining low
-- New premium advertisers and publishers continuing to join the platform
-- Mindful of a challenging environment, the Group has
reorganised its management and sales teams and reduced its cost
base on an annualised basis by GBP1 million
-- Programmatic continues to yield promising results with
revenues of GBP0.4m, up 6x compared to the same period last
year
-- Growth in Lifestyle vertical with integration into full publisher distribution underway
-- Partnership with CNN Business as exclusive content
recommendation partner now firmly embedded and CNN Business now
ranks as Dianomi's top publisher with further scope for growth
-- On average there are 0.4 billion readers per month across
Dianomi's premium financial publications
Outlook:
-- Benefits of cost saving plan coming through
-- Market conditions still difficult but expect to be profitable in H2
-- Continued evolution into a full format advertising platform
offering premium brands and agencies a single point of access to ad
buying
Rupert Hodson, Chief Executive Officer of Dianomi, said :
"We are mindful of an environment that continues to be
challenging and the need to adapt. The Group's operational cost
base has been streamlined and optimised following the restructuring
of the Group's global management and sales teams, resulting in an
annualised cost reduction of GBP1 million. However, in spite of a
difficult backdrop, I am pleased to report that Dianomi continues
to attract new clients and now counts all 10 of the top 10 US asset
managers as clients. Our expansion into programmatic is delivering
and we continue to attract new premium clients to the platform as
well as focusing on the scalability of our service within our
existing top accounts. We are expanding our range of ad products to
present a compelling offer to our clients. I am confident that in
spite of macro-economic headwinds we are well placed to capitalise
on the opportunity ahead."
* Adjusted EBITDA is calculated as loss or profit after tax
before deducting net finance costs, tax, depreciation, exceptional
items and share based payment charges
** Adjusted to exclude exceptional costs related to the
restructuring and share based payments .
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").
For further information contact:
Dianomi Tel: +44 (0)207 802 5530
Rupert Hodson (Chief Executive Officer)
Charlotte Stranner (Chief Financial Officer)
Panmure Gordon (NOMAD and Broker) Tel: +44 (0)207 886 2500
Emma Earl/ Freddy Crossley, Corporate Finance
Rupert Dearden, Corporate Broking
Novella Communications Tel: +44 (0)203 151 7008
Tim Robertson / Safia Colebrook/Claire de Groot
dianomiplc@novella-comms.com
About Dianomi
Dianomi, established in 2003, is a leading provider of native
digital advertising services to premium clients in the Business,
Finance and Lifestyle sectors. The Group operates from its offices
in London, New York and Sydney. The Group enables premium brands to
deliver native advertisements to a targeted audience on the desktop
and mobile websites, mobile and tablet applications of premium
publishers. It provides over 300 advertisers, including blue chip
names such as abrdn, Invesco and Baillie Gifford, with access to an
international audience of over 400 million devices per month
through its partnerships with over 300 premium publishers,
including blue chip names such as Reuters, CNN Business, the Times
and WSJ. Adverts served are contextually relevant to the content of
the webpages on which they appear and mirror the style of the page,
which enhances reader engagement .
Chief Executive's Statement
Introduction
Dianomi is evolving from a native ad platform, focused within
business and finance, to a full format advertising platform. We aim
to be a privacy first platform offering premium brands and agencies
a single point of access to ad buying across the world's premium
publishers. This year we have reorganised our management and sales
teams to optimise our structure to drive sales growth and enhance
profitability. Dianomi has invested in expanding its programmatic
capacity, in addition to developing ad products such as video and
polls whilst ensuring that it has the right team in place to
deliver.
Operating Review
A decline in traffic volumes has been a key challenge for
publishers in 2023 and Dianomi is not immune to this trend with
traffic levels across Dianomi's key publisher partners down by
between 10% to 30%. As we discussed at the time of our trading
statement in July, whilst demand from our advertiser base has
remained consistent this reduced traffic affects our ability to
generate revenue from the adverts that we place. Dianomi's total
impressions were down by 7.4% year on year. Revenue per click
("RPC") was also down by 17% year on year due to an increase in
Apple News publishers which tend to command lower RPCs.
However, retention of both publishers and advertisers remains a
key strength. The number of advertisers that we worked with was
stable at 288 in H1 (H1 2022: 295) and our publisher base was also
broadly unchanged at 309 (H1 2022: 316). This is testament to the
differentiated platform and products that we are able to provide to
our clients.
