CHAIRMAN'S STATEMENT

 

After a challenging year for many media businesses, with audience volatility created by algorithm updates on key platforms and wider economic factors, I am pleased to report that Digitalbox plc ('Digitalbox') successfully delivered a positive Adjusted EBITDA* for 2023. While this represents a reduction on previous years, it marks the fifth consecutive year of profitable trading since being listed in 2019.

 

The business maintained its strategic focus on delivering a 'mobile first' media operation at scale, using leading technologies to optimise both audience engagement and commercial performance, while integrating bolt-on acquisitions that complement its operating model.

 

During the year, the management team focused on the delivery of this strategy, and successfully navigated a mix of macro and micro challenges.  Specifically, the UK economy was subdued by high interest rates, the cost-of-living crisis and geo-political issues that impacted international markets. These issues had a knock-on effect on the global advertising market. Also, dominant platform owners Alphabet and Meta reported challenges resulting from these conditions. The result was a highly difficult trading environment.

 

We reported the local headwinds facing the business in the middle of the year as our biggest brand ,Entertainment Daily  remained blocked by Google and our second biggest, The Tab, suffered a content strike that reduced the reach on one of its biggest Facebook pages. Despite these headwinds,  the team adapted and made headway with dealing with these issues in the latter part of the year.  Digitalbox delivered full year revenue of £2.8m (2022: £3.6m) and positive Adjusted EBITDA* which were within market guidance.

 

Digitalbox ended the year with gross cash of £1.9m, which is £0.9m down on the prior year, and with net cash (gross cash less bank debt) of £1.7m, which is £0.7m less than the prior year. This is chiefly due to the strategic value-enhancing bolt-on opportunities the team completed during the year.  In accordance with Digitalbox's stated buy and build strategy, we added 12m followers from the four Media Chain Group pages we acquired, completed the purchase of tvguide.co.uk, while successfully integrating The Poke that we had acquired a few weeks prior to the start of 2023.

 

With an enlarged brand portfolio comprising Entertainment Daily, The Daily Mash, The Tab, The Poke and tvguide.co.uk and a doubling our social media follower base, the business is well placed to grow into 2024. We can potentially take advantage of further acquisition opportunities that the Directors believe trading conditions will likely bring to the fore.

 

 

Marcus Rich

Chairman

25 March 2024

 

*Adjusted EBITDA is defined as operating profit after adding back depreciation, amortisation, impairment, share based payments, acquisition costs and direct costs associated with business combinations. 

 

CHIEF EXECUTIVE'S STATEMENT

 

FINANCIAL HIGHLIGHTS

 

REVENUE                               ADJUSTED EBITDA

£2.8m vs £3.6m in 2022            £0.02m vs £1.1m in 2022

                             

                                   

ADJUSTED EBITDA MARGIN        ADJUSTED EBITDA PER SHARE

0.7% vs 30.2% in 2022                   0.02p vs 0.92p in 2022

                                        

*Adjusted EBITDA is defined as the operating profit after adding back depreciation, amortisation, impairment, share based payments, acquisition costs and direct costs associated with business combinations.

 

 

Chief Executive's Statement

2023 was another important year for Digitalbox, as we expanded the portfolio of trading brands against a backdrop of challenging market conditions. With the first full year of trading of The Poke, which we acquired in December 2022, we can report the brand has already repaid 50% of its acquisition cost and is well positioned to benefit from a recovering advertising market. While tvguide.co.uk took longer than expected to complete, the tech solution we rolled out has seen traffic improve and produce a better-than-expected advertising performance. This performance is a solid foundation for future development.

 

The year saw economic uncertainty stemming from a mix of post-pandemic structural changes, the war in Ukraine, high interest rates and the UK cost of living crisis which impacted consumer spending.  Marketers continue to favour mobile digital media, which presents the most accountable and relevant commercial solution within the marketing mix. However, marketers acted and spent with much greater caution as the cost of living basics like heating and food significantly eroded household incomes.

 

Against this backdrop we developed our audience positions; the Directors believe the Company is now one of the most significant online publishers in the UK entertainment space and will benefit from the demand for quality mobile advertising inventory at scale.

 

Our positive year-end position of an expanded, profitable portfolio of trading brands has resulted from our knowledge, focus and agility. These attributes have allowed us to tackle the challenges we faced, while remaining focused on the positive macro trends attached to advertising within the mobile channel which we anticipate will grow ahead of the market.

 

Financial review

Full year revenue of £2.8m is 22% down on 2022. This headline is masking the volatility within this overall movement due to a challenging macro trading environment. The trading environment saw a 40% growth in the Group's underlying revenues in H1 2022 and a 27% reduction in H2 2022. Although we are disappointed to deliver a reduction in Adjusted EBITDA* compared to 2022, we are pleased to continue the trend of being consistently profitable with Adjusted EBITDA* of £20k, despite the aggressive market conditions.

 

Cash generation is a key feature of this business and, despite the challenging trading conditions leading to a year-on-year revenue reduction of £0.8m, the cash generated by operations was £0.2m. The business ended the year with gross cash at the bank of £1.9m, which is £0.9m lower than last year. This is despite having invested £1.0m in intangible assets, via the two acquisition of assets made, and spending £0.1m in loan and lease repayments.

 

The challenging conditions within capital markets, coupled with the increased base rate, has led the Board to consider the weighted average cost of capital discount rate when considering the carrying value of goodwill and intangible assets in the balance sheet. This, together with a significantly reduced cash generation from Entertainment Daily due to the prevailing economic conditions and the content distribution issues caused by Meta and Google policy and algorithm changes, has led to an impairment charge of £6.4m against the carrying value of goodwill in relation to Entertainment Daily, plus a consequent £5.0m impairment charge on the carrying value of the investments in the Company balance sheet.

 

Operating review

Digitalbox owns and operates five trading brands - Entertainment Daily, The Daily Mash, The Tab, The Poke and TV Guide. Entertainment Daily produces and publishes online UK entertainment news covering TV, showbusiness, and celebrities. The Tab is the UK's leading student and youth culture site fuelled by a London-based core team and a national network of 30 local university sites. The Daily Mash delivers online satirical news articles in its own distinctive style and The Poke expertly curates the funniest content from around the web and social media. TV Guide delivers the latest information to UK consumers about what to watch and when, ensuring they don't miss out. All five brands generate revenue from advertising in and around the content they publish, and the Daily Mash has also diversified into a paid subscription model.

 

While 2023 was a year of uncertainty, it demonstrated the effectiveness of the digital advertising medium as its share grew to 67% of global ad spend. Post-pandemic trends continue to evolve and the adoption of ecommerce via the most personal of channels, the mobile device, will continue to drive demand for quality inventory.

 

With Digitalbox's lean operating model, the Company believes it is well positioned to push forward with our strategy and remain well placed to benefit from for the forecast growth in mobile ad spending over coming years. Above and beyond the macro conditions that impacted most industries in 2023, Digitalbox was impacted by two specific issues aligned to Alphabet (Google) and Meta (Facebook). Google algorithms blocked our biggest brand Entertainment Daily and Facebook - unjustly in our view - sanctioned a key social page for The Tab's coverage of a popular Netflix documentary about the serial killer Jeffrey Dahmer, deeming it as 'promoting a dangerous individual'. Both issues are showing signs of a potential resolution.

 

Despite the challenges thrown up by the two platforms, our publishing operations for the year saw 239m visits to our websites. As well as successfully integrating The Poke and TV Guide, we established some very strong engagement with the Media Chain Group assets that we acquired and plan to build this further into 2024. Further, there was underlying commercial success as we saw significant year-on-year growth in the Poke and Tab session values over the 12 months and the whole portfolio of trading brands performed ahead of the market.

 

Compelling content remains at the core of the Digitalbox offering, created by talented teams with an expert understanding of their respective audiences' needs. As part of this being an increasingly important factor in website ranking, we have invested in  greater visibility of our teams across expanded author pages on the respective websites. We marry the expertise of these highly valued staff members with our proprietary mobile-first tech stack, Graphene. Named after the incredibly fast, light, super-conductive material, Graphene has been developed to deliver the best user experience through the fastest and lightest page load speeds on mobile.

 

Alongside this highly optimised, low-friction content delivery, the commercial element of the Graphene suite, the Graphene Ad Stack (GAS) now powers the advertising monetisation of Entertainment Daily, The Daily Mash, The Tab, The Poke and TV Guide. We are seeing significant value creation here on The Poke and TV Guide as improved data from our deployment of GAS has enabled it to significantly grow advertising session values since the early stages of our ownership of both brands. As our portfolio expands, GAS's role in optimising revenue performance across the business and speeding the route to enhanced profitability for acquired properties is key for us.

 

The Tab has proved to be a great success since its acquisition at the end of 2020 having fully paid back its purchase costs within the first two years. We are tracking to achieve similar results on The Poke and hope to do the same on TV Guide. We continue to evaluate further acquisition opportunities and have seen an increase in opportunities as other publishers with lower margin headroom endured the challenging trading conditions of 2023. We remain ready to move quickly where we can realise the appropriate value.

 

The Digitalbox team was maintained in scale during a turbulent 2023 to ensure capacity for growth on our existing brands and to ensure any acquisitions can be quickly integrated, whilst operational efficiencies will remain strong.

 

 

Leading as a mobile-first business

Our strategy to create a mobile-first business has helped position us as a leader in the market for both audience engagement and monetisation. Push media skills remain critical, and our brands engage consumers at scale through this channel with 91% of our audience across the portfolio visiting on mobile devices. With an average of 20m monthly user visits to our sites, we present truly significant user scale to the market especially when combined with our capacity to engage.

 

Mobile advertising spend was growing well ahead of the economic issues that emerged in H2 2022 and we anticipate its acceleration as we emerge from this challenging period in 2024. As part of our Graphene technology suite that supports our mobile-first strategy, we are building a single site template for all our brands which enables optimisations to be rapidly applied across the portfolio. As previously reported, our GAS set up on The Poke quickly drove it to profitability and we are seeing similar results on TV Guide. This will give Digitalbox a distinct advantage as we look to further optimise our existing portfolio, complete more acquisitions, build new sites and benefit from the forecast growth in the digital ad market.

