Digitalbox plc (DBOX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Digitalbox plc Interim Results for the Period Ended 30th June 2021 Investor Presentation. [Operator Instructions] I would also like to remind you that this presentation is being recorded. Before we begin, I'd like to submit the following poll. And now I'd like to hand you over to CEO, James Carter. Good morning to you.

Good morning. Sorry, I was just filling in the poll to submit, yes, right. I can now see the screen. Thank you very much for joining us for the 2021 interim results presentation. We think they're a pleasing set of results. So hopefully, we can take you through those in detail shortly. I'm joined by Jim Douglas. Hopefully, you can see us with cameras on. Jim waving there and David Joseph -- Jim Douglas, sorry, sorry, COO; David Joseph, our CFO. My first task is to take you through a little bit more about the business, but I think we're going to switch our cameras off, first of all, to ensure that you get maximum screen size throughout the presentation. So that us disappeared. You can memorize our images, and we'll be back on the screen later. So first slide really is just to introduce a little bit more about Digitalbox. Digitalbox is a pure-play digital media company, and we have a pedigree in emerging publishing technologies over the last few years, having sprung from an ag tech business into a media business in our early days. We're 100% digitally focused. We don't have any print assets or any legacy-type formats that we focus on and really only look towards the future in terms of our publishing model. And we have a strategy to acquire, transform and grow digital media properties through the overlay of our methodologies and our platform as we expand the business. And what's key at the bottom of that slide really is, we are market-leading in our sectors. We're mobile-first, but chiefly, we are a profitable growing business, and profitability is key to our growth. How we operate and what we do? We own 3 media brands, 3 websites. One called Entertainment Daily, which is a TV showbiz, celebrity news site; another called The Daily Mash, which is the U.K.'s biggest news satire site; and the third, which we acquired last October, called The Tab, which is the U.K.'s biggest youth, student community site with over 6 million unique users averaging each month. Now we operate these websites from a technical point of view and a platform point of view, and we also operate them from a content point of view. So our content teams populate these sites with compelling content that is pushed out to our audience and they engage with, and these audiences then come back and visit our website. We then monetize those visits to our website through a mixture of advertising and e-commerce solutions that serve them realtime through something most commonly called header bidding, which is an open auction that allows advertisers to compete for the particular eyeball that's there at that one moment in real time. We run an extremely agile operating setup. The last year was a challenge in some respects, but it wasn't an operational challenge for us. So the last 1.5 years, obviously, with the early days of COVID presented some advertising market challenges, but in terms of how quickly the team adapted, it really didn't take us very long at all. And I think that says quite a lot about our business model. The fact that we encourage remote working where it's appropriate. We can scale up and scale down where we need to. And we can place resource exactly where it needs to be to get the biggest bang for our buck in terms of profitability and traction in terms of audiences. So our agile model is key to our success. Just to take you through the content that we aim to present to you this morning. It should last about 30 minutes. And as was indicated, there will be an opportunity for questions at the end. I'll take you through the leadership team, and Jim and David will contribute there as well. But David Joseph will take you through in detail the numbers, the financial results for H1. Myself and Jim Douglas will take you through the period, which we've seen as an integration and growth period really, and some of the brand highlights that have sprung from that. And I will summarize with how we aim to go forward into the future. So firstly, myself. My background is varied. I used to work at a company called EMAP PLC, which was once a FTSE 100 business and works on a brand, which I, in fact, worked on with our Chairman, Marcus Rich, called FHM, which grew really from a 50,000 selling weekly magazine or bimonthly magazine in the U.K. to a global business worth over GBP 250 million. So it's quite some business at its peak. I then went to work for a guy called Felix Dennis, an independent maverick publisher and led their new product development whilst I was there. And he in many ways encouraged me to sort of go beyond and do some more significant things. And I raised some money with some former colleagues from EMAP to create Factory Media, which was, at the time, Europe's largest action sports publisher. We raised GBP 3.5 million through VCT equity and then later sold the business for GBP 12.5 million. And I then got involved in Digital Box. So over to you, Jim.

