Digitalbox plc (DBOX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Digitalbox plc interim results investor presentation. [Operator Instructions]. The company may not be in a position to answer every question it received during the meeting itself. However, all questions submitted today will be reviewed with responses published on the Investor Meet company platform where it is appropriate to do so. Before we begin, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. I'd now like to hand you over to CEO, James Carter. Good morning, sir.

Good morning. Welcome. As Jake said, to the Digitalbox H1 2022 interim results. I'm joined by Jim Douglas and David Joseph, our CFO; and Jim Douglas, our COO. And we hope you're going to consume or what we believe to be a really positive set of results. First of all, to introduce Digitalbox in a nutshell. We're a pure-play digital media business with a pedigree in emerging publishing technologies. We're 100% digital mobile focused, and we have a strategy to grow and transform acquisitions -- digital media acquisitions as we build the business. In very simple terms, this is how our business operates. We own and operate 3 digital brands, one called Entertainment Daily, another called The Tab, which is student targeted platform and another, The Daily Mash, which is a new satire platform. We create compelling content on those websites, which engage audiences and we then monetize the visits to our websites through e-commerce and advertising solutions. So the presentation should last about 30 minutes, leaving time for questions at the end. But it's broadly broken down into 5 sections. I'll introduce alongside Jim and David Joseph. The leadership team, David will take us through the key parts of this presentation in terms of the financial results. And I'll highlight some of the development that we've delivered over the first half of this year, whilst Jim will take you through some of the key brand highlights before I summarize at the end. For the leadership team, the executive team, my background has been a 20-year history in the media industry, having previously worked to the company called EMAP plc, that group to be one of the biggest media companies in the U.K. at the time, running a business called FHN, which our Chairman, Marcus Rich was very, very involved in, which grew to be a business with a global value of over GBP 250 million and operations in over 30 countries around the world. I then moved to our direct competitor, a company called Dennis Publishing, who are operating magazine called Maxim, which competed directly with FHM at the time and did some new product development there and launched a product called Monkey, which was a men's weekly magazine, before moving on to create Factory Media with some former colleagues, which was a European Action Sports publishing business, which we transitioned from print to digital and raised GBP 3.5 million to do that and then sold it for GBP 12.5 million. Jim, do you want to introduce yourself? We're not hearing you, I don't think, Jim.

Jim, if you wouldn't mind, I've just put on the chat there. If you'd be so kind just to comment on the dial-in, I think you're being disconnected. Jim, let me just see if I can just bring up your mic, just 1 second, do bear with us James, just for 1 second.

Whilst waiting, shall I do my intro?

Yes, please David.

Okay. So David Joseph, Chief Financial Officer. So I'm a law graduate and charter accountant, I've been qualified with Pricewaterhouse a very long time ago, PwC now, of course. I spent the first half in my career within the highly regulated large corporate plc environment, commencing my media experience 27 years ago on joining EMAP plc, at the time a very large international publisher back in the '90s, and where I met and worked with James and with Marcus. Jim was a little bit before my time. The second half of my career has been spent working with SMEs, predominantly backed by private equity. M&A has been a constant throughout the whole of my career, meaning that I have a got significant amount of experience in buying and selling businesses, both in the U.K. and overseas, and mainly in the GBP 0.5 million to GBP 50 million range. And hopefully, Jim is back up now.

Sorry, DJ, we lost you, I think, there.

Yes. We're just waiting for -- we're just waiting for Jim to come in. If I may, James, just hand back to you to run through once we get Jim back in.

Okay. David, thank you for your introduction. As you can see from the slide, hopefully, that you can consume on the screen, the executive team are very well invested in the business, having grown the shareholding recently collected -- shareholdings to over 20%, which includes warrant shares for myself and Jim Douglas. So very committed and keen to grow the value of the business. Jim, are you there to introduce yourself?

He's just starting in now, James, so he will literally be in 2 minutes.