 

PROJECTED GLOBAL DIGITAL / MOBILE AD SPEND

	2023	2024	2025	2026	2027
Forecast global digital ad spend $bn*	601	667	734	802	870
Forecast market growth		10.9%	10%	9.2%	8.6%

*Source: eMarketer, March 2023 https://www.insiderintelligence.com/content/digital-ad-spend-worldwide-pass-600-billion-this-year

 

Portfolio growth

Television listings site TV Guide is the most recent addition to the Digitalbox portfolio, with its acquisition completing in October 2023. We feel the site is an excellent stablemate for Entertainment Daily with a distinct proposition and relationship with Entertainment Daily's regular editorial output. It brings over 1m monthly users.

 

The Poke, as detailed previously acquired at the end of 2022, had a strong first year of full trading with a focus on unlocking the brand's commercial potential, with like-for-like revenues growing by over 80%.

 

Entertainment Daily saw an overall reduction in sessions (visits) of 27% year-on-year largely as result of Google algorithms drastically reducing its appearance in their search and Discover feeds. Google accounted for 25m sessions in 2022 so it is good to be making headway towards a resolution in 2024. Facebook performed comparatively well across the year given the reported challenges faced by other publishers. The editorial team continued to hit all the TV and showbiz stories as the news broke, maximising traffic and social engagement around moments that caught the nation's imagination. This year also saw the second annual Entertainment Daily Awards, along with expanded social amplification through the new Soap Daily page and the acquired Media Chain Group pages.

 

The Tab continues to make a  consistent positive contribution and is growing its advertising session values significantly ahead of the market. There was strong growth of 25% year-on-year. Editorial campaigning for key issues connecting with the student demographic continued to produce national media pick-ups, alongside its established output of entertainment and culture coverage. While the site had to ride out the challenge of the Facebook strike, this has been resolved for 2024. We continue to leverage the existing Tab portfolio of Facebook pages, the newly acquired Media Chain Group pages and are growing our TikTok and Instagram followers.

 

The Daily Mash had a year of transition as we progressed our consumer-revenues strategy, informed by the brand's loyal audience and genuinely unique content. Subscription sign-ups grew by over 180% across the year.  Although the TV show was not continued by UK TV due to challenges faced by its Dave channel, we managed to create some significant engagement testing short form video content across multiple social channels including Tik Tok and Facebook and this informs how we move forwards.

 

 

Culture and people

We remain focused on creating a culture that enables talented people to do their best work. Even before the pandemic that meant being flexible and agile rather than harbouring traditional views of office culture or adopting a one-size-fits-all approach. We continue to mix office-based roles and remote working arrangements, full-time and part-time positions, staff and freelance contributor agreements to marry the needs of the business with those of our people. A hybrid scenario of both home and office working is what we have found most successful.

 

Good communication and a sense of inclusion are important to us, so we continue to publish monthly all-staff updates on progress and stage weekly leadership sessions alongside daily team meetings. Alongside this, we hold two annual all-staff gatherings, with this year's summer event a murder mystery themed conference at Oakley Hall in Hampshire and literary themed event in London's Bloomsbury for Christmas.

 

Recruiting and retaining great people is crucial to our growth. Our success hiring younger talent on Entertainment Daily through its apprentice programme has continued along with training and development for more senior staff. The Daily Mash and the Poke brought on new contributors and The Tab continues to offer free and highly relevant training initiatives for its network of student journalists.

 

Everyone at Digitalbox benefits from the company's life assurance and pension schemes and we aim to ensure our staff are rewarded fairly and have opportunities to progress within the business. All team members and their dependents have access to our free wellbeing and support programme including personalised healthy eating and exercise plans, mental health support, legal and medical advice and ways to prevent burnout. A share options scheme also exists for senior staff.

 

I would like to take the opportunity to thank all Digitalbox staff for their incredible hard work and enthusiasm during a challenging last year and their valuable contribution to enable us to position the building blocks for future growth. As the company continues to expand its portfolio it's a pleasure to be working with such a talented and committed team.

 

 

Business outlook

Since listing on the AIM market of the London Stock Exchange in 2019, Digitalbox has continued to develop as a profitable UK digital media business positioned squarely in the mobile space.

 

Despite the highly challenging macroeconomic environment of 2023, global digital advertising spend is forecast to grow by more than 40% in the next four years. The consumer and market reaction to both economic and health-related turbulence of the last few years has accelerated the trends which benefit Digitalbox, pushing the business to the forefront as mobile devices' share is forecast to shift from 67% of all digital ad spend in 2023 to 73% in 2027 and our content and tech teams continue to strengthen delivery through this channel.

 

Beyond the advertising market, TV continues to be highly competitive with the battle for share pushing all participants towards higher quality content. The streamers' optimum operating models have yet to settle and the terrestrial channels face the pressure of this changing landscape, yet the quality of the output continues to grow to benefit our audiences and fuel the information they crave from publishers like Digitalbox. This increasingly competitive market stimulates our various audiences leading to big shows like I'm a Celebrity Get Me Out Of Here and Love Island showing strong engagement across our properties in 2023.

 

The four acquisitions completed since being listed on AIM - The Daily Mash, The Tab, The Poke and TV Guide - have all proved the potential of our model, giving us confidence we can continue to create growth within the portfolio and make further acquisitions when the fit is right.

 

While H1 2022 saw a strong recovery from the pandemic, the markets adjusted to work with the new realities of the economic landscape in mid-year and continued throughout 2023. The trend towards a more cautious approach to marketing spend was stimulated by the previously mentioned macro international uncertainty driven by war and spiralling interest rates alongside the UK's cost of living crisis. As consumer spending power recovers in line with declining interest rates and greater political certainty is installed, we expect the advertising market will bounce back.

 

Our view is that Digitalbox's position in the open advertising market is a good place to be as it can adapt in real time, with high-quality inventory always in demand. Global commentary points towards a measured market recovery in 2024 with a full return forecast for 2025. We have no reason to doubt these predicted improving conditions and are confident the business is very well placed to benefit from the returning market.

 

Our audience sourcing is now more diverse and balanced than at any time in the Company's history, which offers greater stability. We enter 2024 with an expanded trading brand portfolio primed for future growth, alongside a returning economy and a confident digital advertising sector expected to significantly increase its share of global ad spend over coming years.

 

 

 

James Carter

Chief Executive      

25 March 2024

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2023

		Year ended	Year ended
		31 December	31 December
		2023	2022
	Note	£'000	£'000
Revenue	7	2,790	3,578
Cost of sales		(606)	(534)
		------------	------------
Gross profit		2,184	3,044
Administrative expenses		(8,957)	(2,999)
		--------------	--------------
Operating (loss)/profit	8	(6,773)	45
Memorandum:
Adjusted EBITDA1		20	1,081
Depreciation		(14)	(7)
Amortisation		(265)	(191)
Impairment of goodwill and intangible assets		(6,384)	(716)
Share based payments		(96)	(62)
Direct costs of business combinations		-	(60)
Direct costs of intangible asset acquisitions		(34)	-
		--------------	--------------
(Loss)/profit from operations		(6,773)	45
Finance costs	10	(6)	(8)
Finance income		44	8
		------------	------------
(Loss)/profit before taxation and attributable to equity holders of the parent		(6,735)	45
Taxation	11	58	759
		------------	------------
(Loss)/profit after tax		(6,677) ------------	804 ------------
All profits and losses after taxation arise from continuing operations.
There was no other comprehensive income for 2023 (2022: £NIL).

 

¹Adjusted EBITDA is defined as the operating profit after adding back depreciation, amortisation, impairment, share based payments, acquisition costs and direct costs associated with business combinations

 

 

 

		£	£
(Loss)/Earnings per share
Basic (continuing)	12	(0.05662)	0.00683
		=========	=========
(Loss)/Earnings per share
Diluted (continuing)	12	(0.05662)	0.00670
		=========	=========

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2023

 

	Share capital	Share premium	Share based payment	Retained earnings/ (deficit)	Total        equity
	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2022	1,163	11,149	464	297	13,073
Issue of new shares	16	20	-	-	36
Equity settled share-based payments	-	-	62	-	62
Reserves transfer in respect of lapsed options	-	-	(330)	330	-
Profit after tax	-	-	-	804	804
	--------------	--------------	--------------	--------------	--------------
Balance at 31 December 2022	1,179	11,169	196	1,431	13,975
	--------------	--------------	--------------	--------------	--------------
Equity settled share-based payments	-	-	96	-	96
Reserves transfer in respect of lapsed options	-	-	(104)	104	-
Loss after tax	-	-	-	(6,677)	(6,677)
	--------------	--------------	--------------	--------------	--------------
Balance at 31 December 2023	1,179	11,169	188	(5,142)	7,394
	--------------	--------------	--------------	--------------	--------------

 

 

 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 AS AT 31 DECEMBER 2023

 

		31 December 2023		31 December 2022
ASSETS	Note	£'000		£'000
Non-current assets
Property, plant and equipment	13	46		52
Intangible fixed assets	14	4,594		10,194
Deferred tax asset	19	547		617
		-----------------		-----------------
Total non-current assets		5,187		10,863
Current assets
Trade and other receivables	15	946		952
Cash and cash equivalents	16	1,913		2,827
		-----------------		-----------------
Total current assets		2,859		3,779
		-----------------		-----------------
Total assets		8,046		14,642
		=========		=========
LIABILITIES
Current liabilities
Trade and other payables	17	(409)		(288)
Bank loans and overdrafts	17	(149)		(112)
Corporation tax	17	-		(61)
		-----------------		-----------------
Total current liabilities		(558)		(461)
		-----------------		-----------------
Non-current liabilities
Bank loans	17	(94)		(206)
		------------------		------------------
		(94)		(206)
		------------------		------------------
Total liabilities		(652)		(667)
		------------------		------------------
Total net current assets		2,301		3,318
		------------------		------------------
Total net assets		7,394		13,975
		=========		=========
Capital and reserves attributable to owners of the parent
Share capital	21	1,179		1,179
Share premium	23	11,169		11,169
Share based payment reserve	23	188		196
Retained (deficit)/earnings	23	(5,142)		1,431
		------------------		------------------
Total equity		7,394		13,975
		=========		=========

The financial statements were approved by the Board and authorised for issue on 25 March 2024.

