Dianomi plc
("Dianomi, the "Company" or the "Group")
Final
Results
Dianomi, a leading provider of
native digital advertising services to premium clients in the
Business, Finance and Lifestyle sectors,
announces the Company's audited results for the year ended 31
December 2023.
Financial Headlines
· Revenue of £30.2
million for the year (FY22: £35.9 million) with reduced traffic
across our publisher base contributing to lower revenue
· Gross
margin for the full year of 24.7% (FY22: 27.3%) as a result of a
previously announced contract amendment with a major publisher
partner and publisher mix
· Adjusted EBITDA* loss of £0.4 million (FY22: profit of £1.6
million), with a return to profitability in the second half of the
year
· EBITDA loss of £1.7
million (FY22: profit of £1.2 million), including reorganisation
costs of £1.1 million
· Adjusted loss per share** of 3.10 pence (FY22: earnings of
2.58 pence)
· Statutory loss per share of 9.71 pence (FY22: earnings of 1.62
pence)
· As at 31 December
2023, the Group had no borrowings and cash of £7.7 million (30 June
2023: £7.1 million, 31 December 2022: £11.7 million)
Operating Headlines
· Appointment of Ken Johnston as Head of Global sales alongside
the integration of the US and EMEA sales teams to drive
collaboration and maximise the opportunity to capture additional
advertising spend
· Successfully reduced cost base by £1 million on an annualised
basis
· Good client
retention with annual advertiser and publisher churn (calculated on
a revenue basis) of 6.2% (FY22: 5.5%) and 0.9% (FY22: 2.8%)
respectively
· Continued to add new publishers to our client base with the
number of publishers at year end standing at 340 (FY22:
336)
· In 2023, new
clients attracted to the platform included Natixis Investment
Management, Equinix, Macquarie, Emirates, and Allianz Global
Investors and the overall number of advertisers stood at 371 (FY22:
387)
· Continued to establish Dianomi as a full format advertising
platform offering premium brands and agencies a single point of
access to ad buying across the world's premium
publishers
Outlook
· Elections in
the US and in a further 63 countries around the world likely to
boost traffic across the Dianomi publisher base in 2024
· Dianomi now
better placed to monetise any uptick in traffic with a
substantially reduced cost base and significantly broadened product
suite
· Focus on providing
a single point of access to digital advertising buying across the
world's premium publishers by evolving to a full format advertising
platform and giving Dianomi the opportunity to compete for more
varied and larger marketing budgets
· Continued investment in programmatic capacity to support full
format advertising
· Balance sheet
strength continues to underpin the business and provide the ability
to invest appropriately as opportunities arise
· Current year
trading is in line with management expectations, with the
profitability achieved in the second half of 2023 continuing into
2024.
Rupert Hodson, CEO of Dianomi commented:
"At the headline level 2023 has been
a challenging year for Dianomi and the wider advertising industry.
Digital traffic across news publications over the course of the
year reduced by between 10% to 30%. This naturally translated into
lower revenues for the business which is reflected in the results
we report today. It is important to highlight that demand
from many of our advertisers was unchanged but lower traffic levels
reduced our ability to monetise this demand. In response, during
2023 we focused on expanding our distribution channels, scaling up
both new and existing publisher partnerships, and moving to become
a full format advertising platform. These actions together with
reducing our cost base by £1m on an annualised basis and
reorganising our management and sales teams means the Group is well
placed to drive scale and profitability."
*
Calculated as profit after tax before charging interest, tax,
depreciation and amortisation in the financial year, adjusted for
share-based payments, non-recurring income and costs relating to
the reorganisation. This metric provides a more comparable
indication of the Group's core business performance by removing the
impact of non-trading items that are reported
separately.
**
Adjusted to exclude costs relating to the reorganisation,
non-recurring income, the derecognition of the deferred tax asset
and share-based payments.
The information contained within
this announcement is deemed to constitute inside information as
stipulated under the Market Abuse Regulations (EU) No. 596/2014. It
forms part of United Kingdom domestic law by virtue of the European
Union (Withdrawal) Act 2018. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For
further information contact:
|
Dianomi
Rupert Hodson (Chief Executive
Officer)
Charlotte Stranner (Chief Financial
Officer)
|
Tel: +44 (0)207 802 5530
|
|
Panmure Gordon (NOMAD and Broker)
Emma Earl/ Freddy Crossley,
Corporate Finance
Rupert Dearden, Corporate
Broking
|
Tel: +44 (0)207 886 2500
|
|
Novella Communications
Tim Robertson / Safia
Colebrook
|
Tel: +44 (0)203 151 7008
|
About Dianomi
Dianomi, established in 2003, is a
leading provider of native digital advertising services to premium
clients in the Business, Finance and Lifestyle sectors. The Group
operates from its offices in London, New York and Sydney. The Group
enables premium brands to deliver native advertisements to a
targeted audience on the desktop and mobile websites, mobile and
tablet applications of premium publishers. It provides over 350
advertisers, including blue chip names such as abrdn, Invesco and
Charles Schwab, with access to an international audience of over
400 million devices per month through its partnerships with over
300 premium publishers, including blue chip names such as Reuters,
CNN Business and WSJ. Adverts served are contextually relevant to
the content of the webpages on which they appear and mirror the
style of the page, which enhances reader engagement.
http://www.dianomi.com.
Chairman's Statement
Introduction
The business continued to face a
number of market related challenges during the year, and we believe
Dianomi (the "Company" or the "Group") responded well. The
fundamentals of the business remain robust. Dianomi continues to
work with an enviable premium client base, boasting relationships
with the top global names in banking and wealth management
alongside a host of leading financial institutions. The client list
is matched by the premium portfolio of publishers from CNN Business
and the Wall Street Journal to the Times. Our financial position is
underpinned by a strong balance sheet.
Despite these advantages, the fall
in traffic numbers across certain publications by up to 30%,
naturally impacted the trading performance of the business in 2023.
In response, the executive management team made some important
strategic changes. Firstly, reducing the cost base by £1 million on
an annualised basis. Secondly, reorganising the structure of the
business teams and making changes to some key leadership positions.
Thirdly, recognising the importance of improving distribution
channels in this market and moving the business to becoming a full
format advertising platform.
Dianomi therefore enters 2024 a more
nimble and more focused business.
Our
People
In March 2023, Raphael Queisser and
Cabell de Marcellus, who, alongside our CEO Rupert Hodson, founded
the business, stepped down from the Board and from their day to day
roles. Dianomi is deeply grateful to both Raphael and Cabell for
their substantial contributions to the business since its inception
in 2003. This was also the start of a wider number of
organisational changes made across the business. In April, Ken
Johnston, who had originally helped establish our US presence,
rejoined the business after a successful run as a sales leader at
Meta. With Ken's appointment, as Head of Global Sales, came the key
decision to integrate the sales teams of the US and EMEA and
restructure the operating teams seeking greater collaboration and
shared purpose. Towards the end of the year, in November, we
welcomed Paul Gibson as an independent Non-Executive Director. Paul
brings substantial operational experience and has spent 30 years in
software and related services, as well as experience of serving on
the Board's of several private and listed companies.
During the year the Board reviewed
the equity incentivisation in place for employees and were of the
view that the share option plans put in place at the time of the
Company's IPO no longer met the three principles of its
remuneration strategy, namely, alignment with shareholders, and
incentivisation and retention of employees. Therefore, in order to
ensure that the senior leaders and employees were appropriately
incentivised, after consulting with significant shareholders, the
Board took the decision to cancel the existing share options and
grant new share options under new share option plans with rebased
performance and extended vesting criteria alongside a lower
exercise price.
Our
Strategy
Whilst a fall in traffic numbers
impacted our trading performance in 2023, strategically, the
business remains well placed especially given the current demise of
the cookie as an advertising targeting tool because our platform
already provides a cookie-free solution. Critically, Dianomi
occupies a premium position in the contextual advertising space and
has the platform and technology to offer transparency on
performance for publishers and advertisers alike.
Dianomi is evolving from a native
advertising platform where we serve ads into owned and operated
placements on a publisher's website based on the content of those
pages, to a full format advertising platform whereby we can offer
advertisers different types of ad formats such as video, display,
podcasts and polls as well as native. In doing so we aim to offer
premium brands and agencies a single point of access to digital
advertising buying across the world's premium publishers giving us
the opportunity to compete for more varied and larger marketing
budgets. To this end, we have continued to invest in programmatic
capacity, together with broadening our suite of ad products
significantly.
In 2023, the Group continued to
broaden advertiser base by enabling financial and lifestyle ads to
sit alongside each other across our full publisher inventory. The
content we serve is typically from premium advertising brands and
are vetted for quality and brand safety, meaning that the broader
pool of lifestyle content is still highly relevant for our
contextual positioning with publishing partners. Furthermore, we
are increasingly moving our ads higher up the page, creating more
viewable content with in-article units and display ads, reflecting
the strength of our performance for publishers and consistent
quality of our advertisers.
ESG
We seek to operate our business in
an environmentally friendly manner. We are helped in this goal by
our business model which is based on direct relationships with
publishers without the need for intermediaries which in industry
terms is known as supply path optimised and therefore more
efficient, streamlined and carbon friendly than the majority of
similar platforms. Furthermore, earlier this year we migrated from
a hosted solution with Rackspace to AWS which on average runs
workloads with a much lower carbon footprint than the average data
centre.
In total, we are a company of less
than 40 people and operate a hybrid home working and office working
model, with the serviced offices from which we operate being
environmentally conscious in the products they use and the energy
they consume.
We value and support the people in
our business, comprised of a talented and diverse team who value
and respect difference. We remain committed to attracting,
developing, and retaining the best talent from a diverse range of
backgrounds regardless of race, ethnicity, age, gender, sexual
orientation or physical ability.
The Board operates within a robust
governance framework and ensures that the Group has a balance of
diverse skills and experience to deliver our strategy and growth
objectives. The Board and its subcommittees include independent
non-executive members with varying backgrounds and
experience.
Financial Overview and Outlook
We delivered revenue for the full
year of £30.2 million. This was a 15.9% decrease against the prior
year and directly reflects the fall in traffic across the Group's
publisher inventory. We made a loss at adjusted EBITDA* level of
£0.4 million (unadjusted loss at EBITDA level was £1.7 million) and
an adjusted loss per share** of 3.10 pence (statutory loss per
share was 9.71 pence). This was due in part to a contract amendment
with one of our top publisher partners whereby we agreed not to
recoup an overpayment relating to a guarantee under which minimum
traffic levels were not met, which resulted in the overpayment of
£0.8 million being recognised as an additional cost of sale which
was in part off-set by a higher revenue share with the publisher
for second half of the year. During the first half of the year we
undertook a cost rationalisation and, while the Group returned to
profitability in the second half of the year, this rationalisation
was not sufficient to offset the cost of the contract amendment and
the reduction in revenue as a result of challenging market
conditions.
