DIGITALBOX PLC
ANNUAL REPORT
AND ACCOUNTS
2022
DIGITALBOX PLC
CONTENTS
DIGITALBOX PLC
CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
CONTENTS
Chairman’s statement
Chief Executive’s report
Strategic report
Corporate and social responsibility report
Corporate governance report
Audit Committee report
Remuneration Committee report
Directors’ report
Directors’ responsibilities statement
Independent auditor’s report
Consolidated statement of comprehensive income
Consolidated statement of changes in equity
Consolidated statement of financial position
Page
3
5 - 9
10 - 16
17
18 - 24
25 - 26
27
28 - 29
30
31 - 35
38
39
40
Consolidated statement of cash flows
41 - 42
Notes forming part of the consolidated financial statements
43 - 66
Company statement of financial position
Company statement of changes in equity
67
68
Notes forming part of Company financial statements
69 - 71
Directors, Secretary and Advisers
72
Chairman’s Statement
FOR THE YEAR ENDED 31 DECEMBER 2022
I am delighted to report that Digitalbox
plc (‘Digitalbox’) successfully delivered
an Adjusted EBITDA* for 2022 of £1.1m,
an increase of 5.1% on the prior year and,
importantly, the business increased
profitability with the Adjusted EBITDA
margin of 30.2% compared to 28.1% in
the prior year.
The business maintained its strategic
focus delivering a ‘mobile first’ media
operation at scale through the use of leading
technologies to optimise both audience engagement
and commercial performance. As the mobile channel
represents the key segment of the fast-growing digital
advertising market, we continue to see this as an
excellent area to operate within.
The aftershocks of the global pandemic together
with the war in Ukraine had a profound impact on
global food and energy prices which have negatively
impacted consumer spending power and, in turn,
advertising spend. The result was a highly volatile
trading environment in 2022 which was well navigated
by the management team. We reported seeing the
headwinds arriving in the middle of the year and the
team adapted to deliver full year revenues of £3.6m
and Adjusted EBITDA within market guidance.
Digitalbox closed the year with gross cash of £2.8m
which is £0.6m up on the prior year and with net cash
(gross cash less bank debt) of £2.5m which is £0.7m up
on the prior year.
On the acquisition front, in accordance with
Digitalbox’s stated buy and build strategy, we have
exchanged contracts on the acquisition of the assets
of tvguide.co.uk ltd and completed the purchase of
The Poke, the latter having hit the ground running
and demonstrating its potential from the outset. The
acquisition of tvguide.co.uk is expected to complete
in H1 2023.
With the enlarged portfolio of Entertainment Daily,
The Daily Mash, The Tab, The Poke and tvguide.co.uk,
the business will be well placed to deal with the
challenges of 2023 and to take advantage of further
acquisition opportunities that the trading conditions
will likely bring to the fore.
Marcus Rich
Chairman
27 March 2023
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com DIGITALBOX PLC
CHIEF EXECUTIVE’S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
CHIEF EXECUTIVE’S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Chief Executive’s Report
FOR THE YEAR ENDED 31 DECEMBER 2022
2022 was another significant year
for Digitalbox, once again delivering
profitable growth and making further
progress on our strategy of building
a leading mobile-focused media
business. We developed our portfolio
with the addition of The Poke, attracted
new audiences and monetised them
effectively. The successful year-end
outcome has been greatly aided by our
knowledge, focus and agility allowing
Further progress
building a leading,
mobile-first media
business
us to drive benefit from our strategic positioning and
navigate challenging trading environments.
With the economic turmoil arising from the
pandemic, the war in Ukraine and other issues within
the UK economy itself, marketers continue to choose
media which presents the most accountable and
relevant commercial solutions within the marketing
mix, in particular mobile digital media. As we have
continued to develop our audience verticals we are
now the most significant online publisher of humour/
comedy content in the UK and one of the largest
publishers for women, continuing to benefit from
the market movement towards quality advertising
inventory at scale.
FINANCIAL REVIEW
We are pleased to deliver Adjusted EBITDA* of £1.1m,
which reflected an increase of 5.1% on the prior year
and a margin of 30.2% (2021: 28.1%). Cash generation
is a key feature of this business and we closed the
year with gross cash of £2.8m, an uplift of £0.6m on
the prior year and with net cash (gross cash less bank
debt) of £2.5m an uplift of £0.7m on the prior year.
These cash increases are despite the business having
continued to invest in its products and having
acquired The Poke in an all-cash purchase towards the
end of the year. This underlines the cash generative
nature of the business delivering Cash Generated by
Operations of £1.4m which is 131% of Adjusted EBITDA.
Full year revenues of £3.6m are 2.4% down overall
on 2021 but mask the challenging macro trading
environment of 2022 which saw the Group’s
underlying revenues up 40% in H1 and down 27% in
H2 on the same periods in the prior year.
The revenue model for The Daily Mash changed
from purely consumer advertising dependent to a
hybrid subscription model during the year, which
required the Directors to provide for a full impairment
of the carrying value of this cash generating unit.
Accordingly, an impairment charge of £716k has been
charged to the profit and loss account.
OPERATING REVIEW
Digitalbox currently owns and operates four trading
brands – Entertainment Daily, The Daily Mash, The
Tab and The Poke. Entertainment Daily produces and
publishes online UK entertainment news covering TV,
showbiz and celebrities. The Tab is the UK’s largest
student and youth culture site fuelled by a London-
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com DIGITALBOX PLC
CHIEF EXECUTIVE’S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
CHIEF EXECUTIVE’S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Projected Global Digital / Mobile Ad Spend
836
766
696
627
567
65%
67%
69%
71%
73%
Global digital ad spend $bn*
Mobile share of global
digital ad spend*
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. All four brands generate
revenue from advertising in and around the content
they publish.
Whilst 2022 was a year of continued uncertainty, it
further demonstrated the effectiveness of the digital
advertising medium as its share grew to 65% of
global ad spend. As post-pandemic trends continued
to evolve the adoption of ecommerce via the most
personal of channels, the mobile device, continued
to grow. With Digitalbox’s mobile-first focus, we were
well positioned in 2022 and remain very well placed for
the forecast growth over coming years.
Our audience levels in term of sessions increased by
7% to 293m. As well as building out further content
strands to our existing brands we invested in acquiring
The Poke, with the deal completing in December
2022. Integration has been smooth and we have
quickly re-platformed the brand to gain benefit from
our technology stack and drive its commercial success.
Compelling content remains at the core of the
Digitalbox offering, created by talented teams with an
expert understanding of their respective audiences.
We marry their expertise 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, part of the Graphene suite, the Graphene
Ad Stack (GAS) now powers Entertainment Daily, The
Daily Mash, The Tab and, most recently, The Poke.
We are seeing significant value creation here as The
Poke’s improved data from our deployment of GAS
has enabled it to significantly grow advertising
session values within the early stages of
our ownership.
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 and we hope to
deliver similar results with The Poke. We
continue to evaluate further acquisitions and have
seen a significant increase in opportunities as other
publishers with lower margin headroom endured
challenging trading conditions in 2022. We remain
ready to move quickly where we can realise the
appropriate value.
The Digitalbox team was scaled during 2022 to bring
capacity for further 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 continue to
engage consumers at scale through this channel with
91% of our audience across the portfolio visiting on
mobile devices. With an average of over 24m 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 of 2022 and we anticipate its
acceleration once we emerge from this challenging
period. As part of our Graphene technology suite that
supports our mobile-first strategy, we have built a new
Graphene Ad Stack (GAS) which enables optimisations
to be rapidly applied. As previously reported, our GAS
set up on The Tab quickly drove it to profitability and
we are seeing similar results on The Poke. This will
give Digitalbox a distinct advantage as we look to
further optimise our existing portfolio, complete more
acquisitions and benefit from the forecast growth in
the digital ad market.
PORTFOLIO GROWTH
Humour curation site The Poke
is the most recent addition to the
Digitalbox portfolio, with its acquisition
completing in December. We feel The
Poke is an excellent stablemate for The Daily Mash
with a distinct editorial proposition of its own. It brings
1m social followers.
Entertainment Daily saw overall session (visits) growth
of 17% year-on-year despite Google algorithm changes
causing some challenges. Google accounted for 25m
sessions in 2022 and Facebook also performed well in
the first half of the year contributing to record organic
traffic levels in Q1. 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 launch of the Entertainment Daily
Awards, which attracted more than 150k votes and
national coverage including the opening segment of
ITV’s daytime flagship, This Morning.
The Tab continues to perform on strategy delivering
consistent positive contribution now we have
transitioned it onto our Graphene platform which will
enable further optimisations going forward. This year
saw another year of strong, campaigning editorial
alongside its established output in entertainment
and culture coverage, new hires into the social and
editorial team and increased content output from
its 30 local teams.
*Source: eMarketer, Oct 2022 https://www.insiderintelligence.com/content/worldwide-digital-ad-spending-2023
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com DIGITALBOX PLC
CHIEF EXECUTIVE’S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
CHIEF EXECUTIVE’S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
for a second series on UK TV’s Dave channel. This
season the show had a well-received new host in the
form of Rachel Parris and continued to perform well
with audience levels once again placed it in the top
three programmes for the channel.
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.
During the year our teams fully embraced
flexible working while delivering great
results. Good communication and a
sense of inclusion are important to us, so
we continue to publish monthly all-staff
The Daily Mash had a steady year of recovery growing
back from the Facebook strike that caused problems
in H1 when the platform struggled to identify the
difference between fictional individuals identified in
satire and mainstream news articles. With a highly
loyal core audience and genuinely unique content, the
Mash represented an ideal opportunity to diversify its
revenue sources. Our launch of an ad-free premium
content experience behind a paywall continues
to show encouraging signs with 1,400 monthly
subscribers. The impact of the brand was further
extended with The Late Night Mash TV show returning
updates on progress and stage weekly leadership
sessions alongside daily team meetings. Building on
this, in July we held our second all-staff conference
and party in Bath followed by a December trip to
London’s Winter Wonderland, both providing fantastic
opportunities for the entire company to gather and
share ideas.
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 new
development opportunities, training and
Corporate Highlights
REVENUE
ADJUSTED EBITDA
£3.6m vs £3.7m in 2021
£1.1m vs £1.0m in 2021
ADJUSTED EBITDA MARGIN
ADJUSTED EBITDA PER SHARE
30.2% vs 28.1% in 2021
0.9p vs 0.9p in 2021
*Adjusted EBITDA is defined as the operating profit after adding back depreciation, amortisation, impairment, share
based payments, acquisition costs, direct costs associated with business combinations and capital restructure costs
development for more senior staff. The Daily Mash has
strengthened its commissioning team and we have
used The Tab’s outreach network to bring new writing
talent onto the site.
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 immediate families 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.
and the markets adjusted to work with the new
realities attached to changed consumer behaviour,
2022 was a clear story of two halves. The trend towards
digital and mobile advertising spend continued
accelerating in the first half followed by a second half
slowdown driven by the global impact of spiralling
energy and food prices impacting consumer
spending power. With global economies subject to
these headwinds into H1 2023, the open ad market is
a good place to be as it has the ability to adapt in real
time. Global commentary points towards the market
recovering in the second half of 2023 with a full return
forecast for 2024. We have no reason to doubt these
predicted changes and are confident the business is
very well placed for the returning market.
We enter 2023 with an expanded portfolio primed for
future growth when the economy returns, a stronger
investor base and a confident digital advertising
sector expected to significantly increase its share of
global ad spend over coming years.
James Carter
Chief Executive
27 March 2023
I would like to take the opportunity to thank all
Digitalbox staff for their incredible hard work and
enthusiasm during the last year and their valuable
contribution to these results. As the company
continues to grow it’s a pleasure to be working with
such a talented and committed team.
BUSINESS OUTLOOK
Digitalbox has continued to develop as a profitable
UK digital media business positioned squarely in the
mobile space.
Despite the highly challenging macroeconomic
environment, global digital advertising spend is
forecast to grow by more than 40% in the next four
years. The 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 65% of all digital
ad spend in 2022 to 70% in 2027 and our content and
tech teams continue to strengthen delivery through
this channel.
Beyond the advertising market, entertainment
production houses are expected to increase their
spend to over £10bn for UK TV in 2023, providing
increasing engagement from both the big terrestrial
channels and the streamers. This increasing
investment stimulates our various audiences leading
to big shows like I’m a Celebrity Get Me Out Of Here
and Love Island showing record engagement on our
sites in 2022.