Okay. Well, maybe we'll skip his introduction and move forward. So Digitalbox has very much a mobile-first strategy, and we chose this route when we began to build the business quite simply because other competitors and publishers in the U.K. were struggling to make a profit through a mobile journey. Digitalbox has created a profitable business that is ahead of the curve. Every year since we've created the business, we have made a profit, including COVID year. The key reason behind choosing that was obviously audience shift to mobile devices away from desktop devices. But also the fact that there was a real lag in the ad market that was destined to play catch-up and create strong tailwinds on to mobile. And we've created as we've built the business a really strong tech process and overlay, which is labeled Graphene tech suite. Graphene really delivers the best possible user experience and publishing experience alongside the commercial transactions on the Graphene ad stack to optimize results. And as you can see, we had a really good year in terms of audience delivery, particularly around females in 2021 with over 180 million visits to our platforms, which really demonstrates the strength of the Graphene delivery solution. So H1 2022 highlights really were as follows: cash generated from operations was up to GBP 0.7 million, which was up from GBP 0.2 million in H1 2021. The Tab profitability was led by a 57% increase year-on-year in the session values that we created on that site, heavily driven by the Graphene ad stack and us laying that over the site as we moved into the first half of the year in 2021, and we're now seeing the real benefit of that. And audience growth being 22% up across the portfolio during the first half of this year, which is significant and led by Entertainment Daily and its success in engaging in a variety of new channels. The Daily Mash had success in terms of its TV show, the Late Night Mash, being recommissioned on Dave by U.K. TV. And we saw significant subs growth, which is our new paid subs model on this side, which is pivoting it away from the pure advertising model that had existed before. And we ended the period with gross cash -- gross cash balance of GBP 2.8 million. So just to tell you a little bit more about the financial side of the business, I'll pass you over to David Joseph.

Thanks, James. So this slide shows extract to the income statement for the first half of '22 and '21 as better published interim statements. Both periods include the results of all 3 products, hence the numbers are truly like-for-like. Despite the turbulent conditions created by the war in Europe, and its corresponding impact on global energy and food prices, hitting the consumer hard. The business had an excellent trading period, delivering revenues of GBP 1.9 million, which is 40% of period-on-period. And delivering an adjusted operating profit of GBP 0.7 million, which is a quantum uplift on the prior period of GBP 0.3 million. Pleasingly, with direct cost of revenue remaining relatively contained, the gross profit margin increased 3 percentage points to 87%. This ultra-high gross margin results from the market continuing to value our audience highly and due to high volumes, which carried no additional direct costs. I see you towards the adjusted operating profit figure is the true indicator of the underlying health and strength of this business is everything below this is either noncash financial accounting or nonrecurring. This business is a mobile-first digital media business. Hence, it is highly efficient, having the create once, use many times model. This makes operational gearing high, but as revenues grow, overall cost do not grow proportionately, resulting in an increase in adjusted operating profit margin. The first half of 2022 saw a 13 percentage point increase in the adjusted operating profit margin percentage, up to 35%. We're in the process of evolving the revenue model on The Daily Mash from a pure advertising-based one to a hybrid advertising and subscription based one. For this reason, we are obliged to write off the carrying value of goodwill and intangible assets subscribed to this brand in the balance sheet, resulting in GBP 716,000 impairment charge. This is a noncash financial accounting entry. Next slide, please. Segmental, the headline here is revenue growth of 40%, but this means a little unpractical. The biggest growth driver was Entertainment Daily, growing 40% year-on-year, but providing 69% of the absolute growth period-on-period. This is a result of a strong session values and continued high volumes. The Tab grew 54%, continuing its upward stride from the moment we acquired it. As previously stated, the Daily Mash is transitioning its revenue model following successful subscription trials, but this resulted a 12% decline in revenues period-on-period. Next slide, please, James. Cash generation. One of the most impressive features of this business is its ability to generate cash, and this slide illustrates this perfectly. I've restated the statement of cash flows in order to highlight the cash generated from operations because this is what's really going on in the business, the conversion of adjusted operating profit into an increase in cash at the bank. You'll see the first half of 2022 saw cash generated from operations totaled GBP 737,000, which amounted to 111% of adjusted operating profit. This is not the norm, however, as it is sensitive to [Indiscernible] collection at the period end. For example, one large [Indiscernible] in payment for just a few days can have a significant impact. A more sensible view is to look at the aggregate performance. To the right, it shows cash generated from operations, averaging at 98% of adjusted operating profit. Overall, though, I would expect this conversion rate to average around 95%. Now remember that the only cash outgoings essentially, [Indiscernible] are tax, bank debt and CapEx, the latter 2 being relatively benign. So we ended the period with GBP 2.8 million gross cash in the bank and with the balance on the [Indiscernible] loan of GBP 0.4 million. For context only, the gross cash balance in the business last Friday, 23rd September was GBP 3.2 million, and that's up 45% since the year-end in December. My final slide, please, James. Statements financial position. I'd draw your attention to 6 points of note here. Number one, the largest item in the balance sheet is intangible assets, which is largely goodwill. And as previously stated, due to a change in the revenue model for the Daily Mash, we felt it prudent to write off the carrying value of goodwill and intangible assets relating to this brand. We will also consider the carrying value of Entertainment Daily and The Tab and are comfortable, but they're still relevant as these brands have not been diminished by the events for the last 2.5 years. In fact, far from it, they're thriving. The second item, trade debtor increase looks small compared to the increase in revenues, but this is net of the direct loans for repayment of GBP 172,000 earlier this year. Trade debt has actually increased by GBP 184,000, which is more consistent with the increase in revenues. The third item, cash in the bank of GBP 2.8 million, bolstered by underlying trading is up 37% on the prior year figure of GBP 2 million. The fourth item, net cash, so after receiver of loan, GBP 2.4 million is 57% on the prior year figure of GBP 1.5 million. The fifth item, the business is highly liquid with GBP 3.4 million of net current assets, which for a business of this size is very substantial, and this is up from GBP 2.6 million in the prior year. And finally, the 6 item, capital and reserves, a full suite of positive numbers despite the write-off of the carrying value of goodwill and intangible assets relating to the change in revenue model for The Daily Mash. Thanks, James.