Going into 2024, we believe the
changes made to personnel and the way the business is structured
have had a positive impact. The election in the US and in a further
63 countries around the world should benefit traffic numbers. Most
importantly, there is a good pipeline of publisher and advertiser
prospects which we are hopeful of converting during the course of
2024.
Lastly, I would like to thank both
our shareholders for their support and the team for their continued
commitment and enthusiasm towards driving Dianomi to achieve our
goals.
Michael Kelly
Non-Executive Chairman
Chief Executive's Statement
Introduction
As a technology-led business we are
constantly working to evolve the solutions we provide to our
clients and we did this successfully during 2023. While the market
environment was certainly challenging, demand from many of our
premium clients was unchanged. We represent all of the top ten
largest asset managers and seven of the top ten largest wealth
management companies in the US, similarly we represent 340 of the
world's leading publishers. We continue to turn away the majority
of the companies and publishers who ask to be a part of the Dianomi
platform in order to ensure we remain a pure premium operator. We
know that many of our customers and publishers would like to place
more ads through our platform and this is why we are evolving from
a native ad platform to a full format advertising
platform.
Our objective is to grow the
business beyond our native roots whilst retaining a premium,
privacy first positioning. Our ability to achieve this is being
significantly enhanced by the global switch from cookies to an ID
free future. Advertisers and publishers continue to look for a
solution to this seismic change and for the premium end of the
market Dianomi provides a ready-made solution.
Operational review
The return of Ken Johnston to head
global sales has had a positive impact on the business. Uniting the
sales teams in the US and EMEA has brought the business closer
together and highlighted the global nature of our business and
potential for shared opportunities and collaborations. A key goal
for the combined sales team is to maximise the opportunities for
additional spend amongst the Group's ten largest clients all of
whom have substantial global advertising budgets outside of their
current spend with Dianomi.
The ability to increase the spend of
existing clients is in part driven by capacity. Dianomi is evolving
to enable clients to buy both native (owned and operated) and
display (owned and operated and open market) ads. Currently, a top
ten Dianomi publisher is trialing Dianomi direct demand display ads
to their audiences, the results of which are due in Q2 2024. We
have also substantially broadened our suite of products aimed at
scaling CPM sales (where we charge the advertiser based on
impressions rather than clicks) including Canvas, Polling, Content
Hubs and Podcasts.
We took the decision to allow
lifestyle ads to sit alongside financial ads for the first time on
the Dianomi platform. Historically, lifestyle advertisers were
treated as a separate vertical to financial advertisers. Over time
it has become clear that our audiences are interested in both
premium financial and lifestyle content and that it is logical and
commercially valuable to combine them. This fits with the Dianomi
approach to focus not on the publication but on the interests of
our audiences. Each month there are approximately 440 million
readers across our premium financial publications, and we know
their interests extend well beyond business. Initially, we are
serving Lifestyle ads in just four categories: Automotive, Luxury,
Technology and Travel.
We continue to develop our
programmatic offering and our programmatic revenue grew by 50% in
2023 to £1.8 million from £1.2 million. During the year we were
able to increase supply through testing a growing number of
publishers including Newsweek, MSN Money and Yahoo Finance via
programmatic channels. We believe that we have an opportunity to be
the contextual partner of choice in the direct and programmatic
space within the premium end of the market.
Commercial review
Our premium publisher base increased
in number over the course of 2023 and by the end of the year we had
340 active publishers vs 336 at year end 2022 with the majority of
new publishers being Apple News publishers. Despite only joining
the Dianomi platform in 2021, CNN Business, is now our largest
publisher with plans to further extend Dianomi's presence on CNN
platforms. 20 new publishers joined in 2023 including US News,
Smithsonian Magazine and The Guardian. However, the majority of our
publishers experienced a drop in their traffic volumes which lead
to a reduction in the number of clicks on our ads. Revenue per
click ("RPC") was down at 55 pence in 2023 vs 64 pence in 2022
predominantly due to a change in the mix of our impressions, with
more impressions coming from Apple News publishers, which tend to
command a lower RPC.
During 2023, we had 371 active
advertisers, compared to 387 in the prior year but we continued to
attract new premium brands to the platform including Natixis
Investment Managers, First Horizon Bank and CoStar Realty
Investment. Reflecting the wider market environment average spend
across the top 100 advertisers on the platform reduced by 18% to
£227k per annum however we did see increased spend on the Dianomi
platform from companies such as Bank of America and
abdrn.
Financial review
Group revenue decreased 15.9% to
£30.2 million (2022: £35.9 million) as a result of the decrease in
traffic seen across our publisher base.
Programmatic revenue increased in
the year from £1.2 million in 2022 to £1.8 million in 2023. Video
revenue decreased from £1.4 million to £1.2 million. Video revenue
tends to be tied to specific campaigns. We still believe that video
represents a key growth opportunity for Dianomi and hope to report
improved progress in the current year.
Revenue from the Group's new
Lifestyle segment remained static at £1.3 million (2022: £1.3
million). With the decision to enable lifestyle advertisers across
the whole of our publisher network, we hope to see the number of
lifestyle advertisers grow in the current year.
Gross margin was down 260 basis
points to 24.7% predominantly due to a contract amendment with one
of our major publisher partners as a result of minimum guaranteed
traffic levels not being met by the publisher which resulted in a
one off cost of £0.8 million. The one off cost was in effect an
overpayment by Dianomi which Dianomi agreed not to recoup, in
return for which the publisher provided Dianomi with an enhanced
revenue share as from 1 July 2023 and, in addition to its existing
permanent ad units, additional premium ad inventory, including a
new in-article unit in line with Dianomi's strategy of moving
further up a publisher's page.
Gross profit for the period was £7.5
million (2022: £9.8 million), a 23.5% decline on the previous year
due to lower revenues and the one off cost as described
above.
We made a loss at adjusted EBITDA*
level of £0.4 million (2022: profit of £1.6 million) and a
corresponding adjusted** loss per share of 3.10 pence (2022: profit
of 2.58 pence) reflecting the lower revenues and lower gross
profit. Statutory loss per share was 9.71 pence (2022: profit of
1.62 pence). We underwent a reorganisation during the year in order
to streamline the cost base, resulting in one-off costs of £1.1
million. The Group returned to profitability in the second half of
the year and the first quarter of 2024.
We currently have no borrowings and
at the end of the year we had cash of £7.7 million vs £11.7 million
at the end of 2022. Our cash position declined during the year
partly due to restructuring costs of £1.1 million associated with
the cost rationalisation programme we undertook during the first
half of the year, as well as the publisher overpayment as explained
above, the losses in the first half of the year and the unwinding
of the working capital benefit at the end of 2022 highlighted at
the time of the 2022 results.
The Group is in a growth phase of
its evolution and so the Board is not proposing to recommend a
dividend and instead the Group will continue to preserve its cash
resources so that it has sufficient capacity to invest in the
growth of the Group and/or take advantage of strategic
opportunities should they arise.
Outlook
As ever, I would like to thank our
team, for their individual and collective contributions during
2023. We are a people business and it is our relationships with
each other and with our clients that is the key to our success.
Going into 2024, I am confident we have a stronger suite of
products and solutions to offer our customers with which we can
drive increasing scale into the business. Trading in the first
three months is in line with our expectations and we will look to
build upon that during the course of the year.
Rupert Hodson
Chief Executive Officer
Financial Review
|
|
2023
|
2022
|
Change
|
|
Revenue (£m)
|
30.2
|
35.9
|
(15.9)%
|
|
Gross profit (£m)
|
7.5
|
9.8
|
(23.5)%
|
|
Gross margin
|
24.7%
|
27.3%
|
(9.5)%
|
|
Adjusted EBITDA* (£m)
|
(0.4)
|
1.6
|
£(2.0)
|
|
Adjusted (loss)/profit before tax*
(£m)
|
(0.5)
|
1.5
|
£(2.0)
|
|
Adjusted EPS* (p)
|
(3.10)
|
2.58
|
(5.68)p
|
|
Net cash (£m)
|
7.7
|
11.7
|
(34.2)%
|
* In order to provide better clarity to the underlying
performance of the Group, Dianomi uses adjusted EBITDA, adjusted
profit before tax and adjusted EPS as alternative performance
measures. Please refer to notes 8 and 13 for further
details.
Basis of Preparation
The financial statements, for the
year ended 31 December 2023 together with the comparative period
data for the year ended 31 December 2022, are prepared in
accordance with International Financial Reporting Standards adopted
by the UK.
Revenue
Revenue decreased 15.9% to £30.2
million (2022: £35.9 million), predominantly due to lower traffic
levels across the publisher base and a lower level of revenue being
generated from new publishers coming on to the platform during the
year compared to previous years.
Programmatic revenue increased to
£1.8 million compared to £1.2 million in 2022 as we increased our
capacity to buy additional publisher inventory via programmatic
means. Video revenue decreased from £1.4 million in the year to 31
December 2022 to £1.2 million.
Revenue from the Group's Lifestyle
segment amounted to £1.3 million (2022: £1.3 million). With the
decision to enable lifestyle advertisers across the Group's entire
publisher base, both financial and lifestyle, this segment should
show growth in the current year.
Gross profit and margin
Gross profit represents the Group's
share of revenue from publishers under the terms of the revenue
share agreements that the Group has with them. Gross profit
decreased 23.5% to £7.5 million from £9.8 million, representing a
gross margin of 24.7% (2022: 27.3%). The decrease was largely due
to the one-off cost of £0.8 million relating to a contract
amendment with one of the Group's largest publishers in the first
half of the year which resulted from minimum guaranteed traffic
levels not being met by the publisher. The one-off cost was in
effect an overpayment by Dianomi which Dianomi agreed not to recoup
in return for an enhanced revenue share as
from 1 July 2023 and, in addition to its existing permanent ad
units, additional premium ad inventory, including a new in-article
unit.
Also contributing to the lower gross
margin was the mix of publishers, with a larger contribution from
CNN Business which is now the largest publisher for the Group, but
which is on a lower revenue share than average in favour of the
publisher, though Dianomi's share increases as revenue
grows.
Administrative expenses
Administrative expenses decreased to
£8.3 million in the year to 31 December 2023 from £9.0 million in
2022. Included in administrative expenses were share-based payments
of £0.3 million (2022: £0.5 million). During the year the
Board took the decision to cancel the existing
share options and grant new share options under new share option
plans with rebased performance and extended vesting criteria
alongside a lower exercise price. The decrease in
administrative expenses is due to the reorganisation undertaken by
the Group during the year to rationalise its cost base. As a result
of this reorganisation, staff costs, which represent the largest
cost within administrative expenses, decreased to £4.5 million from
£5.2 million in previous year. However, the reorganisation meant
that the Group incurred one-off costs of £1.1 million in the year
(2022: £nil).