The three acquisitions completed since being listed
on AIM – The Daily Mash, The Tab and The Poke –
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.
Whilst 2021 saw a strong recovery from the pandemic
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Strategic Report
We set out to build a new digital media
business; one driven by profit and
rates of engagement resulting in more time being
spent within the respective gateways to this content.
The
Digitalbox
Vision
efficiency delivering high quality
content engaging users at
speed and scale.
Our aim remains to generate
organic growth of our existing
assets and to acquire and transform
digital media properties with the
potential to thrive through the
application of the Digitalbox model.
We have a proven ability to grow at speed
by focusing on current and future trends; rapidly
adapting to technical advances and the habits of our
audience, free from legacy issues that frequently
cause distraction in other media businesses.
CONSUMER MEDIA BEHAVIOUR
The Digitalbox publishing model was informed
by the recognition of the growth of ‘push media’
consumption, especially on mobile – where the most
highly engaging and relevant content from publishers
is placed in users’ feeds based on trending topics,
article performance and their own behaviours and
interests. Content-surfacing algorithms continue to be
refined, delivering a better user experience and higher
Meta, Alphabet and TikTok continue to compete
for consumer attention through ‘push media’
consumption, and it is the publishers with the most
engaging content that will continue to benefit from
this competition. Google continues to develop its push
content strategy via the Discover feed which is now
making billions of content suggestions and Facebook
is placing a greater focus on its content tools being
more fully integrated across its platforms in a bid to
better enable creators and satisfy their audiences.
TikTok is taking audience share from all of the key
platforms and its predictive content model points
the way towards the use of AI which will become
increasingly important over the next few years.
Targeting consumers via an array of distribution
channels is one thing, but having the ability to
profitably operate in those channels is where the real
skillset lies.
Whilst the major platforms continue to evolve their AI
models, consumers continue to support other push
media sources too and as a result, we will continue to
see growth opportunities.
OUR APPROACH
We believe in order to be successful in today’s media environment a business, its brands and its people must be:
ENGAGING
The internet is dominated
FAST
Audiences’ expectation levels
FLEXIBLE
Digitalbox is a mobile-first
EFFICIENT
Efficiency matters because we
by platforms that compete
are higher than ever and their
media company for the simple
regard profitable operation as
for engagement and media
attention spans are lower.
reason that this is where
the key to longevity. The digital
brands that deliver the
Our content and tech teams
consumers have congregated.
market has seen many long
highest levels will prosper.
obsess about getting the best
Our future strategy will be
bets against models that fail
Our teams’ passion for their
stories to their readers as
shaped by continuing to move
the profit test. Our teams use
subjects, understanding of
quickly as possible.
with our audience. This will
every tool to maximise their
their audiences and expertise
in producing truly compelling
content, consistently deliver
market-leading levels of
engagement.
inevitably require flexibility as
impact and efficiency.
different platforms go in and
out of favour and different
devices emerge. We know
tomorrow will be different.
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Our latest acquisition,
The Poke, has already seen
improved commercial
performance
discerning. These 25-44 year olds are power-sharers
of digital media who even in these challenging times
continue to spread a smile.
The Tab was founded by three students at Cambridge
in 2009 as a reaction to out-of-touch student papers.
Since then it has exploded into one of the biggest sites
in Britain, speaking directly the UK’s youth. They are
the generation tasked with more responsibility than
any other in the last 50 years. It will be their reinvention
that heals the planet, that creates new ways of
working and cares for our ageing population. The
leaders of tomorrow, the global citizens who need to
think in a more measured and considered fashion.
The Poke was founded in 2010 and has since delivered
a uniquely entertaining editorial mix, captivating fans
293
MILLION
VISITS
RELEVANCE
Our business is currently built around a UK audience
focus which brings distinct benefits across our key
disciplines:
Our editorial content resonates strongly with our
audiences, keeping our readers coming back again
and again.
Our key advertiser relationships all have a significant
presence in our local market which is one of the
world’s most advanced marketing economies and
they place the greatest value on high-quality UK
traffic.
The addition of The Poke in December 2022 with its
UK centricity adds more depth to this element of our
strategy.
GROWTH THROUGH ‘BUY AND BUILD’
On our admission to AIM in February 2019, Digitalbox
outlined a strategy to make investments in its
existing portfolio and perform acquisitions to grow
the business. We intended to identify targets within
markets that offer natural synergies with our ongoing
operations and also to expand our existing assets
into areas where there is a clear appetite from our
audiences.
The completion of The Poke transaction in 2022
marked our third acquisition after The Daily Mash
in 2019 and The Tab in 2020. Early results have been
pleasing as we have been able to improve the brand’s
commercial performance despite a very challenging
advertising market.
We will continue to target and screen acquisitions
that best align with our processes and enhance our
existing portfolio to deliver the strategic vision. We will
also continue to develop new content verticals that
offer the opportunity to scale our existing portfolio.
AUDIENCES THAT ARE IN DEMAND
Entertainment Daily reaches a core demographic
of 25-55 year old UK women; the power brokers
of UK shopping. Being frequently in charge of
the household budget they are passionate about
the territory they control. They love brands that
provide status and are always on the look-out for
great deals they can share with their friends. Our
audience has evolved to 4m per month.
The Daily Mash is consumed by savvy UK
independent thinkers. These educated professionals
respond to the brand’s pitch-perfect skewering of
the rich and infamous and its inventive and surreal
takes on the absurdity of modern life. Influential
among their peers thanks to their own finely-tuned
view of the world, they are seen as selective and
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
MOBILE-OPTIMISED GRAPHENE TECH PLATFORM
Operational KPIs
Graphene is our scalable and
dynamic mobile-first platform. This
tech stack consists of a blend of
technologies allowing our websites
to flourish through an efficient, light
touch content delivery approach.
This brings significant advantages
to how our sites are experienced by
users and also ranked by the key
platforms – especially Alphabet and
Meta – as they evaluate the preferred
destinations for users.
Further, our Graphene Ad Stack (GAS)
maximises mobile profitability, which
has been used to great effect more
than doubling the session values on
The Tab since early 2021.
Graphene also enables us to realise
tech and serving costs on the
acquisitions we make.
Graphene will continue to evolve via
our tech roadmap for 2023.
ONLINE SESSIONS
MOBILE USERS
UK AUDIENCE
293 million
110 million
76 million
(2021: 108m)
(2020: 59m)
(2019: 35m)
(2021: 76m)
(2020: 51m)
(2019: 37m)
SOCIAL FOLLOWERS
8 million
(2021: 7.0m)
(2020: 6.7m)
(2019: 3.5m)
Numbers of users visiting
sites on mobile and
tablet devices
Users of Digitalbox’s
websites based in UK
Social followers of
Digitalbox’s properties
(2021: 273m)
(2020: 221m)
(2019: 225m)
Visits to Digitalbox’s
websites
2022 Figures include full year Google Analytics audience figures for Entertainment Daily, The Daily Mash and The Tab, and one month of The Poke in December 2022.
Social Followers includes followers of associated pages on Facebook, Twitter, Instagram and TikTok.
with an expertly curated blend of the funniest tweets,
comments, videos and reddit discussions as the world
reacts to trending news and life in general. Its well-
balanced audience of males and females sit primarily
in the 25-45 age bracket, loving The Poke’s up-to-the-
minute takes on the biggest, best and most bizarre
stories of the day.
PORTFOLIO DEVELOPMENT
While profitability is key, we continue to invest
in the existing business. 2023 will see additional
development of content, distribution strategy and
tech on Entertainment Daily, The Tab, The Daily Mash
and The Poke as we aim to strengthen all aspects of
our publishing operations.
The four audiences have further scope for growth in
isolation and for cross-fertilisation across the portfolio.
Further detail on business performance can be found
in the Financial Review and Operating Review sections
of the Chief Executive’s Report beginning on page 4.
It’s also worth noting that female readers are
particularly in demand by advertisers and women
visited Digitalbox’s websites more than 170 million
times in 2022.
Key dates in 2022
Jan 2022
Highest ever portfolio
session volumes created
for the month of January
Mar 2022
Market Cap
exceeds £17m
May 2022
Announced exchange of
Heads of Agreement to
acquire tvguide.co.uk
Sept 2022
Daily Mash Premium
subscribers pass 1,000
Sept 2022
Interim Results
announce
revenues ahead
Dec 2022
First annual
Entertainment
Daily Awards
Jan 2023
CFO acquires shares
DEC
2022
JAN
2022
FEB
2022
MAR
2022
APR
2022
MAY
2022
JUN
2022
JUL
2022
AUG
2022
SEPT
2022
OCT
2022
NOV
2022
DEC
2022
JAN
2023
Jan 2022
Entertainment
Daily sessions
up 84% y.o.y
Mar 2022
Digitalbox registers
record Q1 audience
volumes
April 2022
Tab Talks student
initiative for aspiring
journalists
June 2022
CFO acquires
shares
Sept 2022
The Late Night
Mash season 2
broadcasts on Dave
Oct 2022
The Tab local
page views
increase by 38%
Dec 2022
The Poke
acquisition
completes
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Highlights
As noted, 2022 saw encouraging progress across
the portfolio, including:
1400
81% CONVERSION
MONTHLY MASH
PREMIUM SUBSCRIBERS
RATE FROM
MASH PREMIUM SUBS TRIALS
LATE NIGHT MASH
TOP 3 SHOW
FOR BROADCASTER
UK TV DAVE
P
U
O
R
G
X
O
B
L
A
T
I
G
D
I
B
A
T
E
H
T
4bn+
AD IMPRESSIONS IN 2022
7% INCREASE
IN AVERAGE
MONTHLY SESSIONS
MOBILE-FIRST
91%
MOBILE
USERS
CAMPAIGNING
EDITORIAL
PICKED UP
BY NATIONALS
53%
INCREASE IN
INSTAGRAM
TRAFFIC
38% INCREASE
IN LOCAL
CONTENT PAGE VIEWS
150K VOTES
FOR FIRST
ENTERTAINMENT
DAILY AWARDS
38%
RECORD 22M
ORGANIC SESSIONS
IN JANUARY
GROWTH
IN DIRECT
TRAFFIC
200% GROWTH IN
FROM GAS DEPLOYMENT
SESSION VALUES
32% UP ON NEW USERS
Y.O.Y IN DECEMBER
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7%
GROWTH
IN UK
USERS
RISKS AND UNCERTAINTIES
The Board considers risk on an ongoing basis and feels
it is important to identify risks, form an objective view
on the impact of these risks, to consider mitigation
plans to counterbalance them and to keep them
under constant review.
The risks are those which the Board considers, as at
the date of this report, are the most critical to the
continued operation of the Group. The risks described
do not represent the totality of the risks facing the
Group and should not be relied on as such by any
person considering any investment decision in relation
to the Company’s ordinary shares.
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DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
RISK
POTENTIAL IMPACT
MITIGATION AND CONTROL
Deviation from
strategy
A failure to implement the Group’s strategy is likely to lead to the
business missing its trading targets which will have an adverse
knock-on effect on its cash flow prospects. Further, its growth
prospects could be impacted with a consequent negative impact
on shareholder value.
The Board meets regularly to monitor the path of the business
with the non-executive directors objectively challenging
the executives over the performance of the business and its
adherence to the agreed plan.
Reliance on key
online media
platforms
In common with all media businesses globally, the Group uses
online media platforms to market and distribute its content
which, in turn, drives consumers to its sites which enables
monetisation.
The Group monitors the balance of traffic sources in its ongoing
operations and when considering acquisition targets and also
works to respond to key algorithm changes.
Detrimental
algorithm
changes &
content policy
strikes
Competition
Traffic sourcing remains an ongoing challenge for all media
companies as the key platforms adapt the way they rank
and prioritise websites for exposure to their users. Also, if content
is flagged correctly or incorrectly for a policy violation by one of
the platforms the ability to reach audience is negatively
impacted for a period.
Digitalbox constantly monitors performance via the key platforms
and makes ongoing adjustments to its set-up to optimise the
results alongside the use of specialist consultants who advise with
broader industry knowledge. In the event of content policy strikes
the Group follows the relevant appeals policy.
A new entrant into the Group’s market could divert our share
of the time our audience has to consume its content, reducing
session numbers. This would have an adverse effect on the
number of adverts the business can serve, hence reducing the
revenues the business would generate
There is nothing the Group can do to stop new entrants. However,
it can continue to provide highly engaging content at speed
encouraging its consumers to remain engaged and loyal.
