Digitalbox (DBOX) expects to report adjusted profit before tax ahead of management expectations after seeing an ‘encouraging’ trading performance for the six months ending 30 June 2020.
The digital media group and owner of Entertainment Daily and The Daily Mash said trading for the period ending 30 June 2020 has been encouraging with strong operating margins and a rise in cash from £0.6m at 31 December 2019 to £1.2 million on 30 June 2020.
Revenue, which is driven by the volume and value of advertising, is expected to be flat year on year at around £1m whilst the number of visits to the group’s website has increased significantly despite being offset by a sharp fall in value per session due to COVID-19.
The company said its executive team has taken measures to mitigate the impact of the lockdown to offset the revenue shortfall, which in turn has protected the profit margin.
The performance of the group’s online publishing assets has progressed during the period, it said, with Entertainment Daily having had ‘a strong six months’ with the number of sessions up 16% compared to the same period last year and more than six million unique users to its site, a similar level to last December, historically the busiest month for Entertainment Daily.
Shares in Digitalbox are trading 6.09% higher at 6.1p this morning, from lows of 5.15p in June.
In the second quarter, lockdown dominated the news agenda and there was a reduced flow in entertainment news and as a result, revenue for the period was flat, the group said.
The Daily Mash saw record audience figures through the early stages of lockdown which the group attributes to the Mash Report TV show which aired on BBC2 through April and May.
While much uncertainty remains, the company said it has recognised early signs in the third quarter that advertising spend is increasing. Digitalbox said it remains ‘cautiously optimistic’ that a positive advertising market upturn will occur in the second half of the year.
“Running a largely automated commercial operation through programmatic and header bidding solutions has enabled us also to continue the trading of our inventory without disruption,” said James Carter, Chief Executive of Digitalbox.
He added, "While the lockdown has presented great opportunities for the Daily Mash to showcase the talent of its writers, the flow of news for Entertainment Daily slowed as TV production stopped and celebrities were out of view.”
“We remain cautiously optimistic about the second half of 2020 as big TV shows return to our screens, retail opens up again, and the economy returns to a more positive position."
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