Good morning, everyone. Yes, like James, I also started my career at EMAP, a different part of EMAP. I was a journalist and editor on their video games portfolio. And then in the early '90s, I moved to what was then an embryonic publishing company called Future. And I went on to run a number of their divisions, including their entertainment, sports and 4 type of groups as a publisher and Publishing Director. And I was also an Editorial Director for 10 years across the wider Future business, and the team that I led had ultimate responsibility for all product development. We worked on a number of launches, including T3, Total Film and Techradar. That's me.

DJ?

So good morning, everyone. I'm Dave Joseph, CFO. I'm a law graduate, Chartered Accountant. I qualified with PwC a very long time ago, in fact, when it was actually called Pricewaterhouse. I spent the first half of my career in the highly regulated big corporate/plc world, amongst those, EMAP plc; and the second half of my career in a more entrepreneurial SME world. I have over 25 years in the media sector and have a good deal of experience in M&A, typically ranging from GBP 1 million to GBP 50 million, both here in the U.K. and overseas. Thanks, James.

Okay. Thank you. One of the things that we've focused on in the last 6 months is freshening up of our Board and our team. So Marcus Rich joined us in the -- in January/February this year as Chairman. Formerly, CEO of TI Media before it sold to Future plc. And prior to that, Daily Mail. And prior to that, our paths obviously crossed quite closely at EMAP. We felt the need to freshen the Board and bring in more media experience, and Phil Machray was appointed in the late spring of this year. In fact, I think it was spring/summer. But Phil brings with him a wealth of media experience, having spent some years at Reach plc across what is, in fact, the biggest network of audience in the U.K., bigger than Google, I understand. But the fact that we're doing this really positions us well for future growth. So just to touch on our mobile-first strategy. Smartphone is now the first screen for Internet consumption. 84% of adults use it to access the internet. Digitalbox, by choosing this route when we set our strategy out in the early days of the creation of the current business, we felt very much because the bigger players at the time were not delivering profitability via mobile. We felt we could certainly be ahead of the curve and -- if we were to do so. And I think this is illustrative, this point, the second bullet point that the MailOnline delivered, I think, most recent reported profits of about 1% of GBP 100 million digital revenue. You can be absolutely certain none of that really came from their mobile distribution channel. So we're certainly ahead of the game and ahead of some key players that exist in the market, and that's really why we continue to obsess about mobile optimization, delivery, monetization, audience, sourcing, et cetera. The advantage of obviously being positioned at a future position from the market perspective is revenues will continue to flow disproportionately towards the mobile channel away from desktop, and we're certainly seeing that with 65% of digital revenue in 2018 flowing on to mobile. It will play catch-up with the 84% of internet -- 84% of mobile users using the device to access the internet. So it will continue to play catch up as we move forward. We have our own technology that we've developed, which is around absolutely delivering the best possible user experience on a mobile device, and it's labeled Graphene within our technology stack. And Graphene really helps optimize user experience, make it as quick as possible, makes our content deliver as quickly as possible and ensures the advertising auctions take place with the least possible friction. And all of that ends up with the best possible results that we can, and we'll continue to refine our Graphene setup as we move forward. And the fundamental points that has guided us since our inception is, we've been guided by profitability. We don't focus heavily on nonprofitable channels. So for example, the addition of apps as a route to market was dismissed in the early days chiefly because if you look at consumer behavior, consumers really only tend to consume 4 or 5 apps on a daily basis. And those apps happen to be the big players, Facebook, Google, BBC, et cetera. So to get in that mix is quite difficult. But to get in that mix through those key platforms, i.e., Google and Facebook is much more successful and much more profitable. So we're guided really by the profitability that we can create from our model. The 2021 highlights really have been driven by The Tab continuing its profitability in the first half of this year. So the first 3 months of the ownership in 2020, we delivered a profit. Traditionally, as you move into the spring of the year in the media market, it gets much tougher, but we managed to deliver profitability on each of the months since we've owned The Tab. So that's been very successful. And we've driven audience volumes up 15% over the period, users are up 15%. Entertainment Daily has continued with strong audience growth and equally strong session value growth. So the advertising tensions in the auctions that are in place have helped drive the success on Entertainment Daily to being 43% up year-on-year in H1. The Daily Mash has continued to broaden its horizons and has moved from the BBC in terms of its TV show that goes out and is now working with Dave, and we're putting out 50% more episodes this year than last year. Jim will talk more about that later. And we closed the period with a cash balance of GBP 2 million, which positions us well for delivering strategy in a much more significant way than otherwise. DJ, over to you.

