dotDigital Group plc - Final Results

RNS Number : 5644S

dotDigital Group plc

07 November 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU 596 / 2014) WHICH IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN

Dotdigital Group plc

("Dotdigital" or the "Group")

Final Results for the year ended 30 June 2023

Strong profitable growth and cash generation

Dotdigital Group plc (AIM: DOTD), the leading SaaS provider of an all-in-one customer experience and data platform (CXDP), announces its final audited results for the year ended 30 June 2023 ("FY23").

Financial Highlights

·	Group revenue growth of 10% to £69.2m (FY22: £62.8m)
	o	Recurring and repeating revenue was maintained at 94% of total revenue (FY22: 94%). Contracted recurring revenue continues to represent 79% of total revenue
	o	ARPC¹ increased 11% to £1,622 per month (FY22: £1,461 per month)
	o	ARR² growth of 10% to £54.4m (FY22: 10%)
·	Adjusted EBITDA³ of £22.0m (FY22: £21.7m) and adjusted operating profit of £14.5m (FY22: £14.5m)
·	Adjusted profit before tax⁴ of £15.4m (FY22: £14.5m)
·	Adjusted diluted earnings per share increased 6% to 4.43p (FY22: 4.18p)
·	Strong net cash balance on 30 June 2023 of £52.7m (30 June 2022: £43.9m)
·	Proposed final dividend of 1p per ordinary share (FY22: 0.98p) in line with progressive dividend policy

Operating Highlights

·	Growth in all global regions has underpinned the double-digit revenue growth performance at Group level
·	Customers continue to expand usage of platform and ongoing product innovation resulting in functionality recurring revenue⁵ increasing 11% to £24.9m (FY22: £22.3m)
·	Launch of next-generation Customer Experience Data Platform (CXDP) and significantly enhanced AI-powered functionality supporting growth in higher value customers
·	New technology integrations with partners extending market coverage, with revenue from strategic partners increasing 8% to £31.2m (FY22: £28.9m)
·	Investment in people to strengthen international footprint, with headcount up by 15%
·	On track to achieve target of Net Zero emissions by 2030
·	Integration of Fresh Relevance on track, acquired in September 2023 post period end, driving step-change in CXDP roadmap. First new joint customer wins already completed

Milan Patel, Chief Executive Officer of Dotdigital, commented:

"We are pleased to have delivered a year of strong growth and cash generation, slightly ahead of initial expectations, whilst continuing to invest in our growth opportunity and maintaining high profit levels. The Group's product offering has advanced materially in the year with the launch of our CXDP platform and enhanced AI functionality. We have also bolstered our global teams which is translating into positive momentum.

"The post period acquisition of Fresh Relevance's personalisation technology and talented team marks a leap forward in our strategy, accelerating our product roadmap and opening up new, high value market opportunities. We start the new financial year with solid global foundations, a substantially enhanced product offering and a robust financial position. We have had an encouraging start to FY24 and look forward to our continued profitable growth."

Analyst Briefing and Investor Presentation

Management will be hosting a live online presentation and Q&A for analysts today at 9.30am GMT. To register to attend the analyst presentation, please contact dotdigital@almastrategic.com.

The Company will also host a live presentation and Q&A covering the results via the Investor Meet Company platform on Monday 13 November at 11.00am GMT. The presentation is open to all existing and potential shareholders. Investors can sign up to Investor Meet Company for free and add to meet Dotdigital via this link.

Investor Deck: A copy of the slides relating to the FY23 results is available here: https://www.dotdigitalgroup.com/events-presentations/

Annual Report: A copy of the Annual Report for FY23 will be available on our website shortly: https://www.dotdigitalgroup.com/reports/

1.	ARPC means Average Revenue Per Customer (including new customers added in period and existing customers)
2.	ARR means Annual Recurring Revenue
3.	Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation and adjusted for acquisition costs and share-based payments
4.	Adjusted profit before tax is earnings before tax and adjusted for acquisition costs, exceptional costs and share-based payments
5.	Functionality revenue refers to license fees and enhanced bolt-on functionality

Dotdigital Group Plc Milan Patel, CEO Alistair Gurney, CFO	Tel: 020 3953 3072 investorrelations@dotdigital.com

Alma (Financial Communications) Hilary Buchanan David Ison Kieran Breheny	Tel: 020 3405 0210 dotdigital@almastrategic.com

Canaccord Genuity (Nominated Advisor and Joint Broker) Bobbie Hilliam, Corporate Finance Jonathan Barr, Sales	Tel: 020 7523 8000

Cavendish Capital Markets Limited (Joint Broker) Jonny Franklin Adams, Corporate Finance Sunila de Silva, Equity Capital Markets	Tel: 020 7220 0500

Singer Capital Markets (Joint Broker) Shaun Dobson, Corporate Finance Alex Bond, Corporate Finance	Tel: 020 7496 3000

About Dotdigital

Dotdigital Group plc (AIM: DOTD) is a leading provider of cross-channel marketing automation technology to marketing professionals. Dotdigital's customer experience and data platform (CXDP) combines the power of automation and AI to help businesses deliver hyper-relevant customer experiences at scale. With Dotdigital, marketing teams can unify and enrich their customer data, identify valuable customer segments, and deliver personalised cross-channel customer journeys that result in engagements, conversions, and loyalty.

Founded in 1999, Dotdigital is headquartered in London with offices in Croydon, Manchester, New York, Melbourne, Sydney, Singapore, Cape Town, and Warsaw. Dotdigital's solutions empower over 4,000 brands across 150 countries.

CHAIR'S STATEMENT

Since we announced our FY22 results, Dotdigital Group Plc (Dotdigital) has made important steps forward and I am pleased to be able to report on a year characterised by solid commercial out-turn and, crucially, material advances in development and delivery of our growth strategy. We have entered the new financial year in a strong position and are optimistic about the future.

Optimal allocation of cash to accelerate growth and build long-term value

I would first like to welcome our new colleagues that joined the business with the post-period acquisition of Fresh Relevance Ltd (Fresh Relevance), a leading cross-channel personalisation technology firm. (For further details see note 33 of the consolidated financial statements).

Behind the scenes, much of the financial year was spent refining our Customer Experience and Data Platform (CXDP) growth strategy and ensuring we have a crystal-clear picture of where we want to get to as a business and the deliverables required to achieve this.

We operate in an incredibly dynamic industry that is in a perpetual state of evolution, so it is important that we build out our offering at pace to cement our competitive advantage. The Fresh Relevance deal enables us to meet several deliverables that would have taken considerable time and resource to achieve organically, enabling us to leapfrog several of our competitors and bringing us closer to providing the most complete platform on the market.

