News

Full year results for the nine months ended 30 September 2024

22 January 2025

FINANCIAL PERFORMANCE AHEAD OF CALENDAR YEAR MARKET EXPECTATIONS.
STRONG MOMENTUM GOING INTO 2025.

LBG Media, the global digital entertainment business with a focus on young adults, is pleased to announce its results for the nine months ended 30 September 2024 (“FY24” or “the period”). Following the change in year-end, statutory financial results are being reported for the nine months ended 30 September 2024.


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Highlights

  • Financial performance ahead of market expectations for the calendar year to December 20241
  • Deeper brand relationships and becoming integral to our clients’ corporate marketing strategies
  • Integration of U.S. businesses delivered significant wins with a strong pipeline, providing confidence in future growth
  • Increasing diversification of revenues with Direct 51%, Indirect 47% (Social 26%, Web 21%), Other 2%2
  • Strong results in Direct & Web; Social temporarily impacted by Facebook commercial model change in calendar Q3
  • Positive first quarter in the year ending 30 September 2025 (“FY25”) giving confidence over full year performance and clear line of sight to £200m revenue

Financial Highlights

FY24
(9 months to 30 September 2024)
FY23
(12 months to 31 December 2023)
Unaudited 12 months to 30 September 2024 Unaudited 12 months to 30 September 2023 Unaudited 12 month YoY growth rate (%)
    -      Direct 34.4 29.3 43.931.6 39%
    -      Indirect 29.4 37.1 40.738.3 6%
    -      Other 1.1 1.1 1.61.0 60%
Total Group Revenue (£m) 64.9 67.5 86.270.9 22%
Adjusted EBITDA (£m)3 16.9 17.4 24.521.1 16%
Adjusted EBITDA margin326% 26% 28%30% (2)%pts
Profit before tax 12.1 5.9 14.511.0 32%
Cash and cash equivalents 27.2 15.8 27.230.7 (12)%

 

  • Total Group revenue up 22% for the unaudited 12 months to 30 September 2024, with 6% organic growth and the remainder attributed to the acquisition of Betches in October 20234
  • Broadly even split between Direct and Indirect reflects effectiveness of business model and reinforces sustainability of our growth, with Facebook now accounting for 23% of total revenue for the unaudited 12 months to 30 September, compared to 37% at time of IPO
  • Adjusted EBITDA up 16% for the unaudited 12 months to 30 September 2024, predominantly driven by the expansion of our U.S. footprint, through the acquisition of Betches, and a more efficient ANZ operating model
  • Adjusted EBITDA margin impacted by investments for growth of £3.4m which have focused on our Direct and Web segments, and which are already delivering positive results   
  • Cash and cash equivalents of £27.2 million at 30 September 2024 (31 December 2023: £15.8 million) with very strong cash conversion of 105%5

Strategic and Operational Highlights

DIRECT: Continued demand from brands and media agencies for our content to reach young adults online

  • Strong performance in client retention and acquisition, with brief conversion of 29%, repeat revenue of 74% and 9 clients that generate revenue over $1m6
  • Expanded partnerships with major brands such as Google, where we have supported campaigns for Android, Pixel, Gemini, and Google Pay, showcase our ability to collaborate with brands on a macro scale

INDIRECT: Revenues we share with social media platforms that place adverts next to our content

  • Global audience has grown by 19% year-on-year, to 503m, with U.S. audience of 143m, highlighting our unparalleled engagement and extensive reach7
  • Investment in Web driving sessions and yields higher, with positive progress maintaining our position as one of Facebook’s largest publishers
  • From July to September 2024, changes to Facebook’s commercial model resulted in lower Indirect revenues from Social compared to the same period in the prior year. As with previous platform changes, we were able to adapt quickly and saw a return to normalised levels on exiting Q1 FY25, providing positive momentum for the remainder of the new year ahead

U.S. EXPANSION: Combined business performing well in the world’s largest ad market

  • Strong signs of early success with key client wins such as Netflix, L’Oreal and White Castle and alignment of commercial teams in H1 bearing fruit with a strong pipeline
  • Collaboration between LBG Media and Betches has advanced Betches’ social content strategy, showcasing cross-business learning and presenting opportunity for diversification of our U.S. revenues

Outlook

The Group has entered FY25 with good momentum across its three growth lenses of Direct, Indirect, and U.S. expansion. The Board remains confident in the size of the opportunity ahead and may consider further investment to accelerate the U.S. growth strategy.  

Building on a robust first quarter that achieved double-digit growth compared to the same period last year, management is confident in the growth trajectory for the remainder of FY25 and expects revenue to increase by approximately 10%.