Cash flow
A significant downturn in the trading performance of the Group
would have an adverse effect on the Group’s cash reserves.
The business has substantial cash reserves, is very profitable,
has a very low capital expenditure requirement and pays close
attention to its cash flow forecasts.
Downturn in
advertising
spending
A material decline in UK mobile digital advertising spend
would have a significant impact on the Group’s revenues and
profitability. Also, technologies which may limit the Group’s ability
to effectively monetise the audience it attracts, including but
not limited to brand-safety tools and ad blockers could impact
revenue and profitability.
The Board stays abreast of the wider economic climate,
market trends and advertising forecasts and – through close
relationships with advertising partners – is well informed about
current and coming developments. It has demonstrated an
ability to grow revenues during periods of significant change
(including the introduction of GDPR).
Cyber attack
A cyber attack could result in the loss of data, loss of revenue due
to service outage or loss of cash due to fraud.
COVID-19 /
Further
pandemics
A resurgence of COVID-19 or further pandemics would impact
consumer behaviour, advertising revenues and publishing
operations.
Bolt-on
acquisitions
As a business planning on scaling through the acquisition of
businesses that complement the Digitalbox portfolio, there is
risk attached to the process in three key areas: price being paid,
quality of due diligence undertaken and the risk attached to
integrating the acquisition into the business.
As the business is a digital media business, it has an enhanced
understanding of the challenges posed by cyber fraudsters.
The business has a robust data protection policy, robust data
protection and network access controls and carries appropriate
cyber crime insurance.
The Group has proven its flexibility with staff effectively working
from home. Also, as a digital publisher, the Group’s ability to
reach its audiences is not as heavily affected as other media
owners and its sites may see increased traffic, offsetting a
proportion of any downturn.
The Group uses consultants to help the process of acquiring new
businesses so we have a triple screening process through the
executive team, consultants and then the Board.
Staff retention
Competition for high-quality staff and increased mobility owing
to remote working may put pressure on the ability to recruit and
retain staff.
The nature of the work provided by Digitalbox is regarded as
inherently attractive mitigating the likelihood of staff churn.
Inflationary
pressures
The global cost of living crisis is creating inflationary forces,
leading to higher operating costs, reducing profitability.
These pressures within the Group are largely confined to
impacting on payroll and may ultimately feed through into
higher advertising rates, offsetting the issue to an extent. The
Group also believes that inflationary pressures may create further
opportunities to acquire targets.
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
CORPORATE AND SOCIAL RESPONSIBILITY REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
RISKS AND UNCERTAINTIES (continued)
RISK
POTENTIAL IMPACT
MITIGATION AND CONTROL
Management
Succession
Planning
Loss of the knowledge and experience of any senior staff leaving
the business may impact performance if a suitable successor
cannot be identified in a timely manner.
Potential successors within each team are informally identified
by the COO & CEO; a pragmatic approach best suited to the
business’ lean structures.
ESG strategy &
Implementation
The business may need to update and communicate its policies
in order to meet evolving governance criteria.
Review of policies and communications to be undertaken and
acted on in H1 2023.
Corporate and Social Responsibility Report
Artificial
Intelligence
Progress particularly in the field of Generative AI may create
significant disruption including but not limited to the areas of
content creation, search traffic and user behaviour. As a result, all
online media outlets are likely to experience opportunities and
challenges as this rapidly evolving technology develops.
The business will trial and adopt these technologies where
there are opportunities to better equip its teams to increase the
efficiency, quality and quantity of content output and enhance
other operational areas. The business will apply the agility
demonstrated in the past to adapt.
Section 172 of the Companies Act 2006 requires that the Directors act in a way that the consider, in good faith, would most likely
promote the long term success of the business taking into consideration the interests of its shareholders and other stakeholders. The
table sets out our key stakeholder groups, their interests and how the Group engages with them.
STAKEHOLDER
WHY WE ENGAGE
HOW WE ENGAGE
Our shareholders
We maintain and value regular dialogue with our shareholders throughout the
year and place great importance on our relationship with them. We know that
our investors expect a comprehensive insight into the financial performance of
the Group, and awareness of long-term strategy and direction. As such, we aim to
provide high levels of transparency and clarity of our results and long-term strategy
and to build trust in our future plans.
• Regular reports and analysis on investors
and shareholders
• Annual Report
• Company website
• Shareholder circulars
• AGM
• RNS announcements
• Press releases
Our employees
Without our employees we wouldn’t have a business. Effective employee
engagement leads to a happier, healthier workforce who are invested in the success
of the Group. We strive to address any employee concerns regarding working
conditions, health and safety, training and development, as well as workforce
diversity. Engagement with our employees starts from the top and is driven
effectively throughout the Group.
• Evaluation and feedback processes for
employees and management
• Competitive rewards packages
• Encouraging employee training and
development
Regulatory bodies
The Group’s operations are subject to a wide range of laws, regulations, and listing
requirements including data protection, tax, employment, environmental and
health and safety legislation, along with contractual terms.
Our customers
Our relationship with our partners is collaborative and we are in constant dialogue
to provide support and analytics as required. We listen to and engage with our
customers on a regular basis to ensure that we understand their needs and can
provide solutions that address them. We work hard to ensure that customer
concerns are dealt with in a timely and professional manner.
Our suppliers
We have a number of key suppliers with whom we have built strong relationships
with. We establish effective engagement channels to ensure our relationships
remain collaborative and forward focused, and to foster relationships of mutual
trust and loyalty.
• Company website
• RNS announcements
• Annual Report
• Direct contact with regulators
• Compliance updates at Board Meetings
• Consistent risk review
• Continual dialogue and review of feedback
from customers to ensure satisfaction
• Taking a collaborative approach to
problem solving with our suppliers
• Clear parameters are given, backed-up by
written agreements where required, to
ensure the Group and supplier’s actions
are co-ordinated
The Group aims to operate ethically and be socially-
responsible in its actions. Below are a number of the
approaches through which this is achieved.
RELATIONSHIP WITH EMPLOYEES
The Group encourages an environment of openness
and debate and welcomes all feedback from within.
BUSINESS CONDUCT, ETHICS
AND ANTI-CORRUPTION
The Group is committed to ensuring high standards of
business conduct and has adopted policies in
support of this including an Anti-Bribery & Anti-
Corruption policy and an Equal Opportunities & Anti-
Harassment policy.
SAFEGUARDING CONSUMERS’ DATA
The Group is committed to safeguarding its
consumers’ data and only use this information where
express permission is granted and solely for the
purpose specified. The Group holds registrations with
the ICO and follows its guidelines to ensure it remains
fully compliant with GDPR.
Details of the Group’s performance are shared with
all employees at appropriate times via face-to-face
meetings where safe to do so, virtual meetings, email
updates and the Group’s corporate website.
The Group expects a high standard from its staff and
provides support to achieve this. Where possible, as
new roles in the organisation arise, the Group aims to
promote from within.
The Group is committed to fostering new talent and
runs a successful apprenticeship programme, often
hiring candidates into full-time roles on completion of
their apprenticeship.
The Group offers flexible working arrangements for
its staff including remote working and part-time
contracts.
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Corporate
Governance
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Corporate Governance Report
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX AND THE QCA CODE
Digitalbox PLC is committed to good
corporate governance and has adopted
the corporate governance guidelines of the
Quoted Companies Alliance (QCA).
This section outlines the ways in which the Group
applies the QCA’s ten principles of corporate
governance.
1. Establish a strategy and business model which
promote long-term value for shareholders
Digitalbox aims to become a leading publisher of
digital media. The Group intends to achieve this
through a buy-and-build strategy with a focus on
profitable publishing on mobile devices. This strategy
is aligned with consumer behaviour and commercial
trends.
The Group will create and deliver compelling content
for its audiences via the web properties it owns now
and will own in the future. This content will engage
audiences and in turn create valuable environments
for advertisers to reach them.
The Group intends to deliver long-term value for
shareholders through its understanding of consumer
media consumption, the arising revenue opportunities
including advertising and a continued focus on the
operating profitability of its brands.
More detail on strategy can be found in the Strategic
Report starting on page 10.
2. Seek to understand and meet shareholder
needs and expectations
The Group is committed to building and maintaining
strong relationships with its shareholders and
considers the understanding of shareholder’s needs
fundamental to its success.
The Chief Executive Officer and Chief Financial
Officer are active in meeting with and preparing
presentations for institutional investors and engage in
regular dialogue with the Group’s brokers in order to
gauge shareholder sentiment.
The Group’s Annual General Meeting (AGM) is the
main forum for discussing matters with shareholders,
addressing shareholder queries and understanding
their needs and expectations. Notice of the AGM
and proposed resolutions are sent to shareholders at
least 21 days prior to the AGM. Shareholders and their
representatives are invited to fully participate and vote
in the AGM and are also given the opportunity to vote
by proxy. Voting results are published after the AGM.
Outside the AGM will Group convene general
James Carter
Chief Executive Officer
Jim Douglas
Chief Operating Officer
David Joseph
Chief Financial Officer
Marcus Rich
Non-Executive Chairman
Philip Machray
Non-Executive Director
Martin Higginson
Non-Executive Director
James joined Digitalbox in 2016 and is
Jim oversees editorial operations at Digitalbox
David is a law graduate and Chartered
Marcus joined Digitalbox as Chairman in
Philip joined Digitalbox as
Martin is recognised as a seasoned
responsible for the strategy, direction and
and has previously held strategic and profit
Accountant, starting his career and qualifying
February 2021. Before this he was the CEO of
an Independent Non-Executive Director
Technology, Media and Telecoms (TMT)
day-to-day running of the business. He has
responsibility for successful media brands in
with Price Waterhouse, moving into industry
TI Media for 6 years where he led the MBO of
in July 2021 and is Chairman of the Audit
entrepreneur. He has started, sold, and listed
a proven track record in building value in
sectors including film, music, games, sport
in steel stockholding (ASD plc) then into
Time Inc. UK backed by private equity firm
Committee. He is Chief Financial Officer
numerous businesses. His first business was
the media industry, within both public and
and automotive. He has led creative teams
FMCG (Unilever plc) before entering the
Epiris in March 2018, and then the subsequent
of data and intelligence business, Merit
sold to IPC Magazines in 1982. Following
limited companies. As part of the founding
in both UK and US. He started his career at
media industry in 1995 when he joined
successful £140m sale of the now named TI
Group plc. Phil is a Chartered Accountant
three years with IPC he left to set up his
executive team at Factory Media, he drove
EMAP plc as a journalist and in the early 90s
Emap plc. Here he occupied several senior
Media to Future plc in April 2021. Previously
with over 25 years’ experience in the media
own publishing and telecoms business, this
the business to achieve a significant exit to
he joined start-up business Future Publishing,
financial roles within its operating companies,
he worked for Associated Newspapers in the
sector as an advisor, Board member and
was subsequently sold to Scottish Power
Forward Internet Group. Prior to the creation
which eventually became and remains a listed
including Chief Financial Officer of Emap
roles of Commercial Director and Managing
Executive. Most recently Phil worked for 16
plc. During his time with Scottish Power he
of Factory Media, James was NPD Director at
company. At Future, Jim held the position of
Metro, the men’s and music publications
Director Mail On Sunday. He has held several
years at Reach plc (formerly Trinity Mirror
joined their subsidiary Scottish Telecom,
Dennis Publishing and Publishing Director
Editorial Director for 10 years with ultimate
business and Emap Advertising, the then
senior Managing Director positions for sizable
plc) where he held roles including Director
as Managing Director of their Internet and
at EMAP plc where he had responsibility for
responsibility for product development.
central cross platform advertising sale
businesses in the 16 years he worked for Emap
of Corporate Development, Chief Operating
Interactive division, including Internet ISP
FHM. FHM grew from a fledgling fashion
During this time Future was named UK Digital
business. On leaving in 2001 David has since
plc in Publishing, TV and Advertising in the
Officer of Regionals, and Managing Director
Demon Internet. Following the flotation of
focused magazine to a global network of 32
Publisher of the Year five times.
worked exclusively within the media industry
UK and both the USA and Australia. Marcus
of Specialist Digital. Phil began his career
Thus plc (formerly Scottish Telecom) he left to
editions and a value at its peak of over £250m.