Dotdigital is a highly cash generative business and had built up significant cash reserves for a company of its size. The Board firmly believes that using Dotdigital's balance sheet to fortify its strategic position and unlock higher growth potential will deliver the best long-term returns to shareholders. The acquisition of Fresh Relevance is aligned to this and, supported by a financial position that remains strong, we are continuing to explore M&A opportunities where we are confident it will further accelerate progress towards our goals.

Established teams and steadily improving performance

Since joining Dotdigital in July 2022, I have observed a steady continued improvement as the Group moved past the challenges of H1 FY22. In some ways the year prior was a period of transition with important personnel changes against an uncertain macroeconomic backdrop. We now have the right talented leadership in place and teams well-embedded across all regions, with activity ramping up as expected.

A return to growth in the US reflects the management's drive and the work they have done to enhance sales discipline. Our North American operations are now stable and there is a sense that momentum is building. Our venture into Japan, while still in its infancy, looks promising. For the team there to have achieved the level of sales traction they have at this stage is remarkable and bolsters the performance of an already strong Asia-Pacific region. (See note 3)

Geographic expansion remains a key pillar of our growth strategy and our overseas operations are now in excellent condition. The progress we are making overseas demonstrates the truly global appeal of our platform and we are confident of making further inroads as we elevate our offering and strengthen the channels and partners that underpin our growth ambitions.

Fostering a culture of responsibility

FY23 was a year of material progress across our ESG strategy. The establishment of Dotvoice, our colleague-led programme comprising Dotwellbeing, Dotgreen, Dotcommunity and DotDEI, has helped bring clear direction and purpose to our efforts. Together these groups have been instrumental in building a culture of learning and engagement across our communities and making responsibility an inextricable part of how we do business.

Dotwellbeing continues to be a beacon for our employees, supporting their well-being. Dotgreen has championed sustainability, achieving ISO14001 certification and actively contributing to our ambitious Net Zero 2030 target. DotDEI has made significant strides, ensuring diversity, equity, and inclusion remain at the heart of our organisational ethos. Dotcommunity, through impactful partnerships and initiatives, has reinforced our commitment to social responsibility.

Dividend

The Board will be maintaining its progressive dividend policy in line with Group EBITDA growth. Therefore, subject to approval at the AGM in December 2023, the Board proposes that the Group pay a final dividend of 1p per ordinary share (2022: 0.98p), payable at the end of January 2024.

Well-positioned to take advantage of the wealth of available opportunities

On behalf of the Board I would like to extend our gratitude to everyone at Dotdigital. Through their collective buy-in and dedication we have achieved important milestones in the year and are well set to make further progress.

The broader economic environment remains uncertain but with a meticulously mapped out set of organic and inorganic deliverables, an increased focus and exceptionally capable teams, we will navigate it with confidence.

CHIEF EXECUTIVE OFFICER'S REPORT

Overview

The Group delivered a robust performance in FY23, with double-digit revenue growth and strong cash generation. This follows healthy demand across the Group's diverse customer base as marketing professionals focus their budgets towards data-led marketing initiatives, together with a growing contribution from prior year investments which drove accelerating momentum in the second half.

The Group's roadmap of expanding Customer Experience Data Platform ("CXDP") capabilities and regular functionality enhancements continue to unlock new, higher value growth opportunities. This is reflected in the continued progression of Average Revenue Per Customer (ARPC) and functionality recurring revenue, both increasing 11% in the year, as customers expand their usage of the platform and the Group converts a larger pipeline of higher value enterprise deals.

Positive trading continues to translate into financial strength for the Group, which is governed by a resilient, profitable and cash generative business model with high levels of recurring revenues. For FY23, Group revenue grew 10% to £69.2m (FY22: £62.8m), with recurring and repeat revenue representing 94% (FY22: 94%). Adjusted profit before tax was ahead of expectations at £15.4m (FY22: £14.5m) and adjusted EBITDA was in line with expectations at £22.0m (FY22: £21.7m), reflecting planned investment in headcount and operations. Strong cash generation continued through the period contributing to a cash balance of £52.7m at year end (FY22: £43.9m).

This provides the resource and flexibility for ongoing investment in the organic and inorganic growth opportunity, which is centred on building out the Group's CXDP offering. These efforts were accelerated post year end with the acquisition of personalisation technology business, Fresh Relevance, adding highly complementary capabilities to the Group along with more than 300 customers and the ability to address a larger, higher value market opportunity.

The Group exited the year with positive trading momentum across all regions, a strong financial position and a clear product strategy. Investments into the Group's infrastructure, people and product has delivered results as expected, and worked to create a strong platform to layer on the capabilities and talent from Fresh Relevance. The Group is now in a stronger position to pursue its growth ambitions, supported by a healthy pipeline and robust financial position.

Business Review

Dotdigital provides omnichannel marketing automation technology and customer data insights to digital marketing professionals. The Group's technology works to unify datapoints from across marketing stacks to create a single, trusted source from which marketing professionals can launch highly targeted, personalised and relevant campaigns to customers and prospects. The result is better customer experience and improved conversions, helping to drive revenue and business growth.

Dotdigital's solutions address a common marketing requirement across regions and sectors, with the Group's customer base comprising a spread of industry verticals. During the year, the Group saw particularly strong momentum in charity and not for profit, events and entertainment, health and fitness and travel sectors , with new customers including Shell Energy UK, CBRE, Lloyds Pharmacy, Britvic PLC, National Farmers' Union of England and Wales, RSA Conference LLC and Hawksmoor Group . The Group's global presence, able to serve customers in multiple territories, its comprehensive offering and focus on customer support remain key differentiators.

Market opportunity

The overarching shift toward digital marketing continues its progression, occupying a steadily increasing proportion of marketing budget and forecast to be double digit growth in the coming years according to Statista. Underneath this, the uncertain global economic backdrop through the year prompted more acute focus on retention marketing backed by clear demonstrable Return on Investment.

The Group's technology platform, built from the ground-up with analytics and data at its core, represents a compelling proposition in line with long-term trends and in different market conditions. Customers of Dotdigital on average see a 409% ROI, $21k of cost savings and $1m increase in profit over a three year period according to Forrester's Total Economic Impact study that was commissioned by Dotdigital.

Through this, Email marketing maintains its place as one of the most cost-effective marketing channels, with email volumes growing 7% in the period, alongside the ongoing adoption of an omnichannel approach, including continued adoption of SMS with a pipeline increasing for WhatsApp and In-app Push messaging capabilities.