The Group does not capitalise costs
relating to the ongoing support and development of its platform,
these are included within administrative expenses as they relate to
the maintenance and enhancement of its ongoing operations, and
therefore do not meet the capitalisation criteria.
Group profitability
As a result of both lower revenues
and gross profit, the Group generated a loss at adjusted EBITDA
level of £0.4 million compared to a profit of £1.6 million in 2022.
To provide a better guide to the underlying business performance,
adjusted EBITDA excludes share-based payments, other, non-recurring
income and costs relating to the reorganisation along with
depreciation, amortisation, interest and tax from the measure of
profit.
The Group made a loss before tax of
£1.8 million and a loss after tax of £2.9 million (2022: profit of
£1.1 million and £0.5 million respectively).
Net
finance income
Net finance income was £0.1 million
compared to net finance income of £0.04 million in 2022, reflecting
the higher interest rate environment. The Group is debt-free and
has no interest rate exposure.
Taxation
The Group had a tax charge for the
year ended 31 December 2023 of £1.1 million (2022: £0.7 million)
representing the tax payable in relation to the Group's US
subsidiary and the derecognition of the deferred tax asset. For
further detail on taxation see notes 11 and 12 of the Financial
Statements. Adjusted loss after tax, used in calculating adjusted
earnings per share, is shown after adjustments for the applicable
tax on adjusting items as set out in notes 8 and 13.
Earnings per share
Loss per share for the year ended 31
December 2023 was 9.71 pence (2022: earnings of 1.62 pence).
Adjusted loss per share was 3.10 pence (2022: earnings of 2.58
pence). Adjusting items and their tax impacts are set out in note
13.
Diluted loss per share for the year
ended 31 December 2023 was 9.71 pence (2022: earnings of 1.46
pence). Adjusted diluted loss per share was 3.10 pence (2022:
earnings of 2.34 pence). As at 31 December 2023, 1,420,017 share
options were outstanding (31 December 2022: 1,721,551) following
the cancellation of the option plans implemented at IPO and
introduction of the new option plans in November 2023.
Statement of Financial Position
Net assets as at 31 December 2023
totalled £8.6 million (31 December 2022: £11.8 million). Trade
receivables increased to £8.1 million (31 December 2022: £7.5
million) and trade creditors increased to £4.2 million as at 31
December 2023 (31 December 2022: £3.0 million). Accruals, which
predominantly reflect the payments due to the Group's publisher
partners, decreased to £3.0 million as at 31 December 2023 from
£4.5 million as at 31 December 2022.
The Group's net cash position
decreased 34.2% to £7.7 million as at 31 December 2023 (31 December
2022: £11.7 million). The Group used cash during the year due to
the unwinding of the working capital benefit at the end of 2022 as
flagged in the 2022 Annual Report, the one-off costs incurred in
relation to the reorganisation and the contract amendment with one
of the Group's major publisher partners. Net cash outflow from
operations was £3.2 million in 2023 (2022: net cash inflow of £1.0
million) with £0.9 million of tax paid in the year in relation to
the Group's US operations, including amounts due from 2022 and
payments on account in relation to 2024, which resulted in
overpayments which will be put towards the Group's 2024 tax
liability. The Group is debt-free.
Charlotte Stranner
Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
|
|
Year
ended
31 Dec
2023
|
Year
ended
31 Dec
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Note
|
|
|
|
Revenue
|
4
|
30,154
|
35,915
|
|
Cost of sales
|
(22,702)
|
(26,127)
|
|
|
---------------------------------------------------
|
---------------------------------------------------
|
|
Gross profit
|
7,452
|
9,788
|
|
|
|
| |
|
Administrative expenses
|
7
|
(8,329)
|
(8,981)
|
|
Other gains and losses
|
|
-
|
136
|
|
Reorganisation costs
|
3&8
|
(1,054)
|
-
|
|
Other
income
|
6
|
-
|
167
|
|
----------------------------------------------------
|
-----------------------------------------------------
|
|
Operating (loss)/profit
|
|
(1,931)
|
1,110
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
14
|
213
|
107
|
|
Share-based payments
|
24
|
312
|
526
|
|
Reorganisation costs
|
3&8
|
1,054
|
-
|
|
Other income
|
6
|
-
|
(167)
|
|
|
|
-------------------------------
|
-------------------------------
|
|
Adjusted EBITDA
|
|
(352)
|
1,576
|
|
|
|
|
|
|
Finance income
|
10
|
115
|
41
|
|
Finance expense
|
10
|
(3)
|
(4)
|
|
|
-------------------------------------------------
|
-----------------------------------------------------
|
|
(Loss)/profit on ordinary activities before
taxation
|
(1,819)
|
1,147
|
|
Taxation
|
11
|
(1,097)
|
(662)
|
|
|
|
|
-------------------------------------------------
|
-----------------------------------------------------
|
|
(Loss)/profit for the year
|
|
(2,916)
|
485
|
|
|
|
|
|
|
Other comprehensive (loss)/income items that may be
reclassified subsequently to profit or loss
Currency translation
differences
|
|
(600)
|
651
|
|
|
|
-------------------------------------------------
|
---------------------------------------------------
|
|
Total comprehensive (loss)/income for the year attributable to
the owners of the company
|
|
(3,516)
|
1,136
|
|
|
|
=================================================
|
==================================================
|
|
|
|
|
|
|
Basic (loss)/earnings per ordinary
share (p)
|
13
|
(9.71)
|
1.62
|
|
|
|
|
|
|
Diluted (loss)/earnings per ordinary
share (p)
|
13
|
(9.71)
|
1.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
All
operations are continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
|
As
at
31
Dec
2023
|
As at
31
Dec
2022
|
|
|
£000
|
£000
|
|
Note
|
|
|
Non-current assets
|
Right-of-use asset
|
14
|
-
|
213
|
|
|
---------------------------------------------------
|
---------------------------------------------------
|
|
Total non-current assets
|
-
|
213
|
Current assets
|
Trade and other
receivables
|
16
|
8,339
|
7,874
|
|
Deferred tax asset
|
12
|
-
|
675
|
|
Corporation tax
receivable
|
|
145
|
-
|
|
Cash and cash equivalents
|
17
|
7,740
|
11,663
|
|
|
------------------------------------------------------
|
------------------------------------------------------
|
|
Total current assets
|
16,224
|
20,212
|
|
|
|
|
|
Total assets
|
16,224
|
20,425
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
18
|
(7,641)
|
(8,048)
|
|
Corporation tax payable
|
|
-
|
(371)
|
|
Lease liabilities
|
19
|
-
|
(219)
|
|
|
------------------------------------------------------
|
------------------------------------------------------
|
|
Total current liabilities
|
(7,641)
|
(8,638)
|
|
|
-----------------------------------------------------
|
-----------------------------------------------------
|
|
|
|
|
|
Total liabilities
|
(7,641)
|
(8,638)
|
|
|
====================================================
|
====================================================
|
|
Net
assets
|
8,583
|
11,787
|
|
|
====================================================
|
====================================================
|
|
Equity
|
|
|
|
|
Share capital
|
23
|
60
|
60
|
|
Share premium account
|
|
5,436
|
5,436
|
|
Share options reserve
|
|
3,692
|
3,380
|
|
Foreign currency reserve
|
|
(461)
|
139
|
|
Retained
(losses)/earnings
|
|
(144)
|
2,772
|
|
|
====================================================
|
====================================================
|
|
Total equity attributable to the
owners of the company
|
8,583
|
11,787
|
|
|
====================================================
|
====================================================
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
|
Attributable to the owners of
the Company
|
|
|
|
Share
capital
|
Share premium
account
|
Share options
reserve
|
Foreign
currency
reserve
|
Retained earnings/
(losses)
|
Total
equity
|
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
-----------------------------------------
|
------------------------------------------------
|
------------------------------------------------
|
------------------------------------------------
|
-----------------------------------------------
|
------------------------------------------------
|
|
|
Balance at 1 January 2023
|
60
|
5,436
|
3,380
|
139
|
2,772
|
11,787
|
|
|
|
-----------------------------------------
|
-------------------------------------------------
|
-------------------------------------------------
|
-------------------------------------------------
|
-----------------------------------------------
|
------------------------------------------------
|
|
|
Comprehensive loss for the period
|
|
|
|
|
|
|
|
|
Loss for the period
|
-
|
-
|
-
|
-
|
(2,916)
|
(2,916)
|
|
|
Currency translation
differences
|
-
|
-
|
-
|
(600)
|
-
|
(600)
|
|
|
|
-----------------------------------------
|
-------------------------------------------------
|
-------------------------------------------------
|
-------------------------------------------------
|
-----------------------------------------------
|
------------------------------------------------
|
|
|
Total comprehensive loss for the period
|
-
|
-
|
-
|
(600)
|
(2,916)
|
(3,516)
|
|
|
-----------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
------------------------------------------------
|
|
Transactions with owners of the Company
|
|
|
|
|
|
|
|
Share-based payment
credit
|
-
|
-
|
312
|
-
|
-
|
312
|
|
|
-----------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-------------------------------------------------
|
------------------------------------------------
|
|
Total transactions with owners of the
Company
|
-
|
-
|
312
|
-
|
-
|
312
|
|
|
-----------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-------------------------------------------------
|
------------------------------------------------
|
|
Balance at 31 December 2023
|
60
|
5,436
|
3,692
|
(461)
|
(144)
|
8,583
|
|
|
-----------------------------------------
|
---------------------------------------------------
|
---------------------------------------------------
|
---------------------------------------------------
|
------------------------------------------------
|
----------------------------------------------
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Attributable to the owners of
the Company
|
|
|
|
Share
capital
|
Share premium
account
|
Share options
reserve
|
Foreign
currency
reserve
|
Retained
earnings
|
Total
equity
|
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
-----------------------------------------
|
------------------------------------------------
|
------------------------------------------------
|
------------------------------------------------
|
-----------------------------------------------
|
------------------------------------------------
|
|
|
Balance at 1 January 2022
|
60
|
5,436
|
2,854
|
(512)
|
2,287
|
10,125
|
|
|
|
-----------------------------------------
|
-------------------------------------------------
|
-------------------------------------------------
|
-------------------------------------------------
|
-----------------------------------------------
|
------------------------------------------------
|
|
|
Comprehensive income for the period
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
485
|
485
|
|
|
Currency translation
differences
|
-
|
-
|
-
|
651
|
-
|
651
|
|
|
|
-----------------------------------------
|
-------------------------------------------------
|
-------------------------------------------------
|
-------------------------------------------------
|
-----------------------------------------------
|
------------------------------------------------
|
|
|
Total comprehensive income for the period
|
-
|
-
|
-
|
651
|
485
|
1,136
|
|
|
-----------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
------------------------------------------------
|
|
Transactions with owners of the Company
|
|
|
|
|
|
|
|
Share-based payment
credit
|
-
|
-
|
526
|
-
|
-
|
526
|
|
|
-----------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-------------------------------------------------
|
------------------------------------------------
|
|
Total transactions with owners of the
Company
|
-
|
-
|
526
|
-
|
-
|
526
|
|
|
-----------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-----------------------------------------------
|
-------------------------------------------------
|
------------------------------------------------
|
|
Balance at 31 December 2022
|
60
|
5,436
|
3,380
|
139
|
2,772
|
11,787
|
|
|
|
-----------------------------------------
|
---------------------------------------------------
|
---------------------------------------------------
|
---------------------------------------------------
|
------------------------------------------------
|
----------------------------------------------
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
Year
ended
31
Dec 2023
|
Year
ended
31 Dec
2022
|
|
|
£000
|
£000
|
Cash flows from operating activities
|
(Loss)/profit on ordinary activities
before taxation
|
(1,819)
|
1,147
|
|