Board of Directors
on many projects including start up, MBI,
MBO, turnaround, distressed and buy and
build across a wide spectrum of enterprise
values (£1 million to £50 million) and funding
structures, internationally, both in the Far East
and in the USA.
has created significant shareholder value
at Deloitte LLP and was a Director within
start Monstermob, a company he went on to
in the businesses he has run across the
Deloitte’s Technology, Media &
list on AIM in 2003; growing it to a Top 50 AIM
media landscape.
Telecoms practice.
listed business. Monstermob Group plc was
sold to Zed Worldwide in 2006. Martin has
subsequently founded Cityblock plc, a luxury
student accommodation business, NetPlayTV
plc, an interactive TV gaming business,
Digitalbox and Immotion plc.
20
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
meetings where shareholder approval is required or
appropriate on Group matters and may seek input
from major institutional investors from time to time in
relation to Group policy.
3. Take into account wider stakeholder and social
responsibilities and their implications for
long-term success
The Group seeks to engage with its wider group of
stakeholders via:
Face-to-face / virtual briefings for staff to update
on the Group’s progress and developments
The Board considers the risks facing the business on
an ongoing basis and ensures mitigation strategies
are in place wherever possible. The Executive Directors
regularly keep the Board updated on current trading,
wider market trends and other developments as a
means of identifying existing and potential future
opportunities and risks.
Key risks and uncertainties facing the business are
found on page 15.
5. Maintain the Board as a well-functioning,
balanced team led by the Chair
Email updates for staff regarding developments
Releasing public updates via the RNS service
Stakeholder feedback being passed to Senior
The Board comprises three Executive Directors and
three Non-Executive Directors. The Board considers all
three Non-Executive Directors to be independent.
Management via the relevant team member at
Digitalbox as appropriate.
The Group’s approach to this can be found on page 16.
4. Embed effective risk management,
considering both opportunities and threats,
through the organisation
The Board will operate in a collaborative and
constructive manner with a clear focus on the delivery
of the strategy and increasing shareholder value.
The appointment of Directors will be in accordance
with the Articles of Association.
The Board met eight times in 2022.
Details of the Board members, their roles and their
attendance at meetings can be found on pages 20
and 23.
6. Ensure that between them the Directors have
necessary up-to-date experience, skills and
capabilities
The Group considers the skills and experience of the
Board to be appropriate and this is kept under review.
The Executive Directors have each worked in
consumer media for more than twenty years, and as
a group have experience at senior management level
in respected PLC media businesses. Their specific
media expertise includes editorial management, new
product development, commercial management,
strategic planning, international expansion, financial
management, corporate restructuring, digital
transition, brand development, acquisitions and
disposals.
The Group’s non-executive Directors have extensive
successful track records in the fields of technology,
telecoms, publishing, television and also have
extensive experience in M&A.
7. Evaluate Board performance based on clear
and relevant objectives, seeking continuous
improvement
The Board’s process of evaluating its own
performance, that of its Committees and the
individual Directors, is led by the Chairman.
The process is conducted by the Remuneration
Committee. The Remuneration Committee will
evaluate Board performance against targets.
9. Maintain governance structures and processes
that are fit for purpose and support good
decision-making by the Board
Targets are aligned with the delivery of the Group’s
strategy.
The Board may utilise the results of the evaluation
process when considering the adequacy of the
composition of the Board and for succession planning.
8. Promote a culture that is based on ethical
values and behaviours
The Group aims to achieve the highest ethical
standards and behaviour when conducting its
business, with integrity, fairness and equality being
high priorities.
The roles of the Chairman and the Chief Executive
Officer are separated and clearly defined. The
Chairman provides impartial leadership and guidance
to the Board. Working with the Executive Directors,
the Chairman is responsible for setting the agenda for
Board meetings and ensuring Board members receive
the information they need to properly participate in a
timely fashion.
The Chief Executive Officer is responsible for the
execution of Group strategy approved by the Board,
the leadership of the Group’s senior management
team and its employees on a day to day basis.
The Corporate and Social Responsibility report is found
on page 17.
The Chief Operating Officer supports the Chief
Executive in the delivery of the strategy with a specific
remit over editorial matters.
Board
Audit
Remuneration
Nomination
Disclosure
James Carter
Jim Douglas
David Joseph
Martin Higginson
Philip Machray
Marcus Rich
8/8
8/8
8/8
8/8
8/8
8/8
-
-
-
3/3
3/3
3/3
-
-
-
1/1
1/1
1/1
-
-
-
n/a
n/a
n/a
-
-
-
n/a
n/a
n/a
22
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
AUDIT COMMITTEE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
of any termination payments. The remuneration of the
Non-Executive Directors is a matter for the Board. The
Remuneration Committee will meet when necessary
and generates an annual remuneration report to be
approved by the members of the Company at the
annual general meeting. No Director may determine
their own remuneration. Marcus Rich acts as chairman
of the Remuneration Committee and Philip Machray
and Martin Higginson are the other members of the
Remuneration Committee.
The Remuneration Committee report is found
on page 27.
The Nomination Committee is responsible for
reviewing the structure, size and composition of
the Board based upon the skills, knowledge and
experience required to ensure the Board operates
effectively. The Nomination Committee meets when
necessary to do so. The Nomination Committee
also identifies and nominates suitable candidates
to join the Board when vacancies arise and
makes recommendations to the Board for the re-
appointment of any Non-Executive Directors. Marcus
Rich acts as chairman of the Nomination Committee
and Philip Machray and Martin Higginson are the
other members of the Nomination Committee.
The Disclosure Committee is responsible for ensuring
compliance with the AIM rules and MAR concerning
disclosure of inside information and works closely
with the Board to ensure that the Group’s nominated
adviser is provided with any information it reasonably
requests or requires in order for it to carry out its
responsibilities under the AIM Rules and the Aim
Rules for Nominated Advisers. The Disclosure
Committee approves all RNS and other significant
announcements, normally via email and will meet
as required. Marcus Rich acts as Chairman of the
Disclosure Committee. Philip Machray and Martin
Higginson are the other members of the Disclosure
Committee.
10. Communicate how the Group is governed
and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders.
The Group communicates with shareholders
and other stakeholders through its Annual and
Interim Reports, regulatory and non-regulatory
announcements, its investor relations website, Annual
General Meetings and face-to-face meetings.
Further details of this can be found on page 16.
The Board has established four committees with
clearly defined responsibilities. These are as follows:
The Audit Committee’s principal functions include
ensuring that the appropriate accounting systems
and financial controls are in place, monitoring
the integrity of the financial statements of the
Group, reviewing the effectiveness of the Group’s
accounting and internal control systems, reviewing
reports from the Group’s auditors relating to
the Group’s accounting and internal controls,
and reviewing the interim and annual results
and reports to Shareholders, in all cases having
due regard to the interests of Shareholders.
The Audit Committee will meet as necessary,
informed by the reporting and audit cycle or other
requirements. Philip Machray, who has recent and
relevant financial experience acts as chairman.
Martin Higginson and Marcus Rich are the other
members of the Audit Committee.
The Audit Committee report is found on page 25
and 26.
The Remuneration Committee is responsible for
determining and agreeing with the Board the
framework for the remuneration packages for
each of the Executive Directors. The Remuneration
Committee considers all aspects of the Executive
Directors’ remuneration, including pensions, bonus
arrangements, benefits, incentive payments and
share option awards, and the policy for, and scope
Audit Committee Report
T he Audit Committee is responsible for
ensuring that the financial performance of
the Group is properly reported and reviewed.
Its role includes monitoring the integrity
of the financial statements (including annual and
interim accounts and results announcements),
reviewing internal control and risk management
systems, reviewing any changes to accounting
policies, reviewing and monitoring the extent of the
non-audit services undertaken by external auditors
and advising on the appointment of external auditors.
The Board has overall responsibility for the Group’s
system of internal financial control and for reviewing
its effectiveness. The purpose of the system of control
is to manage rather than eliminate the risk of failure
to achieve business objectives and can only provide
reasonable, but not absolute, assurance against
misstatement or loss. The Chief Financial Officer is the
executive within the Group responsible for day-to-day
financial management of the Group’s affairs and its
internal accounting.
The Group’s Chief Financial Officer and the external
auditors attend meetings of the Audit Committee
by invitation. The Committee also holds separate
meetings with the auditors as appropriate.
2022 ACTIVITIES
The Audit Committee met twice during the year to
consider the prior year’s Annual Report and Accounts
and the current year interim financial statements.
The Committee also met with the Group’s external
auditors in January 2023 to agree the audit plan for
the 2022 financial year-end, and in March 2023 prior to
approving the 2022 accounts.
The Committee undertook a review and assessment
of the Annual Report in order to determine whether
it could advise the Board that, taken as a whole, the
Annual Report is fair, balanced and understandable,
and provides shareholders with the information they
need to assess the Group’s position, performance,
business model and strategy. In doing this, the
Committee reviewed and discussed the findings from
the external auditors as part of the 2022 year-end
audit and fully discussed the Annual Report at the
Committee meeting in March 2023. It considered the
following Significant Accounting Judgements:
1. Revenue recognition – the Committee considered
the Group’s approach to revenue recognition and
its compliance with IFRS, and concluded that the
very nature of programmatic advertising revenue
ensured clarity on the allocation of revenue across
each distinct accounting period and a clean cut off.
2. Carrying value of goodwill and other intangible
assets – the Committee considered the Group’s
approach to evaluation of the carrying value of
goodwill and other intangible assets. Having
recognised an impairment of the goodwill and
intangible assets associated with The Daily Mash
during the course of the year, the Committee
carefully reviewed the retained carrying value of the
assets associated with the Group’s other brands. The
Committee was satisfied with the carrying values
having considered the discounted cash flow model
which demonstrated that no impairment charge
was required.
3. Capitalisation of development costs – the
Committee reviewed the circumstances under
which development costs had been capitalised
as intangible assets during the course of the year
and was satisfied that for each development,
management had demonstrated that the
recognition criteria under IAS38 had been met.
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
AUDIT COMMITTEE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
REMUNERATION COMMITTEE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Audit Committee Report cont...
Remuneration Committee Report
4. Going Concern – the Committee considered the
appropriateness of a going concern basis especially
in the light of macroeconomic factors in the wake
of COVID-19. The Committee was assured that the
business has a strong balance sheet, is trading
profitably and that, whilst consumer advertising
revenues are expected to be under pressure during
periods of economic uncertainty, the Group’s core
business model is resilient.
Following a robust process, the Committee
recommended to the Board that the Annual Report
is, taken as a whole, fair, balanced and understandable.
INTERNAL AUDIT
The Group does not have an internal audit function as
this is not considered appropriate given the scale of
the Group’s operations. The Audit Committee believes
that management is able to derive assurance as to
the adequacy and effectiveness of internal controls
and risk management procedures without a separate
Internal Audit function.
EXTERNAL AUDITORS
The Audit Committee has reviewed the independence
and effectiveness of Haysmacintyre LLP, the Group’s
external auditors, and are satisfied in both respects.
Haysmacintyre LLP’s fees in the year in respect of
audit services were £54k (2021: £47k) and in respect
of non-audit services were £5k (2021: £5k) as detailed
in note 8. Haysmacintyre LLP have signified their
willingness to continue in office and a resolution
to reappoint Haysmacintyre LLP as auditor to the
Company will be proposed at the AGM.
Philip Machray
Chairman of the Audit Committee
28 March 2023
T he Remuneration Committee determines
the remuneration packages for Executive
Directors and other senior employees and
keeps the Group’s policy on pay and benefits
under review generally.
The Remuneration Committee will keep under review
the long-term incentivisation of Executive Directors
and senior employees, balancing the need to control
costs while ensuring that pay and benefits offered by
the Group are appropriate for attracting and retaining
high-calibre staff.
The Committee will continue to have due regard to
remuneration reports from independent sources, to
the guidance of its professional advisers and to good
practice generally.
Directors’ remuneration for the year of 2022 are shown
on page 53. Directors’ shareholdings are set out below:
Director
Number of
%
Number of
%
1p Ordinary Shares as at
31st December 2022
1p Ordinary Shares as at
31st December 2021
James Carter
Jim Douglas
David Joseph*
10,908,078
10,908,078
600,000
9.3%
9.3%
0.5%
10,908,078
10,908,078
-
9.4%
9.4%
-
22,416,156
19.0%
21,816,156
18.8%
Total ordinary shares
117,923,393
116,332,457
*on 13 January 2023 David Joseph acquired a further 550,000 shares.
