CATCHING UP WITH DBOX, AFTER A POSITIVE TU - 10/12/25

It was earlier in the year when I last penned something here on DigitalBox (DBOX), so given its very recent update to the market and my subsequent catch-up with CEO James Carter, now seems like an ideal time for some further comment.

For regular visitors to the blog, or those aware of my posts on X or ADVFN, the company is one I am very keen on, despite its micro-capsize.

As I often point out, there are previous articles and coverage on the blog for those that are interested, where in my view the company remains an undervalued play.

Of course, falling firmly into the category of a media minnow won’t appeal to everyone, but from a personal perspective the smaller area of the market has served me well over the years.

In terms of the business for those that are unfamiliar, DBOX is a mobile-first digital publishing company and a pure digital media play, fully optimised for mobile users.

Its operations consist of its own collection of content-rich websites and brands, including Entertainment Daily, The Tab, The Poke, The Daily Mash, TV Guide and others, including the more recently added Royal Insider and Reality Shrine.

The all-important revenue and monetisation element has historically been derived from programmatic digital advertising delivered around its content.

This involves the automated buying and selling of advertising space via an auction process that takes place when people visit or load a webpage.

Within the model, DBOX boasts its own platform that provides site architecture ensuring fast and user-friendly mobile pages, which in turn, improves the monetisation per session.

Over the last few years, the company has acquired various assets to both boost and broaden its reach, while also mitigating the potential downside from algorithm changes that occur with the likes of Google or Facebook.

Despite its size, the company is a profitable, cash-generative business with positive growth prospects supported by net cash that currently makes up around 35% of the market cap.

Having emerged from a strategic review that effectively endorsed the current strategy, the D'BOX board has subsequently increased its brand offerings while remaining open to additional bolt-on buys.

Speaking with James Carter last week, it is clear that management is pleased with the current traction and performance against what is undoubtedly a difficult backdrop for media companies.

As a result of its recent trading performance, the company was required to update the market, stating that it expects EBITDA for the twelve months to 31 December to be significantly ahead of market expectations.

While that saw some uplift in the share price to a current 4.75p, it still stands on a single digit forward PER of 9 based on next year’s broker forecast, while the PEG stands at an attractive 0.2.

Despite the positive trading news, James informed me that there will be an end-of-year update next month and that should see broker Panmure Liberum revisiting its numbers.

One aspect of the TU last week that caught my eye was the performance of on-platform revenue, which has moved from just £161k in H1 of last year to heading towards £1m.

Whilst acknowledging that it represents a good performance in a short space of time, James pointed out that in the bigger picture and in relation to peers it remains very small.

Still, it doesn’t take away the prospects for more marked numbers going forward, as it represents a strategic shift that could play out well.

What the on-platform strategy means, is that the company is using its own content for leverage where users spend most of their time, which encompasses third-party platforms as opposed to merely its own.

Importantly, for a business like DBOX, despite advertising headwinds across media, the trends remain positive with ongoing mobile consumption continuing to drive advertising spend.

James pointed out that the investment that has been made over the last year was undertaken in order to bring more to the table and provide leverage across its brands to accelerate growth.

There is an element of frustration, though, in that despite having a healthy net cash position of circa £1.7m even after ploughing money into the business, DBOX remains constrained by its size when it comes to significantly scaling up.

To that end though, there appears to be things afoot in order to drive the numbers towards Panmure’s 2027  notable expectations, which if achieved would surely see a significant and sizeable rerating.

James speaks of additional brands and initiatives continuing, but also that the industry is ripe for consolidation, which could potentially open the door to other growth avenues for the company.

Understandably, there was no elaboration on that front, but with a decent slug of cash on the balance sheet and a trading performance already proving strong and ahead of peers, the company would appear to be in a decent spot.

Speaking about brand performances, James singled out recent additions such as Reality Shrine and Royal Insider as being particularly pleasing, with notable positivity from US audiences.

The CEO said that audiences in the US deliver a much greater level of advertising spend than their UK counterparts, so it is an obvious market on which to focus.

Having previously acquired social assets from MediaChain, the addition of some six million followers—predominantly female—has assisted in the early success and would appear to bode well going forwards.

One aspect that is worth addressing at this juncture is the AI effect, which is likely to impact the industry in various ways and will be a threat of varying degrees for all publishers.

In DBOX’s case, it seems that it could be better placed than many, as its platform—focused on fast load speed—could benefit from AI inclusion, while on the flip side, the company is now less focused on Google with the emphasis instead on social media platform audiences.

Given that much of DBOX’s content is more nuanced and concentrated on humour and entertainment as opposed to factual flow, any negative intrusion from AI should be limited.

Within the brands, James also spoke positively of TV Guide, which for an outlay of £470k has performed very well, having repaid its purchase price in just 18 months.

He did also indicate that it was on course to deliver a £400k contribution in 2025 alone, which appears to show impressive traction given the outlay.

With TV Guide development in the spotlight, I also caught up briefly with Jim Douglas COO, who said: "The tech and editorial team have delivered a hugely improved website and some really strong content and we think there's more potential here, especially in terms of social platform performance – it's a core part of our skill set and a major focus for TVGuide into 2026."

And that serves to illustrate the acumen of the team here in acquiring specific specific assets that are both embedded and transformed quickly, ensuring an early payback.

When it comes to management, it is interesting to see that no less than three of the board were at Future plc, so it is reasonable to conclude that collectively there is a wealth of experience.

As previously mentioned, there will be another update next month, so it will be interesting to see what Panmure’s forecasts look like going forwards, as there appears to be a real push to accelerate growth.

Within that growth goal challenges for such a small player obviously exist, with not only having to navigate the cyclicality of the advertising market, but also contend with the likes of larger competition such as LadBible.

Any investment or market space will always have its challenges though and given its recent trajectory in a difficult climate, holding largely niche specific brands DBOX appears to  possess the potential for delivery.  

At present, it expects the year 2025 shortly concluding to deliver revenue of £4m with EBITDA at £0.2m, although that latter number will, as we know, come in ahead.

Looking at next year, for now, the expectation is for £5m in revenue with EBITDA increasing to £0.9m and a PBT of £0.7m with net cash anticipated coming out at £2.5m.

On that basis, the shares trade on a PE of 9 for next year, which given the large element of cash aligned to the growth potential looks very good value to this holder.

Of course, there is potential for either an uplift on that from the broker or another earning enhancing or strategic opportunity to emerge, where either or both would further add to the investment case.

For now, Panmure has a 10p price target on the stock, so it will be interesting to see where their new target is set.