DigitalBox PLC (LON:DBOX) said it is evaluating potential acquisition targets after a successful year in which it saw strong growth in website users and reported another underlying profit.
The AIM-listed digital publisher, which acquired youth news site The Tab in October 2020 after buying the parent company of satirical website The Daily Mash in 2019, had gross cash of £1.9mln in the bank at the end of December, including £0.5mln of Government-backed Coronavirus (COVID-19) loans.
Digitalbox successfully steered through challenging market conditions last year, maintaining revenues at £2.2mln despite a difficult third quarter that was disrupted by social media algorithm changes designed to counter COVID-19 disinformation.
Group audience figures recovered to 12mln monthly users in December 2020, with more than 250 million ad impressions, while for the whole year compound user numbers across Digitalbox's three websites were up 76% to 67mln.
Underlying profits (EBITDA) came to £0.3mln versus £0.5mln the year before, while pre-tax losses were cut to £143k from £460k.
The company said the performance in 2020 proved the potential of its operating model and website platform, “giving continued confidence in the group's ability to build a larger portfolio of successful, profitable digital brands”, with the strong balance sheet giving “the flexibility to move on the right opportunities at speed”.
While acknowledging the importance of profitability, the board said it will continue to invest in the existing business in 2021 across Entertainment Daily, The Tab and The Daily Mash with the aim of delivering further meaningful growth from diversification of their key routes to audiences.
This will be helped by the £1.2mln capital injection from new cornerstone investor Downing Strategic Micro-Cap Investment Trust in the autumn, while more experience was added to the board last month with the appointment of former Time UK boss Marcus Rich as non-executive chairman.
“We enter 2021 with cash at the bank, an expanded portfolio of assets, a stronger investor base, a brighter advertising market and a re-invigorated board,” said chief executive James Carter.
“We look forward to 2021 as a trading period that will start to normalise and present more acquisition opportunities as the reality of life begins to create pressures on those businesses who were less able to navigate the economy in 2020.”