|
|
|
|
Adjustments for:
|
|
|
|
Depreciation - leased
assets
|
213
|
107
|
|
Interest
payable
|
3
|
4
|
|
Interest
receivable
|
(115)
|
(41)
|
|
Increase in trade and other
receivables
|
(465)
|
(478)
|
|
(Decrease)/increase in trade and
other payables
|
(407)
|
185
|
|
Other cost/(income)
|
33
|
(167)
|
|
Share-based payment
charge
|
312
|
526
|
|
|
|
|
|
|
------------------------------------------------------
|
------------------------------------------------------
|
|
Cash (used in)/generated from operating
activities
|
(2,245)
|
1,283
|
|
|
======================================================
|
======================================================
|
|
|
|
|
|
Taxation paid
|
(907)
|
(269)
|
|
|
------------------------------------------------------
|
------------------------------------------------------
|
|
Net
cash (used in)/generated from operating
activities
|
(3,152)
|
1,014
|
|
|
======================================================
|
======================================================
|
Cash flows from investing activity
|
|
|
|
|
Interest received
|
115
|
41
|
|
|
------------------------------------------------------
|
------------------------------------------------------
|
|
Net
cash generated from investing activity
|
115
|
41
|
|
|
======================================================
|
======================================================
|
Cash flows from financing activities
|
Interest paid in respect of
leases
|
(3)
|
(4)
|
|
Capital payments in respect of
leases
|
(219)
|
(106)
|
|
|
------------------------------------------------------
|
------------------------------------------------------
|
|
Net
cash used in financing activities
|
(222)
|
(110)
|
|
|
======================================================
|
======================================================
|
|
Net
(decrease)/increase in cash and cash equivalents
|
(3,259)
|
945
|
|
Cash and cash equivalents at
beginning of period
|
11,663
|
10,278
|
|
Exchange movement on cash
|
(664)
|
440
|
|
|
------------------------------------------------------
|
------------------------------------------------------
|
|
Cash and cash equivalents at end of period
|
7,740
|
11,663
|
|
|
======================================================
|
======================================================
|
NOTES TO THE FINANCIAL STATEMENTS
1. General
information
Dianomi plc (the "Company") and its
subsidiaries' (together the "Group") principal activity is the
delivery of premium native advertising for the financial services,
technology, corporate and lifestyle sectors. The Company was
incorporated on 16 August 2002 in England and Wales as a private
company limited by shares under the name Data-ID Limited. On 17
December 2002, the Company changed its name to Dianomi Limited. On
17 May 2021, the Company re-registered as a public limited company
and changed its name to Dianomi plc.
The address of the registered office
is 6th Floor, 60 Gracechurch Street, London, EC3V 0HR
and the limited company number is 04513809.
2. Basis of
preparation and material accounting
policies
2.1. Basis of preparation
The financial statements for the
year ended 31 December 2023 have been prepared in accordance with
the historical cost convention and with international accounting
standards in conformity with the requirements of the Companies Act
2006 and with UK adopted International Financial Reporting
International Financial Reporting Standards (IFRSs).
The profit before charging interest,
tax, depreciation, amortisation, share-based payment charges,
other, non-recurring income and exceptional costs (adjusted EBITDA)
is presented in the income statement as the Directors consider this
performance measure provides a more accurate indication of the
underlying performance of the Company and is commonly used by City
analysts and investors.
The preparation of financial
statements requires management to exercise its judgement in the
process of applying accounting policies. The areas involving a
higher degree of judgement, or areas where assumptions and
estimates are significant to the financial information, are
disclosed in note 3.
The presentational and functional
currency of the Company is sterling. Results in these financial
statements have been prepared to the nearest £1,000.
2.2. Basis of consolidation
The consolidated financial
information incorporates the financial information of Dianomi Plc
and all of its subsidiary undertakings. Subsidiary undertakings
include entities over which the Group has effective control, being
Dianomi Inc. and Dianomi Pty Ltd. The Group controls a group when
it is exposed to, or has right to, variable returns from its
involvement with the Group and has the ability to affect those
returns through its power over the Group. In assessing control, the
Group takes into consideration potential voting rights.
2.3. Going concern
At the time of approving the
financial statements, the Directors have a reasonable expectation
that the Company has adequate resources to continue in operational
existence for the foreseeable future. At 31 December 2023 the
Company had cash and cash equivalents of £7.7 million (2022: £11.7
million) and net current assets of £8.6 million (2022: £11.8
million). The Group has no debt outstanding or facilities in place
(2022: £nil).
The Directors have prepared detailed
cash flow forecasts for the next 18 months that indicate the
existing activities of the Group do not require additional funding
during that period. The forecasts are challenged by various
downside scenarios such as the loss of a major publisher, margin
erosion or no new business to stress test the estimated future cash
position. The Directors are pleased to note that the stress tests
did not have a significant impact on the cash flow or cash position
of the Group. In addition, current trading is in line with the
forecast.
2.4. Material accounting
policies
2.4.1. Revenue
The Group's customers are direct
advertisers, affiliate advertisers and advertising agencies with
whom the Group will enter into a contract or insertion
order.
The Group generates revenue by
charging advertisers for advertising campaigns delivered through
its platform. The customer's total spend on advertising is
determined by multiplying an agreed performance metric option, such
as cost per mil (CPM), cost per impression (CPI), cost per click
(CPC) or cost per action (CPA) with the volumes of units delivered.
Revenue is recognised on completion of the performance criteria
which, in most cases, is when an internet user clicks through to an
advertisement that has been displayed on a web page.
Where advanced payments are made in
advance of satisfying the performance obligation, these amounts are
transferred to deferred revenue (contract liabilities) and
recognised when the performance obligation has been met.
The Group's payment terms vary
between 30 to 120 days of receipt of invoice dependent on
advertiser.
The Group does not adjust the
transaction price for the time value of money as it does not expect
to have any contracts where the period between the transfer of the
promised services to the client and the payment by the client
exceeds one year.
2.4.2. Cost of sales
Cost of sales represents the direct
expenses that are attributable to the services sold. They consist
primarily of payments to publishers under the terms of the revenue
share agreements that the Group has with them. Depending on the
terms of the revenue share agreements, cost of sales can include
commissions where applicable.
In limited instances, the Company
incurs costs with publishers based on a guaranteed minimum rate of
payment from the Company in exchange for guaranteed placement of
the Company's promoted recommendations on specified portions of the
publisher's online properties. These guaranteed rates are typically
either a minimum monthly payment or a minimum CPM and are
recognised as an expense as incurred.
2.4.3. Taxation
Current tax is the tax currently
payable based on the taxable profit for the year.
The Group recognises current tax
assets and liabilities of entities in different jurisdictions
separately as there is no legal right of offset.
The Group's US subsidiary does not
charge US sales tax on its services as it provides non-taxable
services.
Deferred tax is provided in full on
temporary differences between the carrying amounts of assets and
liabilities and their tax bases, except when, at the initial
recognition of the asset or liability, there is no effect on
accounting or taxable profit or loss under a business combination.
Deferred tax is determined using tax rates and laws that have been
substantially enacted by the statement of financial position date,
and that are expected to apply when the temporary difference
reverses.
Tax losses available to be carried
forward, and other tax credits to the Group, are recognised as
deferred tax assets, to the extent that it is probable that there
will be future taxable profits against which the temporary
differences can be utilised.
Changes in deferred tax assets or
liabilities are recognised as a component of the tax expense in the
statement of comprehensive income, except where they relate to
items that are charged or credited directly to equity, in which
case the related deferred tax is also charged or credited directly
to equity.
2.4.4. Development
costs
Costs relating to the ongoing
support and development of the Group's platform are recognised as
an expense in profit and loss as incurred.
2.4.5. Foreign currency
translation
a) Function and
presentational currency
Items included in the financial
information of each of the Group's entities are measured using the
currency of the primary economic environment in which the entity
operates ('the functional currency'). The consolidated financial
information is presented in 'sterling', which is the Company's
functional currency and the Group's presentation
currency.
On consolidation, the results of
overseas operations are translated into sterling at rates
approximating to those ruling when the transactions took place. All
assets and liabilities of overseas operations are translated at the
rate ruling at the reporting date. Exchange differences arising on
translating the opening net assets at opening rate and the results
of overseas operations at actual rate are recognised in other
comprehensive income.
b) Transactions
and balances
Foreign currency transactions are
translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in
the income statement.
2.4.6. Cash and cash
equivalents
Cash is represented by cash in hand
and deposits with financial institutions.
2.4.7. 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 in
accordance with the substance of the contractual arrangement.
Financial instruments are recognised on trade date when the Group
becomes a party to the contractual provisions of the instrument.
Financial instruments are recognised initially at fair value plus,
in the case of a financial instrument not a fair value through
profit and loss, transaction costs that are directly attributable
to the acquisition or issue of the financial instrument. Financial
instruments are derecognised on the trade date when the Group is no
longer a party to the contractual provisions of the
instrument.
Non-derivative financial instruments
comprise trade and other receivables, cash and cash equivalents,
loans and borrowings and trade and other payables. All financial
instruments held are classified as loans and
receivables.
a) Trade and other receivables and trade and other
payables
Trade and other receivables are
recognised initially at transaction price less attributable
transaction costs. Trade and other payables are recognised
initially at transaction price plus attributable transaction costs.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method, less any expected credit
losses in the case of trade receivables. If the arrangement
constitutes a financing transaction, for example if payment is
deferred beyond normal business terms, then it is measured at the
present value of future payments discounted at a market rate of
interest for a similar debt instrument.
b) Contract liabilities
A contract liability is recognised
if a payment is received or a payment is due (whichever is earlier)
from a customer before the Group transfers the related services.
Contract liabilities are recognised as revenue when the performance
obligation has been met.
c) Interest-bearing borrowings
Interest-bearing borrowings are
recognised initially at the present value of future payments
discounted at a market rate of interest. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised
costs using the effective interest method, less any impairment
losses.
d) Cash and cash equivalents
Cash and cash equivalents comprise
cash balances and call deposits.
e) Derivative financial instruments
Derivative financial instruments
comprise economic hedges. Hedge accounting is not applied to
derivative instruments that economically hedge financial assets and
liabilities denominated in foreign currencies. Changes in the fair
value of such derivatives are recognized in profit or loss under
financing income or expenses.