We continue to attract premium names to the platform, welcoming
55 new advertisers during the period including Natixis Investment
Management and First Horizon Bank. Our partnership with CNN
Business as exclusive content recommendation partner is well
embedded and they now rank as our top publisher with further
opportunities to scale. Certain new publisher partnerships did not
materialise as originally expected in H1 this year which impacted
our ability to grow but post period end new partnerships have gone
live and we have a strong pipeline of future opportunities.
We continue to focus on driving scale with our core existing
advertisers and direct publisher inventory, expanding existing
relationships. We announced today an amendment to a contract with
one of our top publishers, which, while it has a short term impact
on profitability, provides us with additional ad inventory,
including an in-article unit through which we can serve our
enhanced suite of ad products, giving us the ability to generate
enhanced revenues.
We are further developing our programmatic distribution
capability and our programmatic revenue grew 6x in the six months
to 30(th) June 2023 to GBP0.4 million, albeit from a low base (H1
2022: GBP0.07 million). This allows us to capitalise on further
demand from our premium advertisers and scale their budgets via the
Company's trusted and brand safe platform.
We have taken a strategic decision to open up our lifestyle
vertical and place premium lifestyle advertising alongside
financial content whereas historically lifestyle and financial
clients were treated separately. Commencing in the second half of
2023, selective lifestyle ads will appear across our financial
publisher inventory. The change of strategy has been driven by
demand and reflects the interests of audiences in both business and
leisure.
Our operational cost base has been significantly reduced
following the restructuring of our sales and management teams. In
March this year, Raphael Queisser and Cabell de Marcellus stepped
down from the board and from their day to day roles. In April Ken
Johnston rejoined Dianomi to spearhead the global sales team. This
reorganisation has resulted in a reduction of cost of GBP1 million
on an annualised basis. The Group continues to carefully scrutinise
its cost base whilst ensuring that it invests sufficiently in
future growth.
Financial Review
Group revenue decreased by 17.6 % to GBP 14.8 million (H1 2022:
GBP 18.0 million) in the six months to 30 June 2023 due to the
decline in traffic volumes and decrease in revenue per click as
highlighted above.
Gross margin decreased to 20.9 % (H1 2022: 27.9%) due to the
additional cost of sale incurred as a result of the contract
amendment with one of the Group's largest customers as detailed
above. Without this one-off cost of GBP0.8 million, gross margin
would have been 26.6%, with the decrease vs the prior period being
due to a larger contribution from CNN Business which is now the
Group's largest publisher on a gross revenue basis. As a result,
and combined with the decrease in revenues, gross profit for the
period of GBP 3.1 million showed a decrease of GBP1.9 million
compared to the prior year period (H1 20 22: GBP5.0 million).
The Group generated a loss at adjusted EBITDA* level of GBP1.0
million compared to a profit of GBP1.1 million in the six months to
30 June 2022. The loss is as a result of lower revenues and gross
profit explained above, combined with higher IT related costs as a
result of the Group's transition from a hosted data centre solution
to Amazon Web Services ("AWS"). Though there were initial costs
associated with the transition, it has resulted in a more
cost-efficient, flexible and scalable solution going forward.
During the period, as noted above, the Group also underwent a
restructuring, resulting in various people leaving the business,
and a more appropriate cost base going forward. However, there were
exceptional costs amounting to GBP0.8 million (H1 2022: GBPnil)
associated with the restructuring, relating to consultancy, legal
and employee settlement costs. There will be further exceptional
costs of c.GBP0.2 million relating to the restructuring recognised
in H2.
Basic loss per share was 7.80 pence per share compared to a
basic profit per share of 2.71 pence H1 20 22. Adjusted loss per
share** of 4.69 pence compared to an adjusted profit per share **
of 3.55 pence in H1 2022.
Cashflow in the period was impacted by the unwinding of the
working capital benefit recognised at the end of the year, the
delay in receipt of certain overdue debtor balances amounting to c.
GBP1.2 million (received shortly after the period end), one-off
restructuring costs of GBP0.8 million and foreign exchange movement
as a result of the strengthening of the pound against the dollar
during the period. There will be a short-term impact on cash of
c.GBP0.5 million in the current financial year as a result of the
contract amendment detailed above which will unwind during 2024
.
