Dianomi Regulatory News (DNM)

13 December 2022

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 2022

Revenues are expected to be in line with last year, client retention is excellent and the Dianomi platform consistently reaches over half a billion readers each month. Goldman Sachs, Porsche and Ameriprise all became advertisers this year on the Dianomi ad platform. Distribution of ads continues to be supported by the Group's deep partnerships with premium publishers throughout the world. Dianomi currently works with 387 premium publishers, including those accessed programmatically.

The average spend for the top 100 advertisers is at similar levels to 2021, despite newsletter spend decreasing significantly as highlighted in the results for the six months to 30 June 2022. New advertiser spend in the second half of the year has not grown as anticipated, with the changes to the economic and political landscape over the course of 2022 creating a general global slowdown. While revenues are expected to be in line with 2021 levels, the decrease in gross margin as previously announced on 21 September 2022, alongside the Group's investment in developing the talent base of the business to support future growth, means that Adjusted EBITDA* for the year to 31 December 2022 is expected to be lower than consensus market expectations at approximately half of that for the prior year. Unaudited cash at 30 November remains strong at £10.8 million.

The strength of the Dianomi proposition for both advertisers and publishers remains unchanged. The investment made in new talent which has expanded the Company's sales and engineering capabilities is key to the roll-out of Dianomi's contextually-led programmatically enabled platform, and an important driver for future growth. The platform has been trialled by Porsche and Morgan Stanley, initial results from both have been positive and programmatic revenues are expected to build in 2023.

Macroeconomic headwinds and privacy legislation have caused short-term industry digital ad spending forecasts to be lowered from those published in March. However, total US digital ad spend is still forecast to grow in 2023 and beyond and, furthermore, privacy changes including the deprecation of cookies are set to benefit the Group given Dianomi's premium positioning, the quality of its inventory, the transparency of performance and its contextual platform.

Rupert Hodson, Chief Executive Officer of Dianomi, said:

"The Group remains well placed for future growth, with strong cash generation and a robust balance sheet. Though we are disappointed that the growth originally forecast for this year has not materialised, we are encouraged by the stickiness of both our advertiser and publisher base and the new names which have joined our platform this year. The market environment is challenging, but we are confident that the quality of our platform as well as its contextual nature will prove to be an advantage in light of the expected changes in privacy legislation. Furthermore, the roll-out of our programmatic capabilities provides further opportunity for growth next year and beyond. Alongside this, our investment in talent is for the long-term. Despite macroeconomic headwinds, digital advertising remains a growth sector, Dianomi is a leader in its chosen markets, and we are very focused on further expanding our share."

* Adjusted EBITDA is calculated as profit after tax before deducting net finance costs, tax, depreciation, exceptional items and share based payment charges

** Source: eMarketer December 2022

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.

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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 400 advertisers, including blue chip names such as abrdn, Invesco and Charles Schwab, with access to an international audience of over 500 million devices per month through its partnerships with over 300 premium publishers, including blue chip names such as Reuters, CNN Business, 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.