Digitalbox plc (DBOX) Earnings Call Transcript & Summary

Good morning, and welcome to the Digitalbox plc investor presentation. [Operator Instructions]. I'd now like to hand it over to Marcus Rich, Chair. Good morning to you, sir.

Good morning. Thank you. Good morning, everyone, and welcome to the Digitalbox 2024 Annual Results Presentation. I am Marcus Rich, the Non-Executive Chairman. I will be joined by James Carter, CEO; Jim Douglas, COO; and Richard Spilsbury, CFO, we will take you through the 2024 results. The digital media landscape has changed significantly since 2022. Along with other notable consumer listed media companies, it has taken a while to navigate the turbulence caused by the major platforms, Google and Meta. As they respond to the threat of AI by reducing the audiences to media owners for both advertising and affiliate marketing. Under Google's EEAT, which is Experience, Expertise, Authoritativeness and Trustworthiness, we have now seen how specialist content can range better than generalists. And we've shifted our focus to subdividing the entertainment space into niches with launches such as Emmerdale Insider and Royal Insider. We have essentially worked through the process of these platform changes to see across the growth moving forward. The team will update on success to date but an accelerated strategy of organic launches and bolt-on acquisitions to reflect the platform's change of sentiment will, we believe, grow the business faster. The strategic review in the year helped us to evaluate all alternatives, but also to confirm the existing proven business model can deliver greater shareholder value as we execute on what we have labeled the vertical strategy, which the team will go through in some detail. I'm pleased that we have delivered a positive set of results this year seeing revenue grow by 31% whilst growing audience and scaling the portfolio at the same time to put Digitalbox in a fantastic position to deliver future growth. I'm just going to frame now with this slide, the 6 areas the team will talk through before I hand over to James. Firstly, portfolio growth through buy and build. An important part of the journey to date has been the 7 acquisitions since listing, with Walford News being the latest, all as highlighted have paid back between 18 and 24 months. The challenges post '22 that we've talked about have killed off some of the targets, who haven't been able to adapt to the platform changes. And therefore, build or launches has become even more of a priority for us as we understand how specialist content can rank high with Google. Audience growth, we highlighted in the RNS significant audience growth on TV guide, the tab and the Pope and subscription growth on the mesh. The team will talk through the opportunity for editorial investment to build further audience in 2025, particularly TV guide. If we look at the market, beyond radio times, nobody is doing a particularly good job marrying listings with outstanding TV content. Improved ad market. Digitalbox is always dependent on the macroeconomic backdrop. The positive forecast for digital advertising in 2025 and continued growth in mobile as part of the U.K. advertising mix means we enter 2025 well positioned. Rapid return on acquisitions. We talked a bit about previous acquisitions, but recently, we've acquired large but understimulated dormant social audiences that we've been able to add new content and brands to that have grown very quickly. The team will talk about how this differentiated approach to acquiring audiences is working. Continued profitability. Revenue for '24 is GBP 3.645 million, up 31%. And adjusted EBITDA is GBP 624,000, up from GBP 20,000 in 2023. Richard will take you through the financial highlights. And finally, growing our cash position. Net cash has grown again and as at the end of '24, is GBP 2.015 million. I will now hand you over to James Carter, the CEO of Digitalbox, to take you through the year-end results.