 

 

 

James Carter                                                                                           David Joseph

CEO                                                                                                               CFO

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2023

 

			Year ended 31 December 2023 £'000			Year ended                 31 December 2022 £'000
Cash flows from operating activities
(Loss)/profit from ordinary activities   Adjustments for:			(6,677)			804
Income tax credit			(58)			(759)
Share based payments			96			62
Depreciation on property plant and equipment			14			7
Amortisation of intangible assets			265			191
Impairment on goodwill and intangible assets			6,384			716
Loss on disposal of property, plant and equipment			-			30
Finance costs			6			8
Finance income			(44)			(8)
			-----------------			-----------------
Cash flows (used in)/from operating activities before changes in working capital			(14)			1,051
Decrease in trade and other receivables			86			818
Increase/(decrease) in trade and other payables			121			(451)
			-----------------			-----------------
Cash generated by operations			193			1,418
Income tax paid			(13)			(235)
			-----------------			-----------------
Net cash from operating activities			180			1,183
Investing activities
Purchase of property, plant and equipment			(8)			(43)
Purchase of intangibles			(1,049)			(391)
Interest received			44			8
			-----------------			-----------------
Net cash used in investing activities			(1,013)			(426)
Financing activities
Finance costs			(44)			(8)
Bank overdraft			38			-
Loan and lease repayments			(75)			(144)
Issue of new share capital			-			36
			-----------------			-----------------
Net cash used in financing activities			(81)			(116)
			-----------------			-----------------
Net (decrease)/increase in cash and cash equivalents			(914)			641
Cash and cash equivalents at beginning of the period			2,827			2,186
			------------------			------------------
Cash and cash equivalents at end of the period			1,913			2,827
			=========			=========
Reconciliation of net cash flow to movement in net funds:				Year ended			Year ended
				31 December 2023			31 December 2022
				£000			£000
Net (decrease)/increase in cash and cash equivalents				(914)			641
Repayment of loans and leases				75			144
				-----------------			-----------------
Movement in net funds in the year				(839)			785
Net funds at 1 January				2,509			1,724
				-----------------			-----------------
Net funds at 31 December				1,670			2,509
				=========			=========
Breakdown of net funds
Cash and cash equivalents				1,913			2,827
Bank loans				(243)			(318)
				-----------------			-----------------
Net funds at 31 December				1,670			2,509
				=========			=========

 

 

 

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

1.            GENERAL INFORMATION

 

Digitalbox Plc is a public limited company incorporated and domiciled in the United Kingdom. The address of the registered office is Jubilee House, 92 Lincoln Road, Peterborough, England, PE1 2SN. The Company is listed on AIM of the London Stock Exchange.

 

The principal activity of the Group and of the Company are disclosed in the Directors' Report.

 

These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates.

 

2.            STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED IN THE CURRENT  FINANCIAL  YEAR ENDED 31 DECEMBER 2023

 

The following IFRS standards, amendments or interpretations became effective during the year ended 31 December 2023 but have not had a material effect on this Consolidated Financial Information:

 

Standard

Amendments to IAS 1 (Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements): Disclosure of Accounting Policies.

Amendments to IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors): Definition of Accounting Estimates

Amendments to IAS 12 (Income taxes): Deferred Tax related to Assets and Liabilities arising from a Single Transaction

Amendments to IAS 12 (Income taxes): International Tax Reform - Pillar Two Model Rules

                                                                                                                                                                                                        

All new standards and amendments to standards and interpretations effective for annual periods beginning on or after 1 January 2023 that are applicable to the Group have been applied in preparing these Consolidated Financial Statements.

 

 

3.               NEW AND REVISED IFRS STANDARDS IN ISSUE BUT NOT YET EFFECTIVE

 

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Consolidated Financial Statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.

 

Standard	Effective date
Amendments to IFRS 16: Lease Liability in a Sale and Leaseback	1 January 2024
Amendments to IAS 1: Classification of Liabilities as Current or Non-Current, Non-current Liabilities with Covenants	1 January 2024
Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements	1 January 2024

 

The Directors are continuing to assess the potential impact that the adoption of the standards listed above will have on the Consolidated Financial Statements for the year ended 31 December 2024.

 

4.            ACCOUNTING POLICIES

 

Principal accounting policies

The Group is a public Group incorporated and domiciled in the United Kingdom. The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

4.            ACCOUNTING POLICIES (continued)

 

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as adopted by the United Kingdom ("adopted IFRSs") and those parts of the Companies Act 2006 which apply to companies preparing their financial statements under IFRSs. The financial statements are presented to the nearest round thousand (£'000) except where otherwise indicated.

Basis of Consolidation

The Group comprises the parent company and its subsidiaries, as detailed in note III to the company financial statements. All of these have been included in the consolidated financial statements in accordance with the principles of acquisition accounting as laid out by IFRS 3 Business Combinations.

 

Going concern

The Group generated a loss during the year of £6,677k (2022: profit of £804k), the Group had closing net assets of £7,394k (2022: £13,975k), net current assets of £2,301k (2022: £3,318k) and cash at bank and in hand of £1,913k (2022: £2,827k).

 

The Group generated net cash from operating activities of £180k during the year (2022: £1,183k). The Group has remained cash generative during a difficult economic period which saw the impact of the war in Ukraine inflating global food and energy prices which, in turn, has driven consumer spending power down driving a consequent downturn in global advertising spend. This, together with the adverse changes in the distribution models of the global tech platforms led to a challenging year for media businesses worldwide.

 

In considering going concern, the Directors consider the current financial position and performance of the business, as well as reviewing financial information for a period of at least 12 months from the date of approval of the financial statements. Given the strong and liquid balance sheet position, the ability of the Group to generate operating cash in a challenging market, the full year effect of the successful acquisition of The Poke and the completion of the acquisition of tvguide.co.uk, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The going concern basis of accounting has therefore been adopted in preparing the financial statements.

 

Business combinations and goodwill

Acquisitions of subsidiaries and business are accounted for using the acquisition method. On acquisition of a subsidiary, the Directors determine whether substantially all of the fair value is concentrated into a single asset or group of assets. When applicable, the Directors elect to apply the optional concentration test and recognise the acquisition as an asset acquisition, rather than a business combination. The assets and liabilities and contingent liabilities of the subsidiaries are measured at their fair value at the date of acquisition. Any excess of acquisition over fair values of the identifiable net assets acquired is recognised as goodwill. Goodwill arising on consolidation is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss accounts and is not subsequently reversed. Acquisition related costs are recognised in the income statement as incurred.

 

Transactions between wholly owned group members involving the hive-up or hive-across of trade and / or assets and liabilities are outside the scope of IFRS 3 on the grounds that they represent common control business combinations. The group has elected to apply IFRS 3 in accounting for all such transactions, which involves a full fair value exercise at the date of the transaction. This accounting policy has been consistently applied to all such transactions, and has been chosen on the grounds that the nature of these transactions is

 

 

 4.           ACCOUNTING POLICIES (continued)

 

the amalgamation of acquired businesses into the existing trading business, which generally takes place shortly after the original acquisition.

              

     Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group. and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. 

 

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

 

The Group monitors the performance obligations in accordance with IFRS 15 considering that the performance obligations are met upon the Group delivering the advertisement to the customer.

 

A receivable is recognised when the services are delivered at this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

 

Rendering of services

Revenue from providing services is recognised in the accounting period in which the services are rendered.

 

Revenue from the sale of advertising space is recognised upon the advertisement being generated and the Group delivering the advertisement to the customer. The Group recognises revenue when the amount of revenue can be reliably measured, it is probable future economic benefits will flow to the entity and the Group has satisfied the performance obligations. Revenue is not received in advance and therefore the Group does not account for contract liabilities.

 

Foreign currency

The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group company are expressed in pound sterling, which is the functional currency of the Group, and the presentational currency for the consolidated financial statements.

 

In preparing the financial statements of the individual companies, transactions in currencies other than the individual company's functional currency (foreign currencies) are recorded at rates of exchange prevailing on the dates of the transactions. At the reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of the gain or loss is also recognised directly in equity.

                                                                              

4.    ACCOUNTING POLICIES (continued)

 

Intangible assets

Intangible assets include goodwill arising on the acquisition of subsidiaries and represents the difference between the fair value of the consideration payable and the fair value of the net assets that have been acquired. The residual element of goodwill is not being amortised but is subject to an annual impairment review.

 

Also included within intangible assets are various assets separately identified in business combinations (such as brand value) to which the Directors have ascribed a fair value and a useful economic life. The ascribed value of these intangible assets is being amortised on a straight-line basis over their estimated useful economic life, which is considered to be 7 years.

 

Other intangible assets purchased by the Group are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

 

Amortisation is recognised so as to write off the cost less their residual values over their useful lives, which is considered to be 3 years straight line for development costs and between 3-7 years straight line for other intangible assets.

 

Financial instruments

The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument.

 

Contract liabilities

Contract liabilities comprise payments in advance of revenue recognition and revenue deferred due to contract performance obligation not being completed. They are classified as current liabilities if the contract performance obligations payments are due to be completed within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Contract liabilities are recognised initially at fair value and subsequently at amortised cost.

 

Trade and other receivables

Trade and other receivables are measured at initial recognition at fair value, and subsequently measured at amortised cost using the effective interest method. A provision is established when there is objective evidence that the Group will not be able to collect all amounts due. The amount of any provision is recognised in profit or loss.