2.4.8. Leases
The Group leases property in the UK,
US and Australia.
All leases are accounted for by
recognising a right-of-use asset and a lease liability except
for:
- Leases
of low value assets; and
- Leases
with a duration of twelve months or less.
These leases are recognised as an
expense on a straight-line basis over the term of the
lease.
Lease liabilities are measured at
the present value of contractual payments due to the lessor over
the lease term, with the discount rate determined by reference to
the rate inherent in the lease unless (as is typically the case)
this is not readily determinable, in which case the Group's
incremental borrowing rate on commencement of the lease is used.
This was 3.0 per cent. in the periods under review. Variable lease
payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the
initial measurement of the lease liability assumes the variable
element will remain unchanged throughout the lease term. Other
variable lease payments are expensed in the period to which they
relate.
Right-of-use assets are initially
measured at the amount of the lease liability, reduced for any
lease incentives received, and increased for:
- Lease
payments made at or before commencement of the lease;
- Initial direct costs incurred; and
- The
amount of any provision recognised where the Group is contractually
required to dismantle, remove or restore the leased asset
(typically leasehold dilapidations).
Subsequent to initial measurement
lease liabilities increase as a result of interest charged at a
constant rate on the balance outstanding and are reduced for lease
payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease or over the remaining
economic life of the asset if, rarely, this is judged to be shorter
than the lease term.
No lease modification or
reassessment changes have been made during the reporting period
from changes in any lease terms or rent charges.
2.4.9. Earnings per
share
The Group presents basic and
diluted earnings per share on an IFRS basis. In calculating the
weighted average number of shares outstanding during the period,
any share restructuring is adjusted to allow comparability with
other periods. The calculation of diluted earnings per share
assumes conversion of all potentially dilutive ordinary shares,
which arise from share options outstanding.
2.4.10. Financing
income and expenses
Financing expenses comprise
interest payable, finance charges on shares classified as
liabilities and leases recognised in the income statement using the
effective interest method, unwinding of the discount on provisions,
and not foreign exchange losses that are recognised in the
statement of comprehensive income.
Financing income includes interest
receivable on funds invested. Interest income and interest payable
are recognised in the statement of comprehensive income as they
accrue, using the effective interest method.
2.4.11.
Reorganisation costs
Items which are material because of
their size or nature and which are non-recurring are highlighted
separately on the face of the consolidated statement of
comprehensive income. The separate reporting of exceptional
items helps provide a better picture of the Group's underlying
performance. Items which have been included within this
category are the costs relating the reorganisation which took place
in 2023.
Reorganisation costs are excluded
from the headline profit measures used by the Group and are
highlighted separately in the consolidated statement of
comprehensive income as management believe that they need to be
considered separately to gain an understanding the underlying
profitability of the trading businesses.
2.4.12. Employee
benefits
Post-retirement benefits
The Group operates a defined
contribution plan for its employees. A defined contribution plan is
a pension plan under which the Group pays fixed contributions into
a separate entity. Once the contributions have been paid the Group
has no further payment obligations.
The contributions are recognised as
an expense in administrative expenses in the Consolidated Statement
of Comprehensive Income when they fall due. Amounts not paid are
shown in accruals as a liability in the Statement of Financial
Position. The assets of the plan are held separately from the Group
in independently administered funds.
Share-based payments
Where share options are awarded to
employees, the fair value of the options at the date of grant is
charged to profit or loss over the vesting period. Non-market
vesting conditions are taken into account by adjusting the number
of equity instruments 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.
The fair value of the award also
takes into account non-vesting conditions. These are either factors
beyond the control of either party (such as a target based on an
index) or factors which are within the control of one or other of
the parties (such as the group keeping the scheme open or the
employee maintaining any contributions required by the
scheme).
Where the terms and conditions of
options are modified before they vest, the increase in the fair
value of the options, measured immediately before and after the
modification, is also charged to profit or loss over the remaining
vesting period. If a modification results in a reduction in the
number of options granted, then this results in an acceleration of
the vesting period and therefore any amount unrecognised that would
otherwise have been charged is charged to profit or loss
immediately.
Where equity instruments are granted
to persons other than employees, profit or loss is charged with the
fair value of goods and services received.
2.5. Standards issued but not yet
effective
The IASB and IFRIC have issued the
following relevant standards and interpretations with effective
dates as noted below:
|
Standard
|
Key
Requirements
|
Effective date (for annual periods beginning on or
after)
|
|
Amendments to IAS 1 Presentation of
Liabilities as Current or Non-current
|
The amendments clarify how
conditions with which an entity must comply within twelve months
after the reporting period affect the classification of a
liability.
|
1 January 2024
|
|
Amendments to IFRS 16 Lease
Liability in a Sale and Leaseback
|
The amendments clarify how a
seller-lessee subsequently measures sale and leaseback transactions
that satisfy the requirements in IFRS 15 to be accounted for as a
sale.
|
1 January 2024
|
|
Amendments to IAS 1 Non-Current
Liabilities with Covenants
|
The amendment clarifies how
conditions with which an entity must comply within twelve months
after the reporting period affect the classification of a
liability.
|
1 January 2024
|
|
Amendments to IAS 21 The Effects of
Changes in Foreign Exchange Rates
|
The amendments clarify when a
currency is exchangeable into another currency and how a company
estimates a spot rate when a currency lacks
exchangeability.
|
1 January 2025
|
The new standards, listed above, are
not expected to have a material impact on the Group in the current
or future reporting periods and on foreseeable future
transactions.
2.6. Alternative performance
measures
In order to provide better clarity
to the underlying performance of the Group, adjusted EBITDA and
adjusted earnings per share are used as alternative performance
measures. These measures are not defined under IFRS. These non-GAAP
measures are not intended to be a substitute for, or superior to,
any IFRS measures of performance, but have been included as the
Directors consider adjusted EBITDA and adjusted earnings per share
to be key measures used within the business for assessing the
underlying performance of the Group's ongoing business across
periods. Adjusted EBITDA excludes from operating profit non-cash
depreciation, share-based payment charges, other, non-recurring
income and non-recurring exceptional costs. Adjusted EPS excludes
from profit after tax share-based payment charges, other,
non-recurring income and non-recurring exceptional items and their
related tax impacts. Please refer to note 8 for reconciliations to
Alternative Performance Measures ("APMs").
3. Judgements and key sources of
estimation uncertainty
The preparation of the consolidated
financial information requires the Directors to make estimates and
judgements that affect the reported amounts of assets, liabilities,
costs and revenue in the consolidated financial information. Actual
results could differ from these estimates. The judgements,
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
The judgements and key sources of estimation uncertainty that have
a significant effect on the amounts recognised in the consolidated
financial information are:
Estimations:
- Share-based
payments: the Group measures the
cost of equity-settled transactions with employees by reference to
the fair value of equity instruments at the date at which they are
granted. The fair value is determined by using the Black-Scholes
model taking into account the terms and conditions upon which the
instruments were granted and requires assumptions to be made in
particular the value of the shares at the date of options granted.
Management have had to apply judgement when selecting
assumptions.
- Receivables
provision: the Group reviews the
amount of credit loss associated with its trade receivables,
intercompany receivables and other receivables based on historical
default rates as well as forward looking estimates that consider
current and forecast credit conditions.
Judgements:
- Deferred tax:
the extent to which deferred tax assets can be
recognised is based on an assessment of the probability that future
taxable income will be available against which the deductible
temporary differences and tax loss carry-forwards can be utilised.
In addition, significant judgement is required in assessing the
impact of any legal or economic limits or uncertainties.
- Going concern:
The financial statements have been prepared on the
going concern basis based on a judgement by the Directors that the
Group will continue to be able to meet its liabilities as they fall
due for the foreseeable future, being a period of at least 18
months from the date of signing these financial statements. In this
context, the Directors have prepared detailed cash flow forecasts
for the next 18 months that indicate the existing activities of the
Group do not require additional funding during that period. The
forecasts were challenged by various downside scenarios to stress
test the estimated future cash position. The Directors note that
the stress tests did not have a significant impact on the cash flow
or cash position of the Group. In addition, current trading is in
line with the forecast.
- Treatment of costs incurred
in relation to the reorganisation:
The Group has recorded significant one-off costs in respect of the
reorganisation undertaken in the year ended 31 December 2023
including consultancy, legal and employee settlement costs. The
Directors reviewed the reasonableness and inclusion of these items
in operating adjusted items and the disclosures in the Annual
Report.
3. Revenue
Revenue arises
from:
|
|
|
Year
to
31
Dec 2023
|
Year
to
31 Dec
2022
|
|
|
|
£000
|
£000
|
|
|
|
|
|
|
EMEA
|
|
4,811
|
6,591
|
|
United States of America
|
|
24,428
|
28,317
|
|
APAC
|
|
915
|
1,007
|
|
|
|
======================================================
|
======================================================
|
|
|
|
30,154
|
35,915
|
|
|
|
======================================================
|
======================================================
|
4. Operating
segments
The Group is operated as one global
business by its executive team, with key decisions being taken by
the same leaders irrespective of the geography where work for
clients is carried out. The Directors consider that the geographies
where the Group operates have similar economic and operating
characteristics and the products and services provided in each
region are all related to premium native
advertising. Management therefore consider that the Group has one operating
segment. The Group report is presented and measured to
the Board as a single segment and is consistent with
the financial statements. As such, no additional
disclosure has been recorded under IFRS 8.
6. Other
income
|
|
|
Year
to
31
Dec 2023
|
Year
to
31 Dec
2022
|
|
|
|
£000
|
£000
|
|
Other income
|
|
-
|
167
|
|
|
|
======================================================
|
======================================================
|
Other income in the year ended 31
December 2022 related to
a tax refund as a result of an R&D tax
credit.