Cash used in operations was GBP3.4 million due to the costs
relating to the restructuring, the one-off additional cost of sale
and a decrease in trade and other payables of GBP1.9 million (H1
2022: cash used in operations of GBP0.6 million). Cash conversion
is expected to improve in the second half of the year as the
company returns to profitability .
Net assets as at 30 June 23 amounted to GBP9.0 million (31
December 2022: GBP11.8 million, 30 June 2022: GBP11.9 million),
with the decrease compared to the year and prior period ends
reflecting the decrease in cash. As at 30 June 2023 the Company had
no borrowings and cash of GBP7.1 million (31 December 2022: GBP11.7
million, 30 June 2022: GBP10.4 million ) with the decrease in cash
reflecting the factors detailed above.
Outlook
While our markets are evolving so too is Dianomi. We are
pursuing our plan to evolve into a full format advertising platform
offering premium brands and agencies a single point of access to ad
buying across the world's leading publishers aimed at generating
increased and more predictable levels of revenue. We have the teams
and products in place to achieve this goal whilst also continuing
to drive our core native advertising platform attracting new
advertisers and publishers.
We expect improvements in profitability as we move into the
second half of the year, as cost savings from restructuring begin
to feed through in addition to the enhanced revenue share from one
of our major publisher partners. That said, while it is likely that
our markets will remain challenging in the short term, the business
has a solid financial base and a clear focus on the path to driving
future sales and profitability.
(*) Adjusted EBITDA is calculated as profit after tax before
deducting net finance costs, tax, depreciation, exceptional items
relating to the restructuring and share based payment charges
(**) Adjusted basic earnings per share is calculated using
profit after tax before deducting exceptional items relating to the
restructuring and share based payment charges
DIANOMI PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
SIX MONTHSED 30 JUNE 2023
6 months Year
ended 6 months ended ended
30 Jun 2023 30 Jun 2022 31 Dec 2022
GBP000 GBP000 GBP000
Note
Revenue 14,841 18,006 35,915
Cost of sales (11,734) (12,978) (26,127)
--------------------------------------------------- --------------------------------------------------- -------------------------------------------------------
Gross profit 3,107 5,028 9,788
Administrative
expenses (5,201) (4,132) (8,981)
Other gains and
losses - - 136
Other income - - 167
---------------------------------------------------- ----------------------------------------------- -----------------------------------------------------
Operating
(loss)/profit (2,094) 896 1,110
Depreciation 107 - 107
Share based
payments 7 145 250 526
Exceptional
items 8 822 - -
Other income - (167)
----------------------------------------------- ----------------------------------------------- ----------------------------------------------------
Adjusted EBITDA (1,020) 1,146 1,576
Finance income 44 2 41
Finance expense (2) (1) (4)
------------------------------------------------- ----------------------------------------------- -----------------------------------------------------
(Loss)/profit
on ordinary
activities
before
taxation (2,052) 897 1,147
Taxation (289) (83) (662)
------------------------------------------------- --------------------------------------------- -----------------------------------------------------
(Loss)/profit for
the period (2,341) 814 485
Other comprehensive
(loss)/income
items that may be
reclassified
subsequently to
profit or
loss
Currency
translation
differences (544) 677 651
------------------------------------------------- ------------------------------------------------- ---------------------------------------------------
Total
comprehensive
(loss)/income
for the period
attributable
to the owners of
the company (2,885) 1,491 1,136
================================================= ================================================= ==================================================
Adjusted basic
(loss)/earnings
per ordinary
share (p) 6 (4.69) 3.55 2.58
Adjusted diluted
(loss)/earnings
per ordinary
share (p) 6 (4.69) 3.21 2.34
Basic
(loss)/earnings
per
ordinary share
(p) 6 (7.80) 2.71 1.62
Diluted
(loss)/earnings
per
ordinary share
(p) 6 (7.80) 2.46 1.46
All operations are continuing operations .