Thank you very much, James. So first on my slides, income statement. So this slide shows extract from the interim income statements for '21 and '20. Obviously, it's the first 6 months for both periods. It's important to note that in 2020, these results included the Entertainment Daily and The Daily Mash, but in '21 including the results of these 2 brands plus the trading from our latest acquisition of The Tab. It's been a very good trading period, we can't deny. Despite the global ad market still in recovery from the events of 2020, the business traded profitably in the first half, delivering GBP 300,000 adjusted operating profit compared to GBP 50,000 for the first half of last year, with revenues increasing by 37%. Digitalbox is an ultra high-margin business. And in 2021, our gross margins increased to 84% from 71% in the prior period, and this is as our advertising yields increased period-on-period. Once again, as stated towards the adjusted operating profit figure is the key indicator of the underlying health and strength of this business because everything below this is either noncash financial accounting or nonrecurring. And finally, we can see that the business also produced positive earnings per share and this for the first time since we had mentioned. Next slide, segmental. Entertainment Daily bounced back from the difficulties brought to us in 2020 with an overall 11% increase in revenue, but more tellingly its quarterly performance with quarter 1 down 16%, but quarter 2 up 67%, giving color to the shape of the recovery curve. The Daily Mash suffered from a profanity strike by the Facebook algorithms. They're not being able to differentiate between satire and hate speech, and we're working on this. It's improving, but there's more work to be done. Interestingly, what it did encourage us to do is to experiment with a pay-for-content model, and Jim will cover this in a little more detail shortly. The effect of this was to peg the underlying revenue, that's both products back to a modest 3% increase period-on-period. And the standout performer was obviously The Tab, new to the portfolio for the first 6 months, which continues to exceed our expectation. Next slide, please. Cash generation. One of the most impressive features of this business, I've said it before, is its ability to generate cash and this slide illustrates this perfectly. I've restated the statement of cash flow and obviously noted it's a highlight the cash generated from trading. This is what's really going on in the business. The conversion of adjusted operating profit, or more commonly known EBITDA, into an increase in cash of the bank. You'll notice a significant cash inflow from trade debtors last year. This resulted from the clearing of an issue lingering at the end of 2019 and the continued strong performance of the collection efforts. The outcome on this year's trading activities is that the business generated a GBP 205,000 trading cash inflow. That is adjusted operating profit plus the movement on working capital. You can see the reconciliation of the cash inflows to the interim statements just below. The exceptional EBITDA into cash performance in 2020 is an anomaly, of course, and we should expect normalized cash conversion to be around 95% of EBITDA, that is whatever EBITDA we generate, around 95% of this will serve to increase the bank account, and this is what we should expect for the full year this year. Next slide. The statement of financial position, my final slide, I draw your attention to 5 points of note here. Number one, the largest item in the balance sheet is intangible assets, largely goodwill. And we've considered carefully the carrying value of these items and are comfortable that they are still relevant, as the brands, we operate were not diminished by the events of this year, last year, in fact, far from it. The second item is the trade debtor increase. This is inevitably a direct result of increased revenues period-on-period. Our trade debtors are a good quality and bad debt continue to be negligible. Debtor days average around 70 days, which is par for the course in this industry. The third item, cash at the bank of GBP 2 million and with bank loans of GBP 0.5 million, net cash is GBP 1.5 million, affording us free cash for acquisitions, remembering we make money. The fourth item, this business is highly liquid, having GBP 2.6 million in net current assets, which for a business of this size is very substantial. And the fifth point, share capital, share premium and distributable reserves. We took the opportunity of tying up the capital structure in the second half of last year and cancel the deferred shares, which carried no value and were a distraction. At the same time, we transferred GBP 19.5 million from the share premium account to distributable reserves. And that's me.