Thank you, Marcus. And again, welcome to the Digitalbox Q4 2024 results presentation, we're glad you're able to join us. To recap, for anyone unfamiliar with Digitalbox, Digitalbox is a pure-play digital media company with a pedigree in emerging publishing the technologies. We're 100% digital and mobile focus with our core editorial delivery in the entertainment sector. We've grown through a buy-build strategy and transforming the acquisitions that Marcus pointed out that we've made along the way, delivering very fast returns on investments. Our historical model is simple. We publish great content that drives audiences to our website that we then monetize through commercial solutions across a number of areas. We gutted off very much around display, but we're now reaching out and generating rent through 4 key commercial areas, in fact, 5 key commercial areas. Display advertising, video advertising, e-commerce, subscriptions, direct to consumers and on platform revenue. So a significant change from where we were. We operate the 8 brands that you can see on the screen, entertainment daily, our entertainment TV celebrity news site; The Daily Mash, the U.K.'s leading news satirical website. The Tab, the U.K.'s leading student use culture site driven by an army of student journalists across more than 30 counties across the U.K. The Poke, which is best described consumer aggregators serving some of the funniest moments to hit the web. TV guide, which was, in fact, a sort of very early-stage Internet business and linear TV guide that was launched over 20 years ago, which we've now modernized and made more relevant for today. Emmerdale Insider that is part of our vertical strategy that we'll go into more in detail later, but delivering the best content around Emmerdale soap Opera for fans of that particular scope. And Royal Insider that is exactly what it's there as it's for those who want to keep up with the latest on the U.K. Royal family. And Reality Shrine, which is basically a destination for all those that want the latest twist and turns from the world's big reality TV shows. 2 of those have been launched outside the period that we're reporting on, which are Royal Insider and Reality Shrine. So the presentation will break down into 5 areas. I'll take you through the market backdrop, the key headlines from the business and what the future is looking like, whilst Richard will drill down into the financial detail and Jim Douglas will explore the portfolio development that we've delivered over the past year. Firstly, the leadership team, the Board brings significant experience for the business through success delivered within major institutions like EMAP Plc, the Future plc, Reach plc. In addition to [ power and the Navidea ] Group. The executive has experienced in editorials strategy at the highest level, delivering -- and also delivering VC-back lower to exit and are well invested with a stake of around 20%. So the first slide around the market backdrop. As you can see, this slide has 2 very similar charts, and they are the share prices of 2 public media companies, one being Future plc, the other being Digitalbox plc. And it's a very similar pattern over the 5 years that we're showing you here. And it takes back really to a point in 2022, when both were at the peak. We've obviously seen a lot of macro effect -- macro factors affecting the market since 2022, notably the Ukraine war, Energy crises soaring, inflation, spiraling and general economic uncertainty since that period. But combined with that, media companies that had to deal with the significant changes that have been thrown into the marketplace, partly induced by the emerging AI tools, but also being delivered by Google, in particular, through its parasite update that was there really to be against site abuse and people using great domains to deliver unrelated values. So as an example, maybe the independent new site by delivering content around best barbecues and abusing really in the eyes of Google how that domain should be ranking. There was also the EEAT algorithm that Marcus mentioned, the helpful content update that was really trying to push users towards highly valuable content as opposed to content that was there here to generate transactions and the lease span update. The 2 sort of perfect storms, one being the macro market, and the other being the platform changes that took place. But we've got through this period in a positive shape. Many haven't that we've got through this period in a positive shape and come off with a great growth plan. The algorithm changes that we mentioned has seen a move away, as Marcus also said, from generalist site populate might being favored by the platforms. Sites that can really deliver around trust authority metrics often trained as by fans, for fans, where sites deliver very high levels of consumer engagement. Very high visit frequency, comment frequency, et cetera, all contributing to that engagement that is priced by the platforms. Looking at traffic across the market, there's been lots of commentary about audience trends. The lower black line shows a fairly typical and widely reported trend across digital news media in the U.K. over the last couple of years. So it runs from 2023 to the end of '24. And this one is one of the more popular news brands in the U.K., which is showing a 35% reduction. And it's probably fairly typical of news media in general. The top charts shows Digitalbox total traffic over the same period. And you'll see we've maintained a similar seasonal pattern that growing our audience by 10% in total over the '23 and 2024 period, outperforming the market, against audience. Now let's take a look at the ad market. The lower chart shows the global digital advertising index across 2023 and 2024, you'll note a steady improvement, which again maintained similar seasonal patterns, but rose by around 10% in '24. The chart on top shows Digitalbox revenues across the same period with a very strong Q1 and a much more robust Q4 contributing to a 31% year-on-year increase in income for the business. So again, outperformance of the market. Looking at the global advertising market further with noting we're focused around 2 of the best ad markets on the planet. The light blue bars show the advertising spend per head of population of the dark blue, the amounts channeled into digital spend with the U.K. showing the highest share of the total ad budget going into this medium. And you can see that there's a 2 to 3-fold return per head of population in the U.K. and U.S. compared to other G7 countries as a good place to be operating. Just looking for a summary really of the year. Early in the year, we decided to focus on the biggest strength in our business. Our editorial knowledge of the entertainment market and grew our business for the 8 operating assets that you see today. We maintain acquisitive -- we remained acquisitive buying a further higher properties, which will all contribute to our growth plan and have ended up with much more diverse operation that injects greater stability to our growth plans. So the highlights for the year were 10% traffic growth back in the market cash deployed to both buy and bill of GBP 624,000 adjusted EBITDA, which is 31x the previous year and finishing the year with GBP 2.1 million in gross cash. Now I'd like to hand over to Richard Spilsbury. Richard, your microphone is on, we can hear your paper shuffling. I think you're ready to go.