Look, historically, the developments that we delivered in the first half of this year, the Graphene tech suite was -- or is consistently being developed, and we managed to develop it to a further stage in the first half of 2022. Really, what this is enabling us to do is get to a position where we can more quickly and more effectively onboard any new acquisition. So with TV Guide destined to come in to the business in Q4, we would hope to have the Graphene ad stack fully functioning by the beginning of H1 '23, unlike with the tab that took us really about a transition period of about 6 months. So much more functionality is being brought to the table by the Graphene tech suite. The strong session values that we saw on The Tab. Obviously, it's a fairly significant growth at 57%, up period on period. The first half of 2021, we were sitting at GBP 6.81. The first half of this year, we were sitting at GBP 10.68. But the interesting thing behind that is when you analyze it, you can see how our ad viewability and the dwell times on the ads through the technology we're using to deliver our ad stack has really taken us to that point and given us that big step-up in 2022. So a real success story there really from the Graphene ad stack. The audience overall has grown by 22%, and that's really testimony to Jim and the editorial teams and how they've exploited the various segments. Jim, do you want to talk a bit more about the audience growth?

Yes, sure. Can you hear me okay?

We can. Yes, finally.

Sorry, many apologies, everyone, for the technical issues. So sorry, I didn't get a chance to introduce myself at the start. So like James, I also began my career at EMAP. I was originally a journalist in our video game portfolio, moved on to become an editor, and then I moved to future publishing where I was an editor and then group publishing director over some of their portfolios, including automotive sports, games, film and music. Ultimately, I was a Future's Editorial Director across the wider business for 10 years. And I was previously involved in the development and launches of products, including Total Film and TechRadar. So yes, as James says my remit is primarily over our editorial operations. And this slide shows that we had a fantastic H1, 22% increase in total year-on-year. In particular, this has been driven by really strong performance on Entertainment Daily and inside Entertainment Daily, its social traffic performed very well in the period. But we also saw sessions from Google's Discover platform grow 91% to 23 million sessions in the period. So yes, as James said, we've seen this great audience growth, 22% up versus the same time in 2021. And I'll move on to talk about some more detail about the Editorial operations in a few slides time.

Okay. Thanks, Jim. The paid subscription model on The Daily Mash has been a great success really for us in the early stages. As you can see, we launched it in January last year, but it's now built -- sorry, this is charting from January this year. It's now built to a position of approaching 1,000 subscribers. And the offers here of GBP 2 a month subscription or a GBP 200 lifetime subscription. So there's a blend of offers, but the fact that people are prepared to pay for this unique content being created by The Daily Mash has really given us the opportunity to pivot the business away from a pure advertising focused proposition. So we're seeing some really good progress on that side of the business. How we have converted the acquisition of The Tab is a great success story. This chart really shows the contribution it's made since we acquired it. We acquired it, in fact, at the back end of 2020, but this shows 2021, and how it's made a contribution every month since we've owned it. And the key part of this really is the fact that it's fully repaid the acquisition costs now. And we are really focused on The Tab in terms of building the proposition into the future and building its audience levels and building its local content that's created through the campus subsides. So Jim will take you through some of the brand highlights across the portfolio.