Options have been granted to certain key employees, as below:
Option Holder
Number of Shares
Vesting Date
James Carter*
Jim Douglas*
Nick Clough**
Karen Hyland**
Grace Vielma**
Vested
Vested
17 April 2023
17 April 2023
24 February 2024
681,958
681,958
1,002,960
1,002,960
1,002,960
4,372,796
*Effective options in Digitalbox plc arising from warrants in a subsidiary company vesting immediately
On 16 February 2022 Martin Higginson exercised 1,590,936 warrants at 2.28 pence per share and
subsequently disposed of these shares, generating a gain to him of £64k
Marcus Rich
Chairman of the Remuneration Committee
28 March 2023
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DIGITALBOX PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
Directors’ Report
DIGITALBOX PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
T he Directors present their report and audited
financial statements for the year ended 31
December 2022.
Principal Activities
The principal activities of the Group are the
publication of consumer media through the
digital mobile channel, with revenues derived from
programmatic advertising.
The principal activity of the Company is as a
holding company.
Board of Directors
The Directors who served during the year were:
James Carter
Jim Douglas
David Joseph
Martin Higginson
Marcus Rich
Philip Machray
Future Developments
The Company has chosen in accordance with section
414C(11) of the Companies Act 2006 to include the
disclosure of likely future developments in the Chief
Executive’s Statement beginning on page 5.
Dividends
No dividends were paid during the year (2021: £Nil).
The Board is not recommending the payment of
a final dividend in respect of the year ended 31
December 2022.
Earnings per Share
Earnings per share in the period from continuing
operations was 0.683p (2021: 0.340p) and diluted
earnings per share from continuing operations in the
period was 0.670p (2021: 0.335p).
Going Concern
At the time of approving the financial statements,
the Directors have a reasonable expectation that the
Company and the Group have adequate resources to
continue in operational existence for the foreseeable
future. In reaching this conclusion the Directors
have considered the financial position of the Group,
together with its forecasts and projections for two
years from the reporting date that take into account
reasonably possible changes in trading performance
that the Coronavirus may cause. The going concern
basis of accounting has therefore been adopted in
preparing the financial statements.
Treasury Operations &
Financial Instruments
The Group operates a centralised treasury function
which is responsible for managing liquidity, interest
and foreign currency risks associated with the
Group’s activities.
The Group’s principal financial instrument is
cash, the main purpose of which is to fund the
Group’s operations.
The Group has various other financial assets and
liabilities such as trade receivables and trade payables
naturally arising through from its operations.
The Group’s exposure and approach to capital and
financial risk, and approach to managing these
is set out in note 20 to the consolidated financial
statements.
Employee Engagements
The Group engages with its employees regularly
through face to face communication where permitted,
and virtual meeting where not during which details of
the Group’s performance is shared.
Further information regarding employee
engagement can be found in the Corporate and Social
Responsibility Report on page 17.
Employee Policies
The Group has established employment policies
which are compliant with current legislation and
codes of practice. The Group is an equal
opportunities employer.
Payment of Suppliers
The Group’s policy is to pay suppliers in accordance
with the relevant contractual terms between the
Group and the supplier. Where no specific terms are
agreed, the Group’s standard policy is net monthly.
Directors’ Indemnity
The Company’s Articles of Association provide, subject
to the provisions of UK legislation, an indemnity for
Directors and officers of the Company in respect of
liabilities they may incur in the discharge of their
duties or in the exercise of their powers, including any
liabilities relating to the defence of any proceedings
brought against them which relate to anything done
or omitted, or alleged to have been done or omitted,
by them as officers or employees of the Company.
Appropriate directors’ and officers’ liability insurance
cover is in place in respect of all the Directors.
Directors’ Conflicts of Interest
In the event that a Director becomes aware that they,
or their connected parties, have an interest in an
existing or proposed transaction involving the Group,
they will notify the Board in writing or at the next
Board meeting.
Significant Shareholdings
As at 31 December 2022, the following shareholders
owned 3% or more of the Company:
Matters Covered in the Chairman’s
Statement & Financial Statements
Certain matters which are required to be disclosed in
the Directors’ Report (such as review of the business
and future developments) have been omitted as they
are included within the Chief Executive’s Statement,
the Strategic Report and within the notes to the
Financial Statements.
Annual General Meeting
The Company’s Annual General Meeting will be
announced in due course.
Statement as to Disclosure of Information
to the Auditor
As far as the Directors are aware they have each taken
all necessary steps to make themselves aware of any
relevant audit information and to establish that the
auditor is aware of that information.
This confirmation is given and should be interpreted
in accordance with the provisions of section 418 of the
Companies Act 2006.
Auditors
Haysmacintyre LLP have signified their willingness
to continue in office and a resolution to reappoint
Haysmacintyre LLP as auditor to the Company will be
proposed at the AGM.
Name
Shares
%
Approved by the Board on 27 March 2023 and signed
on its behalf:
Downing Strategic
Micro-Cap Investment Trust plc
Storia Credit Holdings (Europe)
Mr James Carter
Mr Jim Douglas
Hargreaves Lansdown
Asset Management (Bristol)
AJ Bell Securities (Tonbridge Wells)
22,989,795
20,422,822
10,908,078
10,908,078
19.5
17.3
9.3
9.3
5,298,867
3,639,850
4.5
3.1
Political Donations
The Group did not make any political donations
during 2022 (2021: £Nil).
James Carter
Chief Executive Officer
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DIGITALBOX PLC
DIRECTORS’ RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF DIGITALBOX PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
Directors’ Responsibilities Statement
Independent Auditor’s Report
T he Directors are responsible for preparing
the Strategic Report, Directors’ Report and
the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year.
Under that law the Directors have elected to
prepare the financial statements in accordance with
International Financial Reporting Standards (“IFRS”) as
adopted by the United Kingdom and applicable law.
Under company law the Directors must not approve
the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of
the Company and the Group and of the profit or loss
of the Company and the Group for that period.
In preparing these financial statements, the Directors
are required to:
Financial statements are published on the Group’s
website in accordance with the rules and legislation
in the United Kingdom governing the preparation
and dissemination of financial statements, which
may vary from legislation in other jurisdictions.
The maintenance and integrity of the corporate
and financial information on the Group’s website
is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of
the financial statements contained therein.
The work carried out by the auditors does not include
consideration of the maintenance and the integrity of
the website and accordingly the auditor accepts no
responsibility for any changes that have occurred to
the financial statements when they are presented on
the website.
select suitable accounting policies and then
apply them consistently;
make judgements and accounting estimates
that are reasonable and prudent;
state whether IFRS as adopted by the United
Kingdom have been followed subject to any
material departures disclosed and explained in
the financial statements;
provide additional disclosures when compliance
with specific requirements in IFRS is insufficient
to enable users to understand the impact
of particular transactions, other events and
conditions on the Company’s and the Group’s
financial position and financial performance; and
prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Company and the Group will
continue in business.
OPINION
We have audited the financial statements of
Digitalbox plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31
December 2022 which comprise the Consolidated
Statement of Comprehensive Income, Consolidated
Statement of Changes in Equity, Consolidated
Statement of Financial Position, Consolidated
Statement of Cash Flows, Company Statement of
Financial Position, Company Statement of Changes in
Equity, Company Statement of Cash Flows and notes
to the financial statements, including a summary of
significant accounting policies. The financial reporting
framework that has been applied in their preparation
is applicable law and UK adopted International
Financial Reporting Standards (“IFRS”).
In our opinion, the financial statements:
give a true and fair view of the state of the
group’s and of the parent company’s affairs as at
31 December 2022 and of the group’s profit for
the year then ended;
have been properly prepared in accordance with
UK adopted international accounting standards;
and
have been prepared in accordance with the
requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities
under those standards are further described in
the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are
independent of the group in accordance with the
ethical requirements that are relevant to our audit
of the financial statements in the UK, including the
FRC’s Ethical Standard as applied to listed entities, and
we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have
concluded that the director’s use of the going
concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation
of the director’s assessment of the entity’s ability
to continue to adopt the going concern basis of
accounting considered the inherent risks to the group
and the company’s business model and reviewed
the directors’ assessment of how those risks affect
the group and the company’s financial resources or
ability to continue operations over the going concern
period. We considered the likely cash inflows and
outflows over the going concern period and assessed
the risk that the group and the company would
be unable to meet their liabilities as they fall due.
We scrutinised the reasonableness of assumptions
applied to the cash flow forecasts and sensitised such
forecasts against various scenarios which could come
to realisation. We reviewed management’s going
concern memo and discussed with the Board. We
considered post balance sheet date performance and
other wider factors in concluding our assessment.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the group and the company’s
ability to continue as a going concern for a period
of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the
directors with respect to going concern are described
in the relevant sections of this report.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Our audit scope included obtaining an understanding
of the group and its environment, including the
group’s system of internal control, and assessing the
risks of material misstatement at the group level. Audit
work to respond to the assessed risks was performed
directly by the audit engagement team who
performed full scope audit procedures on the parent
company, all non-dormant subsidiaries and
the group as a whole.
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DIGITALBOX PLC
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF DIGITALBOX PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF DIGITALBOX PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
OUR APPLICATION OF MATERIALITY
The scope and focus of our audit were influenced by
our risk assessment and application of materiality. We
define materiality as the magnitude of misstatement
that could reasonably be expected to influence the
economic decisions of the users of the financial
statements. We use materiality to determine the
scope of our audit and the nature, timing and extent
of our audit procedures and to evaluate the effect of
misstatements, both individually and on the financial
statements as a whole.
Materiality for the financial statements as a whole
was set at £57,000, determined by reference to 5%
of group Adjusted EBITDA. We have reported to
the audit committee any corrected or uncorrected
misstatements arising exceeding £2,800. Performance
materiality was set at £42,000, being 75% of materiality.
Component materiality for the parent company
and only trading subsidiary, Digitalbox Publishing
Limited, were capped at £51,300, with reference to a
benchmark of group materiality.
Both entities were subject to statutory audits in their
own rights, however the materiality calculated for
these entities was more than component materiality
and as such, component materiality was used for the
individual audits.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the financial statements of the current
period and include the most significant assessed
risks of material misstatement (whether or not due
to fraud) we identified, including those which had
the greatest effect on the overall audit strategy, the
allocation of resources in the audit, and directing the
efforts of the engagement team. These matters were
addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.
OTHER INFORMATION
The directors are responsible for the other information.
The other information comprises the information
included in the annual report, other than the financial
statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover
the other information and, except to the extent
otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the
other information is materially inconsistent with the
financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or
apparent material misstatements, we are required to
determine whether there is a material misstatement
in the financial statements or a material misstatement
of the other information. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are
required to report that fact. We have nothing to report
in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED
BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the
course of the audit:
the information given in the strategic report
and the directors’ report for the financial year for
which the financial statements are prepared is
consistent with the financial statements; and
the strategic report and the directors’ report
have been prepared in accordance with
applicable legal requirements.
KEY AUDIT MATTER
HOW OUR SCOPE ADDRESSED THIS MATTER
Fraud in revenue recognition (Digitalbox Publishing
Limited)
Group revenue comprises the sale of digital advertising
space. Revenue is recognised in line with the accounting
policies in note 4.
We performed a test in total on the programmatic
revenue within Digitalbox Publishing Limited using extractions
from each customer’s dashboard and agreeing this to the master
spreadsheet maintained by the client. We agreed the master
spreadsheet to the amount of revenue recognised in the nominal
We consider there to be a significant risk around
the occurrence of this revenue and its recognition in
ledger.
accordance with IFRS 15.
Revenue is recognised on the basis of dashboards
maintained by customers and is manually invoiced
on a monthly basis. There is a risk that it is incorrectly
recognised.
We also consider there to be a risk of misstatement
of the financial statements related to transactions
occurring close to the year-end, as transactions could be
recorded in the wrong financial period (cut-off).
Further work included, but was not restricted to:
agreeing a sample of revenue to bank statement receipts;
reviewing a sample of sales raised in January 2023 to ensure that this
was recognised in the correct period; and
reviewing the recoverability of a sample of trade receivables at the year
end to assess validity of their recognition and carrying value as at 31
December 2022.
Impairment of goodwill and other intangibles assets
Our work included, but was not restricted to:
(Digitalbox Plc)
The group has recognised intangible assets and
goodwill, which arose on historic acquisitions. There is a
risk that the value of the intangible assets and goodwill
should be impaired as at 31 December 2022
reviewing and assessing the impairment reviews prepared by
management and challenging the assumption;
reviewing and assessing future budgets and cash flow forecasts
including considering sensitivities;
making enquiries of management and assessing expected future
performance and potential growth in the business.