DIANOMI PLC
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30
JUNE 2023
As at As at 30 As at 31
30 Jun Jun Dec
2023 2022 2022
GBP000 GBP000 GBP000
Non-current assets
Right-of-use
assets 106 - 213
--------------------------------------------------- --------------------------------------------------- ---------------------------------------------------
Total
non-current
assets 106 - 213
Current assets
Trade and
other
receivables 7,593 7,207 7,874
Deferred tax
asset 675 675 675
Cash and cash
equivalents 7,089 10,446 11,663
------------------------------------------------------ ------------------------------------------------------ ---------------------------------------------------
Total current
assets 15,357 18,328 20,212
Total assets 15,463 18,328 20,425
Current
liabilities
Trade and
other
payables (6,281) (6,100) (8,048)
Corporation
tax payable (24) (362) (371)
Lease
liabilities (111) - (219)
------------------------------------------------------ ----------------------------------------------------- ------------------------------------------------------
Total current
liabilities (6,416) (6,462) (8,638)
----------------------------------------------------- ----------------------------------------------------- -----------------------------------------------------
Total
liabilities (6,416) (6,462) (8,634)
==================================================== ==================================================== ====================================================
Net assets 9,047 11,866 11,787
==================================================== ==================================================== ====================================================
Equity
Share capital 60 60 60
Share premium
account 5,436 5,436 5,436
Share options
reserve 3,525 3,104 3,380
Foreign
currency
reserve (405) 165 139
Capital
redemption
reserve - - -
Retained
earnings 431 3,101 2,772
==================================================== ==================================================== ====================================================
Total equity
attributable
to
the
owners of the
company 9,047 11,866 11,787
==================================================== ==================================================== ====================================================
DIANOMI PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 30
JUNE 2023
Attributable to the owners of the Company
Capital Share Foreign
Share Share premium redemption options currency Retained Total
capital account reserve reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------------------- ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ----------------------------------------------- ------------------------------------------------
Balance at 1
January
2023 60 5,436 - 3,380 139 2,772 11,787
----------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------- ------------------------------------------------
Comprehensive
loss
for the period
Loss for the
period - - - - - (2,341) (2,341)
Currency
translation
differences - - - - (544) - (544)
----------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------- ------------------------------------------------
Total
comprehensive
loss for the
period - - - - (544) (2,341) (2,855)
----------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ------------------------------------------------
Transactions
with
owners of the
Company
Share based
payment
credit - - - 145 - - 145
----------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ------------------------------------------------- ------------------------------------------------
Total
transactions
with owners
of the
Company - - - 145 - - 145
----------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ------------------------------------------------- ------------------------------------------------
Balance at 30
June
2023 60 5,436 - 3,525 (405) 431 9,047
----------------------------------------- --------------------------------------------------- ----------------------------------------- --------------------------------------------------- --------------------------------------------------- ------------------------------------------------ ----------------------------------------------
----------------------------------------- ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ----------------------------------------------- ------------------------------------------------
Balance at 1
January
2022 60 5,436 - 2,854 (512) 2,287 10,125
----------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------- ------------------------------------------------
Comprehensive
loss
for the period
Loss for the
period - - - - - 814 814
Currency
translation
differences - - - - 677 - 677
----------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------- ------------------------------------------------
Total
comprehensive
loss for the
period - - - - 677 814 1,491
----------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ------------------------------------------------
Transactions
with
owners of the
Company
Share based
payment
credit - - - 250 - - 250
----------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ------------------------------------------------- ------------------------------------------------
Total
transactions
with owners
of the
Company - - - 250 - - 250
----------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ------------------------------------------------- ------------------------------------------------
Balance at 30
June
2022 60 5,436 - 3,104 165 3,101 9,080
----------------------------------------- --------------------------------------------------- ----------------------------------------- --------------------------------------------------- --------------------------------------------------- ------------------------------------------------ ----------------------------------------------
----------------------------------------- ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ----------------------------------------------- ------------------------------------------------
Balance at 1
January
2022 60 5,436 - 2,854 (512) 2,287 10,125
----------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------- ------------------------------------------------
Comprehensive
income
for the period
Loss for the
period - - - - - 485 485
Currency
translation
differences - - - - 651 - 651
----------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ----------------------------------------------- ------------------------------------------------
Total
comprehensive
income for
the period - - - - 651 485 1,136