 

The Group always recognises lifetime expected credit losses (ECL) for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Group's historical credit loss experience, adjusted for facts that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast director of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

Cash and cash equivalents

Cash and cash equivalents are recognised as financial assets. They comprise cash held by the Group and short-term bank deposits with an original maturity date of three months or less.

 

 

4.    ACCOUNTING POLICIES (continued)

Trade payables

Trade payables are initially recognised as financial liabilities measured at fair value, and subsequent to initial recognition measured at amortised cost.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deduction of all its liabilities. Equity instruments issued by the Group are recorded at the proceeds received net of direct issue costs.

 

Share based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the statement of comprehensive income on a straight-line basis over the vesting period.

 

Non-market vesting conditions are taken into account by adjusting the number of options expected to vest at each statement of financial position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

 

Fair value is calculated using the Black-Scholes model, details of which are given in note 22.

 

Pensions

The pension schemes operated by the Group are defined contribution schemes. The pension cost charge represents the contributions payable by the Group.

 

Property, plant and equipment

Property, plant and equipment are stated at cost net of accumulated depreciation and provision for impairment. Depreciation is provided on all property plant and equipment, at rates calculated to write off the cost less estimated residual value, of each asset on a straight-line basis over its expected useful life. The residual value is the estimated amount that would currently be obtained from disposal of the asset if the asset were already of the age and in the condition expected at the end of its useful economic life.

 

The method of depreciation for each class of depreciable asset is:

 

Office equipment                                               - 25% reducing balance

 

Impairment of Assets

Impairment tests on goodwill are undertaken annually at the balance sheet date. The recoverable value of goodwill is estimated on the basis of value in use, defined as the present value of the cash generating units with which the goodwill is associated. This is computed by applying an appropriate discount rate to the estimated value of future cash flows. When value in use is less than the book value, an impairment is recorded and is irreversible.

4.    ACCOUNTING POLICIES (continued)

 

Impairment of Assets (continued)

Other non-financial assets are subject to impairment tests whenever circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its estimated recoverable value (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly. Where it is not possible to estimate the recoverable value of an individual asset, the impairment test is carried out on the asset's cash-generating unit. The carrying value of property, plant and equipment is assessed in order to determine if there is an indication of impairment. Any impairment is charged to the statement of comprehensive income. Impairment charges are included under administrative expenses within the consolidated statement of comprehensive income. 

 

Taxation and deferred taxation

               Corporation tax payable is provided on taxable profits at prevailing rates.

 

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from its tax base, except for differences arising on:

·      the initial recognition of goodwill; and

·      the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit.

 

Recognition of deferred tax assets is restricted to those instances where it is probable that future taxable profit will be available against which the asset can be utilised. The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).

 

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:

·      the same taxable Group company; or

·      different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

 

There were unused tax losses at 31 December 2023 amounting to £3,610k. In the majority, these were restricted for use for 5 years from the date of acquisition of Tab Media Limited against future taxable profits arising from the trade formerly carried on in Tab Media Limited and now carried on in Digitalbox Publishing Limited.  A deferred tax asset was recognised in relation to these losses for the first time in 2022, as the losses were considered to be highly likely to be recoverable against future profits. It is still the view that these losses will be highly likely to be recoverable against future profits.

 

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Executive Directors, who are responsible for allocating resources and assessing performance of the operating segments.

 

A business segment is a group of assets and operations, engaged in providing products or services that are subject to risks and returns that are different from those of other operating segments.

 

4.    ACCOUNTING POLICIES (continued)

 

Segmental reporting (continued)

A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments. The Executive Directors assess the performance of the operating segments based on the measures of revenue, profit before taxation and profit after taxation. Central overheads are not allocated to business segments.

 

5.            CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

In the application of the Group's accounting policies, which are described in note 4, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on experience and other factors considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The following are the critical judgements and estimations that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

 

Critical accounting judgements

Impairment of goodwill and other intangible assets

Impairment of the valuation of the goodwill relating to the acquisition of subsidiaries is considered annually for indicators of impairment to ensure that the asset is not overstated within the financial statements. The annual impairment assessment in respect of goodwill requires estimates of the value in use (or fair value less costs to sell) of subsidiaries to which goodwill has been allocated.

This requires the Directors to estimate the future cash flows and an appropriate discount factor, in order that the net present value of those cash flows can be determined. Discounted cash flow forecasts are stress tested under a range of scenarios. The headroom was deemed insufficient and therefore an impairment has been recognised against goodwill and intangible assets relating to Entertainment Daily in the year of £6,384k (2022: nil).

 

Critical accounting estimates

Amortisation of intangible assets

The periods of amortisation adopted to write down capitalised intangible assets requires estimates to be made in respect of the useful lives of the intangible assets, to determine an appropriate amortisation rate. Development costs (domain names and website costs) are being amortised on a straight-line basis over the period during which the economic benefits are expected to be received, which has been estimated at 3 years. Intangible assets recognised in relation to the brand names are being amortised straight-line over 7 years.

Share based payment expense

Non-market performance and service conditions are included in the assumptions about the number of options that are expected to vest. At the end of each reporting period the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of

 

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

the revision to the original estimates, if any, in the consolidated statement of comprehensive income, with a corresponding adjustment to equity.

This requires an estimate as to how many options will meet the future vesting criteria as well as the judgements required in estimating the fair value of the options at the date of grant for equity-settled options.

 

Provision for bad and doubtful debts

The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar ageing. The expected loss rates are based on the Group's historical credit losses experience over the twelve month period prior to the period end. Forward looking issues have been considered, including in relation to the ongoing impact of the hostile global trading conditions driven by the impact of the war in Europe. This has had an immaterial effect on the expected credit loss rate.

 

6.         SEGMENTAL INFORMATION

 

A segmental analysis of revenue and expenditure is as follows:

 

2023	Entertainment Daily	Mashed Productions	The        Tab	The Poke	TV   Guide	Head        Office	Total 2023
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	1,440	117	921	219	93	-	2,790
Cost of sales	(305)	(147)	(110)	(40)	(4)	-	(606)
Administrative expenses*	(484)	(122)	(444)	(87)	(9)	(1,018)	(2,164)
Adjusted EBITDA*	651	(152)	367	92	80	(1,018)	20
Amortisation, depreciation, and impairment	-	-	-	-	-	(6,663)	(6,663)
Direct costs of intangible asset additions	-	-	-	-	-	(34)	(34)
Share based payments	-	-	-	-	-	(96)	(96)
Finance income	-	-	-	-	-	44	44
Finance costs	-	-	-	-	-	(6)	(6)
Tax	-	-	-	-	-	58	58
	-------------	-------------	-------------	-------------	-------------	-------------	-------------
Profit/(loss) for the year	651	(152)	367	92	80	(7,715)	(6,677)
	======	======	======	======	======	======	======

 

 

6.         SEGMENTAL INFORMATION (continued)

 

2022	Entertainment Daily	Mashed Productions	The Tab	The Poke	Head Office	Total 2022
	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	2,261	243	1,059	15	-	3,578
Cost of sales	(224)	(190)	(118)	(2)	-	(534)
Administrative expenses*	(529)	(111)	(398)	(6)	(919)	(1,963)
Adjusted EBITDA*	1,508	(58)	543	7	(919)	1,081
Amortisation, depreciation, and impairment	-	-	-	-	(914)	(914)
Acquisition costs	-	-	-	-	(57)	(57)
Capital restructure costs	-	-	-	-	(3)	(3)
Share based payments	-	-	-	-	(62)	(62)
Finance income	-	-	-	-	8	8
Finance costs	-	-	-	-	(8)	(8)
Tax	-	-	-	-	759	759
	-------------	-------------	-------------	-------------	-------------	-------------
Profit/(loss) for the year	1,508	(58)	543	7	(1,196)	804
	======	======	======	======	======	======

 

*Adjusted EBITDA is defined as the operating profit after adding back depreciation, amortisation, impairment, share based payments, acquisition costs and direct costs associated with business combinations.

 

 

The segmental analysis above reflects the parameters applied by the Board when considering the Group's monthly management accounts.

 

 

	External revenue by location of customer		Total assets by location		Net tangible capital expenditure by location
	31 December 2023 Continuing	31 December 2022 Continuing	31 December 2023	31 December 2022	31 December 2023	31 December 2022
	£'000	£'000	£'000	£'000	£'000	£'000
United Kingdom	477	759	7,511	14,097	8	43
Europe	1,249	1,381	307	284	-	-
Rest of World	1,064	1,438	228	261	-	-
	-------------	-------------	-------------	-------------	-------------	-------------
	2,790	3,578	8,046	14,642	8	43
	======	======	=======	=======	======	======

 

 

7.	REVENUE
		2023	2022
	Revenue by stream is split:	£'000	£'000
	Advertising space	2,790	3,578
		-------------	-------------
		2,790	3,578
		======	======
	Revenue by location is split:
	United Kingdom	477	759
	Europe	1,249	1,381
	Rest of world	1,064	1,438
		-------------	-------------
		2,790	3,578
		======	======
The Group had two (2022: four) customers whose revenue individually represented 10% or more of the Group's total revenue, being 17.21% and 14.22% respectively (2022: 19.70%, 13.65%, 12.33% and 11.03% respectively).