Yes. Thank you, James, and good morning to everyone joining us. As you're aware, the trading environment for many digital publishers has remained very tough with many seeing significant declines in engagement due to algorithm changes and uncertain macroeconomic environment in 2024. Last year, my predecessor high noted 3 key aims mainly and I quote, 1, don't incur the trading losses; 2, conserve cash, 3, position the business in the best way in order to capitalize fully when global advertising markets recover, which they will. I'm pleased to be able to report that Digitalbox has demonstrated it has a resilient business model and the insights ambition to find growth even in the challenging market context. We'll therefore be able to report that the group has not only not make losses, but returned to its historically high gross profit margins. Secondly, can demonstrate increased cash and invest it in target accelerated growth; and 3, diversified the portfolio to take advantage of market trends. I'll explain that further over the following slides. On to the income statement in front of you. The income statement represents the trading performance of the enlarged group, the first short year of TV guide, and I will later show like-for-like performance, too. In overall terms, revenue increased by 31%, which is ahead of many comparable businesses due to good cost agility to reallocate resources to the most productive operations. Direct costs were reduced to improve gross profit that -- gross profit margins back to 85% being nearly 7 percentage points higher than last year and double the gross profit margin of many comparable businesses. Administrative costs were up 14% with 60% of the increase due to higher head office costs, but the contribution before head office costs are GBP 1.8 million, up 8% on prior year. Head office costs, as a reminder, in case governance costs associated with our listing on AIM. As a result, adjusted EBITDA increased to GBP 624,000 with a respectable margin of 17%. The adjusted EBITDA encapsulates the underlying profitability of the group giving you greater visibility of trading once we take into account the following: First, value measurement changes such as depreciation, amortization and impairment although there were no impairment charges this year and share-based payments. Secondly, in presence -- in new product development being the vertical strategy and platform improvements to TV Guides and 3 one-off projects not related to trading such as costs for the share capital reduction acquisition costs and the strategy review, which was undertaken in accordance with the takeover code after clear representations from a key shareholder. On to the segmental revenue. The segmental analyses demonstrates revenue growth in all assets and our reduced reliance on entertainment daily, still our largest brand, but now only 40% of revenues. Its growth rate was healthy and lower than other brands due to the current calibration of search algorithms. Other brands showed significant growth with our next largest brand to tap growing 27% and the incredible growth of 255% of TV Guide, which we acquired in Q4 2023 and underscores our ability to extract value from acquisitions. Quarterly revenues changes demonstrate that the trading continues to evolve. Despite the headwinds faced for individual brands within specific quarters, the diversity of our portfolio helped deliver growth in every quarter and Q4 shows that we have the agility to adapt and take advantage off-market opportunities. On to our cash generation. Cash generation remains strong with net working capital cash inflows and continued strong track record in debt recovery. As a result, cash conversion as a percentage of adjusted EBITDA was 90% after investments in new product development and investments in one-off projects. Last year, we reported aggregate cash flows over the last 2 years to better understand underlying cash conversion, and I've done so again to be consistent given that the prior year comparative is still not normal. This shows average cash conversion of 117%, continued growth investments in growth and then other investments to underpin shareholder value. Cash utilization. This slide summarizes how we have managed our cash reserves, which were GBP 1.9 million at the start of the year, net range GBP 2.1 million. We have used cash generation for 3 purposes: 1, to repay loans, and we will fully repay our existing COVID bounce back loan in 2025. Secondly, investing growth for new products development GBP 79,000, CapEx 3,000, acquisitions including the payment of deferred consideration GBP 247,000, totaling GBP 429,000. And thirdly, to underpin shareholder value and the reduction of share premium that creates a channel for dividends and also the shareholder review. We had significant cash reserves at year-end and mindful of the need robust working capital management so we can continue to invest in growth, both acquisitively and organically. While a significant proportion of our revenues are under in U.S. dollars, we convert U.S. dollar funds to selling every quarter to manage foreign currency risk, and we continue to review receivable interest rate secularly to obtain competitive rates. And so to conclude with our financial position. Our financial position continues to be strong, which puts us in good position to exploit market opportunities for growth. Our largest asset category are the intangible assets, mainly arising from consolidation accounting for acquisitions, along with all our intangible assets, we have performed a sensitized impairment review and no additional impairments are acquired this year. Our approach to assessing the impairment review has been consistent with prior year, and we continue to consider the assumptions applied to be appropriate. You are not a capital-intensive business and that is seen in the main value of our fixed assets. Our deferred tax asset represents the highly larger recovery of tax losses in future trading periods from 2025 onwards, which will benefit our effective rate of tax. Net current assets have increased and are healthy and the bank loan is due to be repaid this year. The share premium has been reduced following shareholder approval and court confirmation and credited to the distributable reserves. So this strong financial position has given us the opportunity to undertake a number of acquisitions in the last few months, namely GRV Entertainment Group, Walford News and as a post-balance sheet event, which is not adjusting Media Chain, as well as 2 new launches, Emmerdale Insider, Royal Insider. Your board will continue to focus on maximizing value to the expansion of the current model. We will continue to develop its business through launching new products, and we remain alive to acquisition and merger opportunities to maximize shareholder value.