CEO, Solly Solomou commented:

“2024 was a transformational year for LBG Media. We are running more campaigns for more blue-chip brands, particularly in the U.S., the largest advertising market in the world. We have been able to drive this momentum for two reasons. Firstly, our acquisition of Betches has extended our already-strong reach with U.S. social audiences and our combined business is performing well. Secondly, LBG Media has a unique model. More than half a billion people globally, including Gen Z and Millennials, see us as the go-to destination for digital content. The biggest brands and the biggest celebrities therefore want to partner with us to access the growing buying power and influence of this hard-to-reach demographic. The strength of our model, our progress in the U.S., and our fantastic team, explain why our results are ahead of calendar year expectations and give us confidence of further progress in 2025.”

Analyst Presentation

LBG Media will host a hybrid virtual and in-person analyst briefing at 9.30am UK time, on Wednesday 22 January 2025. To join the briefing virtually, please use the following webcast link: https://brrmedia.news/LBG_FY_24

A recording of the presentation will also be available on the LBG Media website at www.lbgmedia.co.uk/results-reports-presentations/results-and-presentations following the event.

Notes

1 External market consensus for year ending 31 December 2024: Revenue £86.3m and Adjusted EBITDA £23.4m.

2 On a proforma basis for the 12 months to the 30 September 2024. Social and Web form part of Indirect, which, along with Direct, is one of two core revenue streams.

3 Adjusted EBITDA – earnings before interest, tax, depreciation, and amortisation adjusted for share-based payments (including employers NIC as appropriate) and adjusting items. Adjusted EBITDA margin is adjusted EBITDA divided by Group Revenue represented as a percentage.

4 Organic growth excludes the impact of Betches acquisition and ANZ model restructure.

5 Cash conversion is on a proforma basis for the 12 months to 30 September 2024 and calculated as operating cash flow divided by adjusted EBITDA.

6 All numbers shown on a proforma basis for the 12 months to 30 September 2024. Repeat revenue represents percentage of proforma 2024 Direct revenue from clients that ran campaigns with us in 2022 and 2023 proforma periods.

7 Audience numbers reflect social followers, unique podcast listeners and average monthly website users in the 12 months 30 September 2024. The percentage growth indicates the change compared to the corresponding period in the previous year.

 

 

For further information please contact:

LBG Media plc
Solly Solomou, Co-founder & CEO
Richard Jarvis, CFO
Matthew Lee, Investor Relations
[email protected]
  
Zeus (Nominated Adviser & Broker)
Dan Bate / Nick Cowles (Investment Banking)
Benjamin Robertson (Equity Capital Markets)
Tel: +44 (0) 161 831 1512
www.zeuscapital.co.uk
  
Peel Hunt LLP (Joint Broker)
Neil Patel
Benjamin Cryer
Alice Lane
Kate Bannatyne
Tel: +44 (0) 207 418 8990
www.peelhunt.com
  
FTI Consulting LLP (Communications)
Jamie Ricketts / Kwaku Aning / Jemima Gurney
+44 (0)20 7418 8990
[email protected]

 

Notes to editors

We help brands reach young adults on social media platforms, such as Facebook, Instagram, Snapchat, X, YouTube and TikTok and our owned and operated websites.

We produce and distribute digital content such as videos, editorial, images and audio.

We do this through our brands, such as LADbible and SPORTbible, which are dedicated to distinct popular interests (e.g. news, sport, gaming).

Engagement is at the heart of what we do – which comes through in our two main revenue streams:

  1. We create bespoke content for blue-chip advertisers that gives them access to a young adult audience that is hard to reach for traditional media players. This is distributed across social media platforms and our owned and operated websites. We call this ‘Direct’ revenue.
  2. Third parties – such as social media platforms – generate revenue by placing advertising next to our content. We call this ‘Indirect’ revenue, and the revenue is shared between the publisher, which is us, and the social media platform.

LBG Media is listed on the AIM market of the London Stock Exchange (AIM: LBG).

 

 

CHAIR’S STATEMENT

LBG has come a long way from the organisation that joined the public markets in 2021, and I am immensely proud of the incredible work our team has done to shape the present-day business. The past nine months have been another period marked by strong financial performance, further embedding of our footprint in the U.S. and strengthening our line of sight to £200m of revenue. Underpinning the success of our business model is our highly engaged audience. This audience grew by 19% in the 12 month proforma period ended 30 September 2024, to 503m, as rising audience numbers, alongside key sporting and cultural event campaigns, confirm our position as one of the ‘go-to’ digital entertainment brands for young adults.

We remain extremely well positioned to capture the opportunity ahead of us as the macro shift towards digital advertising continues and the purchasing power of Gen Z expands. As a digital advertiser focused on young adults, LBG is direct beneficiary of these macro trends, and this is evident in our financial performance, and future opportunity, as we look to enhance value for our shareholders and stakeholders alike.