So just briefly to take you through what we have labeled a period of integration and growth. Session values. This chart really demonstrates, I suppose, on the one hand, the impact of COVID-19. The darker gray line represents the trend in session values from mid-March last year, and as you can see, they dropped off. So around half the run rates that we might have expected in 2020 had COVID-19 not hit in that first half. So they moved down to around GBP 6. However, we saw a strong, strong bounce back in Q3 and Q4 in 2020. We've equally seen the same strong bounce back in the first quarter of this year and the second quarter. Just to illustrate, really roughly how these compare with a more normalized world of 2019. Then in 2019, Entertainment Daily session values averaged across the entire year GBP 12 as an average. You can see here that the session values are up towards GBP 14 or more in 2021. And it's worth noting that the first half of the year typically represents a significant reduction on average session values compared to the second half of the year. So I can't tell you exactly obviously where we're going to finish over 2021, but you can see here, the trend is surging towards, and that's largely as a result of Entertainment Daily having strong, recognizable, viewable, powerful inventory that is seeing great demand push up the prices. We've done a lot of work on traffic diversification, and this is really absolutely key to our success. And Jim is going to take you through that now. Jim.?

Yes. So as James mentioned earlier, platforms that we publish on and this slide gives a good sense of the work that we've been doing. So one of our aims over the past year has been to build a more diversified traffic base. And obviously, the benefit of that is that it reduces your exposure to traffic volatility on any particular platform. So you can see the progress that we've made in this area. On the left-hand side, the left-hand chart is our traffic composition for the first half of 2020, where across the business, social traffic, which is the light blue segment, represented 84% of all traffic and other sources combined only around 16%. So with the focus that we put on the existing portfolio, in particular, with Entertainment Daily and also through the acquisition of The Tab coming in, we've really transformed that mix. And you can see that on the right-hand column, where we've grown organic SEO, direct traffic and referral traffic from 16% to almost 50% of our total traffic mix, which we think is a far more comfortable mix. Obviously, we need to be mindful that if you overly diversify, you can end up losing focus and you can go off chasing platforms where the route to profitability is much less clear or where the demographic is not right. So for now, we think this is -- this composition is a pretty good place to be.

Okay. Thanks, Jim. The integration piece. There's been a lot of work from Jim and his team to ensure that the editorial team on The Tab were well embedded into our -- set up in our processes. That's really beginning to pay off, as you can see from this chart financially. The black hole, as you can see on the left of the screen, was The Tab's performance in 2019, when it lost money in the region of GBP 400,000. And as you can see here, in January 2021, it made about GBP 12,000 contribution to our business and has continued to do so since with over GBP 30,000 in recent months, in May and June. So the integration process from The Tab has gone very well, and we look forward really to continued growth on that brand as we expand the business. Jim is going to take you through some brand highlights really on the creative side.

Okay. Thanks, James. Yes, so Entertainment Daily, as we've already mentioned, was the first product in our stable and is in many ways the pathfinder brand for the Digitalbox model. It's core demographic, for those of you who don't know the brand, 25- to 55-year-old women and the brand's editorial rematch, as James mentioned, is fast-paced delivery of TV and showbiz news with a strong U.K. focus. Quite often people assume that it's a broad global brand, but we took the decision to focus very much on the U.K. market because we wanted to make sure our content was as relevant as possible because that really helps with engagement rates. So as James mentioned earlier, in terms of highlights, Entertainment Daily has benefited from really strong session values. So partly, obviously, that is a result of the release of pent-up advertising demand coming out of lockdown, but particularly, it's aim to demand for Entertainment Daily's highly valued demographic. And they just -- it's just quite difficult to reach this kind of demographic at scale for many big brands, and so we're an important part of that mix. And so as well as this demand that's out there, our Graphene platform, our Graphene ad stack, it gives us the ability to drive the maximum revenue from that demand. So that's really what's behind the session value growth. And also, as we saw earlier, when we were looking at the traffic composition, Entertainment Daily has made -- has played a really key part in that, moving our traffic mix away from social. So the way we deliver that was investment in both editorial content and from a technical perspective, and it has been a real key focus for the team over the last year, and that is paying off for us. We've seen Google traffic grow by 91% year-on-year, as you can see here. And we're seeing some of that work recognized. So the brand has been mentioned a number of times. Press Gazette -- U.K. Press Gazette, which is a reasonably well-known U.K. media source is including Entertainment Daily in its list of fastest-growing news sites, where we've outpaced some of possibly our better-known peers, including Hello. So it's been a really pleasing, pleasing period for Entertainment Daily. And then on...