Thank you, Richard, for that comprehensive overview. Let's take a look now at some of the areas that we've developed over the previous year. When looking forward, it's always important to reflect some new strengths, and here are a few that we've surfaced. Engaging content, which creates -- making content that people really want to read and brings us very efficient editorial team, as I've mentioned before. We're very good at efficient revenue generation. Our Graphene Ad Stack drives great results with limited resource. We're good at adapting to platform changes with a strong track record of dealing with the challenges thrown up by the major platforms is a key ingredient to developing our business since its inception. Our push media skills are strong. Our teams have some of the best skills in social media, and our return on acquisitions, as already mentioned, have typically delivered a payback in less than 2 years. That's a real strength. And we're good at generating cash, highly cash generative, which will help to fund our growth plans. One of this year's big success stories has been TV Guide. After buying the site in October 2023, we've repaid over 70% of its costs and are on track to fully repay probably within 20 months, further demonstrating our ability to breathe new life into properties that have soled. And that's a repeat process of what you can see on the right here with the Tap taking 18 months, 20 months. That the GBP 480,000 that we spent on TV guide looks at the moment to be pretty good value. Social. So we're up to 21 million followers. We entered the market in 2019 on the left-hand chart at around 3.5 million followers, and have since grown to 21 million by 2024. Some of that has been through acquisition. And as I previously mentioned, the media chain acquisition of the 99 problems phase that we attached to the Tab can be demonstrated by the reach chart, since we bought it in August '23. The blue line to the right shows around 500,000 reach per day being delivered by the site, when we first bought it. And it's now up to an average of around 10 million per day. So that's a real signal of how we've managed to create value around that particular acquisition that is delivering great traffic results to be Tab site and also growth on platform revenues from within Meta. We've diversified our revenue sources. The 2 charts on the left shows in December 2019. And the blue up piechart represents programmatic revenue. So in December 2019, you can see we're 100% programmatic revenue against 2 brands, Entertainment Daily and The Daily Mash. We'll fast forward December 2024, and you can see a very different mix in our revenue makeup. Driven part by subscriptions in the green on The Daily Mash, which has seen a big success since we started to deliver that a couple of years ago. And in the red, the direct revenues and on platform revenues that we've started to develop over the past year. Well this really is a result of the platform changes that have taken place and the fact that Meta has had to respond to TikTok and start to reward content creators for engagement on the platform. And we've created new products. So this image that you can see on the screen really pieces together how we created Reality Shrine that we launched about 4 weeks ago. So as you have all seen, we brought reality tidbit from GRV Media in November '24. We took the best list of reality tidbit, fused it with some of the best reality TV content that we had in the archive on our parked website called [indiscernible] and blended that with pop culture shrine with social page that we have been developing in the background around youth audiences within the Tab Group. And both of these things put together to create rate too strong. And that illustrates really how our approach to buying a building has changed over time. If there are fully formed assets, we're absolutely on the lookout, but things that we can extract value from as we are doing here with Reality Shrine. And that really is a way of fast-forwarding any launches. So if we consider on day 1 of Reality Shrine being published, we had Google traffic. This would normally take some time to deliver despite people. So that's the fast track way to delivering value. We've labeled our vertical strategy, and this really is around the -- congregating around very specific content areas with highly invested audiences. So people that are very, very committed to support area of subject matter. Emmerdale Insider is an example of that with a high frequency [Technical Difficulty] and people in demand depends. That's a great example. That collectively generates super engagement for people who are highly engaged delivering comments, delivering feedback lights and reading relatively long at subject matter. This all combines to generate value around the deep algorithm that Marcus mentioned. So really, what we've done is build around core strength for -- Emmerdale Insider, Reality Shrine, Royal Insider are the ones that we launched to date. And we'll continue to launch more products as we move throughout the year around this vertical strategy. And that's really how we plan to deliver a greater platform engagement as these values that we're talking about will rank higher than more generalists. As you can see, as we've developed, I think over the last 5 years, you can see how we've grown our cash position. So we entered the market in 2019 with around GBP 0.5 million of cash. And over time, whilst growing the number of assets that we're operating, we've managed to build with a cash position of GBP 3.1 million at the end of 2024. Now I'd like to pass over to Jim Douglas to talk through some of the significant developments that we've made within the portfolio.