 

8.	PROFIT FROM OPERATIONS
		2023	2022
		£'000	£'000
	This is arrived at after charging/(crediting):
	Continuing operations
	Staff costs (see note 9)	1,620	1,384
	Direct costs of business combinations	-	57
	Depreciation of property, plant & equipment	14	7
	Amortisation of intangible fixed assets	265	191
	Impairment on goodwill and intangible assets	6,384	716
		======	======
	Auditors' remuneration in respect of the Company	20	18
	Audit of the Group and subsidiary undertakings	42	37
	Review of interim financial information	5	4
		-------------	-------------
		67	59
		=======	======

 

 

 

9.	STAFF COSTS
		2023	2022
		£'000	£'000
	Staff costs for all employees, including Directors consist of:
	Wages and salaries	1,357	1,176
	Social security costs	149	134
	Pensions	18	12
		-----------	-----------
		1,524	1,322
	Share based payment charge	96	62
		-----------	-----------
		1,620	1,384
		======	======

 

		2023	2022
	The average number of employees of the group during the year was as follows:	Number	Number
	Directors	5	6
	Management and administration	5	4
	Content	22	22
		-----------	-----------
		32	32
		======	======

 

Directors' Detailed Emoluments

 

Details of individual Directors' emoluments for the year are as follows:

	Salary	Consultancy	Bonus	Pension	Total	Total
	2023	2023	2023	2023	2023	2022
	£'000	£'000	£'000	£'000	£'000	£'000
J Carter	154	-	-	1	155	138
J Douglas	154	-	-	1	155	138
M Higginson (resigned 30 April 2023)	2	6	-	-	8	25
D Joseph	50	-	-	-	50	45
P Machray	26	-	-	-	26	25
M Rich	37	-	-	-	37	35
	-----------	-----------	-----------	-----------	-----------	-----------
Total	423	6	-	2	431	406
	=====	=====	=====	=====	=====	=====

 

 

9.	STAFF COSTS (continued)

 

All pension contributions represent payments into defined contribution schemes.

 

The Executive Directors have service contracts with the Company which are terminable by the Company or relevant director after a fixed term of 12 months followed by 6 months' notice.

 

The Directors' interests in the issued ordinary share capital of the Company was as follows:

 

			Shares of £0.01				Shares of £0.01
Director			31/12/2023				31/12/2022
James Carter			10,908,078	9.3%			10,908,078	9.3%
Jim Douglas			10,908,078	9.3%			10,908,078	9.3%
David Joseph*			1,150,000	1.0%			600,000	0.5%

*David Joseph acquired shares through Integral 2 Limited, a company controlled by him.

 

There is a share-based payment charge attributable to options held by the directors during the year amounting to £46k (2022: £17k). The options held in the prior year lapsed on 28 February 2022. New options were issued in the year that lapse on 5 April 2026.

 

Effective options in Digitalbox plc exist due to two directors having warrants in its subsidiary company, Digital Publishing (Holdings) Limited, which, when exercised, are satisfied by issuing shares in Digitalbox plc.

 

These are set out in the table below,

 

'Effective Option' Holder		Number of Shares
James Carter		681,958
Jim Douglas		681,958
		1,363,916

 

The warrants had vested prior to admission onto AIM on 28 February 2019 and carry an effective exercise price of 2.28 pence per share issued in Digitalbox plc.

 

A full breakdown of options in issue are shown at page 24. Further information on share options is included in note 22.

 

The market price of the shares at 31 December 2023 was 3.35p with a quoted range from throughout 2023 of 3.35p to 8.75p. The options vest based on performance criteria detailed in note 22.

 

 

10.	FINANCE COSTS
		2023	2022
		£'000	£'000
	Interest on bank loans	6	8
		------------	------------
		6	8
		======	======
11.	TAXATION ON PROFIT/LOSS FROM ORDINARY ACTIVITIES
		2023	2022
		£'000	£'000
	Current tax
	UK corporation tax on profits for the current period	-	132
	Adjustment in respect of prior periods	(127)	1
	Deferred tax
	Origination and reversal of temporary differences	97	(96)
	Changes in tax rates	-	(3)
	Benefit arising from previously unrecognised tax losses	-	(793)
	Adjustment in respect of prior periods	(28)	-
		------------	------------
	Total tax credit	(58)	(759)
		======	======

The tax assessed for the year differs from the standard rate of corporation tax in the UK applied to profit/(loss) before tax.

 

		2023	2022
		£'000	£'000
	Total profit/(loss) on ordinary activities before tax	(6,734)	45
		------------	------------
	Profit/(loss) on ordinary activities at the standard rate of corporation tax in the UK of 23.52% (2022: 19%)	(1,584)	9
	Effects of:
	Expenses not deductible for tax purposes	40	24
	Income not taxable	-	(6)
	Impairment on goodwill	1,491	61
	Adjustments to prior periods	(155)	1
	Fixed asset differences	-	(2)
	Deferred tax asset not previously recognised	42	(793)
	Deferred tax not recognised - loss relief in current period	-	(50)
	Effect of changes in tax rates on deferred tax	3	(3)
	Losses carried back	105	-
		-------------	-------------
	Tax credit for the year	(58)	(759)
		======	======

 

In the Budget on 3 March 2021, the Chancellor announced the intention to increase the main rate of UK corporation tax to 25% for the financial year beginning 1 April 2023. This was substantively enacted on 24 May 2021.Deferred tax at the balance sheet date has therefore been measured using the enacted tax rate of 25% (2022: 25%) in these financial statements.

 

There were unused tax losses at 31 December 2023 amounting to £3,610k. In the majority, these were restricted for use for 5 years from the date of acquisition of Tab Media Limited against future taxable profits arising from the trade formerly carried on in Tab Media Limited and now carried on in Digitalbox Publishing Limited.  A deferred tax asset was recognised in relation to these losses for the first time in 2022, as the losses were considered to be highly likely to be recoverable against future profits. It is still the view that these losses will be highly likely to be recoverable against future profits.

 

 

12.	EARNINGS PER SHARE
		2023	2022
		£'000	£'000
	The earnings per share is based on the following:
	Continuing (loss)/earnings post tax attributable to shareholders	(6,677)	804
		===============	===============
	Basic weighted average number of shares	117,923,393	117,718,533
	Diluted weighted average number of shares	118,809,024	120,002,622
		===============	===============
	Basic earnings/(loss) per share (£)	(0.05662)	0.00683
	Diluted earnings/(loss) per share (£)	(0.05662)	0.00670
		===============	==============

 

Earnings per ordinary share has been calculated using the weighted average number of shares in issue during the relevant financial periods. IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease earnings per share or increase the loss per share. The exercise price of the outstanding share options is significantly more than the average and closing share price. Therefore, as per IAS33 the potential ordinary shares which could arise from exercised share options are disregarded in the calculation of diluted EPS. 

 

 

 

13.	TANGIBLE FIXED ASSETS
		IFRS 16 Right-of-Use Asset	Office equipment	Total
		£'000	£'000	£'000
	Cost
	Balance at 1 January 2022	56	29	85
	Additions	-	43	43
	Disposals	(56)	(14)	(70)
		---------------	---------------	---------------
	Balance at 1 January 2023	-	58	58
	Additions	-	8	8
		---------------	---------------	---------------
	Balance at 31 December 2023	-	66	66
		---------------	---------------	---------------
	Accumulated depreciation
	Balance at 1 January 2022	25	14	39
	Depreciation charge	-	7	7
	Depreciation eliminated on disposal	(25)	(15)	(40)
		---------------	---------------	---------------
	Balance at 1 January 2023	-	6	6
	Depreciation charge	-	14	14
		---------------	---------------	---------------
	Balance at 31 December 2023	-	20	20
		---------------	---------------	---------------
	Net Book Value
	At 31 December 2023	-	46	46
		======	======	======
	At 31 December 2022	-	52	52
		======	======	======

 

All tangible fixed assets held in the current and prior year were owned assets.

 

 

 

 

14.	INTANGIBLE FIXED ASSETS	Goodwill	Other	Development	Total
	GROUP	Arising on	Intangible	costs
		Consolidation	Assets
		£'000	£'000	£'000	£'000
	Cost
	Balance at 1 January 2022 Additions	9,610 -	1,476 18	121 171	11,207 189
	Business combinations	-	202	-	202
		-----------	-----------	-----------	---------------
	Balance at 1 January 2023	9,610	1,696	292	11,598
	Additions	-	937	112	1,049
		-----------	-----------	-----------	---------------
	Balance at 31 December 2023	9,610	2,633	404	12,647
		-----------	-----------	-----------	---------------
	Accumulated amortisation
	Balance at 1 January 2022	-	457	40	497
	Amortisation Impairment	- 321	159 395	32 -	191 716
		-----------	-----------	-----------	---------------
	Balance at 1 January 2023	321	1,011	72	1,404
	Amortisation	-	178	87	265
	Impairment	6,341	-	43	6,384
		-----------	------------	------------	---------------
	Balance at 31 December 2023	6,662	1,189	202	8,053
		------------	------------	------------	---------------
	Net Book Value
	At 31 December 2023	2,948	1,444	202	4,594
		======	======	======	======
	At 31 December 2022	9,289	684	221	10,194
		======	======	======	======
	At 31 December 2021	9,610	1,018	82	10,710
		======	======	======	======

 

During the year, the Group acquired the website tvguide.co.uk which has a carrying value in the financial statements of £453,214. The Group also capitalised development costs of £84k relating to development activities performed in respect of the tvguide.co.uk platform. These assets will be amortised over the same period. This is considered to have a useful economic life of 7 years and will be amortised over this period.

 

The Group subsequently purchased a collection of social media platforms from Media Chain Group Limited, which have a carrying value of £450,726. These assets have been subsumed within Entertainment Daily and The Tab split equally. The portion attributable to Entertainment Daily is being written off over 7 years. The portion attributable to The Tab is being written off over the unexpired portion of the 7 year write off period relating to the original acquisition of The Tab.

 

 

 

14.    INTANGIBLE FIXED ASSETS (continued)

 

Amortisation is charged to administrative expenses in the Statement of Comprehensive Income.

 

GOODWILL AND IMPAIRMENT
The carrying value of goodwill in respect of each cash generating unit is as follows:
						31 December 2023	31 December 2022
						£'000	£'000
Digitalbox Publishing (Holdings) Limited						2,830	9,171
Mashed Productions Limited						-	-
Tab Media Limited						118	118
						-------------	-------------
						2,948	9,289
						======	=======

 

The Group is obliged to test goodwill annually for impairment, or more frequently if there are indications that goodwill and indefinite life intangibles might be impaired, as the goodwill is deemed to have an indefinite useful life. In order to perform this test, management is required to compare the carrying value of the relevant cash generating unit ("CGU") including the goodwill with its recoverable amount. The recoverable amount of the CGU is determined from a value in use calculation.