Our progress

In the 9 months ended 30 September 2024, LBG made significant progress focusing on three key growth lenses: Direct, Indirect, and U.S. expansion, with the latter supplementing growth across both Direct and Indirect operations. During this period, the Group delivered revenue of £64.9m, adjusted EBITDA reached £16.9m, while profit before tax increased to £12.1m. For the unaudited proforma 12 months ended 30 September 2024, the Group reported revenue of £86.2m, up 22% compared to the same prior period. On an unaudited 12 month proforma basis, adjusted EBITDA rose to £24.5m, an increase of 16%, and profit before tax grew 32% to £14.5m.

Direct revenue, which is where we provide content marketing services to blue-chip brands and media agencies, accounted for over 50% of total Group revenue in the 9 months ended 30 September 2024 with the impressive growth driven by an expanding client base, deeper relationships with existing partners and the acquisition of Betches in October 2023. Direct brief conversion of 29% and 74% repeat client revenue in the 12 month period to 30 September 2024 also highlights the confidence our partners have in our ability to deliver targeted and unique campaigns that drive meaningful penetration and results.

Our Indirect business is where we generate revenue on social platforms and from our owned and operated websites. We have expanded our Web capabilities by investing in people and technology that have enhanced our Web programmatic offering, resulting in a significant increase in both sessions and yields during the period. Social revenues were temporarily impacted by the Facebook commercial model change in calendar Q3 but, as with previous platform changes, we were able to adapt quickly and saw a return to normalised levels on exiting Q1 FY25. This gives us confidence and positive momentum for the remainder of the new year ahead.

We also saw significant progress in the U.S. market where we successfully integrated the LBG and Betches commercial teams in the first half of the period, resulting in several major wins that are a testament to the complementary nature of our operations. Partnerships with global brands like The Boston Beer Company, NYX Cosmetics, and White Castle illustrate the growing demand for access to our vast audience and top-tier capabilities in the U.S. market.

Change in accounting reference date

As announced on 24 July 2024, we have adopted 30 September as our accounting year-end. In this transitionary reporting period we are required to present the statutory statements as the 9 months ending 30 September 2024 in comparison to the 12 months ending 31 December 2023. However, we appreciate that it is difficult for the reader to understand the underlying performance of the business on this basis, therefore our Annual Report and Accounts include an unaudited proforma consolidated statement of comprehensive income as supplementary information, providing insight into the Group's performance on an annualised basis for the 12 months ending 30 September 2024 in comparison to the 12 months ending 30 September 2023. This unaudited proforma information, sourced from the Group's management accounts for the two comparative periods, does not form part of the audited financial statements. Additional notes, including segmental analysis, key assumptions, and reconciliations to the reported financial statements, are detailed on pages 27 to 29 of the Group’s Annual Report and Accounts.

Board changes

The Board is always open and transparent with its shareholders and announces that, due to personal reasons, the Company’s Chief Financial Officer, Richard Jarvis, is currently taking some time away from the business. To ensure that in the interim the Board has the appropriate oversight and guidance, I will move into an executive Chair role, spending more time in the business, with particular responsibility for the finance and legal teams. My career included 14 years as COO, CFO & Deputy CEO at GB Group plc, before I retired in June 2021. 

LBG announced on 6 January 2025 that Richard Flint has stepped down from his non-executive role on the Board, effective 31 December 2024. I would like to express my gratitude to Richard for his valuable contributions and guidance during his tenure, particularly in helping to shape the Group’s strategic direction. The Board wishes him the very best in his future endeavours.

Social responsibility and governance

We take immense pride in the significant work we do to support meaningful causes and drive positive change. Our commitment to being a socially responsible organisation is rooted in our ability to engage with our audience, empowering them by fostering communities that laugh, think, and act. This engagement is a fundamental enabler of our success, and we are dedicated to remaining true to these core values in the years ahead.

Outlook

Finally, none of the progress made this period would have been possible without the dedication and hard work of our people. On behalf of the Board, I want to thank every member of the LBG team for their commitment and effort throughout the period - it has not gone unnoticed. I would also like to extend my gratitude to the brands we work with, our global audience and our shareholders for their continued support and trust.

As we look ahead to the opportunities and challenges of the coming year, I remain confident that we present a unique and highly differentiated proposition within the market. We capture the eyes and ears of a highly sought-after demographic for marketers, and in the complex, digital media landscape, the detailed understanding we have of this audience provides a strong foundation for long-term growth and the delivery of sustained shareholder value.