MATTERS ON WHICH WE ARE REQUIRED
TO REPORT BY EXCEPTION
In the light of the knowledge and understanding
of the group and the parent company and its
environment obtained in the course of the audit, we
have not identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
adequate accounting records have not been
kept by the parent company, or returns adequate
for our audit have not been received from
branches not visited by us; or
the parent company financial statements are not
in agreement with the accounting records and
returns; or
certain disclosures of directors’ remuneration
specified by law are not made; or
we have not received all the information and
explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities
statement set out on page 30, the directors are
responsible for the preparation of the financial
statements and for being satisfied that they give a
true and fair view, and for such internal control as
the directors determine is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
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DIGITALBOX PLC
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF DIGITALBOX PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF DIGITALBOX PLC
FOR THE YEAR ENDED 31 DECEMBER 2022
In preparing the financial statements, the directors
are responsible for assessing the group’s and the
parent company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern and using the going concern basis
of accounting unless the directors either intend to
liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of
these financial statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities,
including fraud is detailed below:
EXPLANATION AS TO WHAT EXTENT
THE AUDIT WAS CONSIDERED CAPABLE
OF DETECTING IRREGULARITIES,
INCLUDING FRAUD.
Based on our understanding of the company and
industry, we identified that the principal risks of
non-compliance with laws and regulations related to
regulatory requirements for the business and trade
regulations, and we considered the extent to which
non-compliance might have a material effect on the
financial statements. We also considered those laws
and regulations that have a direct impact on the
preparation of the financial statements such as the
Companies Act 2006, income tax, payroll tax and sales
tax.
We evaluated management’s incentives and
opportunities for fraudulent manipulation of the
financial statements (including the risk of override
of controls), and determined that the principal risks
were related to posting inappropriate journal entries
to revenue and management bias in accounting
estimates. Audit procedures performed by the
engagement team included:
Inspecting correspondence with regulators and
tax authorities;
Discussions with management including
consideration of known or suspected instances
of non-compliance with laws and regulation and
fraud;
Evaluating management’s controls designed to
prevent and detect irregularities;
Identifying and testing journals, in particular
journal entries posted with unusual account
combinations, postings by unusual users or with
unusual descriptions; and
Challenging assumptions and judgements
made by management in their critical
accounting estimates.
Because of the inherent limitations of an audit,
there is a risk that we will not detect all irregularities,
including those leading to a material misstatement
in the financial statements or non-compliance
with regulation. This risk increases the more that
compliance with a law or regulation is removed from
the events and transactions reflected in the financial
statements, as we will be less likely to become aware
of instances of non-compliance. The risk is also greater
regarding irregularities occurring due to fraud rather
than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the
audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.
uk/auditorsresponsibilities. This description forms part
of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company’s
members those matters we are required to state to
them in an Auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than
the company and the company’s members as a body,
for our audit work, for this report, or for the opinions
we have formed.
Jon Dawson
(Senior Statutory Auditor)
For and on behalf of Haysmacintyre LLP, Statutory Auditors
10 Queen Street Place
London
EC4R 1AG
Date: 27 March 2023
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DIGITALBOX PLC
FINANCIAL STATEMENTS
DIGITALBOX PLC
FINANCIAL STATEMENTS
Financial
Statements
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
capital
2022
£’000
Share
premium
2022
£’000
Share
based
payment
2022
£’000
Retained
(deficit)/
earnings
2022
£’000
Balance at 1 January 2021
1,163
11,149
Equity settled share-based payments
Profit after tax
-
-
-
-
Balance at 31 December 2021
1,163
11,149
Issue of new shares
Equity settled share-based payments
Reserves transfer in respect of lapsed options
Profit after tax
16
-
-
-
20
-
-
-
321
143
-
464
-
62
(330)
-
(99)
-
396
297
-
-
330
804
Total
equity
2022
£’000
12,534
143
396
13,073
36
62
-
804
Balance at 31 December 2022
1,179
11,169
196
1,431
13,975
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating profit
Memorandum
Adjusted EBITDA1
Depreciation
Amortisation
Impairment o
Share based payments
Direct costs of business combinations
Profit from operations
Finance costs
Finance income
Profit before taxation and attributable
to equity holders of the parent
Taxation
Profit after tax
Note
7
8
8
10
11
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
3,578
(534)
3,044
(2,999)
-
45
1,081
(7)
(191)
(716)
(62)
(60)
45
(8)
8
45
759
804
3,667
(529)
3,138
(2,508)
10
640
1,029
(31)
(215)
-
(143)
-
640
(14)
1
627
(231)
396
All profits after taxation arise from continuing operations.
There was no other comprehensive income for 2022
1Adjusted EBITDA is defined as the operating profit after adding back depreciation,
amortisation, impairment, share based payments, acquisition costs, direct costs associated
with business combinations and capital restructure costs.
Gain per share
Basic (continuing)
Gain per share
Diluted (continuing)
£
£
0.00683
0.00340
0.00670
0.00335
12
12
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DIGITALBOX PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CASH FLOWS
31 December
2022
£’000
31 December
2021
£’000
Note
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
ASSETS
Non-current assets
Property, plant and equipment
Intangible fixed assets
Deferred tax asset
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Bank loans
Corporation tax
Total current liabilities
Non-current liabilities
Lease liabilities
Bank loans
Deferred tax liability
Total liabilities
Total net current assets
Total net assets
Capital and reserves attributable
to owners of the parent
Share capital
Share premium
Share based payment reserve
Retained earnings
13
14
19
15
16
17
17
17
17
17
17
19
21
23
23
23
52
10,194
617
10,863
952
2,827
3,779
14,642
(288)
-
(112)
(61)
(461)
-
(206)
(206)
(667)
3,318
13,975
1,179
11,169
196
1,431
46
10,710
-
10,756
1,770
2,186
3,956
14,712
(739)
(29)
(112)
(163)
(1,043)
(2)
(319)
(275)
(596)
(1,639)
2,913
13,073
1,163
11,149
464
297
Cash flows from operating activities
Profit from ordinary activities
Adjustments for:
Income tax expense
Share based payments
Depreciation on property plant and equipment
Amortisation of intangible assets
Impairment on goodwill and intangible assets
Loss on disposal of property, plant and equipment
Finance costs
Finance income
Cash flows from operating activities
before changes in working capital
Decrease / (increase) in trade and other receivables
(Decrease) / increase in trade and other payables
Cash generated by operations
Income tax paid
Net cash from operating activities
Investing activities
Purchase of property, plant and equipment
Purchase of intangibles
Interest received
Net cash used in investing activities
Financing activities
Finance costs
Loan and lease repayments
Issue of new share capital
Net cash from financing activities
Net increase in cash and cash equivalents
804
(759)
62
7
191
716
30
8
(8)
1,051
818
(451)
1,418
(235)
1,183
(43)
(391)
8
(426)
(8)
(144)
36
(116)
641
Cash and cash equivalents at beginning of the period
2,186
Total equity
13,975
13,073
Cash and cash equivalents at end of the period
2,827
The financial statements were approved by the Board and authorised for issue on 27 March 2023.
396
231
143
31
215
-
-
14
(1)
1,029
(723)
280
586
(76)
510
(2)
(86)
1
(87)
(4)
(86)
-
(90)
333
1,853
2,186
James Carter
CEO
David Joseph
CFO
40
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation of net cash flow to movement in net funds:
1. GENERAL INFORMATION
Net increase in cash and cash equivalents
Inception of finance leases
Repayment of loans and leases
Movement in net funds in the year
Net funds at 1 January
Net funds at 31 December
Breakdown of net funds
Cash and cash equivalents
Lease liabilities
Bank loans
Net funds at 31 December
Year ended
31 December
2022
£000
Year ended
31 December
2021
£000
641
-
144
785
1,724
2,509
2,827
-
(318)
2,509
333
(56)
86
363
1,361
1,724
2,186
(31)
(431)
1,724
The notes on pages 43 to 66 form part of the group financial statements.
Digitalbox Plc is a public limited company incorporated and domiciled in the United Kingdom. The address of
the registered office 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. Foreign operations are included in accordance with the
policies set out in note 4.
2. STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED IN THE
CURRENT FINANCIAL YEAR ENDED 31 DECEMBER 2022
The following IFRS standards, amendments or interpretations became effective during the year ended 31
December 2022 but have not had a material effect on this Consolidated Financial Information:
Standard
Amendments to IFRS 3: Reference to the Conceptual Framework
Amendments to IAS 16: Property Plant and Equipment (Proceeds before intended use)
Amendments to IAS 37: Onerous Contracts (Cost of fulfilling a contract)
Amendments to IFRS 1, Annual Improvements to IFRS Standards 2018-2020 IFRS 9, IFRS 16 and IAS 41
All new standards and amendments to standards and interpretations effective for annual periods beginning
on or after 1 January 2022 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
Amendments to IAS 1 Disclosure of accounting policies
Amendments to IAS 8 Definition of accounting estimates
Amendments to IAS 12 Deferred tax related to assets and liabilities arising from
a single transaction
Effective date
1 January 2023
1 January 2023
1 January 2023
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 2023.
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.
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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 profit during the year of £804k (2021: £396k), the Group had closing net assets of
£13,975k (2021: £13,073k), net current assets of £3,318k (2021: £2,913k) and cash at bank and in hand of £2,827k
(2021: £2,186k).
The Group generated net cash from operating activities of £1,183k during the year (2021: £510k). The Group has
remained cash generative during a difficult economic period which saw the impact of the war in Ukraine and
the effect that has had on inflation in the UK.
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 and ongoing financial
performance of the Group, the successful acquisition of The Poke and the expectations from forecast financial
information, the Directors have a reasonable expectation that the Group has adequate resources to continue
in operational existence for the foreseeable future.
The Directors believe that they can continue to accommodate the impact of increasing inflation which has
been demonstrably achieved in the year ended 31 December 2022, and accordingly continue to adopt the
going concern basis in preparing the financial statements.
Business combinations and goodwill
Acquisitions of subsidiaries and business are accounted for using the acquisition method. 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 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.
Leases
The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises
a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low
value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-
line basis over the term of the lease unless another systematic basis is more representative of the time pattern
in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily
determined, the Group uses its incremental borrowing rate. The Group assesses its discount rate using its
incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise fixed lease payments (including
in-substance fixed payments), less any lease incentives.
The lease liability is included in Payables in the Statement of Financial Position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by reducing the carrying amount to reflect the payments
made.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement day and any initial direct costs. They are subsequently measured at
cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying
asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that
the Group expects to exercise a purchase option, the related right-of-use asset is depreciation over the useful
life of the underlying asset.
The depreciation starts at the commencement date of the lease.
The right-of-use assets are included in the tangible fixed assets in the Statement of Financial Position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts any identified
impairment losses.
44
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
4. ACCOUNTING POLICIES (continued)
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.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s
foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense
items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly
during the period, in which case the exchange rates at the date of transactions are used. Exchange differences
arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation
differences are recognised as income and expense in the period in which the operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated at the closing rates.
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.
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.
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.
46
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
4. ACCOUNTING POLICIES (continued)
The method of depreciation for each class of depreciable asset is:
Office equipment
Right-of-Use asset
- 25% reducing balance
- over term of lease
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.
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 2022 amounting to £3,172k. In the majority, these were
restricted for use for 5 years 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 has been recognised
in relation to these losses for the first time, as these are now considered to 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.
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.
Government grants
Government grants are recognised when there is reasonable assurance that the grant conditions will be met
and the grants will be received, and are recognised as a separate component of other operating income,
rather than being offset against the costs to which they relate.
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
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 give due
consideration to the impact of COVID-19 on the future cash flows, and are stress tested under a range of
scenarios. In all instances, the headroom is sufficient to satisfy the Directors that there are no indicators of
impairment based on circumstances that were present or could be reasonably foreseen at the reporting date.
Critical accounting Estimates
Amortisation of intangible assets
The periods of amortisation adopted to write down capitalised intangible assets requires judgements to
be made in respect of estimating 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.
48
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
Depreciation
The useful economic lives of tangible fixed assets are based on management’s judgement and experience.
When management identifies that actual useful economic lives differ materially from the estimates used to
calculate depreciation, that charge is adjusted retrospectively.
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 the revision to the original estimates, if any, in the consolidated statement of comprehensive
income, with a corresponding adjustment to equity.
This requires a judgement 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.