Sorry, Jim that was me.

That was my fault. I was trying to drive at the same time. On The Daily Mash, Daily Mash is the U.K.'s favorite satirical news site. We acquired it shortly after readmission in 2019. Every day, The Mash delivers a mix of topical satire and its unique takes on the absurdity of modern life. Now as David mentioned earlier, one of the challenges that The Mash brand faced -- faces is Facebook algorithms, struggling to understand the difference between satire and misinformation or hate speech. So we are in a continual dialogue with Facebook to try and help them understand the difference. But clearly, when it's all being driven by algorithms, sometimes those nuances get a little bit lost. And as David mentioned, we have seen traffic suppressed during this period. We have seen some recovery, but as David said, we're -- there's more work to do. So that has prompted us to look at new revenue streams. And so some of the work that we've been doing is the testing of a new subscriber offer, which you can see on the right-hand side of the screen there. At the moment, it's a very simple service in its very early stages. It basically just offers users the chance to go ad-free, but we are generating sign-ups, and we are seeing some users paying GBP 200 for a lifetime membership for ad-free match. So it is quite exciting for us, quite encouraging. The next stage in development will be more marketing and exclusive subscriber content. So we're going to be working on that over the coming months. We've also refreshed the front end of the site using our Graphene platform. So that makes the front end site feel a bit fresher and crucially, it delivers really fast load speeds for users, which improves the user experience and also improves advertising efficiency. And possibly the best news, as James mentioned, is that Mash is back on TV. When we reported our 2020 results, we said that we were hopeful that we'd see the brand come back, and that indeed has come to pass and its UKTV. Actually, it's Dave, but the parent company is UKTV. They've commissioned a bigger and better incarnation of the mass show. We're currently in the middle of a 9-run total episode, and you will see some of the benefit of that in the H2 numbers. Obviously, that's not including in these results we're talking about now. They seem to be pretty determined about the show, something of a flagship for them and a real success. They're running the show for an hour each week, and it's also on repeats, being Dave you would expect that. And we think we're also going to see 2 seasons a year from the show. So we're really, really pleased to make the creative development that the show is getting at Daily is really, really strong. And then on the next slide, we look at The Tab, which rounds out the portfolio. This is the acquisition that we announced at the beginning of Q4 2020 and a really good example of the Digitalbox strategy in action. As you may know, it's the U.K.'s largest student and youth culture site. We have a team -- core team based in London and a network of editors and writers based in 33 universities across the country. And the benefit of that is that it means we can deliver national coverage, but also really strong depth on local university-specific stories. So our integration plan for the brand was to bring it onboard, maintain a strong editorial mix and ensure it continues to resonate with this audience, but we basically reworked the commercial operation. In the first half of 2021, we saw that really strong editorial that I talked about really deliver. So we saw the user base expand by 15% year-on-year to 35 million users, and that was really driven by very strong editorial hot takes on trending topics. And crucially, as James illustrated earlier, we've brought the brand into profitability, partly because of our rolling out of the Graphene ad stack, which just runs much more efficiently than the previous setup that they had in place and also because of our new approach to branded content work where we are continuing to see really strong demand. We're in the middle of a recurring campaign with NatWest at the moment. And also during the year, we've delivered work for the NHS and Student Roost. So brands really want to access the terms, audience, and in particular, they want to be able to create bespoke messaging to talk to the audience in the right way. So we develop content and these campaigns with them. But the crucial difference is, we've adopted a much more tightly managed pricing structure, which means that we can be confident that we can deliver that kind of work with a really clear margin. I think as we've said before on presentation, branded content is often a real challenge and a real challenge for publishers to deliver in a profitable way. And they can -- you can see margin evaporate, if you're not careful. So we've got a much more simple, much more effective way of running those campaigns now. And that is the end of the highlights from me.