Okay. Great. Thank you, James. And so we'll start with Entertainment Daily. This is our most established brand and Entertainment Daily really is the product that helps us refine the Digitalbox publishing model. The brand's editorial remit is the delivery of fast-paced TV and showbiz news with a strong U.K. focus. We saw, as you can see on the slide here, we saw 98 million sessions during the period. And of those, 59 million were from women. So Entertainment Daily is a real powerhouse when it comes to delivering this very sought-after female audience that advertisers are keen to reach. This strong traffic that we've seen was partly driven by celebrity news, like, as you can see on the left-hand side, ongoing interest in last year's Strictly winners, Giovanni and Rose. Strictly has just kicked off again last weekend, obviously, it looks like it's going to be strong series. The traffic also came from reporting on new shows like ITV's starstruck and also mainstream dramas like Trigger Point, which we saw earlier on in the deck. Also on Entertainment Daily, our coverage of the soaps in particular, Coronation Street, Emmerdale and EastEnders, remains a key part of the editorial mix. And entertainment Daily was invited to join the judging panel for this year's British soap awards along with Radio Times, TV times and Inside Soap, which as a result and quite a good indicator of the growing recognition of the influence of the Entertainment Daily brand. And lastly, on ED, as I mentioned, we've seen this really strong performance in Google Discover. 23 million sessions in the period, which is up 91% year-on-year. So it's been a fantastic half for Entertainment Daily, an editorial team really, firing on all cylinders. If we move on to The Daily Mash. So The Mash is the U.K.'s favorite satirical news website, and we acquired it shortly after joining the market in 2019. As well as running The Daily Mash website itself, we licensed the brand to UKTV Dave, previously the BBC, but now it's with UKTV for them to create the Late Night Mash TV show. We're now actually midway through the second series with Rachel Paris, who has now joined as the new host who took after from Nish who did Series 1. We missed a week into the Queen's funeral. So this is now an 8-episode run, but we think it's fair to say having watched last week's episode, which I thought was a really strong, the team have made a really good job making up for that lost episode. As James mentioned just a moment ago, we're in the process of pivoting The Daily Mash brand and beginning to build consumer revenues with Mash premium or as our editor Tom Whiteley describes it, unlimited ad-free access to a world of gilt-edged profanity. We deliver exclusive subscriber content. We offer users an ad-free experience. And from those early results, we think there's real potential here. We're getting good indications of key metrics like lifetime value and retention rates. And so because of that, the growing confidence, we're beginning to accelerate our marketing. Our ambition is to get to a place where subscription fees, these consumer revenues represent about 50% of the Mash's revenue mix. And finally, on the Mash, since the end of the period, we've also been able to remove some of the blocks on distribution on social with Facebook and Instagram breach, both now seeing growth. And then finally, we have The Tab, which is rounding out the portfolio, our third brand, which is the U.K.'s largest student and youth culture site, is powered by a London hub with journalists working at 30 campuses all across the U.K. So the real focus for the brand for the first half, as James and David mentioned, was around the monetization of the traffic, the Graphene ad stack has enabled us to deliver. But as well as this monetization improvement, there's also been good progress in terms of audience, too. So coverage of Stranger Things and Love is Blind have helped add an extra 100,000 followers to the brands. Netflix page. Also in the period, the team have really embraced TikTok, it's absolutely perfect for that demographic. And as a result, they've delivered a further 600,000 new video views on the platform, and that's been delivered by their coverage from campuses, their coverage from festivals and also political protests. And we've also stepped up the volume of content delivered by our local university team, this network of new journalists. It's always been a major element of The Tab's editorial remit and the core London team do a brilliant job of mentoring this network of student journalists. We're concentrating even more on this area now because we think this ability to offer distinctive super relevant local content, full of the audience, we think is going to be a key part of building the brand's Google Discover traffic. If we can build that to the same kind of magnitude as entertainment daily seeing, we think that will be a key driver for us going forward. So that's it for the brand highlights, I'll hand back to James.