Thank you, James. Yes. So in terms of the portfolio development, I'll start with an update on the development of TV Guide, which has been one of the big successes of the year as James and Richard have mentioned. Completed this full first year of -- since we acquired in October '23. As the name suggests, the core proposition here is helping users find the best shows to watch, whether that's what's on now or later until the next week or allowing them to search by specific shows, by channel, by types of show, movies, sport, film. And the path we've been pursuing this year is to transform potentially been a linear home lead listings product into a richer and better experience for users with more editorial content and I'll expand more on that on the next slide. And the results of this work, as you can see here, kind of we've mentioned, I've been pretty spectacular, to be honest, we've seen a 19% increase in Q4 traffic, which is traditionally the peak season for the brand. And as James and Richard had mentioned that's helped -- contractor being another acquisition that's paying back within 24 months, we think, potentially 20 months as it shows on the slide here. So on this next slide, we give a little bit more detail about the development and growth of the TV Guide brand have played out since ownership. We did some stabilization work to the platform prior to completion. So on the left-hand side of this time line back in October '23. In December of that year, we rebuilt the main listings Gridview to be more, which is obviously better for users and better for Google. And we saw the benefits of that work begin to come through in Q1 2024, as you can start to see, which is the traffic line begin to increase. And then in Q2, we pushed on again with automated streaming content being added. We also rebuilt the iOS and Android apps. We introduced a life mode to make the site more readable and more friendly. And then in September, we increased our editorial content. We felt that we've done a lot of good housekeeping work and potentially we could then have more content into this framework. And we added best of list show previews and episode -- recaps. And then on the right-hand side, you can see the combination of all this work wearing the peak Q4 period, we saw traffic increase year-on-year to 16 million sessions [ 8.4 ] million in 2023. And we think there's more opportunity for expanding the brand further, and we're planning a further phase of development of editorial and tech work in Q2 and Q3, and that's going to offer more content and more functionality for users. Moving on now to entertainment daily, which is our longest-standing brand, as I'd imagine many of you familiar with it. Just as a reminder, the site editorial remits the delivery of fast-paced TV and show this news with a strong U.K. focus. We saw a very good Q1 with traffic around a number of key stories giving us a real uplift. So we saw the Christian Horner, Jerry Hallowell and scandal playing out. We saw TV-related coverage like Mr. Bates and the post office traffic -- trafficking very well. One of the favorite Eastenders characters was asked and that gave us some great traffic. And interestingly, we're also managing to deliver a decent proportion of our traffic from timely resurfacing of some stories and internal recirculation to saw some growth. So we've been working on improving this area. And we saw a 22% uplift in traffic from internal recirculation as we are able to surface even more relevant and engaging stories for readers. So once they're on the site, they keep reading. And then on this next slide, on Entertainment Daily, we see another area where we've been concentrating, which is in driving engagement and exclusive. So in this example here, which is around on the left-hand side, which is around the fallout of the Giovanni, Kenichi Hamada, Hopkinton story, around strictly come dancing. And so Giovanni was partially cleared by the BBC investigation. So we write an article around that news moment. And then at the end of that article, we'll run an end of article poll as you in the middle of the slide, I'm asking readers to vote to tell us what they think about the story. And that enables us to then generate an exclusive story on the right-hand side, in this case, saying 72% of our readers probably should return to the show. So this enables us to tap into a major story, take the temperature in terms of reader opinion and then recycle this back to an audience in a way that we know will chime the views. So we're rolling out this tolling editorial product across -- more likely across entertainment daily and across the other sites. We're running at around about 25,000 monthly votes. So we see this as potentially a really useful content -- for useful tool for generating engagement and generating exclusive content. Moving on now to Emmerdale Insider, which is also managed as part of the Entertainment Daily Group. And as James mentioned, is the first of our first sites. So we launched in August. The idea, as James mentioned previously, is to take a streamline and templated approach that enables us to bring new brands to market more quickly and focus on delivering hyper-relevant content that resonates with the audience. So Emmerdale the legendary ITV soap it's been running for more than 50 years. One of the appeal of shows like this, it's just worth mentioning is that because they're on all the time, they are constantly presenting us with concept opportunities, whether that be plan speculation about what's going to be happening in the show as of forthcoming and previous episodes, recaps. And a highly focuse site like this allows us to go even deeper. So we have a great archive around the characters and history of the show as well as coverage for classic Emmerdale episodes. A huge depth of knowledge in the editorial team, and we're really confident that genuine fans will appreciate this level of credibility and expertise. We've seen some good early traction. Site reached around 1 million views in November, and we're really optimistic about how we can continue to develop and expand this site going forward. Next up, we have the last of the properties I'm going to talk around in the Entertainment Daily Group, which is Royal Insider, another of our vertical sites, which launched post-period launched in January. As you can imagine, the slide is 100% focused on delivering coverage of the Royal family, which is a mix of breaking use and longer reads, historical information essential guide to lines of succession for Royal residences, the Royal diary and also extensive picture-based features. The site uses the same template as Emmerdale Insider with different branding, obviously. And as well as fresh content from our own team, we brought over an archive of really good content from the incoming GRV acquisition to kickstart the site. And the intention is to see what kind of potential the brand has in the U.K. but also beyond. The signs are really with around 1 million page views per month. In terms of audience, we're seeing a touch more than half of the traffic coming from outside the U.K., primarily the U.S., as well as our use of an acquired asset in terms of the GRV content archive from an audience point of view, we're also using the recently required Facebook audience from media chain to expand further. So it's a good example of us blending our own talent, a common template and assets from 2 acquisitions to develop a new brand. Moving on to our 2 humor brands, first of all, the Poke, which is having a really great year. So the Poke's remit is to curate kind of a commentary on the biggest, most entertaining stories and how they play out on the Internet, TV and social media, including satirical takes on current affairs and politics. We knew that given the U.S. election cycle, it was going to be our third final year. So we ended our editorial output to cover more stories and publish fresh content 7 days a week. And beyond that easier content, which is understand that is skewed heavily into the political arena. We also went back to the archives and had some -- we reposted traffic from broader content that we know the audience also like. So as an example of remarkably polite refugee or the most British phases of all time, a little bit of life for relief some of that sort of the political content. The result was a 22% traffic growth, which along with using values that we've seen on this site has seen a 63% year-on-year revenue increase. Now moving on to The Daily Mash, which is the U.K.'s favorite satirical news site. Since we made the strategic decision to shift to a paid model. We've been making really good progress. And as this shows growth that we see as key to unlocking the masses return to profitability. So we passed 4,200 subscribers towards the end of the year and have driven around GBP 130,000 worth in consumer revenues. Part of the development this year is about moving leaders up of the value chain into an annual subscriptions, pricing incentives and other activity like bundle deals. So The Daily Mash through licensing deal that we did, which was profitable in and of itself, but it's also now working -- added value item to incentivize readers to choose an annual or lifetime plan as I subscribe. And position where 60% of our subscribers are on annual plans, which obviously protect us to a degree from ongoing market churn. The next phase for the match is to make it easier for users to get subscriptions and share sample article [indiscernible] to further encourage sign-ups, and we're hoping to get up in place for H2. Now moving on to the Tab, which is the U.K.'s largest student and youth used culture. It's powered by the London hub, as James mentioned, we've worked journalists working at campuses, all across the U.K. There's been plenty going on, on this brand during the year. It's really pleasing to be able to report on it at a headline level, we saw 15% growth in traffic. And as you've seen in certain member reporting, that has now helped the brand pass GBP 1 million of revenue. Part of this has been driven, as James showed, by combining the existing Tab social presence with some of the social assets we acquired from Media churn back in '23 and that traffic flowing through in the year. That process is a core follower base across all of the top properties of 14 million followers. And then to feed the expanded audience, we've invested in editorial, we've hired new team members, and we've also welcomed some of the writing team from GRV into the TAB Group with great success. Also, the tech group -- the tech team, excuse me, working alongside the editorial team rebuilt the site too. And we've sharpened up some of the design. We've done a lot of work behind the scenes, meaning the site is more resilient -- easier for the teams to use faster, and we're seeing savings of more than 25% in our server costs. We also love the -- on this slide we're sort of returning our Netflix Facebook page, which we reported last year was sent into the wilderness by Facebook, but has now returned and contributed around GBP 2 million pages in H2. And then briefly, this next slide gives a bit more detail on how we approach the brand. It's really around the 2 sides, which is the global aspects on the left-hand side, where you see higher profile, youth-friendly content like the coverage that have a popular married at first site, which delivered a huge chunk of traffic during the year, almost 10 million page views and the team's take on global pop culture stories. These stories helps grow the U.K. or help grow the site beyond the U.K. audience and brought U.S. traffic to represent more than sessions in H2. So that's a really encouraging product global basis. And then on the side, local because where the university take, as we mentioned, do such a brilliant job of gross routes reporting often around quite serious issues around campuses, and they deliver that on the site itself, but also through their local Instagram and TikTok pages. And these are the stories that regularly get picked up by the nationals helping the brand's credibility. So it's been a great year for the Tab, and we'll keep working here. We'll have more strength to the group in terms of investing in the core brands, but also under the Tab group, we have been as well to date our most recent launch on the next slide, which is a brand new property. Again, this is using the template that we have developed as part of the verticals plan Reality Shrine. We've managed as part of the group. And the aim is to create a super focused of the biggest and oldest reality shows with a strong yield U.S. emphasis. So this is about a combination of factors. We're taking the expertise that we've developed, but not a Tab team's success in delivering very sharp, fast opinionated editorials takes on the big shows. We've been able to use some of the assets of the GRV portfolio to give us a content archive and we started the brand with talent from the Tab and also GRV. We also have [indiscernible] at your page, and we think there's an opportunity to further the traffic potential by bringing in on the previously quite immediately in social -- social pages to expand the brand further. So it's really early stages, and the traffic is looking promising. Again, we're seeing the majority of the traffic being international on this brand, which is what we set out to do around 60% of the traffic is coming from U.S. 15% from Canada. So it's been a really exciting and positive year with lots of activity right across the group, and we'll be able to update more on the development of this brand and a white as the year progresses. That's it for me.