 

Digitalbox Publishing (Holdings) Limited

The recoverable amount of Digitalbox Publishing (Holdings) Limited relates to the Entertainment Daily segment and has been determined from a review of the current and anticipated performance of this unit. In preparing this projection, a discount rate of 20% (2022: 10%) has been used based on the weighted average cost of capital and a future growth rate of 3% has been assumed. It has been assumed investment in capital equipment will equate to depreciation over the year. The discount rate was based on the Group's weighted average cost of capital as estimated by management. After applying sensitivity analysis in respect of the results and future cash flows, in particular for presumed growth rates and discount rates, management concluded that it was probable that such a change in key assumptions would reduce the recoverable amount below book value. The impairment loss being recognised amounts to £6,341k which results in a carrying value of £2,948k. The asset is considered to have a value in use of £3,894k over a 10 year period.

 

Management consider that the discount rate used is a key assumption. A 5% increase in that rate would result in a further impairment of £496k. A 5% reduction in that rate would result in a reduction in the impairment of £665k.

 

Mashed Productions Limited

The recoverable amount of Mashed Productions Limited has been determined with reference to the trade and assets hived across to Digitalbox Publishing Limited in 2020. Due to a change in the revenue model for this CGU the recoverable amount was deemed to be £nil in 2022 and therefore, a full impairment of Mashed Productions Limited was made.

 

Tab Media Limited

The recoverable amount of the Tab Media segment, which was hived up from Tab Media Limited to Digitalbox Publishing Limited on 1 October 2020, has been determined from a review of the current and anticipated performance of this unit. In preparing this projection, a discount rate of 20% (2022: 10%) has been used based on the weighted average cost of capital and a future growth rate of 3% has been assumed. It has been assumed investment in capital equipment will equate to depreciation over the year. The discount rate was based on the Group's weighted average cost of capital as estimated by management. After applying sensitivity analysis in   respect of the results and future cash flows, in particular for presumed growth rates and discount rates, management is satisfied that it is highly improbable that such a change in key assumptions would reduce the recoverable amount below book value.

 

Management consider that the discount rate used is a key assumption, however, a 5% increase in that rate would not result in the requirement for an impairment.

 

 

 

15.	TRADE AND OTHER RECEIVABLES			31 December 2023	31 December 2022
				£'000	£'000
	Trade receivables			757	784
	Prepayments and accrued income			84	100
	Corporation tax			80	-
	Other receivables			25	68
				-------------	-------------
				946	952
				======	======
16.	CASH AND CASH EQUIVALENTS			31 December	31 December
				2023	2022
				£'000	£'000
	Cash at bank and in hand			1,913	2,827
				-------------	-------------
				1,913	2,827
				======	======
17.	LIABILITIES			31 December	31 December
				2023	2022
				£'000	£'000
	Current liabilities
	Trade payables			78	124
	Social security and other taxes			81	84
	Accruals			69	76
	Other payables*			181	4
	Bank loans and overdrafts			149	112
	Corporation tax payable			-	61
				-------------	-------------
				558	461
				======	======
	Non-current liabilities
	Bank loans			94	206
				-----------	------------
				94	206
				======	======

 

*During the year, the Group acquired the website tvguide.co.uk which has a carrying value in the financial statements of £453,214. Of this sum, 180,000 was deferred until 2024 hence this is recorded within current liabilities.

 

18.	LOANS AND OVERDRAFTS			31 December 2023	31 December 2022
				£'000	£'000
	Bank overdrafts
	Due in less than one year			37	-
	Bank loans
	Due in less than one year			112	112
	Due in between one and two years			94	122
	Due in between two and five years			-	84
				-------------	-------------
				243	318
				======	======

On 7 October 2020, Digitalbox Publishing Limited drew down a loan facility amounting to £450k under the CBILS scheme. The present value of the loan at inception discounted at a market rate of interest was £440k. The loan is for a term of five years and is repayable in equal monthly instalments which commenced in 2021. Interest is charged at a fixed rate of 2.43% per annum, with the cost being fully subsidised by central Government for the first 12 months.

 

The loan is secured by a debenture over the assets of the Digitalbox Publishing Limited and a £450k guarantee granted by Digitalbox plc. The outstanding balance at 31 December 2023 was £206k (2022: £318k).

 

 

19.	DEFERRED TAX
			Total
			£'000
	Balance at 1 January 2023		(617)
	Deferred tax charge for the year		70
			-------------
	Balance at 31 December 2023		(547)
			=======

 

The deferred tax provision comprises:			31 December 2023	31 December 2022
			£'000	£'000
Intangible asset timing differences			257	176
Tax losses			(804)	(793)
			-------------	-------------
			(547)	(617)
			======	======
The expected net reversal of deferred tax in 2024 is £41k.

 

 

20.   FINANCIAL RISK MANAGEMENT

 

The Group is exposed to risks that arise from its use of financial instruments. These financial instruments are within the current assets and current liabilities shown on the face of the statement of financial position and comprise the following:

 

Credit risk

The Group is exposed to credit risk primarily on its trade receivables. The Group maintains its cash reserves at a reputable bank. It is group policy to assess the credit risk of each new customer before entering into binding contracts.

 

The maximum exposure to credit risk is represented by the carrying value in the statement of financial position. The credit risk on liquid funds is low as the funds are held at a bank with a high credit rating assigned by international credit agencies.

				31 December 2023	31 December 2022
				£'000	£'000
	Current financial assets
	Trade receivables			757	784
	Other receivables			189	67
	Cash and cash equivalents			1,913	2,827
				-------------	-------------
				2,859	3,678
				======	======

 

The table below illustrates the due date of trade receivables:

		31 December 2023	31 December 2022
		£'000	£'000
	Current	330	286
	31 - 60 days	250	215
	61 - 90 days	155	158
	91 - 120 days	10	68
	121 and over	12	57
		-------------	-----------
		757	784
		======	======

 

The table below illustrates the geographical location of trade receivables:

		31 December 2023	31 December 2022
		£'000	£'000
	United Kingdom	226	252
	Europe	307	270
	Rest of world	224	262
		-------------	-----------
		757	784
		======	======

The directors have considered expected credit losses under IFRS9 and have adopted the simplified approach to their evaluation as the Group has limited exposure to them. The Directors have provided for expected credit losses on a specific basis and this has led to the Group carrying a specific provision against trade debtors of £4k (2022: £20k). The Group experienced one bad debt write off in 2023 amounting to £4k.

 

         Liquidity risk

Liquidity risk arises from the Group's management of working capital and the finance charges and repayments of its liabilities.

 

The Group's policy is to ensure that it will have sufficient cash to allow it to meet its liabilities when they become due and so cash holdings may be high during certain periods throughout the period.

        

The Group's policy in respect of cash and cash equivalents is to limit its exposure by reducing cash holding in the operating units and investing amounts that are not immediately required in funds that have low risk and are placed with a reputable bank.

 

Cash at bank and cash equivalents

				31 December 2023	31 December  2022
				£'000	£'000
	At the year end the Group had the following cash balances:			1,913	2,827
				======	======

Cash at bank comprises Sterling and US Dollar cash deposits.

 

All monetary assets and liabilities within the group are denominated in the functional currency of the operating unit in which they are held. All amounts stated at carrying value equate to fair value.

			31 December 2023 £'000	31 December 2022 £'000
Financial liabilities at amortised cost
Trade payables			78	124
Accruals			69	76
Bank loans and overdrafts			244	318
Other payables			180	4
			-------------	-------------
			571	522
			=======	=======

 

The table below illustrates the maturities of trade payables:

				31 December 2023	31 December 2022
				£'000	£'000
	Current			62	93
	31 - 60 days			1	21
	61 - 90 days			-	-
	91 - 120 days			-	-
	121 and over			15	10
				----------------	---------------
				78	124
				========	========

 

 

The table below shows the maturities of financial liabilities:

 

	2023			Carrying amount	6 months or less	6-12 months	1 or more year
				£'000	£'000	£'000	£'000
	Trade payables			78	78	-	-
	Accruals			69	69	-	-
	Loans			244	94	56	94
	Other payables			180	180	-	-
				----------------	---------------	---------------	---------------
				571	421	56	94
				========	========	========	========

 

	2022			Carrying amount	6 months or less	6-12 months	1 or more year
				£'000	£'000	£'000	£'000
	Trade payables			124	114	-	10
	Accruals			76	76	-	-
	Loans			318	56	56	206
	Other payables			4	4	-	-
				----------------	---------------	---------------	- --------------
				522	250	56	216
				========	========	========	========

 

         Capital Disclosures and Risk Management

 

         The Group's management define capital as the Group's equity share capital and reserves.

 

The Group's objective when maintaining capital is to safeguard its ability to continue as a going concern, so that in due course it can provide returns for shareholders and benefits for other stakeholders.

 

The Group manages its capital structure and makes adjustments to it in the light of changes in the business and in economic conditions. In order to maintain or adjust the capital structure, the Group may from time to time issue new shares, based on working capital and product development requirements and current and future expectations of the Company's share price.

 

Share capital is used to raise cash and as direct payments to third parties for assets or services acquired.

 

Market risk

Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group considers the interest rates available when deciding where to place cash balances.

 

Foreign currency risk

Foreign exchange transaction risk arises when individual Group operations enter into transactions denominated in a currency other than the functional currency. The principal risk arises from the Group's reliance on US Dollar denominated annual revenues which amounted to $1.2m (2022: $1.8m) with a trade debtor balance at the year-end of $228k (2022: $11k). The Group mitigates foreign exchange risk by selling forward US Dollars on a quarterly basis.