Thank you, Jim. So looking to the future, it's clear there are very attractive market conditions. The big glaring thing to look at here is, obviously, the chart to the right of the screen that shows 2020 global digital advertising revenues at $348 billion and traveling over 4 years to over $500 billion, so some fairly significant growth. But another key factor within this is the fact that at the moment mobile is only 76% of that revenue base in 2020, and it will move upwards to 80% plus as we move towards 2024. And that's obviously reflecting 81% of all online time being spent on mobile devices. So the market -- and that's no coincidence. Our strategy was very much to follow the market trend when we formulated our plans at the beginning. The market is ripe for consolidation. The coronavirus pandemic has accelerated the pace of change across the market. You've seen that across many sectors, whether that's media, online shopping, it's thought to have pushed us forward 2 to 3 years at least in terms of our habits. This has really pushed a lot of businesses that were under pressure prior to that into a position where they really are becoming quite questionable. So at the moment, the market is ripe with opportunity. There's a shortage of natural players, i.e., buyers that have a profitable model, which they can rely on in order to overlay on to any acquisition that they're likely to make. And there are available targets without question and those targets do range from bigger targets. For example, there are things that you could put into being under pressure like Vice or BuzzFeed, which are obviously huge compared to the kind of things that we're looking at, but there is a range across the market that's clearly available. We are looking at 3 pools, really. Legacy publishers. These are publishers that have typically grown their businesses around a print proposition. And quite often, they are distracted by the fact that they are very focused on revenue decline on an existing model that was once profitable and not focused on the future model. Within these businesses quite often, there are digital assets that could have a potentially strong future and could drive much, much higher margins than they are in their current business environment. There are first-wave digital media businesses, which are available. And we've obviously -- one great example of that is The Tab that was first created in 2010, and it was something we were able to move on in October last year. And there are also bedroom start-ups, which are perhaps a little bit more like The Daily Mash, which are owner-operated businesses with 2 or 3 staff that have significant value. And that area is of particular interest, as the others are, but I think it's worth noting that this shouldn't be dismissed, this area, because it's probably the area the bedroom start-up that has impacted most across many traditional media businesses. There's no coincidence, Zoella, the video blogger, has taken probably massive chunks of market share away from traditional publishers, like Condé Nast or TI Media or Hearst, and it's these sort of small clever operations that are certainly worth looking at. So in summary, we have delivered a profitable growth period, year-on-year growth against all key measures, revenue, profit, profit before tax. Ad demand for quality mobile audience is increasing. We're seeing growing revenues per session across all brands, and we should expect that to continue as the market grows towards 2024. We've diversified our audience base, which gives us a much, much stronger position as a business. So we can cope better now with fluctuations in the algorithms, which will take place and will take place for all media owners across the market. The integration of The Tab has been a great success, and The Tab has really begun to flourish within the Digitalbox model. And we will be looking to invest further in that brand and grow other content verticals within The Tab proposition as we move forward. Overperformance, full year 2021 results are expected to be materially ahead. Clearly, we're not -- we've still got 3 to 4 months of trading to complete before year-end, but the indicators are very positive. The acquisition pipeline continues with a large amount of work, investigating opportunities there. And we really do believe continuing to execute the strategy, the business has a very bright future. So I think that really wraps up the formal side of the presentation. Now, I think we can switch our cameras back on, but it's over to questions now, I think.

James, David, Jim, thank you very much for your presentation. [Operator Instructions] But just while the company take a few moments to review those investor questions submitted today, I'd like to remind you that a recording of this presentation along with a copy of the slides and the published Q&A can be accessed via our investor dashboard on the Investor Meet Company platform. I'd also like to remind you that your feedback is important to the company, and immediately after the presentation has ended, you'll be redirected to the opportunity to provide your feedback in order that the company can better understand your views and expectations. Investors have submitted a number of questions during the presentation today, and I want to hand back to you to respond to those where it's appropriate for you to do so. Could I just ask you to read out the question and then who is it from.

Yes. I'll -- DJ and Jim, I'll lead this and pass accordingly. The first one is from Chris R. What organic development are you targeting to grow organic users? I think that's one for you, Jim.