Okay. Thank you, Jim. So just looking at where our future growth is going to come from after a successful H1 '20 to '22. We will focus on continued expansion or organic development of the portfolio that we've already got in place. We believe there's growth to be had around Entertainment Daily and will be strengthening that site with the addition of new content verticals and new functionality introduced very shortly. The Tab, as Jim says, has got more audience growth potential in it. And The Daily Mash has got diversification in it, whilst Graphene platform has the ability to be strengthened and deliver much greater opportunity for us to grow quickly. TV guide, we plan to bring into the portfolio in Q4, as announced earlier in the year. And we're heavily focused on other new acquisition opportunities. So the real opportunity for growth really across these 3 key pillars that we're focused on. What market conditions are like. Well, first of all, to stand back and look at where people are consuming their media. Smartphone is very much now the first screen for adults and their access of the Internet with 85% of adults using it to access the Internet. U.K. adults spend nearly 4x as much time on a smartphone compared to a desktop device. And advertising really is playing catch-up with that change that's happened in the market. So if you look at the chart to the right of the screen, you can see in 2021, the dark green elements compared to the lighter brighter green elements represent the mobile share of digital ad spend. We're all very much aware that digital ad spend is forecast to grow over the next 3, 4, 5 years to a point where it will be hitting close to GBP 700 billion on a global basis. But the really interesting thing is the fact that mobile share of that digital spend will grow disproportionately. So we're going to be seeing the mobile advertising market being worth more than the entire digital market as it existed last year by 2026. We don't really see much standing in the way of that process of change. The areas that we're looking at in terms of opportunities. We'll continue to look at legacy publishers and legacy publishers that operators really of brands that have quite often failed to make a transition from print to digital, and there are opportunities there and discussions there. But I think also increasingly, they're a first wave digital media businesses that we're looking at, where there is plenty of opportunity. A great example of that is TV Guide, which is product that was established over 20 years ago, and is now struggling in order to stay relevant in its operating model in today's world. There are plenty of opportunities that we're engaged in discussion with in that first wave digital area. And in addition, we'll continue to look at smaller sort of bedroom startups, as we call them, but are typified by The Daily Mash, where they're a small team who've reached significant scale, but don't have the commercial clout to really advantage them as they move forward. So becoming part of the Digitalbox portfolio can really bring a commercial benefit to these businesses. So in summary, Digitalbox, we've got a -- we've created profitable growth through the execution of the strategy that we've laid out to the market. And it's growth against all key measures, audience, revenue, adjusted operating profits and margins. Ad demand for quality of mobile audiences will only increase over the coming years. And we've delivered very strong results around the mobile advertising solution through inventory that is really sought after. We've made progress across our portfolio. Entertainment Daily has seen audience growth. The Tab has really improved its monetization success over the past 6 months and first 6 months of this year. And we've delivered diversification with The Daily Mash in achieving a very interesting and strong subscription base -- paid subscription base on that site. So H1 performance really has given us a really strong level of performance that insulates against any challenges that we may face through the macroeconomic conditions that are faced in the globe and the U.K. as we move forward. The acquisition pipeline remains strong, the TV guide due to complete in Q4 and with the team, myself and Jim and head of tech, very focused on other acquisition opportunities as we speak. So the business is set for a really bright future with a strong balance sheet, an expanding portfolio, and we really feel we're building momentum. So thank you for your time listening to the presentation. I'll pass back to Jake. Hopefully, we have no more technical glitches, but we should be taking some questions.

James, absolutely, and David and Jim as well. Thank you very much indeed for your presentation this morning. [Operator Instructions] I just want the team take a few moments to review those questions that were submitted already. I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q&A can be accessed via your investor dashboard. James, David, Jim, as you can see, we have received a number of questions from today's presentation. So thank you to all of those on the call for taking the time to submit their questions. And guys, if I could just hand back to you to run through that Q&A tab to respond to those questions where it's appropriate to do so, and then I'll pick up from you at the end.

Okay. I'll feed the questions out. So there's a question here from Nick B. How do you balance free and paid-for offerings, is part 1 of the question. Jim, do you want to answer that?