 

Dave Wilson
Chair
22 January 2025

 

 

CHIEF EXECUTIVE OFFICER’S REVIEW

2024 has been a period of strong financial growth and key strategic and operational advancements as we progress along our line of sight to £200m in revenue. This path to £200m is driven by a clear focus on three key growth lenses: Direct, Indirect, and U.S. expansion, with our expansion in the U.S. supporting growth across both Direct and Indirect segments. Combined with our diversified revenue streams, strong client relationships, and dedicated team, this provides us with a platform for sustainable growth, enabling LBG to continue to capture market share from traditional media players in the years ahead.

Market dynamics

The global ad market is expected to exceed $1 trillion by 2025.1 Over two-thirds of this is allocated to digital advertising and the momentum continues to be one-way, with this figure expected to reach 70% in the next year, up from 50% just five years ago.1 This macro shift positions LBG as a key player within the biggest and fastest-growing segment of global advertising. A significant driver of this growth is social media, which has become the largest global advertising medium, accounting for 24% of total ad spend. With 94% of Gen Z using social media, we are uniquely positioned to capture spend targeting this influential demographic.1 Gen Z is not only the largest generation ever from a population perspective, but it is also demonstrating significant purchasing power - already Gen Z represents 17% of global spend and is projected to become the wealthiest generation that has ever lived.1 Our focus on engaging this digitally native generation, alongside the rapid expansion of the digital ad market, provides substantial opportunities for sustainable long-term growth for our business.

1 - Sources: WARC, Global Ad Spend Outlook 2024/25 & NIQ, A Report on Gen Z Spending Power.

Financial Performance

We have delivered a strong financial performance in both the reporting and proforma period. Total revenue  for the 9 months ended 30 September 2024 reached £64.9m (12 month FY23: £67.5m). Revenue was £86.2m for the unaudited proforma financial statements for the 12 months ended 30 September 2024, an increase of 22% based on the same period from the prior year. The growth of Direct, which now accounts for more than 50% of our total revenue, up from 41% at the time of our IPO in 2021, underscores the effectiveness of our business model and the strong relationships we have built with major brands. Further diversity in Indirect revenues with the growth of our Web offering provides the business with a robust and resilient financial base.

Our strong topline performance in the nine month period has resulted in adjusted EBITDA of £16.9m (12 month FY23: £17.4m). For the unaudited proforma financial statements for the 12 months ended 30 September 2024, adjusted EBITDA increased by 16%, driven by strong revenue growth, improvements to the ANZ operating model, and the accretive impact of Betches. Our profit before tax increased to £12.1m for the nine month period ended 30 September 2024, whilst on an unaudited 12 month proforma basis, profit before tax grew 32% to £14.5m. We are also pleased to report a healthy cash position of £27.2m as at 30 September 2024, up from £15.8m at 31 December 2023. This provides us with the flexibility to continue reinvesting in our business and pursue strategic acquisitions, thereby supporting our long-term growth.

Strategic Progress

Direct: Direct revenue is where we provide content marketing services to blue-chip brands and media agencies and have a direct relationship with the advertiser.

Our Direct segment performed extremely well in the nine months ended 30 September 2024, driven by the strengthening of relationships with existing clients, expansion of our client base and the acquisition of Betches in October 2023. The growth in Direct revenue is a result of our ability to build deeper, more strategic partnerships, particularly with brands like Google, Lloyds and Costa Coffee, as well as our growing footprint in the U.S. where we already have one $1 million client. Our Euros-themed edition of the highly successful original series “Snack Wars”, which was sponsored by Uber Eats, was a great showcase of our expanding capabilities as we delivered brand sponsored-content in a native format that resonated with our audience, garnering millions of views.

As our client relationships continue to evolve, we have increasingly become an integral part of corporate marketing strategies. Our direct brief conversion rate for the 12 months ended 30 September 2024 stood at 29% and repeat client revenue was 74% - both clear indicators of the trust and value brands place in us, on a repeat basis. Our ability to provide partners with real time analytics and ROI insights that demonstrate the value and success of their advertising investment is a feature which sets us apart from the competition, particularly traditional media. We continue to capture a growing share of spend from these traditional players, as our unique value proposition, high-quality content, and deep audience engagement resonate with advertisers seeking to connect with young adults.

Indirect: Indirect is where we generate revenue on social platforms (“Social”) and from our owned and operated websites (“Web”).

Indirect has performed in line with our expectations for the period, with solid growth driven by the continued expansion of our global audience, which increased by 19% to 503m in the 12 months to 30 September 2024. Our U.S. audience now stands at 143m. Social, which includes revenues generated from social media platforms and partners, delivered a robust performance despite recent changes to Facebook’s commercial model. While these changes impacted social ad yields and introduced some short-term volatility, the segment remained resilient as the new model focuses on high-quality, engaging content - an area that aligns directly with our strengths. As we have demonstrated with previous platform changes, our scale, expertise, and data-driven approach enable us to adapt quickly and navigate such changes in the external environment efficiently.