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:
2022
Entertainment
Daily
£’000
Mashed
Productions
£’000
Revenue
Cost of sales
2,261
(224)
Administrative expenses*
(529)
Adjusted EBITDA
1,508
Amortisation , depreciation,
and impairment
Acquisition costs
Capital restructure costs
Share based payments
Finance income
Finance costs
Tax
-
-
-
-
-
-
-
243
(190)
(111)
(58)
-
-
-
-
-
-
-
The
Tab
£’000
1,059
(118)
(398)
543
-
-
-
-
-
-
-
Profit/(loss) for the year
1,508
(58)
543
The
Poke
£’000
15
(2)
(6)
7
-
-
-
-
-
-
-
7
Head
Office
£’000
-
-
(919)
(919)
(914)
(57)
(3)
(62)
8
(8)
759
(1,196)
Total
2022
£’000
3,578
(534)
(1,963)
1,081
(914)
(57)
(3)
(62)
8
(8)
759
804
2021
Revenue
Cost of sales
Administrative expenses*
Other operating income
Adjusted EBITDA
Amortisation, depreciation
and impairment
-
Share based payments
Finance Income
Finance costs
Tax
Entertainment
Daily
£’000
Mashed
Productions
£’000
2,463
(205)
(474)
-
1,784
-
-
-
-
308
(171)
(86)
-
51
-
-
-
-
51
Profit/(loss) for the year
1,784
The
Tab
£’000
896
(153)
(287)
-
456
-
-
-
-
-
Head
Office
£’000
-
-
(1,272)
10
(1,262)
(246)
(143)
1
(14)
(231)
456
(1,895)
Total
2021
£’000
3,667
(529)
(2,119)
10
1,029
(246)
(143)
1
(14)
(231)
396
*Administrative expenses exclude depreciation, amortisation, impairment, share based payments and acquisition and listing costs.
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
2022
Continuing
£’000
759
1,381
1,438
3,578
United Kingdom
Europe
Rest of World
31 December
2021
31 December
2022
31 December
2021
31 December
2022
31 December
2021
Continuing
£’000
1,683
665
1,319
3,667
£’000
14,097
284
261
14,642
£’000
14,205
141
366
14,712
£’000
£’000
43
-
-
43
58
-
-
58
At the end of 2021, a key UK based customer was acquired by a large European based business. The acquired business continued
to be a key customer of the Group with its revenues billed from Holland instead of the UK. This is the reason for the change in
proportion of revenue from the UK and Europe.
50
51
ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
7. REVENUE
Revenue by stream is split:
Advertising space
Revenue by location is split:
United Kingdom
Europe
Rest of world
2022
£’000
3,578
3,578
759
1,381
1,438
3,578
2021
£’000
3,667
3,667
1,683
665
1,319
3,667
The Group had four customers whose revenue individually represented 10% or more of the
Group’s total revenue, being 19.70%, 13.65%, 12.33% and 11.03% respectively.
9. STAFF COSTS
Staff costs for all employees, including Directors consist of:
Wages and salaries
Social security costs
Pensions
Share based payment charge
The average number of employees of
the group during the year was as follows:
Directors
Management and administration
Content
2022
£’000
1,176
134
12
1,322
62
1,384
2021
£’000
1,284
101
14
1,399
143
1,542
2022
Number
2021
Number
6
4
22
32
6
3
20
29
8. PROFIT FROM OPERATIONS
Directors’ Detailed Emoluments
2022
£’000
2021
£’000
Details of individual Directors’ emoluments for the year are as follows:
This is arrived at after charging/(crediting):
Continuing operations
Staff costs (see note 9)
Direct costs of business combinations
Depreciation of property, plant & equipment
Amortisation of intangible fixed assets
Impairment on goodwill and intangible assets
Foreign exchange differences
Government grants
Auditors’ remuneration in respect of the Company
Audit of the Group and subsidiary undertakings
1,322
57
31
191
716
-
-
18
41
59
1,584
-
31
215
-
17
(10)
18
34
52
In 2022, government grants of £NIL (2021: £10k) were received as part of the Government’s initiatives to provide
immediate financial support as a result of the COVID-19 pandemic. There are no future related costs associated
with these grants which were received solely as compensation for costs incurred in the year.
52
Salary
2022
£’000
Consultancy
2022
£’000
Bonus
2022
£’000
Pension
2022
£’000
Total
2022
£’000
Total
2021
£’000
N Burton
(resigned 17 February 2021)
J Carter
J Douglas
M Higginson
D Joseph
R Miller
(resigned 17 February 2021)
M Armitage
(resigned 1 July 2021)
P Machray
(joined 1 July 2021)
M Rich
(joined 17 February 2021)
-
137
137
-
45
-
-
25
35
-
-
-
25
-
-
-
-
-
Total
379
25
-
-
-
-
-
-
-
-
-
-
-
1
1
-
-
-
-
-
-
2
-
138
138
25
45
-
-
25
35
406
*these sums included bonuses paid in accordance with and Executive Bonus Scheme, with the net proceeds being used to
extinguish director loans.
3
*288
*288
25
41
14
13
13
30
715
53
ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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:
10. FINANCE COSTS
Interest on lease liabilities
Interest on bank loans
2022
£’000
-
8
8
2021
£’000
2
12
14
Shares of £0.01
31/12/2022
Shares of £0.01
31/12/2021
11. TAXATION ON PROFIT/LOSS FROM ORDINARY ACTIVITIES
Director
James Carter
Jim Douglas
David Joseph*
10,908,078
10,908,078
600,000
9.3%
9.3%
0.5%
10,908,078
10,908,078
-
9.4%
9.4%
-
*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 £17k (2021: £100k). These options subsequently lapsed on 28 February 2022.
Current tax
UK corporation tax on profits for the current period
Adjustment in respect of prior periods
Deferred tax
Origination and reversal of temporary differences
Changes in tax rates
Benefit arising from previously unrecognised tax losses
Adjustments in respect of prior periods
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.
Total tax charge/(credit)
2022
£’000
132
1
(96)
(3)
(793)
-
(759)
2021
£’000
165
24
27
-
-
15
231
These are set out in the table below,
‘Effective Option’ Holder
Number of Shares
James Carter
Jim Douglas
681,958
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. On 16 February
2022 Martin Higginson exercised 1,590,936 warrants at 2.28 pence per share and
subsequently disposed of these shares.
Further information on share options is included in note 22.
The market price of the shares at 31 December 2022 was 8.50p with a quoted range
from throughout 2022 of 8.25p to 16.25p. The options vest based on performance criteria
detailed in note 22.
The tax assessed for the year differs from the standard rate of corporation tax in the UK applied to loss before tax.
Total profit on ordinary activities before tax
Profit on ordinary activities at the standard rate of
corporation tax in the UK of 19% (2021: 19%)
Effects of:
Expenses not deductible for tax purposes
Income not taxable
Impairment on goodwill
Adjustments to prior periods
Fixed asset differences
Deferred tax asset not previously recognised
Deferred tax not recognised – loss relief in current period
Effect of changes in tax rates on deferred tax
Tax charge/(credit) for the year
2022
£’000
45
9
24
(6)
61
1
(2)
(793)
(50)
(3)
(759)
2021
£’000
627
119
30
-
-
39
-
-
(23)
66
231
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% (2021: 25%) in these financial statements.
There were unused tax losses at 31 December 2022 amounting to £3,172k. In the majority, these were restricted for use for 5 years
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 has been recognised in relation to these losses for the first time, as these are now
considered to be highly likely to be recoverable against future profits.
54
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
12.EARNINGS PER SHARE
The earnings per share is based on the following:
Continuing earnings post tax attributable to shareholders
Basic weighted average number of shares
Diluted weighted average number of shares
Basic earnings per share (£)
Diluted earnings per share (£)
2022
£’000
804
2021
£’000
396
117,718,533
120,002,622
116,332,457
118,297,010
0.00683
0.00670
0.00340
0.00335
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
Cost
Balance at 1 January 2021
Additions
Disposals
Balance at 1 January 2022
Additions
Disposals
Balance at 31 December 2022
Accumulated depreciation
Balance at 1 January 2021
Depreciation charge
Depreciation eliminated on disposal
Balance at 1 January 2022
Depreciation charge
Depreciation eliminated on disposal
Balance at 31 December 2022
-
Net Book Value
At 31 December 2022
At 31 December 2021
IFRS 16
Right-of-Use Asset
£’000
Office
equipment
£’000
Total
£’000
33
56
(33)
56
-
(56)
-
31
27
(33)
25
-
(25)
6
-
31
27
2
-
29
43
(14)
58
10
4
-
14
7
(15)
6
52
15
60
58
(33)
85
43
(70)
58
41
31
(33)
39
7
(40)
52
46
The net book value of owned and leased assets included as “Property, plant and equipment” in the Statement of
Financial Position is as follows:
Tangible fixed assets owned
Right-of-Use tangible fixed assets
2022
£’000
52
-
52
2021
£’000
15
31
46
13. TANGIBLE FIXED ASSETS (continued)
Information about the Right-of-Use assets is summarised below:
Net Book Value
Property
2022
£’000
-
Depreciation charge in respect of the Right-of-Use asset is as follows:
Property
2022
£’000
-
2021
£’000
31
2021
£’000
27
14. INTANGIBLE FIXED ASSETS
GROUP
Cost
Balance at 1 January 2021
Additions
Balance at 1 January 2022
Additions
Business combinations (note 24)
Balance at 31 December 2022
Accumulated amortisation
Balance at 1 January 2021
Amortisation
Balance at 1 January 2022
Amortisation
Impairment
Balance at 31 December 2022
Net Book Value
At 31 December 2022
At 31 December 2021
At 31 December 2020
Goodwill
Arising on
Consolidation
£’000
Other
Intangible
Assets
£’000
Development
costs
Total
£’000
£’000
9,610
-
9,610
-
-
9,610
-
-
-
-
321
321
9,289
9,610
9,610
1,476
-
1,476
18
202
1,696
247
211
458
159
395
1,012
684
1,018
1,229
35
86
121
171
-
292
35
4
39
32
-
71
221
82
-
11,121
86
11,207
189
202
11,598
282
215
497
191
716
1,404
10,194
10,710
10,839
The company acquired the intellectual property of The Poke in December 2022 for £202,000.
Amortisation is charged to administrative expenses in the Statement of Comprehensive Income.
56
57
ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
14. INTANGIBLE FIXED ASSETS (continued)
15. TRADE AND OTHER RECEIVABLES
GOODWILL AND IMPAIRMENT
The carrying value of goodwill in respect of each cash generating unit is as follows:
Digitalbox Publishing (Holdings) Limited
Mashed Productions Limited
Tab Media Limited
31 December
2022
£’000
31 December
2021
£’000
9,171
-
118
9,289
9,171
321
118
9,610
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, due to the goodwill 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. It is considered that any reasonably possible changes in the
key assumptions would not result in an impairment of the present carrying value of the goodwill.
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 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 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. The key sensitivity is the
discount rate which does not breach the outer sensitivity of a 15 year useful economic lifetime until it reaches an
improbable 16%.
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 has been deemed as £NIL in 2022 and therefore, a full impairment of Mashed
Productions Limited has been 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 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 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. The key sensitivity is the discount rate which does not breach the outer sensitivity of a 15 year useful
economic lifetime until it reaches an improbable 16%.
Trade receivables
Prepayments and accrued income
Other receivables
16. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
17. LIABILITIES
Current liabilities
Trade payables
Social security and other taxes
Accruals
Lease liabilities
Other payables
Bank loan
Corporation tax payable
Non-current liabilities
Lease liabilities
Bank loans
31 December
2022
£’000
784
100
68
952
31 December
2022
£’000
2,827
2,827
31 December
2022
£’000
124
84
76
-
4
112
61
461
-
206
206
31 December
2021
£’000
1,428
104
238
1,770
31 December
2021
£’000
2,186
2,186
31 December
2021
£’000
86
144
508
29
1
112
163
1,043
2
319
321
58
59
ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
18. LOANS
20. FINANCIAL RISK MANAGEMENT
Bank loans
Due in less than one year
Due in between one and two years
Due in between two and five years
31 December
2022
£’000
31 December
2021
£’000
112
122
84
318
112
122
197
431
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 2022 was £318k (2021: £431k).
19. DEFERRED TAX
Balance at 1 January 2022
Deferred tax charge for the year
Balance at 31 December 2022
The deferred tax provision comprises:
Intangible asset timing differences
Tax losses
The expected net reversal of deferred tax in 2023 is £35k.