Yes, sure. Yes, the reason that we think we wanted to explore user subscriptions on The Daily Mash, primarily was that we felt that it had such a strength in its unique content. So the content on entertainment daily and the content of The Tab are very, very strong, credible editorial offerings. But if you want to read about some of those subjects that those brands cover, obviously, you can find that content elsewhere, whereas The Daily Mash, we really feel this is truly unique. So that was 1 of the reasons why we wanted to begin subscriber exploration on The Daily Mash. We are really mindful that The Mash has got a very loyal and quite local audience. And so we're trying to find the right mix of still giving them all the content that they get from The Daily Mash and then offering this additional extra content. And it's quite straightforward really. And that we run an additional set of articles that are only available behind the paywall for subscribers. And we think that there are enough articles of this, maybe 6 or 7 new stories a week. We think that feels like the right mix combined without free to give it some really good value. Now we're starting to see a greater uptake that gives us more confidence to potentially increase the content that we're putting, making available for our subscribers. So it's very much a work in progress. It's encouraging where we've got to date, and we're constantly reviewing with Tom Whiteley who is The Mash's editor in chief to try and find out what's the right mix of content like available free and to make available for subscribers only.

Okay. Thanks, Jim. The second part of that question was The Tab looks to have been a great deal, and how many more are there like this on the horizon? There are others, is all I can say. And there are other underperforming opportunities, we think we can convert using our methodologies, really, and we hope to be announcing more of these in the next 6 months. The question about whether The Daily Mash premium requires further investment. We've invested a very small amount in the progress we've made to date, which gives us a real feeling that if we do start to invest more significantly we can really grow that model to a point where, as Jim has already suggested, it could represent 50% of the commercial results on that site. So we think there's a really significant opportunity there, but we've yet to really start pushing the marketing spend. There's a question also about marketing and driving traffic to our site. And is there an opportunity to buy channels and content that this stays through debt? I think that's referring to buying websites and content at this stage 3 debt. DJ, do you want to answer that?

So for the right asset, of course, we've got plenty of cash. We're cash generating, true cash generating and we're a good bet to lend money to. So for the right asset, I think that'll be quite attractive.

Okay. Question from Fiona O. What functionalities do you need to add Graphene to optimize? I think that's -- not entirely sure what that question means other than what functionality does Graphene have within it? Jim, do you want to expand on the Graphene functionality a little bit?

Yes, sure. I mean I think as James said, one of the big steps forward that we've taken around Graphene over the last period is the ad stack and that the potential benefit there is the upside that we've seen as a result of the monetization of The Tab, the improved monetization of The Tab, a very large proportion of that has been delivered by Graphene. So the work that we've been doing is to try and make that optimization easier to deliver. So I think there's still potentially further to go with that. So I guess that would be enhancing the existing functionality that we've now got in place. Obviously, there comes a point where that's a very useful and powerful tool for us. It may well be, at some point in the future, that we may consider opening up some of that functionality depending on if we found that was the right strategic thing to do in a sort of licensing model. But we've also got other areas that we can expand Graphene internally to refine and improve our own optimization because there's always more that can be done. And so it may well be that one of the next things that we begin to look at is an even greater level of granularity to look at, for example, profitability by content type. So the Queen's passing and our coverage of that was an interesting example of that recently where Entertainment Daily covered that very significant news event very, very successfully. But obviously, there was significant advertiser reticence around -- advertising around the event. So that's just -- that's a very, very polarizing example of where not all content monetizes at the same rate. So one of the things that we can potentially use Graphene go and invest further is to look at other different content strands and begin to look at comparative ROI on those different pieces of content. So that's not all Graphene can do. Obviously, it's a multifaceted platform. But hopefully, that gives you an idea of potentially one of the areas that we could look to develop next.

Okay. Thanks, Jim. There's another question that says, a very strong first half. Have you started to see the economic headwinds so far in H2? We started to see a more choppy market since the back end of H1. And really what that's resulted in is a period from June onwards, where we've exceeded our performance expectations every month since that moment. But it's become much less predictable than it had been over the previous few months of the year. Clearly, nobody forecasts the Queen's death into their budgeting models, in September. But equally, we think that could well bring in advertising spend into Q4 that was delayed from the end of Q3. So it remains challenging in terms of forecasting, but we remain wholly optimistic about how we will perform within the ad market as it exists. And we've proven over previous years that we perform at the upper end of the ad market. So we remain confident that any economic headwinds will keep us in a very strong position to continue to deliver the strategy that we've laid out. DJ, there's one question at the beginning, which is how we're going to scale to be GBP 100 million-plus company. Do you want to chat through that?