Web has been a standout performer and now accounts for 45% of Indirect revenue for the 12 months ended 30 September 2024, up from 30% at the end of FY23. We have seen significant growth, fuelled by ongoing investment in technology and talent, which has led to substantially increased yields through the period. The diversification of our Indirect revenue, supported by both social platforms and our owned web assets, enhances the stability of our income streams and provides multiple levers for sustained, long-term growth.

U.S. Expansion: Supporting our growth across both Direct and Indirect segments.

Expanding our operations in the U.S., the world’s largest advertising market, presents a significant opportunity from both a Direct and Indirect perspective. Since acquisition of Betches on 17 October 2023, we have made significant strides in integrating our U.S. operations. This has included consolidating offices at Betches HQ and reorganising sales teams to focus on category specialisations in areas such as entertainment, alcohol and consumer goods.

This operational shift has enabled us to build deeper client relationships and is demonstrating encouraging signs of early success with new high-profile partnerships, such as Netflix, L’Oreal and White Castle, and a very encouraging pipeline. We are also excited about new opportunities such as the launch of Betches Sports, a sub-sector where we already have significant experience through our SPORTbible brand. Our U.S. operation offers brands a ‘one-stop shop’ to access our young adult audience and the steps we have taken this year put the business in a fantastic position to capitalise on the significant opportunity ahead of us in the U.S. market.

Purpose Driven Work & Awards

At LBG we believe strongly in leveraging our global platform to drive socially responsible agendas, supporting meaningful change. During the period, we launched the “You’re On Mute” campaign to encourage young people to vote in the general election and also partnered with charity Stamp Out Spiking to launch the “End Spiking, Now” campaign, raising awareness of the drink spiking problem and advocating for legal changes. The campaign, which included a powerful mini-series, culminated in the UK government’s decision to make drink spiking a specific offence. Additionally, LBG was honoured to become The King’s Trust’s first official social partner for their annual awards, celebrating young people who have overcome significant barriers. These initiatives reflect our ongoing commitment to using our platform to empower young people and contribute to positive social change.

We are very proud to have been the most awarded media owner at the Campaign Media Awards for the second year running, with three wins for our partnerships with The AA, Jacamo, and McDonald's. We also took home Best Finance Campaign at the Digital Media Awards for Bank of Ireland, along with other shortlists including 'Channel of the Year,' 'Best Factual Channel,' and 'Best Short Form' for our Honesty Box show.

Clear Line of Sight to £200m Revenue Opportunity

Through our strategic growth lenses LBG is uniquely positioned for significant growth in the years ahead and we remain on track as we progress along our line of sight to £200m of revenue. The positive momentum in our market and the continued growth of our global audience, is supported by our ability to foster even deeper relationships with blue-chip brands and key partners. Our U.S. operations provide a solid foundation for further growth in the world’s largest advertising market and the diversification of our revenue streams, along with our strong cash generation profile, provides us with the financial flexibility to accelerate growth through strategic M&A opportunities.

We have made tremendous progress in the period, and with a clear strategy, strong partnerships, and continued market expansion, LBG is well-positioned for sustained, profitable growth in the years to come.

 

Solly Solomou
Chief Executive Officer
22 January 2025

 

 

FINANCIAL REVIEW

Highlights & KPIs

The Group delivered strong financial performance in the 9 months to 30 September 2024, reflecting the successful execution of our strategy across our three growth lenses of Direct, Indirect and U.S. expansion. The following highlights and key performance indicators (‘KPIs’) showcase our progress and accomplishments over the period. As the current reporting period covers 9 months, compared to a 12 month period for the prior year, percentage changes have not been presented.

  UNAUDITED PROFORMA
 9 months
ended
30 Sept 24
Year
ended
31 Dec 23
12 months
ended
30 Sept 24
12 months
ended
30 Sept 23
Change
 £'000 £'000 £'000 £'000  %
Revenue  64,945  67,510   86,245  70,895  22%
Adjusted EBITDA 16,929  17,368   24,475  21,126  16%
Profit before tax 12,139  5,937   14,469  10,999  32%
Closing cash 27,174  15,800   27,174  30,727  (12%)
Cash generated from operations 20,264  10,100   25,817  14,954  73%
Cash conversion 120%  78%   105%  71%  
           
Financial KPIs          
Adjusted EBITDA as a % of revenue 26.1% 25.7%   28.4% 29.8%   
Profit before tax as a % of revenue 18.7% 8.8%   16.8% 15.5%   
         
Non financial KPI's         
Global audience* (m) 503  452   503  424  19%
Brief conversion 29%  29%   29%  29%  -
Daily web sessions (m) 5.3  4.7   5.0  4.9  2%
Web yield per 1k sessions (£)  10.01  6.87   10.07  6.04  67%

 

* Global Audience reflects social followers, unique podcast listeners and average monthly website users in the period.