Total
£’000
(275)
892
617
31 December
2022
£’000
31 December
2021
£’000
(176)
793
617
(275)
-
(275)
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.
Current financial assets
Trade receivables
Other receivables
Cash and cash equivalents
The table below illustrates the due date of trade receivables:
Current
31 – 60 days
61 – 90 days
91 – 120 days
121 and over
The table below illustrates the geographical location of trade receivables:
United Kingdom
Europe
Rest of world
31 December
2022
£’000
31 December
2021
£’000
784
67
2,827
3,678
1,428
238
2,186
3,852
31 December
2022
£’000
31 December
2021
£’000
286
215
158
68
57
784
577
421
267
126
37
1,428
31 December
2022
£’000
31 December
2021
£’000
252
270
262
784
921
141
366
1,428
60
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
20. FINANCIAL RISK MANAGEMENT (continued)
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 together based on similar
credit risk and ageing. The average credit period given on sales is 30 days. There are no receivable balances impaired at the reporting
date. In determining the provision for impairment of trade receivables, the Group stratifies the receivables into one component
being corporate debtors. The expected credit loss allowance for impairment is trivial and so no impairment has been recognised at
the year-end.
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
2022
£’000
31 December
2021
£’000
At the year end the Group had the following cash balances:
2,827
2,186
Cash at bank comprises Sterling and US Dollar cash deposits.
The table below shows the maturities of financial liabilities:
2022
Trade payables
Accruals
Loans
Other payables
2021
Trade payables
Accruals
Lease liabilities
Loans
Other payables
Carrying amount 6 months or less
£’000
£’000
6-12 months
£’000
1 or more year
£’000
124
76
318
4
522
114
76
56
4
250
-
-
56
-
56
10
-
206
-
216
Carrying amount 6 months or less
£’000
£’000
6-12 months
£’000
1 or more year
£’000
86
508
31
431
1
1,057
85
508
14
56
1
664
1
-
15
56
-
72
-
-
2
319
-
321
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.
Capital Disclosures and Risk Management
Financial liabilities at amortised cost
Trade payables
Accruals
Lease liabilities
Bank loans
Other payables
The table below illustrates the maturities of trade payables:
Current
31 – 60 days
61 – 90 days
91 – 120 days
121 and over
31 December
2022
£’000
31 December
2021
£’000
124
76
-
318
4
522
86
508
31
431
1
1,057
31 December
2022
£’000
31 December
2021
£’000
93
21
-
-
10
124
45
28
12
-
1
86
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 $1.8m (2021: $1.9m) with a trade debtor balance at the year-end of
$11k (2021: $214k). The Group mitigates foreign exchange risk by selling forward US Dollars on a quarterly basis.
62
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
21. SHARE CAPITAL
23. RESERVES
No.
31 December
2022
Value
£’000
No.
31 December
2021
Called up share capital
Allotted, called up and fully paid
Ordinary shares of £0.01 each
117,923,393
117,923,393
1,179
1,179
116,332,457
116,332,457
Value
£’000
1,163
1,163
As at 1 January 2022
Issue of shares
As at 31 December 2022
No.
£’000
116,332,457
1,590,936
117,923,393
1,163
16
1,179
On 16 February 2022, 1,590,936 shares were issued pursuant to the exercise of warrants for consideration of
£0.0228 per share, resulting in share premium of £20k.
22. SHARE BASED PAYMENTS
During the year, the Group incurred a £62k share based payment charge (2021: £143k). Of this total, £17k (2021:
£100k) was recorded as an expense in Digitalbox plc and £45k (2021: £43k) was recorded as an expense in
Digitalbox Publishing Limited.
2022
No. of
share
Weighted
average
exercise price
2021
No. of share
options
Weighted
average
exercise price
Outstanding at beginning of year
Granted during the year
Exercised during the year
Expired during the year
9,141,663
-
(1,590,936)
(3,008,808)
Outstanding at the end of the year
4,541,919
7.74p
-
2.28p
14.0p
5.51p
8,298,757
1,002,906
-
(160,000)
9,141,663
8.19p
6.00p
-
20.00p
7.74p
3,008,718 options are exercisable after 3 years (see page 27), 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.
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. ACQUISITION OF A BUSINESS
On 30 November 2022 the company acquired an unincorporated business, thepoke.co.uk, for consideration of
£204,000.
Book Value
£’000
Fair Value
£’000
Intangible assets (Brand)
Property, plant & equipment
Total consideration
Satisfied by:
Cash
-
2
2
Contribution by the acquired business for the reporting period included in the group statement of
comprehensive income since acquisition:
202
2
204
£’000
204
£’000
15
5
Revenue
Profit after tax
25. LEASING COMMITMENTS
Group as a lessee
In 2022, the group exited their head office lease.
Lease liabilities are due as follows:
Current
Non-current
31 December
2022
£’000
31 December
2021
£’000
-
-
-
29
2
31
64
65
ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
COMPANY STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER 2022
25. LEASING COMMITMENTS (continued)
Contractual undiscounted cash
flows are due as follows:
Current
Non-current
31 December
2022
£’000
31 December
2021
£’000
-
-
-
30
3
33
There is not considered to be any significant liquidity risk by the Group in respect of leases.
The following amounts in respect of leases, where the Group is a lessee, have been recognised in the profit or loss:
Interest expense on lease liabilities
Expenses relating to short-term leases
26. CAPITAL COMMITMENTS
31 December
2022
£’000
31 December
2021
£’000
-
-
-
2
29
31
27. RELATED PARTY TRANSACTIONS
At 31 December 2022, the Group was due £nil (2021: £171k) from James Carter and Jim Douglas, two Directors of
the company, both having used the net proceeds of the 2021 bonus payment to repay their Director loans in full.
During the year, Integral2 Limited billed £65k (2021: £53k) 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 2022, £6k
(2021: £5k) was owed to Integral2 Limited. During the year, David Joseph acquired 600,000 shares in Digitalbox
plc at 8 pence per share through Integral 2 Limited.
During the year, M Capital Investment Properties Limited billed £25k (2021: £25k) to the Group, a company related
by virtue of Martin Higginson, a member of key management personnel, having control over the entity. As at 31
December 2022, £2.5k (2021: £2.5k), was accrued as owing to M Capital Investment Properties Limited.
During the prior year, Robin Miller Consultants Limited billed £11k to the Group, a company related by virtue of
Robin Miller, a member of key management personnel for part of the prior year, having control over the entity.
As at 31 December 2022, £nil (2021: £1.7k), was owed to Robin Miller Consultants Limited. The balances stated
here were for transactions up to the point that Robin Miller resigned as a director and was therefore no longer a
related party.
COMPANY STATEMENT OF FINANCIAL POSITION
At 31
December 2022
£’000
At 31
December 2021
£’000
Fixed assets
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Corporation tax payable
Total current liabilities
Total liabilities
Net current assets
Capital and reserves
Called up share capital
Share premium account
Share-based payment reserve
Retained reserves
Shareholders’ funds
III
IV
V
VI
VII
IX
IX
IX
11,209
11,209
1,286
1
1,287
(73)
-
(73)
(73)
1,214
12,423
1,179
11,169
196
(121)
12,423
11,127
11,127
1,747
20
1,767
(467)
(467)
(467)
1,300
12,427
1,163
11,149
464
(349)
12,427
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 £102k (2021: £75k loss) in respect of the Company.
The financial statements were approved by the Board and authorised for issue on 27 March 2023.
At 31 December 2022 and 31 December 2021 there were no capital commitments.
Total assets less total liabilities
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 £406k in the year ended 31 December 2022 (2021: £715k).
James Carter
CEO
David Joseph
CEO
The key management personnel have been provided with a total of 1,363,916 effective share options resulting in a
charge of £17k in the period (2021: £100k).
Company registration number: 04606754
66
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ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
DIGITALBOX PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
COMPANY STATEMENT OF CHANGES IN EQUITY
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
Share
Capital
£’000
Share
Premium
£’000
Share-based
payment
£’000
Retained
reserves
£’000
Balance at 1 January 2021
1,163
11,149
Loss after tax
Share-based payments
-
-
-
-
31 December 2021
1,163
11,149
Loss after tax
Issue of new shares
Share-based payments
-
16
-
-
20
-
321
-
143
464
-
-
62
Reserves transfer in respect of lapsed options
(330)
330
(274)
(75)
-
-
-
(349)
12,427
(102)
(102)
Total
£’000
12,359
(75)
143
36
62
-
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
31 December 2022
1,179
11,169
196
(121)
12,423
Financial Statements;
The notes on pages 69 to 71 form part of the group 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 6 (2021: 5) and total staff costs were £461k
(2021: £815k). Directors’ remuneration is disclosed in note 9 to the consolidated financial statements.
68
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DIGITALBOX PLC
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
DIGITALBOX PLC
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
31 December 2022
£’000
V. CASH AND CASH EQUIVALENTS
III. FIXED ASSET INVESTMENTS
Subsidiary undertakings
Cost
Balance at 1 January 2022
Additions
Disposals
Balance at 31 December 2022
Provisions
Balance at 1 January 2022
Charge for the year
Balance at 31 December 2022
Carrying value of investments
11,365
82
-
11,447
238
-
238
11,209
The additions to investments comprise a capital contribution to the company’s subsidiary, Digitalbox Publishing Limited, in relation
to equity-settled share-based payments made to employees of that subsidiary as disclosed in Note 22 to the consolidated financial
statements, and an increase in the investment in Digitalbox Publishing (Holdings) Limited as a result of a share issue for cash
triggered by the exercise of warrants.
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
Digitalbox Publishing (Holdings) Limited Ordinary
100% Direct
Subsidiary name
Digitalbox Publishing Limited
Digitalbox Publishing (Holdings) Limited Holding company
Principal activity
Sale of digital advertising space
Jubilee House, 92 Lincoln
Road,Peterborough, PE1 2SN
Jubilee House, 92 Lincoln Road,
Peterborough, PE1 2SN
VIII. SHARE OPTIONS
Share Option Scheme
Cash at bank and in hand
VI. PAYABLES: amounts falling due within one year
Trade payables
Accruals
Corporation tax payable
Other tax and social security
Other payables
VII. SHARE CAPITAL
31 December
2022
£’000
1
31 December
2021
£’000
20
1
20
31 December
2022
£’000
31 December
2021
£’000
10
45
-
18
-
73
29
403
18
16
1
467
Details of the Company’s share capital can be found in Note 21 to the consolidated financial
statements.
Details of the share options outstanding at 31 December 2022 can be found in Note 22 to the
consolidated financial statements.
IX. RESERVES
Details of the reserves can be found in Note 23 to the consolidated financial statements.
X. RELATED PARTY TRANSACTIONS
Details of the Company’s related party transactions can be found in Note 27 to the
consolidated financial statements.
IV. RECEIVABLES: due within one year
Amounts owed by group undertakings
Prepayments and accrued income
31 December
2022
£’000
31 December
2021
£’000
1,261
25
1,286
1,695
52
1,747
70
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DIGITALBOX PLC
DIRECTORS, SECRETARY AND ADVISERS
FOR THE YEAR ENDED 31 DECEMBER 2022
Directors
Company Secretary and Registered Office
Marcus Rich
James Carter
Jim Douglas
Martin Higginson
David Joseph
Philip Machray
David Joseph
Jubilee House
92 Lincoln Road
Peterborough
PE1 2SN
Company Number
04606754
Registrars
Nominated Adviser and Broker
Joint Broker
Independent Auditors
Solicitors
Share Registrars Limited
The Courtyard
17 West Street
Farnham
GU9 7DR
Panmure Gordon
40 Gracechurch Street
London
EC3V 0BT
Leander Capital Partners
10 Old Burlington Street
London
W1S 3AG
Haysmacintyre LLP
10 Queen Street Place
London
EC4R 1AG
FREETHS LLP
Floor 3
100 Wellington Street
Leeds
LS1 4LT
Country of Incorporation of Parent Company
England and Wales
Legal Form
Public Limited Company
Domicile
United Kingdom
72
73
ANNUAL REPORT & ACCOUNTS 2022 | digitalbox.comANNUAL REPORT & ACCOUNTS 2022 | digitalbox.com
Digitalbox plc
Jubilee House
92 Lincoln Road
Peterborough
PE1 2SN
United Kingdom
Co Reg No. 04606754
+44 (0)1225 430 091
digitalbox.com
© 2023