----------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ------------------------------------------------
Transactions
with
owners of the
Company
Share-based
payment
credit - - - 526 - - 526
----------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ------------------------------------------------- ------------------------------------------------
Total
transactions
with owners
of the
Company - - - 526 - - 526
----------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ------------------------------------------------- ------------------------------------------------
Balance at 31
December
2022 60 5,436 - 3,380 139 2,772 11,787
----------------------------------------- --------------------------------------------------- ----------------------------------------- --------------------------------------------------- --------------------------------------------------- ------------------------------------------------ ----------------------------------------------
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months Six months Year
ended ended ended 31
30 Jun 2023 30 Jun 2022 Dec 2022
GBP000 GBP000 GBP000
Cash flows from operating activities
(Loss)/profit on ordinary activities
before taxation (2,052) 897 1,147
Adjustments for:
Depreciation - leased assets 107 - 107
Interest payable 2 1 4
Interest receivable (44) (2) (41)
Decrease/ (increase) in trade
and other receivables 281 187 (478)
(Decrease)/increase in trade
and other payables (1,874) (1,980) 185
Other income - - (167)
Share based payment charge 145 250 526
------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------
Cash (used
in)/generated from
operations (3,435) (647) 1,283
Taxation
received/(paid) (621) 119 (269)
------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------
Net cash (used
in)/generated
from operating
activities (4,056) (528) 1,014
====================================================== ====================================================== ======================================================
Cash flows from investing activities
Interest
received 44 2 41
------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------
Net cash
generated
from
investing
activities 44 2 41
====================================================== ====================================================== ======================================================
Cash flows from financing activities
Interest
paid - (1) -
Interest
paid in
respect of
leases (2) - (4)
Capital
payments
in respect
of leases (111) - (106)
------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------
Net cash
used in
financing
activities (113) (1) (110)
====================================================== ====================================================== ====================================================
Net
(decrease)/
increase in
cash and
cash
equivalents (4,125) (527) 945
Cash and
cash
equivalents
at
beginning
of period 11,663 10,278 10,278
Exchange
movement on
cash (449) 695 440
------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------
Cash and
cash
equivalents
at
end of
period 7,089 10,446 11,663
====================================================== ====================================================== ======================================================
DIANOMI PLC
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. General information
Dianomi plc (the "Company") and its subsidiaries' (together the
"Group") principal activity is the delivery of premium native
advertising for the financial services, technology, corporate sand
lifestyle sectors. The Company was incorporated on 16 August 2002
in England and Wales as a private company limited by shares under
the name Data-ID Limited. On 17 December 2002, the Company changed
its name to Dianomi Limited. On 17 May 2021, the Company
re-registered as a public limited company and changed its name to
Dianomi plc.
The address of the registered office is 6(th) Floor, 60
Gracechurch Street, London, EC3V 0HR and the limited company number
is 04513809.
2. Basis of preparation and significant accounting policies
2.1. Basis of preparation
The financial information relating to the half year ended 30
June 2023 is unaudited and does not constitute statutory financial
statements as defined in section 434 of the Companies Act 2006.
The financial information set out in this Interim Report does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 31 December 2022, prepared under IFRS, have been
filed with the Registrar of Companies. The auditor's report on
those financial statements was unqualified and did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006.
The interim financial information has been prepared in accordance
with the recognition and measurement principles of International
Financial Reporting Standards (IFRS) and on the same basis and
using the same accounting policies as used in the financial
statements for the year ended 31 December 2022, subject to the
introduction of any new accounting standards applicable in the
period.
Whilst the financial information included in these interim
accounts has been prepared in accordance with IFRS, they do not
contain sufficient information to comply with IFRS. In addition,
this report is not prepared in accordance with IAS 34.
This interim report was approved by the board of directors on 19
September 2023 and is available on the Company's website,
dianomi.com
The presentational currency of these financial statements and
the functional currency of the Group is pounds sterling.
2.2. Measurement convention
The consolidated financial information has been prepared under
the historical cost convention. Historical cost is generally based
on the fair value of the consideration given in exchange for
assets.
The preparation of the consolidated financial information in
compliance with IFRS requires the use of certain critical
accounting estimates and management judgements in applying the
accounting policies. The significant estimates and judgements that
have been made and their effect is disclosed in note 3.
2.3. Basis of consolidation
The consolidated financial information incorporates the
financial information of Dianomi Plc and all of its subsidiary
undertakings. Subsidiary undertakings include entities over which
the Group has effective control. The Group controls a group when it
is exposed to, or has right to, variable returns from its
involvement with the Group and has the ability to affect those
returns through its power over the Group. In assessing control, the
Group takes into consideration potential voting rights.