Growth strategy

The Group's underlying growth is the result of continued execution against a consistent organic growth strategy, centred on three pillars: geographic expansion, product innovation and strategic partnerships.

In addition, the Board looks to complement the Group's organic growth through select acquisitions focused on the following key categories: adjacent CXDP-related technologies that will drive ARPC expansion and open up new markets; consolidation in the market for talent and brand to expand geographical coverage; and specialist functionality for target verticals.

Geographic expansion

Regional breakdown reported in local currency

The Group delivered growth in all of its regions. Organic international revenue increased 18% to £22.8m (FY22: £19.2m), with international sales contributing 33% to total revenue (FY22: 31%).

The Group's largest region, EMEA, continued its upward trajectory, delivering growth of 9% to £52.3m (FY22: £48.2m). Contributing to this growth was new customer acquisitions, particularly in non-commerce related customers complemented by continued expansion within the existing base. Revenue growth in EMEA was somewhat offset by a lower level of professional service fees due to slower decision making from organisations due to an uncertain macroeconomic backdrop.

As anticipated at the half year, North America saw a return to growth in the second half, delivering an overall performance for the year of US$13.1m, an increase of 2% (FY22: US$12.9m). This is the result of previous investments into the region now bearing fruit, including the establishment of a strong management team in-region, increased emphasis on enablement for our Sales and Customer Success teams, and early success in converting a reestablished and growing pipeline.

In APAC, the Group reported strong growth in revenues, up 19% to AUS$10.8m (FY22: AUS$9.1m). The standout performer was Japan, an area where the Group has made measured investments in increasing brand awareness across the region, establishing a solid partner network and making several appointments in the go to market team. This has led to numerous customer wins in Q4 along with a stronger pipeline.

Product innovation

The core priority of the Group's R&D efforts is building out and enhancing its CXDP offering. This is designed to address the growing demand for more sophisticated marketing tools with a greater depth of analytics and personalised user experiences delivered via an all-in-one solution. In line with this vision, the focus areas of product development in the year were on: Connectivity and Data, culminating in the launch of a new data platform; Insights and Analytics, to support deeper actionable insights to drive a higher ROI and increasing efficiencies in the Marketing department; and Experiences, to facilitate more personalised customer journeys across any channel.

The first half of the year saw the launch of the Group's CXDP platform, an evolution of the Dotdigital Engagement platform, incorporating cloud first data architecture to support unification across channels and support next generation Application Programming Interface (API). Alongside the platform launch, the Group unveiled a number of new packages and plans for existing customers to support their transition and platform adoption of the new CXDP functionality, with all Dotdigital customers now benefiting from a new and improved user interface and navigation. The result of this effort can be seen in the increased functionality recurring revenue and reduction in churn of clients. Programme enhancements have continued post period end including new features to enable easy conversion of email campaigns to SMS, and improved unified contacts capability.

In May, the Group launched its WinstonAI intelligence engine within the Dotdigital CXDP platform, incorporating artificial intelligence and machine-learning capabilities to help marketers discover deeper insights and analytics, curate captivating content, and optimise communication for higher customer engagement. The platform's single customer view now includes WinstonAI's features such as predictive Customer Lifetime Value, predictive churn and predictive next order. The newly released capabilities have been one of the fastest adopted functionality features in the platform driving efficiencies within Marketing teams.

The Group's acquisition of Fresh Relevance post period end marked a leap forward in the Group's CXDP growth journey, bringing together customer insights, cross-channel engagement, and on-site personalisation capabilities to provide marketers with the tools to exert greater influence across the customer journey. The result is a much-expanded addressable market opportunity, particularly within larger enterprises, as businesses consolidate their marketing tools and focus spend (see note 33)

Strategic partnerships

The Group's strategic partnerships refer to a partner where a customer using that technology integration has the potential to represent or accounts for 10% of Group revenue. This network is complemented by a broader general partner referral network which includes over 200 active global partners.

The main efforts of the Group's partnership expansion are on forming connectors into both ecommerce and CRM platforms, with the Group's core functionality able to serve a range of industry verticals. During the year, the Group has made significant additions to its technology integrations, enabling "out of the box" connectivity to customers' existing technology stacks including Zendesk, TrustPilot, Shopify Hydrogen, Facebook Lead Ads and Google Analytics 4.

Revenue from strategic partners increased 8% to £31.2m (FY22: £28.9m), with new partnerships secured in the year including NetSuite and Shopware. Of the two market segments, the main growth driver was CRM connectors, which increased 22% to £9.8m following targeted investment. Relationships in the ecommerce segment remain solid with partners including Magento, BigCommerce and Shopify contributing to overall ecommerce partner channel revenue growth of 2% to £21.4m where the pipeline remains strong but with a slightly lengthened sales cycle.

Investing in people

A key aspect of Dotdigital's differentiation is the Group's reputation for high levels of customer support and handling, alongside its innovative technology offering, a position rewarded to the Group as a result of the work of its dedicated and talented team. The Group's workforce of over 400 employees across 8 countries is fundamental to the Group's continued success, and we were delighted to see the result of the team's hard work culminate in the Dotdigital Summit post period end in October, showcasing Dotdigital's leadership position by bringing together over 900 professionals from across the industry sharing insight on the ever changing landscape of digital marketing.

We have continued to invest in our people and regional teams during the year, seizing the opportunity to add talent and expertise at a time when other businesses took stock of their prior expansion plans. Headcount grew 15% in the year, with a focus on bolstering the Group's international footprint.

Update on Fresh Relevance acquisition

Post year end we were delighted to welcome our new colleagues from Fresh Relevance to the team following its acquisition. With the two organisations having worked together as partners for five years, with circa. 60 joint customers and strong cultural alignment, the team integration has progressed well.

The existing integration between the Dotdigital and Fresh Relevance platforms facilitates the smooth transfer of web personalisation data from the Fresh Relevance platform into Dotdigital to deliver even more targeted campaigns.

Looking ahead, the integration roadmap focuses on enabling new and joint customers to seamlessly log into and move between the platforms, making it easier for customers to access all capabilities across both. Work will also begin on enhancing the data flow between both platforms to leverage the combined data sets to enable personalisation, segmentation, orchestration and content creation.

From the cost synergies that have been identified and the interest from higher value prospects and existing customers, we expect the acquisition to support the growth of higher margin recurring revenue and have a similar profitable profile to the Group in the medium term.

