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(Sharecast News) - Digital advertising service provider Dianomi reported a "good" first half on Monday, with revenues expected to be up 4% against a "particularly strong" comparative period last year, despite a negative macroeconomic environment.
The AIM-traded firm said both its advertiser and publisher base had expanded so far in 2022, including the rollout of the contract with CNN Business, which, even though it was yet to be fully implemented, was already one of its "top five" publishers.
It said that, while it was too early to determine with certainty, the company still expected revenue for the full year to be "broadly in line" with market expectations.
There were "significant" prospective publisher contracts being pursued, the board said, representing a "solid pipeline" of new business.
The business was reliant on closing new contracts in the pipeline within expected timeframes to deliver its second-half growth expectations, and while the timing to convert the opportunities would vary, Dianomi said there were several opportunities being pursued which provided it with confidence in its outlook.
In the second quarter, some advertisers spent more cautiously, although historical patterns consistently showed trading to be weighted to the second half for both native and video campaigns, but the board did warn that a risk of weaker advertising spend remained.
Trials were underway among new advertisers across contextual and programmatic channels.
While the programmatic platform was described by the firm as "nascent", early results were said to be encouraging, with increased revenue expected to be generated from that in the second half.
Video campaigns represented another growth area which generates ad hoc income, and a number of conversations with "key advertisers" were ongoing in that area.
Dianomi said it made investments in the 2021 financial year and in the first half of the current period to support future growth, including the roll-out of its "contextually-led programmatic platform".
The board said the investments were primarily in marketing and people, including a new head of programmatic.
However, those investments, as well as "additional costs associated with being a public company", contributed to a decrease in its adjusted EBITDA margin to about 5%, from 10% for the six months to June 2021.
The company's adjusted EBITDA margin was expected to improve in the second half, while unaudited cash as at 30 June was £10.4m.
"Given our significant growth in 2020 and 2021 and the uncertain macro environment, we are encouraged by the group's performance in the first half of the year," said chief executive officer Rupert Hodson.
"With the investments made in future growth, as well as healthy pipelines and historical track record, Dianomi is well placed going into the second half of the year, and we are optimistic for a solid result for the year.
"In the medium term, the market opportunities for the group are expanding significantly, as the advertising world adjusts to a cookie-less environment and increasing numbers of potential clients reassess the power and accuracy of contextual solutions."
Reporting by Josh White at Sharecast.com.