2.4. Going concern
The Directors have, at the time of approving the interim report,
a reasonable expectation that the Company and the Group have
adequate resources to continue in operation for the foreseeable
future. As at 30 June 2023 the Group had net assets of GBP9.0
million (30 June 2022: GBP11.9 million) and cash and cash
equivalents of GBP7.1 million (30 June 2022: GBP10.45 million). The
Group has no debt outstanding or facilities in place (30 June 2022:
GBPnil).
In March 2023, the Federal Deposit Insurance Corporation
announced that it had been appointed receiver to SVB Financial
Group ("SVB") and the Bank of England announced that it intended to
apply to the Court to place Silicon Valley Bank UK Limited
('SVBUK') into a Bank Insolvency Procedure. At the time of the
announcements, Dianomi had GBP3.9 million in deposits across SVB
and SVBUK. Shortly thereafter SVBUK was acquired by HSBC UK Bank
Plc and the Federal Deposit Insurance Corporation ("FDIC") and
other regulators guaranteed all depositors in SVB, with First
Citizens Bank subsequently acquiring Silicon Valley Bridge Bank,
N.A. from the FDIC, meaning that all deposits were safe and
secure.
2.5. Principal Accounting Policies
2.5.1.1. Revenue
The Group's customers are direct advertisers, affiliate
advertisers and advertising agencies with whom the Group will enter
into a contract or insertion order.
The Group generates revenue by charging advertisers for
advertising campaigns delivered through its platform. The
customer's total spend on advertising is determined by multiplying
an agreed performance metric option, such as cost per mil (CPM),
cost per impression (CPI), click (CPC) or action (CPA) with the
volumes of units delivered.
Revenue is recognised on completion of the performance criteria
which, in most cases, is when an internet user clicks through to an
advertisement that has been displayed on a web page.
Where advanced payments are made in advance of satisfying the
performance obligation, these amounts are transferred to deferred
revenue (contract liabilities) and recognised when the performance
obligation has been met.
The Group's standard payment terms require settlement of
invoices within 60-90 days of receipt.
The Group does not adjust the transaction price for the time
value of money as it does not expect to have any contracts where
the period between the transfer of the promised services to the
client and the payment by the client exceeds one year.
.
2.5.1.2. Cost of sales
Cost of sales represents the direct expenses that are
attributable to the services sold. They consist primarily of
payments to publishers under the terms of the revenue share
agreements that the Group has with them. Depending on the terms of
the revenue share agreements, cost of sales can include commissions
where applicable.
2.5.1.3. Foreign currency translation
a) Function and presentational currency
Items included in the financial information of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional
currency'). The consolidated financial information is presented in
'sterling', which is the Group's functional currency and the
Group's presentation currency.
On consolidation, the results of overseas operations are
translated into sterling at rates approximating to those ruling
when the transactions took place. All assets and liabilities of
overseas operations are translated at the rate ruling at the
reporting date. Exchange differences arising on translating the
opening net assets at opening rate and the results of overseas
operations at actual rate are recognised in other comprehensive
income.
b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income
statement.
2.5.1.4. Exceptional Costs
Items which are material because of their size or nature and
which are non-recurring are highlighted separately on the face of
the consolidated statement of comprehensive income. The separate
reporting of exceptional items helps provide a better picture of
the Group's underlying performance. Items which have been included
within the exceptional category are the costs relating to the
restructuring undertaken by the Company during 2023.
Exceptional items are excluded from the headline profit measures
used by the Group and are highlighted separately in the
consolidated statement of comprehensive income as management
believes that they need to be considered separately to gain an
understanding the underlying profitability of the trading
businesses.
2.5.1.5. Employee Benefits
Post-retirement benefits
The Group operates a defined contribution plan for its
employees. A defined contribution plan is a pension plan under
which the Group pays fixed contributions into a separate entity.
Once the contributions have been paid the Group has no further
payment obligations.
The contributions are recognised as an expense in administrative
expenses in the Consolidated Statement of Comprehensive Income when
they fall due. Amounts not paid are shown in accruals as a
liability in the Statement of Financial Position. The assets of the
plan are held separately from the Group in independently
administered funds.