Current trading and outlook

The Board is pleased to confirm that positive trading has continued through the start of the new financial year, in line with expectations, alongside the continuation of increasing average order value and building momentum in new industry verticals.

The Group's product positioning, enhanced through the acquisition of Fresh Relevance is resonating in the market with increased pipeline, particularly for larger value deals. The Board is pleased to confirm that the integration of the two teams is on track to complete, and the combined Group has secured its first brand-new customer taking both capabilities. We have also seen an increase in interest from our existing customers from the additional capabilities Fresh Relevance brings to the Dotdigital platform.

The robustness of the Group's financial model and a healthy pipeline gives the Board comfort in the ongoing investment plans as the Group seizes the market opportunity. The Group continues to demonstrate its resilience and capacity to execute strategic progress, and the Board remains confident in the Group's continued growth prospects.

FINANCIAL REVIEW

Business model

The Group generates circa 80% of its revenues from software and annual message plans which are recognised evenly over the life of the contract. New customers are typically sold one of three packages of modules which are designed to address the most common customer personas, with pricing driven by the functionality adopted, the number of contacts, and the volume of messages a customer intends to send. These contracted volumes are committed; however, we of course allow customers to upgrade through their contract period as they recognise value in the platform and require more capacity.

The best value is available to those customers who take advantage of additional functionality and integrations which help them leverage their customer data - this is evidenced by the very low churn we see amongst those customers who have invested in the full power of the product. We have a small amount of professional service revenue (less than 5% of total group revenues) which is recognised as work is delivered. These services relate to both the initial deployment of software, design services, training and support to customers who want to get the maximise value from the product.

FY23 saw the business change from a period of consolidation, as a rebuilt North American sales team ramped up and a new CFO was appointed, into a period of growth with many new hires to drive both sales and development productivity.

In this context, and against the backdrop of challenging macro-economic in which many businesses reported slowing growth, we are proud to deliver revenue, profit before tax, Earnings per share and Cash slightly ahead of market expectations.

Revenue and gross margin

Our recurring and diversified revenue base proved to be resilient and thus we exit the year in a strong position to continue delivering in FY24. We saw a reduction in customer churn particularly in North America and over 94% of our revenues continue to be predictably repeating or contractually recurring.

Revenue increased by 10% FY23 to £69.2m (FY22: £62.8m), driven by SaaS and contracted marketing SMS revenue uplift of £4.8m (10%) and transactional SMS revenue uplift of £1.9m (20%). EMEA remains our largest region with revenue of £52.3m (FY22: £48.2m), however our growth rate in APAC of 19% continues to show the strength of our proposition in that market. Although the weakening pound through H1 had supported our interim revenues, these benefits largely reversed through H2.

Gross margin on our core software product continues to be close to 90% but is diluted by SMS which is typically under 50%. Gross margin of 79.3% in the year reported was marginally lower than FY22 (81.6%) due to a small increase in transactional SMS volume.

Operating expenses

Despite high inflationary environment in all regions and significant investment in sales and development capacity to strengthen all the regions, we maintained a good adjusted operating margin at 21% (FY22: 23%). FY23 operating expenses of £40.4m (FY22: £36.7m) grew primarily because we increased net headcount by 54 and offered inflationary pay increases earlier in the year. This investment has resulted in declining staff attrition through the year, reducing to 12% on a 12 month rolling basis by June 2023.

Balance sheet

The business continues to generate cash in line with profitability and maintain a healthy working capital profile such that we end the year with £52.7m cash (FY22: £43.9m). We have implemented new cash treasury management processes through the year and have benefited from the higher interest rates that have been available for fixed term cash deposits than in recent history. Whilst after the balance sheet date, we completed the acquisition of Fresh Relevance and so reduced our cash balance by circa £20m, we continue to hold over £30m.

Tax

Our effective tax rate is 12.4% (FY22: 13%). This continues to be significantly lower than the mainstream UK corporation tax rate because of our Research & Development tax claim.

EPS

Adjusted Diluted EPS has grown by 6% to 4.43p (FY22: 4.18p). There has been only marginal movement in the number of shares in issue and share options granted in the year, so this reflects underlying profitability growth.

Dividend policy

Consistent with our progressive dividend policy we have increased our proposed final dividend in line with EBITDA growth to 1p in FY23 from 0.98p in FY22.

DOTDIGITAL GROUP PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2023


				30.06.23	30.06.22
				£'000	£'000
			Notes
CONTINUING OPERATIONS
Revenue from contracts with customers			3	69,228	62,832
Cost of sales			7	(14,351)	(11,570)

Gross profit				54,877	51,262

Administrative expenses			7	(40,359)	(36,726)

OPERATING PROFIT FROM CONTINUING OPERATIONS PRE SHARE-BASED PAYMENTS AND EXCEPTIONAL COSTS				14,518	14,536

Share based payments			29	(736)	(456)
Exceptional costs			5	(234)	(475)

OPERATING PROFIT FROM CONTINUING OPERATIONS				13,548	13,605

Finance costs			6	(57)	(57)
Finance income			6	895	57

PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS			7	14,386	13,605

Income tax expense			8	(1,791)	(1,774)

Profit for the year from continuing operations				12,595	11,831

	Profit for the year attributable to the owners of the parent			12,595	11,831
Earnings per share from all operations (pence per share)
		Basic	11	4.21	3.96
		Diluted	11	4.11	3.88
		Adjusted Basic	11	4.53	4.27
		Adjusted Diluted	11	4.43	4.18

DOTDIGITAL GROUP PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2023


		30.06.23	30.06.22
		£'000	£'000


PROFIT FOR THE YEAR		12,595	11,831

OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations		(38)	333

Total comprehensive income attributable to:
	Owners of the parent	12,557	12,164

TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Comprehensive income from continuing operations		12,557	12,164

DOTDIGITAL GROUP PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30 JUNE 2023


		30.06.23	30.06.22
		£'000	£'000
	Notes
ASSETS
NON-CURRENT ASSETS
Goodwill	12	9,680	9,680
Intangible assets	13	19,860	17,698
Property, plant and equipment	14	2,696	3,285

		32,236	30,663

CURRENT ASSETS
Trade and other receivables	16	15,261	13,211
Cash and cash equivalents	17	52,676	43,919

		67,937	57,130

TOTAL ASSETS		100,173	87,793


EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital	18	1,496	1,496
Share premium	19	7,124	7,124
Reverse acquisition reserve	19	(4,695)	(4,695)
Other reserves	19	2,591	2,005
Retranslation reserve	19	258	296
Retained earnings	19	73,536	63,582

