Dianomi PLC Contract Amendment (9876M)

TIDMDNM

RNS Number : 9876M

Dianomi PLC

20 September 2023

Dianomi plc

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

Contract Amendment

Dianomi , a leading provider of native digital advertising services to premium clients in the Business, Finance and Lifestyle sectors, announces that it has agreed a contract amendment with one of its largest and longest standing publisher partners, for whom it provides exclusive content recommendations.

At the end of 2022 Dianomi entered into a contract renewal with a monthly guaranteed payment by Dianomi based on publisher minimum guaranteed traffic levels (the "Agreement"). As has been widely reported, in the year to date, traffic volumes have been significantly lower across all media, such that the publisher minimum traffic levels in the six months to 30 June 2023 were not met, resulting in an overpayment by Dianomi to the publisher of $1 million ("overpayment") for the period which was due to be recouped in the second half of the year.

Following discussions, the Company and the publisher have entered into an amendment to the Agreement (the "Amendment") whereby Dianomi has agreed not to recoup the overpayment, in return for which the publisher will provide Dianomi with an enhanced revenue share as from 1 July 2023 and, in addition to its existing permanent ad units, will provide Dianomi with additional premium ad inventory, including a new in-article unit. The Company will recognise the one-off overpayment as an additional cost of sale in H1.

The new ad inventory and enhanced revenue share will allow Dianomi to generate additional revenue and margin which is expected to at least offset the one-off additional cost of sale over the next 12 to 18 months.

The Amendment is expected to increase revenue and profitability in the second half of the current financial year and beyond. However, for the six months to 30 June 2023, it will result in a lower gross margin and an increased loss at adjusted EBITDA* level of GBP1.0 million (loss of GBP0.2 million before the Amendment). The Company expects to be profitable at an adjusted EBITDA* level in the second half of the current financial year.

There will be a short-term impact on cash of c.GBP0.5 million in the current financial year which will unwind during 2024. Without the Amendment, the business is trading in line with the update the Company published on 17 July 2023 ("Trading Update") with revenue guidance for the full year 2023 currently remaining within the range included in the Trading Update.

CEO of Dianomi, Rupert Hodson, commented : "Whilst the revised contract will impact our earnings this year, we feel the enhanced potential for the remainder of this year and next year is a good trade-off and one that suits both parties, especially as we come into election year for the US. We are looking forward to demonstrating how well we can monetise the new in-article unit which is in high demand across our advertiser base."

For further information contact:

 
Dianomi                                         Tel: +44 (0)207 802 5530 
 Rupert Hodson (Chief Executive Officer) 
 Charlotte Stranner (Chief Financial Officer) 
Panmure Gordon (Nominated Adviser and Broker)   Tel: +44 (0)207 886 2500 
 Emma Earl/ Freddy Crossley, Corporate Finance 
 Rupert Dearden, Corporate Broking 
Novella Communications                          Tel: +44 (0)203 151 7008 
 Tim Robertson 
 Claire de Groot 
 Safia Colebrook

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.dianom i.com .

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(END) Dow Jones Newswires

September 20, 2023 02:01 ET (06:01 GMT)

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