Yes. So we have to be out of the comments on the macroeconomic situation because it's just too hard to call. But absent that, it's a continuation of the plan. It's a buy and build plan, to buying judiciously and then building. And on the buying, pleasingly, we're seeing a lot more opportunities, a lot more things having to view that look quite attractive that would work with us. And we think even better, those opportunities will accelerate going into 2023 as more trauma comes about the market. And on the build side, we talked about Graphene. Graphene is -- it really has accelerated our ability to monetize the assets. And so Graphene is going to be an increasingly more important part of how we build. And then the third component is by growing our revenues and growing our profits, it's enabling us to invest back into our capability, commercial content and tech. And that again goes into this virtuous circle that allows us to buy stuff, exploit it quickly and then move on to the next thing. So to ask the question, more buy and build, and we'll keep focused on that.

Thank you, DJ. There's a further question, it seems like the payback on The Tab was 18 months or less. Is this the benchmark for other acquisitions, including TV guide? I would like to beat that if we can. But I don't think beating that will prevent us from making acquisitions. So there are some assets that we're eyeing at the moment that could well hit that kind of payback period. If we deliver them correctly and optimize them correctly and quickly enough, then there certainly stand a chance of hitting that 18-month payback period. But it's not a rule that we'll put in place that will prevent us from buying the right assets that strengthen the portfolio as we look to grow the business. There's a content question on The Tab is the proposed development of The Tab -- in the proposed development of The Tab, are you considering content features that would challenge alternative sites like student room? I don't think we want to push The Tab into the kind of drier end of the student market. And we want to keep it as a fun place to be, and a place where students get entertainment and where journalism students can express themselves, et cetera. But of that note, Jim, you've already expanded on The Tab content broadening, but do you want to have a comment on that?

Yes. Well, I agree. I don't miss this. I think that, yes, there is a -- clearly, yes, [indiscernible] exceptionally practical in their focus and they're around, helping students get things done and make choices around things that they need in order to have a successful student life. And I think at the moment, as James says, is in a different space. I mean, as well as the entertaining content, there is a really strong campaigning core to The Tab's editorial offering and they run stronger tutorial campaigns around quality and issues that [Indiscernible] students. We think there's potentially more there. But yes, as I say, we think that the local content and localization, but with more of an entertainment spin, as James says, probably feels like a more comfortable place for the brand at this stage because we think it feels a little bit more adjacent to the content that's already being made.

Okay. Thanks, Jim. There's a question mark about research notes and whether or not we can put our research notes on a research tree. It's a question I'm going to have to ask our brokers, Panmure Gordon. But we will address that, if we can, we will issue the guidance to the market. The final question, I think, is around whether or not there are potential revenue -- other revenue streams and diversification on other brands so like a subs model on Entertainment Daily. Entertainment Daily is a different beast, I think, to The Daily Mash. But we will explore diversification and there is in that market opportunity around things like streaming services and affiliate models, affiliate revenues that are being driven by some entertainment sites around streaming. So it's something we'll continue to explore, but it's not a priority on the Entertainment Daily site to set up a paid subs model. I think that exhausts the questions that are in the feed as far as I can see.

James, absolutely, if I may just jump back and then David and Jim as well, thank you very much indeed for addressing those questions that came in from investors this morning. And of course, if there are any further questions that are submitted today, we'll make these available to you immediately after the presentation has ended for you to review. And then add any additional responses where it's appropriate to do so. James, perhaps before redirecting those on the call to provide you their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments to wrap up with, that would be great.

Yes, sure. Thanks, Jake. I think probably, the answer that I gave on a call earlier this morning is one that I should probably repeat, which is somebody ask me what do the next 6 months look like? Well, the business is in a really positive place. We're absolutely well-positioned in terms of delivering strategy and executing a number of things. We're planning on stepping up The Daily Mash subscription drive. As we've now reached 1,000 with very limited marketing investment, and that has a great future ahead of it. We'll continue to perform at the upper end of the ad market. We're absolutely confident about that because of the performance of our inventory. And in fact, the weak pound does actually benefit our business, not that we're particularly in favor of a weak pound, but with the majority of our advertising being traded in dollars then it brings us back better results. And we expect to move on more acquisitions fairly soon as we move towards the end of the year. So we're absolutely trying to deliver and delivering on the key aspects of our business as we move into 2023. Thank you.

James, that's great. And David and Jim as well, thank you once 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. It's going to take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Digitalbox plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you.