TOTAL EQUITY		80,310	69,808


LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities	21	1,321	1,758
Deferred tax	24	2,644	2,755

		3,965	4,513
CURRENT LIABILITIES
Trade and other payables	20	14,629	12,654
Lease liabilities	21	823	818
Current tax payable		446	-

		15,898	13,472

TOTAL LIABILITIES		19,863	17,985

TOTAL EQUITY AND LIABILITIES		100,173	87,793

DOTDIGITAL GROUP PLC

COMPANY STATEMENT OF FINANCIAL POSITION

30 JUNE 2023


		30.06.23	30.06.22
		£'000	£'000
	Notes
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	14	9	7
Investments	15	19,047	18,362

		19,056	18,369

CURRENT ASSETS
Trade and other receivables	16	2,939	1,545
Cash and cash equivalents	17	396	163

		3,335	1,708

TOTAL ASSETS		22,391	20,077


EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital	18	1,496	1,496
Share premium	19	7,124	7,124
Other reserves	19	2,600	1,915
Retained earnings	19	10,969	9,400

TOTAL EQUITY		22,189	19,935


LIABILITIES
CURRENT LIABILITIES
Trade and other payables	20	202	142

TOTAL LIABILITIES		202	142

TOTAL EQUITY AND LIABILITIES		22,391	20,077

As permitted by section 408 of the Companies Act 2006, the parent company's income statement has not been included in these financial statements. The profit for the Company was £4,459,042 (2022: £4,163,416).

DOTDIGITAL GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2023


	Called up share	Retained	Share
	capital	earnings	premium
	£'000	£'000	£'000

Balance as at 1 July 2021	1,494	54,081	7,124

Transactions with owners
Issue of share capital	2	-	-
Dividends	-	(2,564)	-
Transfer in reserves	-	234	-
Deferred tax on share options	-	-	-
Share-based payments	-	-	-
Transactions with owners	2	(2,330)	-

Total comprehensive income
Profit for the year	-	11,831	-
Other comprehensive income	-	-	-
Total comprehensive income	-	11,831	-

Restated balance as at 30 June 2022	1,496	63,582	7,124

Balance as at 1 July 2022	1,496	63,582	7,124
Issue of share capital	-	-	-
Dividends	-	(2,926)	-
Transfer in reserves	-	285	-
Deferred tax on share options	-	-	-
Share-based payments	-	-	-
Transactions with owners	-	(2,641)	-

Profit for the year	-	12,595	-
Other comprehensive income	-	-	-
Total comprehensive income	-	12,595	-

Balance as at 30 June 2023	1,496	73,536	7,124

DOTDIGITAL GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2023

CONTINUED…
	Retranslation	Reverse acquisition	Other	Total equity
	reserve	reserve	reserves
	£'000	£'000	£'000	£'000

Balance as at 1 July 2021	(37)	(4,695)	3,066	61,033

Transactions with owners
Issue of share capital	-	-	-	2
Dividends	-	-	-	(2,564)
Transfer in reserves	-	-	(234)	-
Deferred tax on share options	-	-	(1,283)	(1,283)
Share-based payments	-	-	456	456
Transactions with owners	-	-	(1,061)	(3,389)

Total comprehensive income
Profit for the year	-	-	-	11,831
Other comprehensive income	333	-	-	333
Total comprehensive income	333	-	-	12,164

Balance as at 30 June 2022	296	(4,695)	2,005	69,808

Balance as at 1 July 2022	296	(4,695)	2,005	69,808
Issue of share capital	-	-	-	-
Dividends	-	-	-	(2,926)
Transfer in reserves	-	-	(285)	-
Deferred tax on share options	-	-	150	150
Share-based payments	-	-	721	721
Transactions with owners	-	-	586	(2,055)

Profit for the year	-	-	-	12,595
Other comprehensive income	(38)	-	-	(38)
Total comprehensive income	(38)	-	-	12,557

Balance as at 30 June 2023	258	(4,695)	2,591	80,310

· Share capital is the amount subscribed for shares at nominal value.

· Retained earnings represents the cumulative earnings of the Group attributable to equity shareholders.

· Share premium represents the excess of the amount subscribed for share capital over the nominal value net of the share issue expenses.

· Retranslation reserve relates to the retranslation of foreign subsidiaries into the functional currency of the Group.

· The reverse acquisition reserve relates to the adjustment required to account for the reverse acquisition in accordance with UK Adopted International Accounting Standards.

· Other reserves relate to the charge for the share-based payment in accordance with IFRS 2 and the transfer on the exercise or lapsing of share options.

DOTDIGITAL GROUP PLC

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2023


	Called up share	Retained	Share	Other
	capital	earnings	premium	Reserves	Total equity
	£'000	£'000	£'000	£'000	£'000

Balance as at 1 July 2021	1,494	7,570	7,124	1,690	17,878

Transactions with owners
Issue of share capital	2	-	-	-	2
Dividends	-	(2,564)	-	-	(2,564)
Transfer in reserves	-	231	-	(231)	-
Share based payments	-	-	-	456	456
Transactions with owners	2	(2,333)	-	225	(2,106)

Total comprehensive income
Profit for the year	-	4,163	-	-	4,163
Total comprehensive income	-	4,163	-	-	4,163

Balance as at 30 June 2022	1,496	9,400	7,124	1,915	19,935

Balance as at 1 July 2022	1,496	9,400	7,124	1,915	19,935

Issue of share capital	-	-	-	-	-
Dividends	-	(2,926)	-	-	(2,926)
Transfer in reserves	-	36	-	(36)	-
Share based payments	-	-	-	721	721
Transactions with owners	-	(2,890)	-	685	(2,205)

Profit for the year	-	4,459	-	-	4,459
Total comprehensive income	-	4,459	-	-	4,459

Balance as at 30 June 2023	1,496	10,969	7,124	2,600	22,189

· Share capital is the amount subscribed for shares at nominal value.

· Retained earnings represents the cumulative earnings of the Company attributable to equity shareholders.

· Share premium represents the excess of the amount subscribed for share capital over the nominal value net of the share issue expenses.

· Other reserves relate to the charge for the share-based payment in accordance with IFRS 2 and the transfer on the exercise or lapsing of share options.