Thank you, Jim. Plenty going on there and plenty being delivered by the staff that are now around 40 full-time members with the company now. So looking towards the future, we've got momentum, and we're going to continue to scale the business over the coming years. This chart shows a number of operating assets within the portfolio, and we'll have at least 10 by the end of 2025 and continue the process of launching and acquiring over future years as illustrated by the larger bars going towards 2027. We'll continue to create operational diversity with more brands and more revenue sources to create greater stability as we grow. We'll continue to focus on bolt-on acquisitions, looking across the market, that the sweet spots being really typically first stage -- first wave digital media businesses, where they failed to modernize the current market conditions. These represent by the TV Guide and the typically by the Tab, TV Guides and The Poke. And the typically businesses that were formed in the Northeast with great foundations have struggled to evolve, as I said before, the model to be relevant today. We think the current economic conditions will continue to apply pressure for more opportunities to emerge and we'll continue to consider both fully formed and what I label fractional assets as we move forward. We're playing in a positive state. U.K. adults spend 4x as much time online via mobile devices compared to desktop. Mobile advertising revenue is still playing. Digital advertising spend is forecast to grow to over GBP 900 billion in 2028, making it GBP 251 billion bigger than that, that it was delivered in 2024. So a positive place to be operating. And finally, in summary, the media market has had a bit of a reset in '23 and '24. The combination of Google algorithm did change the market. In fact, as Marcus suggested, some out of business. Audience and revenue, outperformance of the market are really positive against both metrics, and we aim to continue that process of building the company's audience volume as we progress with launching and expansion. We had profitable operations again. It's the sixth consecutive year of profit at EBITDA level. And the plan for growth are positive with 10 assets being ready for delivery by the end of 2025 and positive early signs around those that we've grown at the beginning of this year. And we're generating cash, which will fund our growth. We have an ability to build and make further bolt-on acquisitions as the opportunities unfold. And the final point is we have momentum, and that's a key point really that we're progressing. We're progressing well. We're building the assets, building the revenues and building a bigger future for the business. So thank you. I'd now like to move on to the Q&A, if that's possible. But could I request one of our team, I think, someone is shuffling papers causing quite a lot of noise on the system that I can pick up. So it would be quite good if we could stop the shuffling for a movement as we move into the Q&A.

[Operator Instructions] And James, if I hand over to you, I'll pick up at the end.

Okay. Are you putting the cameras back on Mark or -- The cash position has strengthened, the first question by Tom M. How is cash being allocated for future growth? Richard, do you want to pick up on that one?

Cash for future growth, as James has explained, we're looking to be able to move opportunistically, certainly with acquisitions. We've done some quite small acquisitions in the last 6 months, each individually being quite small. So either accelerating the rate of acquisition or increasing the size of acquisition are one of the opportunities that we are adapting.