Share based payments
Where share options are awarded to employees, the fair value of
the options at the date of grant is charged to profit or loss over
the vesting period. Non-market vesting conditions are taken into
account by adjusting the number of equity instruments 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.
The fair value of the award also takes into account non-vesting
conditions. These are either factors beyond the control of either
party (such as a target based on an index) or factors which are
within the control of one or other of the parties (such as the
group keeping the scheme open or the employee maintaining any
contributions required by the scheme).
Where the terms and conditions of options are modified before
they vest, the increase in the fair value of the options, measured
immediately before and after the modification, is also charged to
profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than
employees, profit or loss is charged with fair value of goods and
services received.
2.6. Alternative performance measures
In order to provide better clarity to the underlying performance
of the Group, adjusted EBITDA and adjusted earnings per share are
used as alternative performance measures. These measures are not
defined under IFRS. These non-GAAP measures are not intended to be
a substitute for, or superior to, any IFRS measures of performance,
but have been included as the Directors consider adjusted EBITDA
and adjusted earnings per share to be a key measures used within
the business for assessing the underlying performance of the
Group's ongoing business across periods. Adjusted EBITDA excludes
from operating profit non-cash depreciation and share based payment
charges and non-recurring exceptional costs. Adjusted EPS excludes
from profit after tax, share based payment charges and
non-recurring exceptional items and their related tax impacts.
3. Judgements and key sources of estimation uncertainty
The preparation of the consolidated financial information
requires the Directors to make estimates and judgements that affect
the reported amounts of assets, liabilities, costs and revenue in
the consolidated financial information. Actual results could differ
from these estimates. The judgements, estimates and associated
assumptions are based on historical experience and other factors
that are considered to be relevant.
The judgements and key sources of estimation uncertainty that
have a significant effect on the amounts recognised in the
consolidated financial information are:
Estimations:
- Share-based payments: the Group measures the cost of
equity-settled transactions with employees by reference to the fair
value of equity instruments at the date at which they are granted.
The fair value is determined by using the Black-Scholes model
taking into account the terms and conditions upon which the
instruments were granted and requires assumptions to be made in
particular the value of the shares at the date of options granted.
Management have had to apply judgement when selecting
assumptions.
- Receivables provision: the Group reviews the amount of credit
loss associated with its trade receivables, intercompany
receivables and other receivables based on historical default rates
as well as forward looking estimates that consider current and
forecast credit conditions.
Judgements :
- Deferred tax: the extent to which deferred tax assets can be
recognised is based on an assessment of the probability that future
taxable income will be available against which the deductible
temporary differences and tax loss carry-forwards can be utilised.
In addition, significant judgement is required in assessing the
impact of any legal or economic limits or uncertainties.
- Going concern: The financial statements have been prepared on
the going concern basis based on a judgement by the Directors that
the Group will continue to be able to meet its liabilities as they
fall due for the foreseeable future, being a period of at least 18
months from the date of signing these financial statements. In this
context, the Directors have prepared detailed cash flow forecasts
for the next 18 months that indicate the existing activities of the
Group do not require additional funding during that period. The
forecasts were challenged by various downside scenarios to stress
test the estimated future cash position. The Directors note that
the stress tests did not have a significant impact on the cash flow
or cash position of the Group. In addition, current trading is in
line with the forecast.
4. Revenue
Revenue arises from:
6 months
6 months to to Year to
30 Jun 30 Jun 31 Dec
2023 2022 2022
GBP000 GBP000 GBP000
EMEA 2,328 3,101 6,591
APAC 466 544 1,007
U.S.A. 12,047 14,361 28,317
====================================================== ====================================================== ======================================================
14,841 18,006 35,915
====================================================== ====================================================== ======================================================
5. Operating segments
The Group is operated as one global business by its executive
team, with key decisions being taken by the same leaders
irrespective of the geography where work for clients is carried
out. The Directors consider that the geographies where the Group
operates have similar economic and operating characteristics and
the products and services provided in each region are all related
to premium native advertising . Management therefore consider that
the Group has one operating segment. The Group report is presented
and measured to the Board as a single segment and is consistent
with the financial statements. As such, no additional disclosure
has been recorded under IFRS.