 

21.	SHARE CAPITAL	No.	Value	No.	Value
		31 December 2023	£'000	31 December 2022	£'000
	Called up share capital
	Allotted, called up and fully paid
	Ordinary shares of £0.01 each	117,923,393	1,179	117,923,393	1,179
		---------------------------	------------	---------------------------	------------
		117,923,393	1,179	117,923,393	1,179
		=============	======	==============	======

 

22.	SHARE BASED PAYMENTS
	During the year, the Group incurred a £96k share based payment charge (2022: £62k). Of this total, £46k (2022: £17k) was recorded as an expense in Digitalbox plc and £50k (2022: £45k) was recorded as an expense in Digitalbox Publishing Limited.
	2023 No. of share options Weighted average exercise price 2022 No. of share options Weighted average exercise price Outstanding at beginning of year 4,541,919 5.51p 9,141,663 7.74p Granted during the year 4,513,322 6.07p - - Exercised during the year - - (1,590,936) 5.51p Expired during the year (2,005,812) 5.20p (3,008,808) 9.95p Outstanding at the end of the year 7,049,429 6.68p 4,541,919 5.51p   5,516,228 options are exercisable after 3 years (see page 24), or an exit event. 169,285 options are exercisable immediately. 1,363,916 options relates to Warrants issued prior to the group's admission by Digitalbox Publishing (Holdings) Limited, a subsidiary of the company. These are exercisable upon the exercise of those warrants in a share for share exchange arrangement, under which the company acquires all shares issued in Digitalbox Publishing (Holdings) Limited and in consideration, issues shares to the warrant holders.   A Black-Scholes model has been used to determine the fair value of the share options on the date of grant. The fair value is expensed to the income statement on a straight-line basis over the vesting period, which is determined annually.  The model assesses a number of factors in calculating the fair value.  These include the market price on the date of grant, the exercise price of the share options, the expected share price volatility of the Company's share price, the expected life of the options, the risk-free rate of interest and the expected level of dividends in future periods.

 

 

22.

SHARE BASED PAYMENTS (continued)

 

The inputs into the models of options previously granted which have contributed to the share-based payment arising in the year are:

 

Date of grant	17/04/2020	24/02/2021	06/04/2023
Model type	Black Scholes	Black Scholes	Black Scholes
Vesting date	16/04/2023	23/02/2024	05/04/2026
Number of options granted	2,005,812	1,002,906	4,513,322
Share price at date of grant	6.75p	6.00p	7.88p
Exercise price	6.75p	6.00p	7.88p
Option life in years	10	10	10
Risk-free rate	10%	10%	5.25%
Expected volatility	65%	65%	65%
Expected dividend yield	0%	0%	0%
Fair value of options	4.62p	5.20p	6.07p

 

23.  RESERVES

 

Full details of movements in reserves are set out in the consolidated statement of changes in equity. The following describes the nature and purpose of each reserve within owners' equity:

 

Share premium: Amount subscribed for share capital in excess of nominal value.

Retained earnings: Cumulative net gains and losses recognised in the consolidated statement of comprehensive income.

Share based payment reserve: Cumulative charges recognised in the consolidated statement of comprehensive income in relation to share based payments.

 

24.     CAPITAL COMMITMENTS

 

At 31 December 2023 and 31 December 2022 there were no capital commitments.

 

25.       RELATED PARTY TRANSACTIONS

 

During the year, Integral2 Limited billed £73k (2022: £65k) to the Group, a company related by virtue of David Joseph, a member of key management personnel, having control over the entity. As at 31 December 2023, £7k (2022: £6k) was owed to Integral2 Limited. During the year, David Joseph acquired 550,000 shares in Digitalbox plc at 8 pence per share through Integral 2 Limited.

 

During the year, M Capital Investment Partners (Holdings) Limited billed £6k (2022: £25k) to the Group, a company related by virtue of Martin Higginson, a member of key management personnel for part of the year, having control over the entity. As at 31 December 2023, £nil (2022: £3k), was accrued as owing to M Capital Investment Partners (Holdings) Limited. The balances stated here were for transactions up to the point that Martin Higginson resigned as a director and was therefore no longer a related party.

 

The key management personnel are considered to be the Board of Directors. Their remuneration is disclosed in detail in note 9. Key management were remunerated £431k in the year ended 31 December 2023 (2022: £406k).

 

The key management personnel have been provided with a total of 1,363,916 effective share options resulting in a charge of £46k in the period (2022: £17k).

 

			At 31 December 2023 £'000		At 31 December 2022 £'000
Fixed assets
Investments	III		6,226		11,209
Deferred tax asset	IV		17		-
			-----------------		-----------------
			6,243		11,209
Current assets
Trade and other receivables	V		1,213		1,286
Cash and cash equivalents	VI		-		1
			-----------------		-----------------
			1,213		1,287
Current liabilities
Bank overdrafts and loans	VII		(38)		-
Trade and other payables	VII		(31)		(73)
			----------------		----------------
Total current liabilities			(69)		(73)
			----------------		----------------
Total liabilities			(69)		(73)
Net current assets			1,144		1,214
			---------------		---------------
Total assets less total liabilities			7,387		12,423
			=======		=======
Capital and reserves
Called up share capital	VIII		1,179		1,179
Share premium account	IX		11,169		11,169
Share-based payment reserve	IX		138		196
Retained deficit	IX		(5,099)		(121)
			------------------		------------------
Shareholders' funds			7,387		12,423
			=========		=========

   

    The Company has taken advantage of the exemptions allowed under section 408 of the Companies Act 2006 and has not presented its income statement in these financial statements. The Group profit for the year included a loss on ordinary activities after tax of £5,082k (2022: £102k loss) in respect of the Company.

 

    The financial statements were approved by the Board and authorised for issue on 25 March 2024.

 

 

 

    James Carter                                                                        David Joseph

CEO                                                                                        CFO

 

Company registration number: 04606754

 

 

	Share Capital	Share Premium	Share-based payment	Retained deficit	Total
	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2022	1,163	11,149	464	(349)	12,427
Loss after tax	-	-	-	(102)	(102)
Issue of new shares	16	20	-	-	36
Share-based payments	-	-	62	-	62
Reserves transfer in respect of lapsed options	-	-	(330)	330	-
	-------------	-------------	-------------	-------------	-------------
Balance at 31 December 2022	1,179	11,169	196	(121)	12,423
	-------------	--------------	-------------	-------------	-------------
Loss after tax	-	-	-	(5,082)	(5,082)
Share-based payments	-	-	46	-	46
Reserves transfer in respect of lapsed options	-	-	(104)	104	-
	-------------	--------------	--------------	--------------	--------------
Balance at 31 December 2023	1,179	11,169	138	(5,099)	7,387
	-------------	--------------	-------------	-------------	-------------

 

I.            ACCOUNTING POLICIES

 

The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by the Act the separate financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

 

The company has taken advantage of the following disclosure exemptions under FRS 101:

·      the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment

·      the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations;

·      the requirements IFRS 7 Financial Instruments: Disclosures;

·      the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers;

·      the requirements of paragraph 58 of IFRS 16, provided that the disclosure of details of indebtedness required by paragraph 61(1) of Schedule 1 to the Regulations is presented separately for lease liabilities and other liabilities, and in total;

·      the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of: (i) paragraph 79(a) (iv) of IAS 1, (ii) paragraph 73(e) of IAS 16 Property Plant and Equipment and (iii) paragraph 118 (e) of IAS 38 Intangible Assets

·      the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 40A to 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements;

·      the requirements of IAS 7 Statement of Cash Flows;

·      the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;

·      the requirements of paragraph 17 and 18a of IAS 24 Related Party Disclosures; and

·      the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

 

Where required, equivalent disclosures are given in the group financial statements of Digitalbox plc.

 

The principal accounting policies adopted are the same as those set out in note 4 to the consolidated financial statements except as noted below:

      

               Valuation of investments

Investments in subsidiaries are stated at cost less any provision for impairment in value.

 

 

II.           OPERATING PROFIT

The auditor remuneration for audit and other services is disclosed in note 8 to the consolidated financial statements.

 

The average number of employees of the company during the year was 5 (2022: 6) and total staff costs were £477k (2022: £468k). Directors' remuneration is disclosed in note 9 to the consolidated financial statements.

 

 

III.	FIXED ASSET INVESTMENTS		31 December 2023
			£'000
	Subsidiary undertakings
	Cost
	Balance at 31 December 2022 and 31 December 2023		11,209
	Provisions
	Balance at 1 January 2023		-
	Impairment charge for the year*		(4,983)
			--------------
	Balance at 31 December 2023		(4,983)
			--------------
	Carrying value of investments		6,226
			=======

 

At the year end the Company had the following subsidiaries:

 

Subsidiary name	Class of shares		Proportion of ownership	Registered office
Digitalbox Publishing Limited	Ordinary		100% Indirect	Jubilee House, 92 Lincoln Road, Peterborough, PE1 2SN
Digitalbox Publishing (Holdings) Limited	Ordinary		100% Direct	Jubilee House, 92 Lincoln Road, Peterborough, PE1 2SN
Subsidiary name		Principal activity
Digitalbox Publishing Limited		Sale of digital advertising space
Digitalbox Publishing (Holdings) Limited		Holding company

 

* In determining the required level of impairment on the investment held by the Company in Digitalbox Publishing Limited, via its investment in Digitalbox Publishing (Holdings) Limited, the directors considered the aggregate contribution of the cash generating units held in that subsidiary, using the same forecasts, Weighted average cost of capital and lifetime term as that provided for the goodwill and intangible asset impairment assessment. This demonstrated a required impairment of £4,983k.