Adjusted EBITDA, which is defined as profit before net finance costs, tax, depreciation, amortisation, asset impairment and release of related liabilities, share based payment charge and adjusting items is a non-GAAP metric used by management and is not an IFRS disclosure.

Financial Review

Revenue 9 months
ended
30 Sept 24
 Year
ended
31 Dec 23
  12 months
ended
30 Sept 24
 12 months
ended
30 Sept 23
 Change
 £'000 £'000 £'000 £'000  %
Direct 34,443  29,349   43,920  31,635  39%
Indirect 29,368  37,111   40,749  38,272  6%
Other 1,134  1,050   1,576  988  60%
Total 64,945  67,510 86,245  70,895  22%

 

Total Group revenue for the 9 months ended 30 September 2024 was £64.9m, demonstrating strong operational performance despite being lower than the £67.5m reported for the 12 month prior period. This highlights the growing appeal of our offerings to advertisers and reflects the accelerated growth driven by the strategic value we deliver to our clients on both our Direct and Indirect revenue streams.

The strength of our diversified revenue model continues to improve with Direct accounting for more than 50% of total Group revenue, alongside progression of our Web operations which now accounts for 49% of total Indirect revenue in the 9 months ended 30 September 2024.

On an unaudited proforma basis, revenue for the 12 months ended 30 September 2024 reached £86.2m, representing a 22% increase compared to the prior year. This growth comprised 6% organic growth, driven by deeper relationships with blue-chip brands and continued expansion of Web, offset by softer Social revenues as a result of the Facebook commercial model change in calendar Q3. The remainder of the increase in total Group revenue can be attributed to the acquisition of Betches, which occurred in October 2023.

Direct revenue for the 9 months ended 30 September 2024 was £34.4m (FY23 (12m): £29.3m). This increase, despite the shorter reporting period, was primarily driven by the inclusion of Betches, acquired as part of our U.S. expansion strategy, which has strengthened our Direct revenue streams and aligned with our focus on growing Direct revenue through targeted market opportunities.

On an unaudited proforma basis, Direct revenue for the year ended 30 September 2024 increased by 39%, to £43.9m, up from £31.6m in the prior year. The Group continued to deliver high-quality content, retained, strengthened and developed new relationships with key blue-chip brands, expanded its presence in the U.S., and capitalised on significant cultural and sporting moments with successful campaigns during the year.

Indirect revenue for the 9 months ended 30 September 2024 was £29.4m, down from £37.1m in the prior year. This decline reflects the impact of the shorter reporting period, as well as changes in Facebook’s commercial model which resulted in some short-term volatility in Social revenues in calendar Q3. As with previous platform changes, we were able to quickly adapt and saw a return to normalised levels on exiting Q1 FY25.

On an unaudited proforma basis, Indirect revenue grew by 6% to £40.7m from £38.3m in the prior year. This growth was driven by an expanding audience base and significant monetisation improvements in our Web proposition, aligning with the Group’s strategy of delivering specialised content to targeted audiences.

Operating expenses

Net operating expenses for the 9 months ended 30 September 2024 amounted to £52.4m, compared to £61.4m for the previous 12 month period. On an unaudited proforma basis, net operating expenses for the 12 months ended 30 September 2024 were £71.3m, representing an 19% increase from £59.8m in the prior year. This increase primarily reflects the inclusion of a full year of operating costs associated with Betches.

Adjusted EBITDA

Adjusted EBITDA for the 9 months ended 30 September 2024 was £16.9m, compared to £17.4m for the year ended 31 December 2023.

On an unaudited proforma basis, Adjusted EBITDA was £24.5m for the 12 months ended 30 September 2024, a 16% increase from £21.1m in the previous year. Whilst this improvement reflects the Group’s effective management of core operations, growth in Adjusted EBITDA has been impacted by investments for growth of £3.4m which have focused on our Direct and Web segments, and which are already delivering positive results.

Adjusted EBITDA is used for internal performance analysis to assess the execution of our strategy and is a benchmark that has been used by management and the investment community to assess the performance of the Group. As such, management believe that this adjusted measure is an appropriate measure to assess the performance of the Group. Note that using Adjusted EBITDA produces a materially different result to the most closely related GAAP measure, being Profit Before Tax. It is therefore important to understand the nature of any adjusting items.

Share-Based Payment Charges

Share-based payment charges decreased by £3.2m during the period, to £0.7m compared to £3.9m as of 31 December 2023. The reduction was primarily driven by the vesting of certain Non-Executive Director share schemes in the prior year, which resulted in a decline in associated expenses for the current period.