6. Earnings per share
The Group presents non-adjusted and adjusted basic and diluted
earnings/loss per share (EPS) for its ordinary shares. Basic EPS is
calculated by dividing the profit/loss for the period attributable
to ordinary shareholders by the weighted average number of ordinary
shares outstanding during the period.
Diluted EPS takes into consideration the Company's dilutive
contingently issuable shares. The weighted average number of
ordinary shares used in the diluted EPS calculation is inclusive of
the number of share options that are expected to vest subject to
performance criteria as appropriate, being met.
The profit/(loss) and weighted average number of shares used in
the calculations are set out below:
Six months Six months Year
ended ended ended
30 Jun 23 30 Jun 31 Dec 2022
22
GBP000 GBP000 GBP000
(Loss)/profit attributable
to the ordinary equity holders
of the Group used in calculating
basic and diluted EPS (2,341) 814 485
Basic (loss)/earnings per
ordinary share (p) (7.80) 2.71 1.62
Diluted (loss)/earnings per
ordinary share (p) (7.80) 2.46 1.46
Six months Six months
ended ended Year
30 Jun 30 Jun ended
23 22 31 Dec 22
Adjusted basic GBP000 GBP000 GBP000
and diluted EPS
Reconciliation
of earnings used
in calculating
adjusted EPS:
(Loss)/profit
attributable to
the ordinary
equity holders of
the Group used in
calculating
basic and diluted
EPS (2,341) 814 485
Adjusting items:
Share based
payments 145 250 526
Other income - - (167)
Exceptional items 822 - -
Tax impact of
adjusting items (34) - (68)
====================================================== ====================================================== ======================================================
(Loss)/profit
attributable to
the ordinary
equity holders of
the Group used in
calculating
adjusted basic
and diluted EPS (1,408) 1,064 776
Adjusted basic
(loss)/earnings
per ordinary
share (p) (4.69) 3.55 2.58
Adjusted diluted
(loss)/earnings
per ordinary
share (p) (4.69) 3.21 2.34
Six months Six months Year
ended ended ended
30 Jun 23 30 Jun 22 31 Dec 22
Weighted
average
number of
ordinary
shares used
as the
denominator
in
calculating
non-adjusted
and adjusted
basic
EPS 30,027,971 30,027,971 30,027,971
Weighted share
option
dilution
impact 3,189,063 3,151,686 3,184,268
====================================================== ====================================================== ======================================================
Weighted
average
number of
ordinary
shares used
as the
denominator
in
calculating
non-adjusted
and adjusted
diluted
EPS 33,217,034 33,179,657 33,212,239
7. Share based payments
The Group operates an equity-settled share based remuneration
scheme for employees. All employees are eligible to participate in
the long term incentive scheme and the vesting conditions are both
time and performance based.
On admission to trading on AIM in May 2021, new option schemes
were established.
A total of 242,424 options were granted under these new option
schemes during the period with an exercise price of 82.5p, being
the closing mid-market price the day before grant. 208,487 options
lapsed during the period.
The Black-Scholes option pricing model was used to value the
equity-settles share-based payment awards as it was considered that
this approach would result in materially accurate estimate of the
fair value of the options granted.
The inputs into the model for the period were as follows:
Option Scheme
---------------------------- -------------------------------------
Weighted average share price at
grant date (GBP) 2.68
Weighted average exercise price
(GBP) 2.68
Volatility (%) 44.00%
Weighted average vesting period
(years) 3
Risk free rate (%) 5.04%
Expected dividend yield (%) -
------------------------------------ -----------------------------
The share-based remuneration expense comprises:
As at 30 As at 30 As at 31
Jun 2023 Jun 2022 Dec 2022
GBP000 GBP000 GBP000
Equity-settled
schemes 145 250 526
========================================== ========================================== ==========================================
8. Exceptional items
Items which have been included within the exceptional category
are the costs relating to the restructuring undertaken by the
Company during 2023 and include settlement payments and legal
costs.
As at 30 As at 30 As at 31
Jun 2023 Jun 2022 Dec 2022
GBP000 GBP000 GBP000
Restructuring
costs 822 - -
========================================== ========================================== ==========================================
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END
IR FZGMLGLDGFZZ
(END) Dow Jones Newswires
September 20, 2023 02:00 ET (06:00 GMT)
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