7. Administrative
expenses
|
|
|
Year
to
31
Dec 2023
|
Year
to
31 Dec
2022
|
|
|
|
£000
|
£000
|
|
|
|
|
|
|
Direct staff costs
|
|
4,476
|
5,167
|
|
IT and software costs
|
|
1,511
|
1,273
|
|
Legal and professional
|
|
734
|
754
|
|
Rent
|
|
146
|
239
|
|
Insurance
|
|
268
|
186
|
|
Depreciation - leased
assets
|
|
213
|
107
|
|
Foreign exchange
(gains)/losses
|
|
(39)
|
33
|
|
Share-based payments
|
|
312
|
526
|
|
Other administrative
expenses
|
|
708
|
696
|
|
|
|
======================================================
|
======================================================
|
|
|
|
8,329
|
8,981
|
|
|
|
======================================================
|
======================================================
|
|
|
|
|
| |
During the year the Group obtained
the following services from the Company's auditors as detailed
below:
|
|
|
Year
to
31
Dec 2023
|
Year
to
31 Dec
2022
|
|
|
|
£000
|
£000
|
|
|
|
|
|
|
Audit fees
|
|
128
|
118
|
|
Other services:
|
|
|
|
|
Tax compliance
|
|
10
|
19
|
|
Agreed upon procedures on interim
results
|
|
17
|
15
|
|
|
|
======================================================
|
======================================================
|
|
|
|
155
|
152
|
|
|
|
======================================================
|
======================================================
|
8. Reconciliations to
alternative profit measures
In order to provide better clarity
to the underlying performance of the Group, Dianomi uses adjusted
EBITDA and adjusted earnings per share as alternative performance
measures. These measures are not defined under IFRS. These non-GAAP
measures are not intended to be a substitute for, or superior to,
any IFRS measures of performance, but have been included as the
Directors consider adjusted EBITDA and adjusted earnings per share
to be key measures used within the business for assessing the
underlying performance of the Group's ongoing business across
periods. Adjusted EBITDA excludes non-cash depreciation charges,
share-based payment charges, other, non-recurring income and
non-recurring exceptional costs from operating (loss)/profit.
Adjusted EPS excludes share-based payment charges, other,
non-recurring income and non-recurring exceptional items and their
related tax impacts from profit after tax.
The table below sets out the
reconciliation of the Group's adjusted EBITDA and adjusted
(loss)/profit before tax from (loss)/profit before tax.
|
|
|
Year
to
31
Dec 2023
|
Year
to
31 Dec
2022
|
|
|
|
£000
|
£000
|
|
|
|
|
|
|
|
|
======================================================
|
======================================================
|
|
(Loss)/profit before tax
|
|
(1,819)
|
1,147
|
|
|
|
======================================================
|
======================================================
|
|
Adjusting items:
|
|
|
|
|
Reorganisation costs
|
|
1,054
|
-
|
|
Share-based payments
|
|
312
|
526
|
|
Other income
|
|
-
|
(167)
|
|
|
|
======================================================
|
======================================================
|
|
Adjusted (loss)/profit before tax
|
|
(453)
|
1,506
|
|
|
|
======================================================
|
======================================================
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
213
|
107
|
|
Net finance income
|
|
(112)
|
(37)
|
|
|
|
======================================================
|
======================================================
|
|
Adjusted EBITDA
|
|
(352)
|
1,576
|
|
|
|
======================================================
|
======================================================
|
|
|
|
|
|
The table below sets out the
reconciliation of the Group's adjusted (loss)/profit after tax to
adjusted (loss)/profit before tax.
|
|
|
======================================================
|
======================================================
|
|
Adjusted (loss)/profit before tax
|
|
(453)
|
1,506
|
|
|
|
======================================================
|
======================================================
|
|
|
|
|
|
|
|
|
|
|
|
Tax expense
|
|
(1,097)
|
(662)
|
|
Derecognition of deferred tax
asset
|
|
675
|
|
|
Tax impact of adjusting
items
|
|
(55)
|
(68)
|
|
|
|
======================================================
|
======================================================
|
|
Adjusted (loss)/profit after tax
|
|
(930)
|
776
|
|
|
|
======================================================
|
======================================================
|
|
|
|
|
|
Adjusted (loss)/profit after tax is
used in calculating adjusted basic and adjusted diluted EPS.
Adjusted (loss)/profit after tax is stated before adjusting items
and their associated tax effects. Adjusted EPS is calculated by
dividing the adjusted (loss)/profit after tax for the period
attributable to Ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period. Adjusted
diluted EPS is calculated by dividing adjusted (loss)/profit after
tax by the weighted average number of shares adjusted for the
impact of potential ordinary shares. Potential Ordinary shares are
treated as dilutive when their conversion to Ordinary shares would
decrease EPS. Please refer to note 13 for further
detail.
9. Employee
information
The average number of persons
employed by the Group (including directors) during the year,
analysed by category, was as follows:
|
|
Year
to
31 Dec
2023
|
Year
to
31 Dec
2022
|
|
|
Number
|
Number
|
|
Directors
|
6
|
7
|
|
Employees
|
36
|
39
|
|
|
----------------------------------------------------
|
----------------------------------------------------
|
|
|
42
|
46
|
|
|
======================================================
|
======================================================
|
The aggregate payroll costs of these
persons (including directors) were as follows:
|
|
Year
to
31 Dec
2023
|
Year
to
31 Dec
2022
|
|
|
£000
|
£000
|
|
Wages and salaries
|
3,965
|
4,537
|
|
Social security costs
|
464
|
569
|
|
Pension costs
|
47
|
61
|
|
Share-based payment
expense
|
312
|
526
|
|
|
----------------------------------------------------
|
----------------------------------------------------
|
|
|
|
4,788
|
5,693
|
|
|
|
=====================================================
|
=====================================================
|
|
|
|
|
|
| |
A defined contribution pension
scheme is operated by a third party and the Group pays
contributions on behalf of the employees. The assets of the scheme
are held separately from those of the Group in an independently
administered fund. The pension charge represents contributions
payable by the Group to the fund. Contributions amounting to £nil
were payable to the fund at the end of 2023 (2022:
£nil).
Key management personnel include
employees across the Group who together have authority and
responsibility for planning, directing and controlling the
activities of the Group. Key management personnel are considered to
be the executive directors of the Group and details regarding their
remuneration are set out below:
|
|
FY23
|
|
|
Salary
|
Notice
and Termination Payment
|
Benefits
|
Pension
|
Total
|
|
Name
|
£'000s
|
£'000s
|
£'000s
|
£'000s
|
£'000s
|
|
Rupert Hodson
|
190
|
-
|
11
|
2
|
203
|
|
Charlotte Stranner
|
180
|
-
|
-
|
1
|
181
|
|
Raphael Queisser[1]
|
37
|
221
|
2
|
1
|
261
|
|
Robert Cabell de
Marcellus[1]
|
37
|
225
|
-
|
1
|
263
|
|
Total
|
444
|
446
|
13
|
5
|
908
|
|
|
FY22
|
|
|
Salary
|
Bonus/ Commission
|
Benefits
|
Pension
|
Total
|
|
Name
|
£'000s
|
£'000s
|
£'000s
|
£'000s
|
£'000s
|
|
Rupert Hodson
|
220
|
-
|
11
|
2
|
233
|
|
Charlotte Stranner
|
180
|
-
|
-
|
1
|
181
|
|
Raphael Queisser[1]
|
220
|
-
|
7
|
3
|
230
|
|
Robert Cabell de
Marcellus[1]
|
220
|
-
|
2
|
4
|
226
|
|
Total
|
840
|
-
|
20
|
10
|
870
|
[1] Raphael Queisser and Robert
Cabell de Marcellus stepped down from the board and from their
positions as COO and CTO respectively on 15 March
2023.
The highest paid director received
remuneration of £203k (2022: £233k). No share options were
exercised by the directors in the year (2022: nil).
10. Finance income and
expense
|
|
Year
to
31 Dec
2023
|
Year
to
31
Dec 2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Interest received
|
115
|
41
|
|
|
----------------------------------------------
|
----------------------------------------------
|
|
Total finance income
|
115
|
41
|
|
|
============================================
|
============================================
|
|
|
|
|
|
On lease liability
|
3
|
4
|
|
|
----------------------------------------------
|
----------------------------------------------
|
|
Total finance expense
|
3
|
4
|
|
|
============================================
|
==============================================
|
11. Taxation
|
|
Year
to
31 Dec
2023
|
Year
to
31 Dec
2022
|
|
|
£000
|
£000
|
|
UK
corporation tax
|
|
|
|
Current tax on (loss)/profit for the
year
|
-
|
-
|
|
Adjustments in respect of prior
periods
|
-
|
-
|
|
|
-----------------------------------------------
|
-----------------------------------------------
|
|
|
-
|
-
|
|
|
=================================================
|
=================================================
|
|
Foreign tax
|
|
|
|
Foreign tax on (loss)/profit for the
year
|
422
|
662
|
|
|
-----------------------------------------------
|
-----------------------------------------------
|
|
Total current tax
|
422
|
662
|
|
|
=================================================
|
=================================================
|
|
Deferred tax
|
|
|
|
Origination and reversal of timing
differences
|
675
|
-
|
|
|
-----------------------------------------------
|
-----------------------------------------------
|
|
Total deferred tax
|
675-
|
--
|
|
|
=================================================
|
=================================================
|
|
|
-----------------------------------------------
|
-----------------------------------------------
|
|
Taxation on (loss)/profit on ordinary
activities
|
1,097
|
662
|
|
|
=================================================
|
=================================================
|
Reconciliation of tax
expense
The tax assessed on the
(loss)/profit on ordinary activities for the year is
higher than (2022: higher than) the standard rate
of corporation tax in the UK of 23.52%[1] (2022: 19%).
|
|
Year
to
31 Dec
2023
|
Year
to
31 Dec
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
(Loss)/profit on ordinary activities
before taxation
|
(1,819)
|
1,147
|
|
|
=======================================================
|
=======================================================
|
|
|
|
|
|
(Loss)/profit on ordinary activities
multiplied by standard rate of corporation tax in the UK of
23.52%[1] (2022: 19%)
|
(428)
|
218
|
|
|
|
|
|
Effects of:
|
|
|
|
Expenses not deductible for tax
purposes
|
127
|
16
|
|
Foreign tax
|
-
|
321
|
|
Difference in tax rates
|
(38)
|
-
|
|
Deferred tax not
recognised
|
1,436
|
107
|
|
|
|
|
|
|
=======================================================
|
=======================================================
|
|
Tax on (loss)/profit
|
1,097
|
662
|
|
|
=======================================================
|
======================================================
|
|
|
|
|
[1]
the standard
rate of corporation tax in the UK increased from 19% to 25% in
April 2023 hence a blended rate of 23.52% has been used for
2023.
A total of £946k was paid during
the year with respect to US tax relating to both 2022 and 2023
(2022: £436k), offset by a net credit received in relation to
Australian tax of £35k (2022: £nil) and a UK corporation tax credit
of £4k respectively (2022: credit of £167k).
12. Deferred tax
|
Deferred tax asset
|
|
|
|
|
|
As
at
31 Dec
2023
|
As
at
31 Dec
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Tax losses
|
-
|
675
|
|
|
============= ===========================
|
========================================
|
|
|
|
|
|
| |
The Company has an unrecognised
deferred tax asset of £2,763k calculated at 25% (gross £11,055k)
(FY22: 25%, gross amount £5,748k) in respect of losses carried
forward to future years. Given the uncertainty of the timing
as to when the losses will be utilised the Directors have decided
to take a cautious approach and derecognise the deferred tax
asset brought forward.