Amortisation and Depreciation

Amortisation for the 9 months ended 30 September 2024 was £1.8m, up from £1.4m in the prior period, mainly reflecting the charge against intangible assets acquired through Betches.

Unaudited proforma amortisation for the 12 months ended 30 September 2024 was £2.4m, compared to £1.0m in the prior year. This is due to the amortisation of intangible assets recognised as part of the Betches acquisition in October 2023.

The depreciation charge for the 9 months ended 30 September 2024 was £1.8m (FY23 (12m): £2.1m) On a pro-rata basis, the current year charge reflects an increase, primarily driven by higher depreciation on right-of-use assets and new additions during the year.

Adjusting Items

Adjusting items were £nil for the 9 months ended 30 September 2024, a decrease from £3.7m in the previous period.

Unaudited proforma adjusting items for the 12 months ended 30 September 2024 were £2.7m, compared to £3.5m in the prior year. These items included costs related to business reorganisations and acquisition-related fees, which management considers non-recurring.

Net finance costs

Net finance costs increased by £0.4m to £0.9m (FY23 (12m): £0.5m). The increase in finance costs reflect the unwinding of the discount on contingent consideration of £1.0m arising on acquisition (FY23 (12m): £0.3m), offset by an increase in finance income of £0.2m.

Share of joint ventures

The share in joint ventures amounted to £0.5m for the nine months ended 30 September 2024 (FY23 (12m): £0.3m). This increase reflects the growth and improved profitability of Pubity Group Ltd.

Profit before tax

Profit before tax for the 9 months to 30 September 2024 increased to £12.1m, more than doubling from £5.9m in the prior year. This improvement was driven by lower depreciation and amortisation expenses due to the shorter reporting period, as well as a reduction in adjusting items.

Taxation

The tax charge for the period as £3.2m (FY23 (12m): £4.3m).

Balance Sheet

As of 30 September 2024, the balance sheet shows a strengthened financial position with a £5.8m increase in total assets and an £8.0m rise in net assets from 31 December 2023.

The balance sheet reflects a stronger liquidity position and a bank facility free structure.

Total assets increased by £5.8m to £97.1m from £91.3m, mainly due to trading performance and improved cash conversion, offsetting decreases in non-current assets, such as goodwill and PPE.

Total liabilities reduced by £2.2m to £24.0m. Non-current liabilities declined by £4.5m due to reductions in lease liabilities based on payments made in the year of £1.6m and a £3.1m ($4.0m) payment of contingent consideration relating to the Betches acquisition.

Included within reserves movements in the year is a £1.6m currency translation difference (FY23 (12m): £1.1m). The increase in the year relates to foreign exchange movements on intercompany loans.

Cashflow and cash position

The Group continues to maintain a strong cash position of £27.2m (FY23 (12m): £15.8m). Cash generated from operations was £20.3m for the 9 month period (FY23 (12m): £10.1m).

Cash conversion in the period was 120% of adjusted EBITDA (FY23 (12m): 78%). This has been driven by improved focus on working capital management. During the period, we made lease payments of £1.6m (FY23: £1.3m).

On an unaudited proforma basis, cash decreased from £30.7m to £27.2m over the 12 months ended 30 September 2024, reflecting a net reduction of just £3.5m.

This is particularly notable given the significant cash outflows related to the acquisition of Betches, including £17.6m paid at the time of acquisition and a further £3.1m in contingent consideration settled in July 2024.

 

Solly Solomou
Chief Executive Officer
22 January 2025

 

 

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Period ended 30 September 2024

 Period ended
30 September 2024
£’000
Year ended
31 December 2023
£’000
Revenue 64,945 67,510
Net operating expenses (52,383) (61,423)
Decrease in expected credit losses of trade receivables (22)
Operating profit 12,562 6,065
Analysed as:   
Adjusted EBITDA116,929 17,368
Depreciation (1,814) (2,088)
Amortisation (1,820) (1,369)
Asset impairment and release of related liabilities (318)
Equity settled share-based payments charge (566) (3,853)
Cash settled share-based payments charge (167)
Adjusting items (3,675)
Group operating profit 12,562 6,065
Finance income 289  106
Finance costs (1,217) (565)
Net finance costs (928) (459)
Share of post-tax profits of equity-accounted joint venture  505 331
Profit before taxation 12,139 5,937
Income tax expense (3,185) (4,271)
Profit for the financial year attributable to equity holders of the Company 8,954 1,666
Currency translation differences (net of tax) (1,562) (1,082)
Profit and total comprehensive income for the financial year attributable to equity holders of the Company 7,392 584
Basic earnings per share (pence) 4.3 0.8
Diluted earnings per share (pence) 4.1 0.8

 

1. Adjusted EBITDA, which is defined as profit before net finance costs, tax, depreciation, amortisation, asset impairment and release of related liabilities, share-based payment charge and adjusting items is a non-GAAP metric used by management and is not an IFRS disclosure.