DOTDIGITAL GROUP PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2023


		30.06.23	30.06.22
		£'000	£'000
	Notes
Cash flows from operating activities
Cash generated from operations	30	21,928	25,162
Tax paid		(1,119)	(1,761)

Net cash generated from all operating activities		20,809	23,401


Cash flows from investing activities
Purchase of intangible fixed assets	13	(8,760)	(7,686)
Purchase of property, plant and equipment	14	(306)	(465)
Interest received		895	57

Net cash flows used in investing activities		(8,171)	(8,094)


Cash flows from financing activities
Equity dividends paid		(2,926)	(2,564)
Payment of lease liabilities		(917)	(1,110)
Proceeds from share issues		-	2

Net cash flows used in financing activities		(3,843)	(3,672)


Increase in cash and cash equivalents		8,795	11,635

Cash and cash equivalents at beginning of year	31	43,919	31,951
Effect of foreign exchange rate changes		(38)	333

Cash and cash equivalents at end of year	31	52,676	43,919

DOTDIGITAL GROUP PLC

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2023


		30.06.23	30.06.22
		£'000	£'000
	Notes
Cash flows from operating activities
Cash generated from operations	30	3,165	2,645

		3,165	2,645
Net cash generated from operating activities

Cash used in investing activities

Purchase of property, plant and equipment	14	(6)	(5)

Net cash flows used in investing activities		(6)	(5)

Cash flows used in financing activates
Equity dividends paid		(2,926)	(2,564)
Proceeds from share issues		-	2

Net cash flows used in financing activities		(2,926)	(2,562)


Increase in cash and cash equivalents		233	78

Cash and cash equivalents at beginning of year	31	163	85

Cash and cash equivalents at end of year	31	396	163

DOTDIGITAL GROUP PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023

1. GENERAL INFORMATION

Dotdigital Group Plc ("Dotdigital") is a public limited company incorporated in England and Wales and quoted on the AIM Market. The address of the registered office is disclosed on the inside back cover of the financial statements. The principal activity of the Group is described on page 43.

2. ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared in accordance with International Accounting Standards as adopted by the UK (IASs as adopted by the UK) and International Financial Reporting Interpretations Committee (IFRIC) Interpretations as endorsed for use in the UK. The financial statements have also been prepared under the historical cost convention, with the exception of the valuation of the valuation of investments, financial liabilities and initial valuation of assets and liabilities acquired in business combinations which are included on a fair value basis, and in accordance with those parts of Companies Act 2006 applicable to companies reporting under UK adopted International Accounting Standards.

The Group has applied all accounting standards and interpretations issued by the International Accounting Standards Board and the IFRS Interpretations Committee effective at the time of preparing the consolidated financial statements.

New and amended standards adopted by the Group

The Group adopted the following new and amended relevant IFRS in the year:
	Annual Improvements to IFRS Standards 2018-2020
IAS 16	Property, Plant and Equipment: Proceeds before Intended Use
IAS 37	Onerous Contracts - Cost of Fulfilling a Contract
IFRS 3	Reference to the Conceptual Framework

The adoption of these accounting standards did not have any effect on the Group's Statement of Comprehensive Income, Statement of Financial Position or equity.

Accounting standards issued but not yet effective
The International Accounting Standards Board ("IASB") has issued/revised a number of relevant standards with an effective date after the date of these financial statements. Any standards that are not deemed relevant to the operations of the Group have been excluded. The Directors have chosen not to early adopt these standards and interpretations and they do not anticipate that they would have a material impact on the Group's financial statements in the period of initial application.
		Effective date

IAS 1 and IFRS Practice Statement 2	Presentation of Financial Statements - amendments regarding the disclosure of accounting policies	1 January 2023
IAS 8	Accounting Policies, Changes in Accounting Estimates - amendments regarding the definition of accounting estimates	1 January 2023
IAS 12	Income Taxes - amendments regarding deferred tax related to assets and liabilities arising from a single transaction	1 January 2023
IAS 12	International Tax Reform-Pillar Two Model Rules	1 January 2024
IFRS 16	Leases - amendments regarding Lease Liability in a Sale and Leaseback	1 January 2024
IAS 1	Presentation of Financial Statements - amendments regarding the classification of liabilities as current or non-current and Non-current Liabilities with Covenants	1 January 2024

The financial statements are presented in sterling (£), rounded to the nearest thousand pounds.

Significant accounting policies

The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements, except if mentioned otherwise.

Basis of consolidation

In the period ended 2009, the Company acquired via a share for share exchange the entire issued share capital of Dotdigital EMEA Limited, whose principal activity is that of providing intuitive software as a service (SaaS) via an all-in-one customer experience and data platform (CXDP).

Under IFRS 3 'Business combinations', the Dotdigital EMEA Limited share exchange has been accounted for as a reverse acquisition. Although these consolidated financial statements have been issued in the name of the legal parent, the Company it represents in substance is a continuation of the financial information of the legal subsidiary, Dotdigital EMEA Limited. The following accounting treatment has been applied in respect of the reverse acquisition:

- the assets and liabilities of the legal subsidiary, Dotdigital EMEA Limited, are recognised and measured in the consolidated financial statements at their pre-combination carrying amounts, without restatement to their fair value;

- the retained reserves recognised in the consolidated financial statements for the beginning of the prior period reflect the retained reserves of Dotdigital EMEA Limited to 30 April 2008. However, in accordance with IFRS 3 'Business combinations', the equity structure appearing in the consolidated financial statements reflects the equity structure of the legal parent Dotdigital Group Plc, including the equity instruments issued under the share exchange to effect the business combination;

- a reverse acquisition reserve has been created to enable the presentation of a consolidated balance sheet which combines the equity structure of the legal parent with the non-statutory reserves of the legal subsidiary and;

- comparative numbers are prepared on the same basis.

The following accounting treatment has been applied in respect of the acquisition of Dotdigital Group Plc:

- the assets and liabilities of Dotdigital Group Plc are recognised and measured in the consolidated financial statements at their fair value at the date of acquisition and;

- the cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the date of acquisition, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.

Subsidiaries

A subsidiary is an entity whose operating and financing policies are controlled by the Group. Subsidiaries are consolidated from the date on which control was transferred to the Group. Subsidiaries cease to be consolidated from

the date the Group no longer has control. Intercompany transactions, balances and unrealised gains on transactions between Group companies have been eliminated on consolidation.

The Group applies the acquisition method to account for business combinations. In the statement of financial position, the acquiree's identifiable assets and liabilities are initially recognised at their fair values at the acquisition date.

As a result of applying reverse acquisition accounting since 30 January 2009, the consolidated IFRS financial information of Dotdigital Group Plc is a continuation of the financial information of Dotdigital EMEA Limited.

Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of services in the ordinary course of the Group's activities. Revenue is shown net of value added tax returns, rebates and discounts after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue can be reliably measured and it is probable that the future economic benefits will flow to the entity. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

The Group sells omnichannel marketing services to other businesses, and services are either provided on a usage basis or fixed price bespoke contract. All revenue is from contracts signed with new customers and upgrades and additional functional recurring revenue sold to existing contracted clients. Revenue from professional services contracts is recognised under percentage of completion method based on a percentage of services performed to date as a percentage of the total services to be performed.

Professional services at no charge: The Group sells professional services to its customers and there are occasions when these services are provided at no cost as part of the contract sold. The services provided for no charge are recognised at the price stated within the latest price list and accounted for as separate performance obligations when the service occurs. The amount allocated to the services is deducted from the contract value and the remainder of the contract value is spread evenly over the term of the contract.

Prepaid contracts: The Group sells 12-, 24- and 36-month contracts to its customers. This revenue is recognised monthly over the period of the contract. Where a customer prepays their contract, this is recognised over the period of the contract irrespective of materiality.

Term contract billing: The Group raises the first invoice to its new customers when the service agreement is signed. Occasionally, the service does not start in the same month as when the service agreement is signed but is invoiced in the month where the service agreement is signed. The revenue is then recognised over the period of the contract irrespective of materiality.

Going concern

The Directors are required to satisfy themselves that it is reasonable for them to conclude whether it is appropriate to prepare the financial statements on a going concern basis, and as part of that process they have followed the Financial Reporting Council's guidelines ("Guidance on the Going Concern Basis of Accounting and Reporting on Solvency and Liquidity Risk" issued April 2016).

The Group's business activities together with factors that are likely to affect its future development and position are set out in the Chairman's report, the Chief Executive Officer's report and financial review and the Directors' report. Budgets and detailed profit and loss forecasts that look beyond 12 months from the date of these consolidated financial statements have been approved and used to ensure that the Group can meet its liabilities as they fall due.

The Directors have made various assumptions in preparing these forecasts, using their view of both the current and future economic conditions that may impact on the Group during the forecast period.

The Directors, at the time of approving the financial statements, have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements.

Operating profit

Operating profit is stated after charging operating expenses but before finance costs and finance income.

Dividends

Final dividend distributions to the Company's shareholders are recognised as a liability in the financial statements in the period in which the dividends are approved by the Company's shareholders while interim dividends distributions are recognised in the period in which the dividends are declared and paid.

Goodwill

Goodwill represents the excess of the fair value of the consideration over the fair values of the identifiable net tangible and intangible assets acquired and is allocated to cash generating units.

Under IFRS 3 "Business Combinations", goodwill arising on acquisitions is not subject to amortisation but is subject to annual impairment testing. Any impairment is recognised immediately in the income statement and not subsequently reversed.

Investments in subsidiaries

Investments are held as non-current assets at cost less any provision for impairment. Where the recoverable amount of the investment is less than the carrying amount, impairment is recognised.

Intangible assets

Intangible assets are recorded as separately identifiable assets and recognised at historical cost less any accumulated amortisation. These assets are amortised over their useful economic lives of four to five years, with the charge included in administrative expenses in the income statement.

Intangible assets are reviewed for impairment annually. Impairment is measured by determining the recoverable amount of an asset or cash generating unit (CGU) which is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

- Domain names

Acquired domain names are shown at historical cost. Domain names have a finite life and are carried at cost less accumulated amortisation. Amortisation is calculated using straight-line method to allocate the cost of domain names over their useful lives of four years.

- Software

Acquired software and websites are shown at historical cost. They have a finite life and are carried at cost less accumulated amortisation. Amortisation is calculated using straight-line method to allocate the cost of software and websites over their useful lives of four to five years.

- Product development

Product development expenditure is capitalised when it is considered that there is a commercially and technically viable product, the related expenditure is separately identifiable and there is a reasonable expectation that the related expenditure will be exceeded by future revenues. Following initial recognition, product developments are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of these intangible assets are assessed to have a finite life of five years. Amortisation is charged on assets with finite lives, and until economic benefit can be received and recognised, this expense is taken to the income statement and useful lives are reviewed on an annual basis. Amortisation is charged from the point when the asset is available for use.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Capitalised development costs are recorded as intangible assets and amortised from the point at which they are ready for use on a straight-line basis over their useful life.

Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when the following criteria as detailed in IAS 38 'Intangible Assets' are fulfilled:

- It is technically feasible to complete the intangible asset so that it will be available for use or resale;

- Management intends to complete the intangible asset and use or sell it;

- There is an ability to use or sell the intangible asset;

- It can be demonstrated how the intangible asset will generate possible future economic benefits;

- Adequate technical, financial and other resource to complete the development and to use or sell the intangible asset are available; and

- The expenditure attributable to the intangible asset during its development can be reliably measured.

-Technology

Technology represents the cost that would be incurred to build the entire Comapi platform had the acquisition not occurred. The useful life of this intangible asset is assessed to have a finite life of 10 years. Amortisation is charged on assets with finite lives, and until economic benefit can be received and recognised, this expense is taken to the income statement and useful lives are reviewed on an annual basis. Amortisation is charged from the point when the asset is available for use.

-Customer relationships

This represents the value of high-value customer contracts within Comapi. The useful life of this intangible asset is assessed to have a finite life of three years. Amortisation is charged on assets with finite lives, and until economic benefit can be received and recognised, this expense is taken to the income statement and useful lives are reviewed on an annual basis. Amortisation is charged over the lifetime of the customer contract.

Impairment of non-financial assets (excluding goodwill)

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.

Property, plant and equipment

Tangible non-current assets are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the assets' carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits are associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Depreciation is provided at the following rates in order to write off each asset over its estimated useful life and is based on the cost of assets less residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.

Right of use assets: over the term of the lease

Short leaseholds: over the term of the lease

Fixtures and fittings: 25% on cost

Computer equipment: 25% on cost

The assets' residual values and useful economic lives are reviewed and adjusted, if appropriate, at each reporting date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable value.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within other (losses) or gains in the income statement.

Capital management

The Group manages its capital to ensure it is able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of cash equivalents and equity attributable to the owners of the parent as disclosed in the statement of changes in equity.

Taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement, to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Current tax

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the balance sheet date.

Deferred taxation

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary difference will be utilised.

Deferred income tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income asset is realised or deferred income tax liability is settled.

Leases

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

- fixed payments (including in-substance fixed payments), less any lease incentives receivable;

- variable lease payment that are based on an index or a rate;

- amounts expected to be payable by the lessee under residual value guarantees;

- the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and;

- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

Right-of-use assets are measured at cost comprising the following:

- the amount of the initial measurement of lease liability;

- any lease payments made at or before the commencement date less any lease incentives received;

- any initial direct costs; and

- restoration costs.