13. Earnings per share
The Group presents non-adjusted
and adjusted basic and diluted (loss)/earnings per share (EPS) for
its ordinary shares. Basic EPS is calculated by dividing the
(loss)/profit for the period attributable to ordinary shareholders
by the weighted average number of ordinary shares outstanding
during the period.
Diluted EPS takes into
consideration the Company's dilutive contingently issuable shares.
The weighted average number of ordinary shares used in the diluted
EPS calculation is inclusive of the number of share options that
are expected to vest subject to performance criteria as
appropriate, being met.
The (loss)/profit and weighted
average number of shares used in the calculations are set out
below:
|
|
Year
to
31 Dec
2023
|
Year
to
31 Dec
2022
|
|
|
£000
|
£000
|
|
(Loss)/profit attributable to the
ordinary equity holders of the Group used in calculating basic and
diluted EPS
|
(2,916)
|
485
|
|
|
|
|
|
Basic (loss)/earnings per
ordinary share (p)
|
(9.71)
|
1.62
|
|
Diluted (loss)/earnings per
ordinary share
(p)
|
(9.71)
|
1.46
|
|
|
Year
to
31 Dec
2023
|
Year
to
31 Dec
2022
|
|
Adjusted basic and diluted
EPS
|
£000
|
£000
|
|
|
|
|
|
Reconciliation of earnings used in
calculating adjusted EPS:
|
|
|
|
(Loss)/profit attributable to the
ordinary equity holders of the Group used in calculating basic and
diluted EPS
|
(2,916)
|
485
|
|
Adjusting items:
|
|
|
|
Share-based payments
|
312
|
526
|
|
Reorganisation costs
|
1,054
|
-
|
|
Other income
|
-
|
(167)
|
|
Derecognition of deferred tax
asset
|
675
|
-
|
|
|
|
|
|
Tax impact of adjusting
items
|
(55)
|
(68)
|
|
|
======================================================
|
======================================================
|
|
(Loss)/profit attributable to the
ordinary equity holders of the Group used in calculating adjusted
basic and diluted EPS
|
(930)
|
776
|
|
|
|
|
|
Adjusted basic (loss)/earnings per
ordinary share (p)
|
(3.10)
|
2.58
|
|
Adjusted diluted (loss)/earnings
per ordinary share (p)
|
(3.10)
|
2.34
|
|
|
|
Year
to
31 Dec
2023
|
Year
to
31 Dec
2022
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
ordinary shares used as the denominator in calculating non-adjusted
and adjusted basic EPS
|
|
30,027,971
|
30,027,971
|
|
Weighted average share option
dilution impact
|
|
1,642,490
|
3,184,268
|
|
|
|
==============================================================
|
===============================================================
|
|
Weighted average number of
ordinary shares used as the denominator in calculating non-adjusted
and adjusted diluted EPS
|
|
31,670,461
|
33,212,239
|
14. Right-of-use assets
|
|
|
Leased
property
|
|
|
|
£000
|
|
Cost
|
|
|
|
At 1 January 2022
|
|
257
|
|
Additions
|
|
320
|
|
|
|
===================================================
|
|
At 31 December 2022
|
|
577
|
|
|
|
==================================================
|
|
At 1 January 2023
|
|
577
|
|
Additions
|
|
-
|
|
|
|
===================================================
|
|
At 31 December 2023
|
|
577
|
|
|
|
==================================================
|
|
Depreciation
|
|
|
|
At 1 January 2022
|
|
257
|
|
Depreciation charge
|
|
107
|
|
|
|
===================================================
|
|
At 31 December 2022
|
|
364
|
|
|
|
==================================================
|
|
At 1 January 2023
|
|
364
|
|
Depreciation charge
|
|
213
|
|
|
|
===================================================
|
|
At 31 December 2023
|
|
577
|
|
|
|
===================================================
|
|
|
|
|
|
|
| |
|
Net
book value
|
|
|
|
At 31 December 2022
|
|
213
|
|
At 31 December 2023
|
|
-
|
In 2022 the Company entered into an
18-month lease for its serviced office premises in London. The
total payments due under the term of the lease amounted to £0.3
million. Lease liabilities in respect of right-of-use assets were
nil as at 31 December 2023 (2022: £0.2 million). The discount rate
used in determining the present value of the lease liability was
3%. The interest expense recognised in the statement of
comprehensive income for the year ended 31 December 2023 was £3k
(2022: £4k). In December 2023 the Company entered into a new
12-month lease agreement for its serviced office premises in London
which commenced 1 January 2024.
15. Subsidiaries
The undertakings in which the
Group's interest at the year-end is 20 per cent. or more are as
follows:
|
Subsidiary
undertakings
|
Country of
incorporation
|
Principal
activity
|
At 31
Dec
2023
|
At 31 Dec
2022
|
|
|
|
|
|
|
|
Dianomi Inc
|
United States
|
Business support
services
|
100%
|
100%
|
|
Dianomi PTY
|
Australia
|
Business support
services
|
100%
|
100%
|
The registered office of Dianomi Inc
is Corporate Service Bureau Inc., 28 Old Rudnick Lane, Dover,
Delaware,19901. The registered office of Dianomi PTY is ALM
Williams Partners, Level 2, 570 St Kilda Road, Melbourne, VIC
3004.
16. Trade and other
receivables
|
|
As
at
31 Dec
2023
|
As
at
31 Dec
2022
|
|
|
£000
|
£000
|
|
Current
|
|
|
|
Trade receivables
|
8,081
|
7,488
|
|
Prepayments
|
145
|
116
|
|
Loan receivable
|
5
|
52
|
|
Other receivables
|
108
|
218
|
|
|
----------------------------------------------
|
----------------------------------------------
|
|
|
8,339
|
7,874
|
|
|
==============================================
|
==============================================
|
All of the trade receivables were
non-interest bearing and receivable under normal commercial terms.
The directors consider that the carrying value of trade and other
receivables approximates to their fair value.
The loan receivable balances relate
to a loan owed from Buckingham Gate Financial Services Limited, a
shareholder and related party. The loan accrues annual interest at
4%.
The expected credit loss on trade
and other receivables was not material at the current or prior year
end. For analysis of the maximum exposure to credit risk, please
refer to note 21.
The impairment loss recognised in
the income statement for the period in respect of bad and doubtful
trade receivables was £35k (2022: £52k).
The ageing of trade receivables is
detailed below:
As at 31 December
2023
|
|
< 30
days
|
< 60
days
|
< 90
days
|
< 180
days
|
> 180
days
|
Total
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
Gross carrying amount
|
3,316
|
2,312
|
1,047
|
797
|
609
|
8,081
|
|
|
===============================================
|
==============================================
|
============================================
|
============================================
|
==============================================
|
=================================================
|
As at 31 December
2022
|
|
< 30
days
|
< 60
days
|
< 90
days
|
< 180
days
|
> 180
days
|
Total
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
Gross carrying amount
|
3,626
|
1,743
|
814
|
456
|
849
|
7,488
|
|
|
===============================================
|
==============================================
|
============================================
|
============================================
|
==============================================
|
=================================================
|
17. Cash and cash
equivalents
|
|
As at 31
Dec
2023
|
As at 31
Dec 2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Cash at bank and in hand
|
7,740
|
11,663
|
|
|
============================================
|
==============================================
|
Cash at bank earns interest at floating rates
based on bank deposit rates.
18. Trade and other
payables
|
|
As at 31
Dec
2023
|
As at 31
Dec 2022
|
|
|
£000
|
£000
|
|
Current liabilities
|
|
|
|
Trade payables
|
4,221
|
3,035
|
|
Other taxes and social security
costs
|
37
|
116
|
|
Contract liabilities
|
-
|
104
|
|
Other payables and
accruals
|
3,383
|
4,793
|
|
|
----------------------------------------------
|
----------------------------------------------
|
|
|
7,641
|
8,048
|
|
|
============================================
|
=============================================
|
The fair value of trade and other
payables approximates to book value at each year end. Trade
payables are non-interest bearing and are normally settled
monthly.
19. Lease liabilities
|
|
As at 31
Dec
2023
|
As at 31
Dec
2022
|
|
|
£000
|
£000
|
|
Current liabilities
|
|
|
|
Lease liabilities
|
|
|
|
|
-
|
219
|
|
|
--------------------------------------------
|
--------------------------------------------
|
|
|
-
|
219
|
|
|
==========================================
|
==========================================
|
The Group leases an office building
in London for use by its staff. The discount rate used in
determining the present value of lease liabilities was the Group's
incremental borrowing rate of 3%. The interest expense recognised
in the consolidated statement of comprehensive income for the year
ended 31 December 2023 was £3k (2022: £4k). Payments of £222k
(2022: £106k) in respect of rental payments paying down lease
liabilities have been recognised in the consolidated statement of
cash flows. In December 2023 the Company entered into a new
12-month lease agreement for its serviced office premises in London
which commenced 1 January 2024.
The office leases in the US and
Australia are considered short term as the lease terms are 12
months or less. The total amount recorded in the consolidated
statement of comprehensive income in respect of short-term leases
is £145k (2022: £239k). Remaining commitments on short term leases
are recorded below.
|
|
As at 31
Dec
2023
|
As at 31
Dec 2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Within one year
|
29
|
27
|
|
|
--------------------------------------------
|
--------------------------------------------
|
|
|
29
|
27
|
|
|
==========================================
|
==============================================
|
19. Financial instruments
The Group's and Company's financial
instruments may be analysed as follows:
|
|
As at 31
Dec
2023
|
As at 31
Dec 2022
|
|
|
£000
|
£000
|
|
Financial assets
|
|
|
|
Financial assets measured at
amortised cost:
|
|
|
|
Cash at bank and in hand
|
7,740
|
11,663
|
|
Trade receivables
|
8,081
|
7,488
|
|
Loan receivable
|
5
|
52
|
|
Other receivables
|
108
|
218
|
|
|
===============================================
|
===============================================
|
|
|
15,934
|
19,421
|
|
|
===============================================
|
===============================================
|
|
Financial liabilities
|
|
|
|
Financial liabilities measured at
amortised cost:
|
|
|
|
Trade payables
|
4,221
|
3,035
|
|
Other payables and
accruals
|
3,383
|
4,793
|
|
|
===============================================
|
===============================================
|
|
|
7,604
|
7,828
|
|
|
===============================================
|
==============================================
|
The Group's income, expense, gains
and losses in respect of financial assets measured at fair value
through profit or loss realised a fair value loss of £nil (2022:
gain of £nil).
