Dianomi (DNM:AIM) saw its shares tank nearly 40% in morning trading as the native digital advertising firm said its revenue for the six months to 30 June 2023 is expected to show an 18% fall.

The firm which provides native digital advertising – this is when online ads mimic the form and function of the platform on which they appear - said it had experienced a fall in traffic volumes (like other publishers) this year.

Dianomi’s clients include large publishers such as Bloomberg, Reuters and The Wall Street Journal.

Across Dianomi’s direct publisher inventory traffic levels are down by between 10-30% in the six months to 30 June 2023 compared to the same period in 2022.

SHARE PRICE WEAKNESS CONTINUES

Investors haven’t been impressed with the firm over the past year, and Dianomi shares have seen its shares fall 75%.

They are still not going to be impressed as not only did Dianomi warn on first-half revenue but also the full year.

The group expects revenue for the year ended 31 December 2023 to be lower than market expectations and is providing new revenue guidance of between £30.5 million and £32.5 million compared to £35.9 million in 2022.

Dianomi's CEO, Rupert Hodson said: ‘The fall in traffic levels will impact our business and the wider industry this year, nevertheless, it also serves to highlight the importance of developing our ability to scale distribution on a programmatic basis through the intelligent use of our deep understanding of context and engagement.

‘As mentioned, we are continuing to attract new customers and expanding distribution through programmatic initiatives.’

The company, was founded in 2003, joined AIM (alternative investment market) in May 2021, after completing an IPO (initial public offering) raising £37 million at an £82 million market cap – its current market cap is just under £25 million.

EXPERT VIEW

Megabuyte’s Jack Wilson-Fowler said: ‘Whilst we’re not too surprised to see trading headwinds persisting for Dianomi (following similar messages recently from its advertising technology peers Audioboom (BOOM:AIM) and Tremor International (TRMR:AIM), this morning’s circa 15% revenue downgrade is at odds with the more positive outlook and pipeline messaging from its FY22 results (in April), suggesting a challenging [couple of] months.

‘It’s unclear what impact this will have on its profit forecasts even accounting for its cost-cutting. The downgrade also adds further disappointment to investors, with the shares now down circa 75% in the last year, translating to a very modest 0.2x forward sales.’

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