Dianomi Regulatory News (DNM)

17 July 2023

Dianomi plc

("Dianomi", the "Company" or the "Group")

Trading Update

Dianomi, a leading provider of native digital advertising services to premium clients in the Business, Finance and Lifestyle sectors, announces the following trading update for the year to 31 December 2023.

As has been widely reported, the decline in traffic volumes has been a key challenge for publishers in 2023. This trend is clear across Dianomi's direct publisher inventory with traffic levels across key publishers down by between 10-30% in the six months to 30 June 2023 vs the same period in 2022. As a consequence, while demand from Dianomi's 400+ premium financial and lifestyle advertisers has remained consistent with the backdrop announced at full year 2022 results, the reduced traffic across its publishers naturally impacts Dianomi's ability to generate revenue from the adverts it places on their digital properties. Furthermore, certain new publisher partnerships did not materialise in the expected timeframe to offset the decline in traffic across existing publishers, though they remain future opportunities.

Readership levels are also perhaps finding a new 'normal' level post pandemic.

Reflecting these lower traffic levels, revenue for the six months to 30 June 2023 is expected to show a c.18% decrease on the same period in the previous year which benefitted from a strong Q1 before advertiser caution set in in Q2 2022. As a result, the Group expects revenue for the year ended 31 December 2023 to be lower than market expectations and is providing new revenue guidance of between £30.5 and £32.5 million (2022: £35.9 million).

Importantly, from a Company perspective, Dianomi continues to expand its distribution channels in order to generate increased and more predictable future income streams through:

· Further developing programmatic distribution, a key driver of future growth; and

· Continuing to scale both existing and new publisher partnerships.

Dianomi's continues to develop its programmatic distribution capability with a 6 fold growth in programmatic revenue in the six months to 30 June 2023 compared to the same period last year, albeit from a relatively modest base. This provides opportunities for Dianomi to unlock further demand from its premium advertisers and scale the budgets they spend via the Company's trusted and brand safe platform. Alongside programmatic, scaling its core direct publisher inventory through expanding existing relationships and attracting new publishers remains a key priority for Dianomi.

Retention of both publishers and advertisers has remained strong in 2023 and year to date the Company has continued to attract new publishers and advertisers to the platform providing the opportunity to scale these new relationships alongside converting new pipeline opportunities.

The operational cost base of the Group has been significantly improved following the restructuring of the Group's global management and sales teams in March, resulting in the cost base reducing by £1 million on an annualised basis. Given the challenging market backdrop, the Group continues to carefully monitor its cost base whilst ensuring that sufficient investment is made to support future growth. Cash as at 30 June 2023 was £7.1 million (31 December 2022: £11.7 million), reflecting the unwinding of the working capital benefit highlighted at the time of the Company's final results for the year ended 31 December 2022, the delay in receipt of certain overdue debtor balances amounting to c. £1.2 million (received shortly after the period end), one-off restructuring costs of £0.8 million and foreign exchange movement as a result of the strengthening of the pound against the dollar during the period. The Company remains debt free and expects improved cash generation in the second half of the year.

CEO of Dianomi, Rupert Hodson, commented: "The fall in traffic levels will impact our business and the wider industry this year, nevertheless, it also serves to highlight the importance of developing our ability to scale distribution on a programmatic basis through the intelligent use of our deep understanding of context and engagement. As mentioned, we are continuing to attract new customers and expanding distribution through programmatic initiatives. We are therefore in a solid position with a strong balance sheet but as a business we are looking beyond the near term and focusing on our future ability to offer our existing customer base the option to substantially increase their spend with us."

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About Dianomi

Dianomi, established in 2003, is a leading provider of native digital advertising services to premium clients in the Financial Services and Business 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 400 advertisers, including blue chip names such as abrdn, Invesco and Baillie Gifford, with access to an international audience of over 400 million devices per month through its partnerships with over 300 premium publishers of business and finance content, including blue chip names such as Reuters, Bloomberg 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.