Yes. I mean, I think really the majority of the growth in organic users we've seen on both The Tab and Entertainment Daily and really that's coming from increased investment and focus in content and trying to make our content as relevant as possible. So I suppose it's really 2 pieces. It's trying to make sure that your core offering is relevant. I mean they're both news-driven brands. And so the primary objective is to make sure that the news content in those sites we're delivering is fast, engaging, relevant and like for the audience, and we know that will certainly deliver us organic users. And then the next part, I suppose, is to consciously look at what performs best in certain channels. So the -- I guess, Entertainment Daily is really where we've tried to make the most progress there. And that has been not exclusively around Google, although Google is where we've seen a huge amount of growth with a 91% uplift. The work there is really about trying to tune the content and make sure that it is fit for purpose in all of the channels. So we've got work going on to make Entertainment Daily and The Tab, but eventually The Mash visible in Google News app. We're already, obviously, visible on Google. We're visible in Google News, but there's even further you can go to make a kind of a branded experience for the brand visible in those platforms. So we think there's more work to be done in terms of reaching out to organic users. But as we mentioned earlier on, we try and make sure that we've got a really fully vision of where the profitability is going to come from. There's lots of channels out there. There's lots of places that we could go to expand our audience. For the time being, we want to make sure that we've got real clarity in making sure that, that development is profitable. So hopefully, that answers that question.

Okay. Thanks, Jim. A further question, Michael T. Why did The Tab profit nearly half in April 2021? Just to answer that in short, Michael, then the media market tends to operate in quarterly cycles, and certainly, in the open market in terms of bidding. So revenues quite simply at the beginning of that quarter are going to be less than the revenues that you'll see at the back end of that quarter. So April generally is going to be a lot less than May and June as it grows towards the end of the period, and that obviously affects profitability. Another one from Michael T. How big is your acquisition pipeline? I suppose, in short, big enough. There are things within the pipeline that are more significant in scale than we could take on at this stage. And there are things that are naturally suited to our scale at this point, but there's a big enough variety of opportunity in order to ensure that our strategy is delivered. Plenty of questions around when we might be able to announce more acquisitions. I guess the only answer to that is when they're announced. Beyond that, DJ, can you take that?

James, it's fair to say, we are operating a buy-and-build strategy. And so this is what we're going to do. It's not parked somewhere. That's something we're actively pursuing. And I don't think we can say further than that at this stage.

No, I think the only thing that I'd throw in just from my perspective is, hopefully, The Tab is a really good indicator of where we've been able to choose the right asset. And I guess, with any M&A plan I suppose that quite right, but sometimes people say quite often about the deals you don't do rather than the deals you do. And we've definitely looked at some targets and decided that they're not quite like for us. And the way The Tab is currently performing, hopefully, she could give some comfort that we are able to identify the right kind of target and the deals we execute on, we believe, that we're able to turn into a positive result, so we're being quite careful. I think there's obviously an understandable appetite to move at a real pace and see lots more products coming in, but we're wanting to make sure that the things that we do buy are going to work for us.

Absolutely, yes.

I think you've addressed pretty much all the questions there from Investors there and, of course, the company will review any further questions submitted and publish responses where it's appropriate to do so. James, just before redirecting investors for the feedback, I wondered if I could ask you for a few closing comments.

Yes, of course. Yes. Okay. I mean the first half of this year has been, I said at the beginning, pleasing. I think some of the guidance that's been put out into the market suggests that it was more than pleasing, but we're well positioned. We really are well positioned. And with our war chest of GBP 2 million in the bank at the moment, then we're even better positioned than we were a year ago to deliver on acquisitions. And you can be in no doubt that we aim to employ the cash reserves we have as positively as possible in order to move the business forward as quickly as possible. And our ambition really here is all about scale and all about building a much, much bigger media business than our current market cap represents. So our ambitions are very much moving as quickly as possible towards GBP 50 million to GBP 100 million and scaling. So really, that's the management plan. Being able to deliver that is clearly dependent upon actions, and we're absolutely focused on delivering those actions as part of the strategy in the coming 6 months. So thank you for your time. Thank you for attending. We will, of course, field any further feedback through the comments section on Investor Meet Company. And we'll hope to talk to you again in 6 months' time.

James, David, Jim, I'd just like to thank you again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations, and this will only take a few moments to complete. It would be of great value to the company. On behalf of the management team of Digitalbox plc, we'd like to thank you for attending today's presentation. That now concludes today's session, and good morning to you all.