Okay. Thanks, Richard. Another question from Tom. You plan to double the size of the business. Can you outline the key drivers for this? Well, the key drivers are fairly simple. If we can double our audience over a period of 2, 3 years, we will double the size of the business -- more than double the size of the business. So it's about overall audience growth being delivered, and we plan to do that through delivering more brands and operating more assets as we move into the next couple of years. There is a question about which I'll pass to Marcus, which is around the share price this morning and limited number of transactions GBP 12,000 worth of shares being traded across the market.

Okay. It's from Gareth actually. So Gareth, I mean, I've got a lot of sympathy actually for shareholders of all media stocks at the moment because post-COVID, there was a rebound in '22, '23. And then we've had the changes with the platforms, which has reduced the audience and also a lot of sympathy, which is there's some short-term trading, particularly around AIM. However, still fundamentally believe that all shares and all companies should be considered on their long-term opportunity. And I think the biggest difference with Digitalbox and some of the largest players currently is our agility to understand what's required from a search engine optimization standpoint and proving it, not just talking about it theoretically with the launches of Emmerdale Insider and Royal Insider. And there will always be a free-to-air ad-funded media business. And I think we can take advantage of the opportunity quicker than some of the bigger media organizations. And ultimately, we should be judged on our growth over '25 and '26, in which case, I think the share price will significantly come back.

Thank you, Marcus. A question from Christopher T. The p in the Tab have repaid their acquisition costs quickly. When do you see the other assets such as TV Guide achieving similar profitability? Well, tracking at the moment would suggest that we'll almost fully repay by possibly the end of April TV Guide. So that will be down to about 20 months, since we acquired it. It's not essential that we repay it in that period, but it's a very strong indicator around things that we've managed to turn around. There's a question from Peter I think I'm going to have to pass to Richard, but could you explain how admin expenses have decreased from GBP 9 million in 2023 to just over GBP 3 million in 2024? And I think it's related to a write-down. Richard, you...

Yes, it is. If you look at the income statement, then what you'll see on that is you'll see admin expenses last year rounded to GBP 9 million. This year, they're GBP 3.2 million. And then the memorandum box below, you'll see that last year, there was a charge of GBP 6.4 million for impairment of goodwill and intangible assets. So that was a reduction in the estimated value last year. As mentioned earlier in the talk, we have reviewed our goodwill and intangible assets and consider that there is no adjustment needed to their carrying value. So there is no impairment charge this year, which primarily explains the reduction in administrative expenses.

Thank you, Richard. There's a question from Mark S. [indiscernible] haven't published an updated note, meaning that the last note was prior to the strategic review. In the absence of updated guidance from the broker, how should we view trading so far in 2025 compared to the previous P&L forecast, which were plus 10% revenue and plus 50% EBITDA versus 2024. And I wouldn't panic. I have been on the phone to the broker this morning, and there will be a note coming out very shortly. In fact, it's probably out now I had a chance to look, but I think it would be out any moment. In terms of how we've started 2025, absolutely in line with expectations. And there's no reason to question the rest of the year at this point at all. We're in line with how we've modeled and budgeted. So I can't really add much more than that. There's a question on [ Wikipedia ] from Peter D. The consensus forecast for 2024 was for a net profit of GBP 437,000, whereas the actual outcome was around breakeven. Could you explain the difference? Question around net profits. Richard, is that one for you?

I haven't seen the Wikipedia post, but the figure looks as though there's a difference between commenting on the total operating loss and the adjusted EBITDA. The adjusted EBITDA that we've disclosed is GBP 624,000. There's a reconciliation, which has been audited on the basis of profit and loss account, which shows a difference between the operating loss of GBP 78,000 and the adjusted EBITDA. We show an adjusted EBITDA figure to give a better representation of underlying profits after we've added back items like depreciation, amortization, share-based payment charge and also new product development investment and costs relating to one-off projects, which relate to the capital reduction to acquisitions and also to the strategic review. So taking those elements out is a better representation, we believe, of the underlying profitability of the group and its ability to generate cash flows.

Thank you, Richard. Another question from Peter D. Could you explain the kind of testing that's required to complete the acquisition of Media chain assets and how long this is expected to take? Jim, do you want to pick that one up?

Yes. Yes, I will. It's really -- I mean, I suppose it's -- in some ways, we've touched on it a little bit when we were talking about the contribution to the Tab traffic of the previously acquired page that was on the graph that James showed in the site. So the process really will be -- we'll engage with the page, begin posting into the page, gauge the audience response. And so that response will be around looking at overall reach levels and engagement on the post itself and then the traffic that we're able to generate and then get a sense of how that may play out over time. And really, it's a question of Richard, James, myself looking at it in terms of the clear financial results that seeing during the period and then working with the editorial team to think about the potential for further growth because it may not be that you see the full performance during the testing period. And that's exactly what happened on the prior acquisition where we had a reasonable degree of confidence, but the true upside played through post acquisition. So I think because we are acquiring brands from the same sources we have before, we've got a reasonable understanding of how they manage their brands and their audiences. And one of the things that what we think that the team is really good at. Very good indication of how [indiscernible]. So that's really the process that we feel -- if we feel confident...

Thank you, Jim. Right. A question from Sally H. Over the last 5 years, the Digitalbox plc has spent circa GBP 1.5 million being a public company, the former CFO. What value does the company gained from this GBP 1.5 million? Marcus, do you want to pick that one up?