 

 

IV.	DEFERRED TAX
					Total
					£'000
	Balance at 1 January 2023				-
	Deferred tax charge for the year				(17)
					-------------
	Balance at 31 December 2023				(17)
					=======
	The deferred tax provision comprises:				31 December 2023
					£'000
	Tax losses				(17)
					-------------
					(17)
					-------------
V.	RECEIVABLES: due within one year			31 December 2023	31 December 2022
				£'000	£'000
	Amounts owed by group undertakings			1,177	1,261
	Prepayments and accrued income			36	25
				------------	------------
				1,213	1,286
				=====	=====

 

 

VI.        CASH AND CASH EQUIVALENTS

 

			31 December 2023	31 December 2022
			£'000	£'000
Cash at bank and in hand			-	1
			-------------	-------------
			-	1
			======	======

 

 

VII.	PAYABLES: amounts falling due within one year
				31 December 2023	31 December 2022
				£'000	£'000
	Bank overdrafts and loans			38	-
	Trade payables			8	10
	Accruals			3	45
	Other tax and social security			20	18
				------------	------------
				69	73
				======	======

 

VIII.       SHARE CAPITAL

              

    Details of the Company's share capital can be found in Note 21 to the consolidated financial statements.

 

 

IX.          RESERVES

         

Full details of movements in reserves are set out in the company statement of changes in equity. The following describes the nature and purpose of each reserve within owners' equity:

 

Share premium: Amount subscribed for share capital in excess of nominal value.

Retained deficit: Cumulative net losses recognised in the company statement of comprehensive income.

Share based payment reserve: Cumulative charges recognised in the company statement of comprehensive income in relation to share based payments.

 

 

X.            RELATED PARTY TRANSACTIONS

 

During the year, M Capital Investment Partners (Holdings) Limited billed £6k (2022: £25k) to the Group, a company related by virtue of Martin Higginson, a member of key management personnel for part of the year, having control over the entity. As at 31 December 2023, £nilk (2022: £3k), was accrued as owing to M Capital Investment Partners (Holdings) Limited. The balances stated here were for transactions up to the point that Martin Higginson resigned as a director and was therefore no longer a related party.

 

The key management personnel are considered to be the Board of Directors. Their remuneration is disclosed in detail in note 9. Key management were remunerated £431k in the year ended 31 December 2023 (2022: £406k).

 

The key management personnel have been provided with a total of 1,363,916 effective share options resulting in a charge of £46k in the period (2022: £17k).

 

  

COMPANY STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 31 DECEMBER 2023

 

 

			At 31 December 2023 £'000		At 31 December 2022 £'000
Fixed assets
Investments	III		6,226		11,209
Deferred tax asset	IV		17		-
			-----------------		-----------------
			6,243		11,209
Current assets
Trade and other receivables	V		1,213		1,286
Cash and cash equivalents	VI		-		1
			-----------------		-----------------
			1,213		1,287
Current liabilities
Bank overdrafts and loans	VII		(38)		-
Trade and other payables	VII		(31)		(73)
			----------------		----------------
Total current liabilities			(69)		(73)
			----------------		----------------
Total liabilities			(69)		(73)
Net current assets			1,144		1,214
			---------------		---------------
Total assets less total liabilities			7,387		12,423
			=======		=======
Capital and reserves
Called up share capital	VIII		1,179		1,179
Share premium account	IX		11,169		11,169
Share-based payment reserve	IX		138		196
Retained deficit	IX		(5,099)		(121)
			------------------		------------------
Shareholders' funds			7,387		12,423
			=========		=========

   

    The Company has taken advantage of the exemptions allowed under section 408 of the Companies Act 2006 and has not presented its income statement in these financial statements. The Group profit for the year included a loss on ordinary activities after tax of £5,082k (2022: £102k loss) in respect of the Company.

 

    The financial statements were approved by the Board and authorised for issue on 25 March 2024.

 

 

    James Carter                                                                        David Joseph

CEO                                                                                        CFO

 

Company registration number: 04606754

 

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2023

 

                                              

 

	Share Capital	Share Premium	Share-based payment	Retained deficit	Total
	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2022	1,163	11,149	464	(349)	12,427
Loss after tax	-	-	-	(102)	(102)
Issue of new shares	16	20	-	-	36
Share-based payments	-	-	62	-	62
Reserves transfer in respect of lapsed options	-	-	(330)	330	-
	-------------	-------------	-------------	-------------	-------------
Balance at 31 December 2022	1,179	11,169	196	(121)	12,423
	-------------	--------------	-------------	-------------	-------------
Loss after tax	-	-	-	(5,082)	(5,082)
Share-based payments	-	-	46	-	46
Reserves transfer in respect of lapsed options	-	-	(104)	104	-
	-------------	--------------	--------------	--------------	--------------
Balance at 31 December 2023	1,179	11,169	138	(5,099)	7,387
	-------------	--------------	-------------	-------------	-------------

 

The notes on pages 66 to 69 form part of the Company financial statements.

 

 

NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 

 

II.           ACCOUNTING POLICIES

 

The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by the Act the separate financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

 

The company has taken advantage of the following disclosure exemptions under FRS 101:

·      the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment

·      the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations;

·      the requirements IFRS 7 Financial Instruments: Disclosures;

·      the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers;

·      the requirements of paragraph 58 of IFRS 16, provided that the disclosure of details of indebtedness required by paragraph 61(1) of Schedule 1 to the Regulations is presented separately for lease liabilities and other liabilities, and in total;

·      the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of: (i) paragraph 79(a) (iv) of IAS 1, (ii) paragraph 73(e) of IAS 16 Property Plant and Equipment and (iii) paragraph 118 (e) of IAS 38 Intangible Assets

·      the requirements of paragraphs 10(d), 10(f), 16, 38A to 38D, 40A to 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements;

·      the requirements of IAS 7 Statement of Cash Flows;

·      the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;

·      the requirements of paragraph 17 and 18a of IAS 24 Related Party Disclosures; and

·      the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

 

Where required, equivalent disclosures are given in the group financial statements of Digitalbox plc.

 

The principal accounting policies adopted are the same as those set out in note 4 to the consolidated financial statements except as noted below:

      

               Valuation of investments

Investments in subsidiaries are stated at cost less any provision for impairment in value.

 

 

II.           OPERATING PROFIT

The auditor remuneration for audit and other services is disclosed in note 8 to the consolidated financial statements.

 

The average number of employees of the company during the year was 5 (2022: 6) and total staff costs were £477k (2022: £468k). Directors' remuneration is disclosed in note 9 to the consolidated financial statements.

 

 

III.	FIXED ASSET INVESTMENTS		31 December 2023
			£'000
	Subsidiary undertakings
	Cost
	Balance at 31 December 2022 and 31 December 2023		11,209
	Provisions
	Balance at 1 January 2023		-
	Impairment charge for the year*		(4,983)
			--------------
	Balance at 31 December 2023		(4,983)
			--------------
	Carrying value of investments		6,226
			=======

 

At the year end the Company had the following subsidiaries:

 

Subsidiary name		Class of shares		Proportion of ownership	Registered office
Digitalbox Publishing Limited		Ordinary		100% Indirect	Jubilee House, 92 Lincoln Road, Peterborough, PE1 2SN
Digitalbox Publishing (Holdings) Limited		Ordinary		100% Direct	Jubilee House, 92 Lincoln Road, Peterborough, PE1 2SN
Subsidiary name			Principal activity
Digitalbox Publishing Limited			Sale of digital advertising space
Digitalbox Publishing (Holdings) Limited			Holding company

 

* In determining the required level of impairment on the investment held by the Company in Digitalbox Publishing Limited, via its investment in Digitalbox Publishing (Holdings) Limited, the directors considered the aggregate contribution of the cash generating units held in that subsidiary, using the same forecasts, Weighted average cost of capital and lifetime term as that provided for the goodwill and intangible asset impairment assessment. This demonstrated a required impairment of £4,983k.

 

IV.	DEFERRED TAX
					Total
					£'000
	Balance at 1 January 2023				-
	Deferred tax charge for the year				(17)
					-------------
	Balance at 31 December 2023				(17)
					=======
	The deferred tax provision comprises:				31 December 2023
					£'000
	Tax losses				(17)
					-------------
					(17)
					-------------
V.	RECEIVABLES: due within one year			31 December 2023	31 December 2022
				£'000	£'000
	Amounts owed by group undertakings			1,177	1,261
	Prepayments and accrued income			36	25
				------------	------------
				1,213	1,286
				=====	=====

 

 

VI.        CASH AND CASH EQUIVALENTS

 

			31 December 2023	31 December 2022
			£'000	£'000
Cash at bank and in hand			-	1
			-------------	-------------
			-	1
			======	======

 

VII.	PAYABLES: amounts falling due within one year
				31 December 2023	31 December 2022
				£'000	£'000
	Bank overdrafts and loans			38	-
	Trade payables			8	10
	Accruals			3	45
	Other tax and social security			20	18
				------------	------------
				69	73
				======	======

 

VIII.       SHARE CAPITAL

              

    Details of the Company's share capital can be found in Note 21 to the consolidated financial statements.

 

 

IX.          RESERVES

         

Full details of movements in reserves are set out in the company statement of changes in equity. The following describes the nature and purpose of each reserve within owners' equity:

 

Share premium: Amount subscribed for share capital in excess of nominal value.

Retained deficit: Cumulative net losses recognised in the company statement of comprehensive income.

Share based payment reserve: Cumulative charges recognised in the company statement of comprehensive income in relation to share based payments.

 

 

X.            RELATED PARTY TRANSACTIONS

 

During the year, M Capital Investment Partners (Holdings) Limited billed £6k (2022: £25k) to the Group, a company related by virtue of Martin Higginson, a member of key management personnel for part of the year, having control over the entity. As at 31 December 2023, £nilk (2022: £3k), was accrued as owing to M Capital Investment Partners (Holdings) Limited. The balances stated here were for transactions up to the point that Martin Higginson resigned as a director and was therefore no longer a related party.

 

The key management personnel are considered to be the Board of Directors. Their remuneration is disclosed in detail in note 9. Key management were remunerated £431k in the year ended 31 December 2023 (2022: £406k).

 

The key management personnel have been provided with a total of 1,363,916 effective share options resulting in a charge of £46k in the period (2022: £17k).