21. Financial risk
management
The Group and Company is exposed to
a variety of financial risks through its use of financial
instruments which result from its operating activities. All of the
Group's financial instruments are classified as loans and
receivables. The Group does not actively engage in the trading of
financial assets for speculative purposes. The most significant
financial risks to which the Group is exposed are described
below:
Credit risk
Generally, the Group's and Company's
maximum exposure to credit risk is limited to the carrying amount
of the financial assets recognised at the reporting date, as
summarised below:
|
|
As at 31
Dec
2023
|
As at 31
Dec
2022
|
|
|
£000
|
£000
|
|
Trade receivables
|
8,081
|
7,488
|
|
Other receivables
|
258
|
386
|
|
|
--------------------------------------------------
|
--------------------------------------------------
|
|
|
8,339
|
7,874
|
|
|
================================================
|
================================================
|
Credit risk is the risk of financial
risk to the Group and Company if a counter party to a financial
instrument fails to meet its contractual obligation. The nature of
the Group's and Company's debtor balances, the time taken for
payment by clients and the associated credit risk are dependent on
the type of engagement.
The Group's and Company's trade and
other receivables are actively monitored. The ageing profile of
trade receivables is monitored regularly by the Chief Financial
Officer. Any debtors over 60 days are individually reviewed by the
Chief Financial Officer every month and explanations sought for any
balances that have not been recovered. A summary of significant
trade and other receivables is provided to the Directors on a
monthly basis and any issues are brought to their
attention.
Unbilled revenue is recognised by
the Group and Company only when all conditions for revenue
recognition have been met in line with the Group's accounting
policy.
The Directors are of the opinion
that there is no material credit risk at group level.
Liquidity
risk
Liquidity risk is the risk that the
Group will encounter difficulty in meeting its obligations
associated with its financial liabilities. The Group seeks to
manage financial risks to ensure sufficient liquidity is available
to meet foreseeable needs and to invest cash assets safely and
profitably.
The tables below analyse the Group's
financial liabilities into relevant maturity groupings based on
their contractual maturities.
The amounts disclosed in the tables
are the contractual undiscounted cash flows. Balances due within 12
months equal their carrying balances, because the impact of
discounting is not significant.
Contractual maturities of financial
liabilities:
|
|
|
As at 31
December 2023
|
As at 31
December 2022
|
|
|
|
Less than
6 months representing total contractual cashflows
|
Carrying
amount of
liabilities
|
Less than
6 months representing total contractual cashflows
|
Carrying
amount of
Liabilities
|
|
|
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
7,641
|
7,641
|
8,048
|
8,048
|
|
|
|
============================================
|
============================================
|
============================================
|
============================================
|
|
Total
|
|
7,641
|
7,641
|
8,048
|
8,048
|
|
|
|
=======================================
|
============================================
|
=========================================
|
============================================
|
Interest rate
risk
As at 31 December 2023 and 2022 the
Group has no interest rate risk exposure as the Group had no debt
outstanding.
Foreign currency
risk
The Group operates internationally
and is exposed to foreign exchange risk arising from various
currency exposures, primarily US Dollars and Australian Dollars.
The Group monitors exchange rate movements closely and occasionally
enters into forward contract agreements to hedge against the
potential volatility of unfavourable foreign exchange rates. The
Group ensures adequate funds are maintained in appropriate
currencies to meet known liabilities. The Group also has trade
receivable balances in foreign currency and monitors the potential
effect of any exchange rate movements on these balances.
The Group's exposure to foreign
currency risk at the end of the respective reporting period,
expressed in Currency Units, was as follows:
|
|
|
|
|
As at 31 December
2023
CU000's
|
|
|
USD
|
CAD
|
EUR
|
AUD
|
SGD
|
|
Cash & cash
equivalents
|
8,399
|
355
|
41
|
968
|
364
|
|
|
|
|
|
As at 31 December
2022
CU000s
|
|
|
USD
|
CAD
|
EUR
|
AUD
|
SGD
|
|
Cash & cash
equivalents
|
11,017
|
1,170
|
249
|
825
|
265
|
The Group is exposed to foreign
currency risk on the relationship between the functional currencies
of the Group companies and the other currencies in which the
Group's material assets and liabilities are denominated. The table
below summaries the effect on profit and loss had the functional
currency of the Group weakened or strengthened against these other
currencies, with all other variables held constant.
|
|
As at 31
Dec
2023
|
As at 31
Dec 2022
|
|
|
£000
|
£000
|
|
|
|
|
|
10% weakening of functional
currency
|
100
|
193
|
|
|
==================================================
|
==================================================
|
|
|
|
|
|
10% strengthening of functional
currency
|
(82)
|
(160)
|
|
|
==================================================
|
========================================
|
The impact of a change of 10% has
been selected as this has been considered reasonable given the
current level of exchange rates and the volatility observed both on
a historical basis and market expectations for future
movements.
Fair value of financial
instruments
The fair values of all financial
assets and liabilities approximates their carrying
value.
Capital risk management
policy
The Group's capital management
objectives are:
· to ensure the Group's ability to continue as a going concern
in order to continue to provide returns for shareholders and
benefits for other stakeholders
· maintain an optimal capital structure to reduce the cost of
capital
The Group considers its capital
comprises share capital plus all reserves, which amounted to £8.6
million as at 31 December 2023 (2022: £11.8
million).
The Group has no debt facilities in
place as at 31 December 2023 (2022: £nil). Management assesses the
Group's capital requirements in order to maintain an efficient
overall financing structure. The Group manages the capital
structure and makes adjustments to it in the light of changes in
economic conditions and the risk characteristics of the underlying
assets.
22. Related party
disclosures
Transactions with BGF are disclosed
below:
|
|
Year
ended
31 Dec
2023
|
Year
ended
31 Dec
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Annual fee
|
50
|
50
|
|
|
================================================
|
==============================================
|
The amount due to BGF as at 31
December 2023 is £nil (2022: £77k). The annual fee relates
specifically to Matthew Singh's (a representative of BGF) services
as a Non-Executive Director.
The Group received revenues of £29k
(2022: £45k) from Buckingham Gate Financial Services Limited, a
company that is controlled by shareholders of the Company. As at 31
December 2023 there were trade receivables from Buckingham Gate
Financial Services Limited of £3k (31 December 2022: £4k). The
Group also has a loan receivable from Buckingham Gate Financial
Services Limited of £5k as at 31 December 2023 (31 December 2022:
£52k), details of which are set out in note 16. Interest receivable
of £1k accrued in the year ended 31 December 2023 (2022:
£3k).
23. Share capital
|
Ordinary Shares
|
Issued Shares
Number
|
Nominal Value
£
|
Issued Amount
£
|
|
As at 31 December 2022, 1 January
2023 and 31 December 2023
|
30,027,971
|
0.002
|
60,056
|
24. Share-based payments
At
the time of the Company's IPO in May 2021, the Dianomi introduced
share option schemes (the "IPO Option Schemes") in order to retain,
incentivise and align employees with shareholders. Under the IPO
Option Schemes employees were granted share options with an
exercise price equal to the IPO price (or for those granted post
IPO equal to the then current share price), a vesting period of 3
years and a non-market performance condition.
During the current financial year,
it became clear that the performance condition for those options
granted at IPO was not going to be met and for those options
granted in 2022 under the same scheme it was unlikely to be
met.
Therefore, it was decided that
employees who were granted options in 2021 and 2022 would be given
the option to have their original options cancelled (the
"Cancellation"), and replacement option schemes (the "Replacement
Option Schemes") would be introduced under which employees would be
issued with new options with a revised performance condition,
exercise price and extended vesting period but at a lower number
than those originally issued.
315,950 options lapsed before the
Cancellation due to employees leaving the Group as part of the
reorganisation.
242,424 options were granted in
April 2023 under the IPO Option Schemes with an exercise price of
82.5 pence were not cancelled.
1,405,601 options which were granted
under the IPO Option Schemes were cancelled in November 2023.
Simultaneously, 1,177,593 new options were issued under the
Replacement Option Schemes.
|
|
Weighted
average exercise price
(pence)
|
Number
|
Weighted
average exercise price (pence)
|
Number
|
|
|
Dec
23
|
Dec
23
|
Dec
22
|
Dec
22
|
|
|
|
|
|
|
|
Outstanding at the beginning of the
period
|
278
|
1,721,551
|
273
|
1,594,387
|
|
Granted during the period
|
55
|
1,420,017
|
335
|
134,627
|
|
Lapsed/cancelled during the
period
|
278
|
(1,721,551)
|
335
|
(7,463)
|
|
|
--------------------------------------------
|
-----------------------------------------------------------
|
-------------------------------------------------------------
|
--------------------------------------------------------
|
|
Outstanding at the end of the period
|
55
|
1,420,017
|
278
|
1,721,551
|
|
|
============================================
|
=
======================
==================================
|
============================================
|
=======================================================
|
|
|
|
|
|
| |
Of the total number of options
outstanding at the end of the period, nil had vested and were
exercisable at the end of the year (31 Dec 22: Nil).
The Black-Scholes option pricing
model was used to value the equity-settled share-based payment
awards as it was considered that this approach would result in
materially accurate estimate of the fair value of the options
granted.
The inputs into the model were as
follows:
|
|
Options
granted under IPO Option Schemes
|
|
Weighted average share price at grant
date (£)
|
2.78
|
|
Weighted average exercise price
(£)
|
2.78
|
|
Volatility (%)
|
44.00%
|
|
Weighted average vesting period
(years)
|
3
|
|
Risk free rate (%)
|
3.482%
|
|
Expected dividend yield
(%)
|
-
|
|
|
Options
granted under Replacement Option Schemes
|
|
Weighted average share price at grant
date (£)
|
48
|
|
Weighted average exercise price
(£)
|
50
|
|
Volatility (%)
|
52.91%
|
|
Weighted average vesting period
(years)
|
3
|
|
Risk free rate (%)
|
3.595%
|
|
Expected dividend yield
(%)
|
-
|
The share-based remuneration expense
comprises:
|
|
As
at
31 Dec
2023
|
As
at
31 Dec
2022
|
|
|
£000
|
£000
|
|
|
|
|
|
Equity-settled schemes
|
312
|
526
|
|
|
==========================================
|
==========================================
|
25. Reserves
Share
Capital
Share capital represents the
nominal value of share capital subscribed.
Share
Premium
Share premium represents the funds
received in exchange for shares over and above the nominal value,
offset by costs incurred on the raise of equity.
Capital redemption
reserve
The capital redemption reserve is a
non-distributable reserve into which amounts are transferred
following the redemption or purchase of the Company's own
shares.
Foreign currency translation
reserve The foreign currency
translation reserve represents exchange differences that arise on
consolidation from the translation of the financial statements of
foreign subsidiaries.
Retained
earnings
The retained earnings
reserve represents cumulative net gains and losses
recognised in the statement of comprehensive income.
Share option
reserve
The share-based payment reserve
represents amounts accruing for equity settled share options
granted plus the fair value of share options exercised upon
IPO.
26. Ultimate controlling
party
There is no ultimate controlling
party as at 31 December 2023 nor was there as at 31 December
2022.
27. Contingent liabilities and contingent
assets
The Group had no contingent
liabilities or contingent assets at 31 December 2023 (31 December
2022: £nil).
28. Capital Commitments
The Group's capital commitments at
31 December 2023 are £nil (31 December 2022: £nil).