Yes. We're an AIM listed company. The first raise, we raised money through AIM in the first half that allowed us to acquire the Tab, which has been a very successful asset. We retained the opportunity to raise further capital by being a publicly listed company. But because of the high cash generation of the business, we've been able to fund all of the acquisitions out of current cash. But it remains an opportunity, I think, moving forward, should we see some bigger acquisition requirements beyond the current cash that we have.

Thank you. More question. Question from John, CGS. I not seen the letters AI anywhere in the presentation. Where does that sit on your risk register? I'll pick that one up. Our thoughts about AI have really developed over time. And clearly, these tools are presenting challenges -- presenting challenges to publishers as they changed the way people are behaving with search and changed the way people are looking to gather information. The optimistic view of this is for the news media, we think it's likely to have a less significant impact due to the fact that these tools are quite slow. You can get news quicker through search rather than through AI tool delivering them. And these tools are better suited to doing sort of research lean forward type information. So if you want to buy a new car with a certain criteria, you're probably quite well served using an AI tool to go and research that for you and provide you with an answer in 30 seconds. If you want to know what's happened on Coronation Street last night, it's a completely different matter, and there's not a kind of financial reward for the AI operator in that kind of search behavior. So we see sort of deep dive AI usage progressing more heavily than news-related AI from a consumer perspective. From a production perspective, we're absolutely using AI tools to refine our production processes. We're not actually using them to deliver content straight to stage, but they are a very valuable tool for researching and delivering human articles to our website. And there's always the hint of an AI article being when you read it, certainly in some instances with inaccuracy. One notable one was on the sun, where I read about someone having viewed Wells Cathedral in Wells in Norfolk, which is quite some achievement given it's about 250 miles away that it is prone to problems around news content. So we're using the tools effectively, and we're learning and looking to use them more heavily to assist production, but not to deliver product. Another question from Mark H. In the results, James spoke about plans to double organic revenue in 3 years. Where did you see the greatest opportunities to achieve this? Does the company have a target for acquisition growth on top of this? Absolutely open to acquiring as well as launching. And really, our plans to double can be achieved through both launching and buying. But at the moment, we're assuring things that are in our control, which are things like delivering new products as we have in the first quarter of this year, and we'll continue to do so as we move through the rest of the year and into next year. There's one question from Patrick? Is it possible for management to switch to just share-based bonus schemes rather than cash in order to fully align with shareholders?

Thanks for the question. The Board absolutely believe that the executive management should be incentivized by share price improvement as a component of their total package, which includes salary and some in-year cash-based payments. The current or the previous EMI option scheme actually vested at the beginning of this year, so it's now redundant, invested below the share price target. And [indiscernible] led by [ Lunt ] have a draft proposal for the introduction of a new share-based option scheme linked to share price performance against peer group to bring to the Board at the beginning of the second quarter.

Thank you, Marcus. One last question, I think, from Sally. H. Reuters Institute for Journalism has stated that the percentage of people reading long-form articles is down from 70% to 50% plus video content is on the way up. Is Digitalbox's strategy in secular decline? And is there any plans to increase video content? I can answer that yourself, Jim. I think what you're alluding to here is probably the move towards short-form TikTok content. TikTok is having a significant impact in the youth market against the likes of Meta and is becoming a new source for lots of under 25 millennials. So the youth audience is heading in that direction for short-form video content to replace perhaps some articles. For the demographic we're serving, we are not seeing the switch to video consumption over more typical flat content. Jim, do you want to pick up on that...

Yes. I mean I suppose the only other thing to add is, yes, we're very mindful of consumer habits and the rise of video, but we're also very keen on ensuring that we can continue to publish content at a positive margin. And we've previously experimented to an extent around The Daily Mash and look very carefully at the ROI on some video content. And we -- away from it because having really looked very carefully at it, we realized that it was very difficult to actually make that -- make sense. The difference potentially this year, touching on a point that James mentioned is when we're looking to do some of our R&D and potentially with the use of some AI tools, it may well be that, that brings the cost of production down to an extent, where that can begin to work. So we're definitely looking at the space. But as James says, at the moment, we see our audiences -- our audiences at least and particularly around news content, very happy to consume the type of content we're generating in the...

Thank you, Jim. And that finishes, I think, the questions. The questions that are in. So nothing left to answer.

Perfect. Thank you very much for answering those questions from investors. Of course, the company can review all the questions submitted today, and we will publish those responses out on the Investor Meet Company platform. Just before redirecting investors to provide with their feedback, which is particularly important to the company. James, could I just ask you for a few closing comments?

Thank you. Yes. So 2024 was a pleasing year really to see a return to more significant profitability. And the important thing really about the year is not only did we return to profitability, we did it by sticking to the strategy that we had in place at the beginning of that year. Expanding the business, launching more products and really infusing our teams with the opportunity for future growth. And I think at this point, it's fair to say the teams have real momentum in place, and we're looking with great excitement to grow the business as we move through the rest of this year and into next year. And look forward really celebrating that with the staff at our next annual gathering in July, which is going to be staged in Cambridge. Thank you very much.

Thank you.

That's great. And thank you once again for updating investors today. Can I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. On behalf of the management team of Digitalbox plc, we'd like to thank you for attending today's presentation, and good morning to you.