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2024

 As at
30 September 2024
£’000
As at
31 December 2023
£’000
Assets   
Non-current assets   
Goodwill and other intangible assets 37,330 39,782
Property, plant and equipment 4,947 5,982
Investments in equity-accounted joint ventures 1,195 690
Other receivables 219 198
Deferred tax asset 274 24
Total non-current assets 43,965 46,676
Current assets   
Trade and other receivables 25,982 28,765
Current tax asset 62
Inventory 22 27
Cash and cash equivalents 27,174 15,800
Total current assets 53,178 44,654
Total assets 97,143 91,330
Equity   
Called up share capital 209 207
Share premium reserve 28,993 28,993
Accumulated exchange differences (2,615) (1,053)
Retained earnings 46,572 37,006
Total equity 73,159 65,153
Liabilities   
Non-current liabilities   
Non-current lease liability 1,757 2,975
Provisions 482 446
Non-current contingent consideration 3,240 6,523
Deferred tax liability 535 556
Total non-current liabilities 6,014 10,500
Current liabilities   
Current lease liability 2,485 2,507
Trade and other payables 9,460 8,906
Contingent consideration 3,811 3,016
Current tax liabilities 2,214 1,248
Total current liabilities 17,970 15,677
Total liabilities 23,984 26,177
Total equity and liabilities 97,143 91,330

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS
Period ended 30 September 2024

 

 Period ended
30 September 2024
£’000
Year ended
31 December 2023
£’000
Net cash flow from operating activities  
Profit for the financial period/year 8,954 1,666
Income tax 3,185 4,271
Net interest expense 928 459
Share of post-tax profits of equity-accounted joint venture (505)(331)
Operating profit12,562 6,065
Depreciation charge 1,814 2,088
Amortisation of intangible assets 1,820 1,369
Asset impairment and release of related liabilities 318
Equity settled share-based payments 566 3,853
Cash settled share-based payment 167
Settlement of cash settled share options (305)
Gain on disposal of property, plant and equipment (30)
Effect of exchange rates on contingent consideration (13)
Decrease/(increase) in trade and other receivables 2,737 (4,151)
Increase in trade and other payables 916 588
Cash generated from operations20,264 10,100
Tax paid (2,638)(2,898)
Net cash generated from operating activities17,626 7,202
Cash flows from investing activities  
Purchase of intangible assets (563)(1,045)
Purchase of property, plant and equipment (466)(954)
Stamp duty paid (26)
Acquisition of subsidiary, net of cash acquired (17,580)
Payment of contingent consideration (3,120)
Net cash used in investing activities(4,149)(19,605)
Cash flows from financing activities  
Lease payments (1,621)(1,323)
Lease deposits paid (50)(23)
Lease deposits received 25544
Proceeds from share issue 2 1
Interest paid (182)(142)
Net cash used in financing activities(1,826)(943)
Net increase/(decrease) in cash and cash equivalents11,651 (13,346)
Cash and cash equivalents at the beginning of the period/year 15,800 29,268
Effect of exchange rate changes on cash and cash equivalents (277)(122)
Cash and cash equivalents at the end of the period/year27,174 15,800

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 30 September 2024

 Share capital
£’000
Share premium
£’000
Accumulated exchange differences
£’000
Retained earnings
£’000
Total Equity
£’000
Balance as at 1 January 2023 206 28,993 29 31,998 61,226
Profit for the financial year 1,666 1,666
Currency translation differences (1,082) (1,082)
Total comprehensive (loss)/income for the year (1,082) 1,666 584
      
Issue of shares in the year 1 1
Share based payments 3,853 3,853
Equity settled share options switched to cash
settled share options
(494) (494)
Deferred tax on share options (17) (17)
Total transactions with owners, recognised directly in equity 1 3,342 3,343
Balance as at 31 December 2023
and 1 January 2024
207 28,993 (1,053) 37,006 65,153
      
Profit for the financial period 8,954 8,954
Currency translation differences (1,562) (1,562)
Total comprehensive (loss)/income for the period (1,562) 8,954 7,392
      
Issue of shares in the period 2 2
Share based payments 566 566
Deferred tax on share options and intangibles 46 46
Total transactions with owners,
recognised directly in equity
2 612 614
Balance as at 30 September 2024 209 28,993 (2,615) 46,572 73,159

 

Share Price

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GBp
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-
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Important Dates

22 Jan
Preliminary Results