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in the income statement. Short-term leases are leases with a lease term of 12 months or less. Low-value assets, being less than £5,000, comprise IT equipment and small items of office furniture.

Extension and termination options

Extension and termination options are included in a number of property and equipment leases across the Group. These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor. None of the total lease payments made in the period to 30 June 2023 were optional.

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Potential future cash outflows have not been included in the lease liability because it is not reasonably certain that the leases will be extended (or not terminated), the amount of these cash flows is uncertain as several rounds of rent reviews are due before this extension date.

Financial instruments

Financial assets and financial liabilities are recognised on the statement of financial position when an entity becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the income statement.

Financial assets

The Group's accounting policies for financial assets are set out below.

Management determine the classification of its financial assets at initial recognition depending on the purpose for which the financial assets were acquired and, where allowed and appropriate, revaluate this designation at every reporting date.

All financial assets are recognised on a trade date when, and only when, the Group becomes a party to the contractual provisions of an instrument. When financial assets are recognised initially, they are measured at fair value plus transaction costs, except for those finance assets classified as at fair value through profit or loss ('FVTPL'), which are initially measured at fair value.

Financial assets are classified into the following specified categories: financial assets at FVPL, 'amortised cost' or 'fair value through other comprehensive income' ('FVOCI'). The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.

Financial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually, the Group recognises lifetime expected credit losses ('ECL') when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

- Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, having a maturity period of 95 days or less at the date of acquisition. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are also included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows. This accounting policy has been changed for the year ended 30 June 2023 to classify short term highly liquid investments that have a maturity of up to 95 days as cash equivalents, the policy in the previous year having referred to 3 months. Management believe that both the financial position and liquidity of the Group are made clearer for the reader when all cash and cash equivalent items are analysed together and that the change therefore results in the presentation of more relevant and reliable information in the financial statements. The change in accounting policy has not resulted in a prior period adjustment.

- Trade receivables

Trade receivables are recognised initially at the lower of their original invoiced value and recoverable amount. A provision is made when it is likely that the balance will not be recovered in full. Terms on receivables range from 30 to 90 days.

- Financial liabilities and equity

Financial liabilities and equity are recognised on the Group's statement of financial position when the Group becomes a party to a contractual provision of an instrument. Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of transaction costs.

The Group's financial liabilities include trade payables, accrued liabilities and lease liabilities.

- Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Terms on accounts payable range from 10 to 90 days.

Foreign currency risk

Currency risk is the risk that the holding of foreign currencies will affect the Group's position as a result of a change in foreign currency exchange rates. The Group has no significant foreign currency risk as most of the Group's financial assets and liabilities are denominated in functional currencies of relevant Group entities. Accordingly, no quantitative market risk disclosures or sensitivity analysis for currency risks have been prepared.

The results and ﬁnancial position of all the Group entities (none of which has the currency of a hyper-inﬂationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
(b) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
(c) all resulting exchange differences are recognised in other comprehensive income.

Equity

Share capital is the amount subscribed for shares at their nominal value.

Share premium represents the excess of the amount subscribed for the share capital over the nominal value of the respective shares net of share issue expenses.

Retained earnings represent the cumulative earnings of the Group attributable to equity shareholders.

The reverse acquisition reserve relates to the adjustment required by accounting for the reverse acquisition in accordance with IFRS 3 'Business combinations'.

The retranslation reserve represents the cumulative exchange differences on the retranslation of foreign subsidiaries into the functional currency.

Other reserves relate to the charge for share-based payments in accordance with IFRS 2 'Share-based Payments' plus the movement on the exercise or lapsing of share options.

Share-based payments

For equity-settled share-based payment transactions the Group, in accordance with IFRS 2 'Share-based Payments' measures their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted. The fair value of those equity instruments is measured at the grant date. For options granted after 2019, a Monte Carlo model is used to measure the fair use of options granted that are subject to a TSR performance condition. A Black Scholes model is used to measure the fair use of all other options granted. The expense is apportioned over the vesting period of the financial instrument and is based on the number which is expected to vest and the fair value of those financial instruments at the date of grant. If the equity instruments granted vest immediately, the expense is recognised in full.

Functional currency translation

- Functional and presentation currency

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (functional currency), which is mainly pounds sterling (£) and it is this currency the financial statements are presented in.

- Transaction and balances

Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Employee benefit costs

The Group operates a defined contribution pension scheme. Contributions payable by the Group's pension scheme are charged to the income statement in the period in which they relate.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments as identified by the Board of Directors.

Foreign currency exchange rate risk

The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. As well as naturally mitigating this risk by offsetting its cost base in the same currencies where possible, currency exposure arising from the net assets of the Group's foreign operations is managed through cash balances denominated in the relevant foreign currencies.

The Group is mainly exposed to the US Dollar, Australian Dollar, Singaporean Dollar, Euro, Belarusian Ruble, South African Rand, Polish Zloty and Canadian Dollar currencies.

The table below details the Group's sensitivity to a 10% increase or decrease in Sterling against the relevant foreign currencies. 10% is the sensitivity rate which represents management's assessment of the reasonable possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end of a 10% change in foreign currency rates. A positive number below indicates an increase in profit where Sterling strengthens 10% against the relevant currency. For a 10% weakening of Sterling against the relevant currency, there would be an equal and opposite impact on the profit and other equity, and the balances below would be negative or positive.

	30.06.23	30.06.22
	£'000	£'000

US Dollar	68	60
Australian Dollar	17	14
Singaporean Dollar	(42)	(37)
Euro	4	10
Belarusian Ruble	(8)	(2)
South African Rand	9	(2)
Polish Zloty	11	5
Canadian Dollar	0	1

	59	49

Critical accounting estimates and judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Judgements

(a) Capitalisation of development costs - refer to note 13

Our business model is underpinned by our email and data-driven omnichannel marketing automation platform. Internal activities are continually undertaken to enhance and maintain the product in a bid to stay ahead of our competition. Management review the work of developers during the period and make the following judgements:

-Internal work relating to product development is reviewed against IAS 38 criteria and will be capitalised if management consider that the criteria have been met;

-Internal work relating to the maintenance of existing products is expensed to the income statement and accounted for in payroll costs.

(b) Valuation of goodwill - refer to note 12

The recognition of business combinations requires the excess of the purchase price of acquisitions over the net book value of assets acquired to be allocated to the assets and liabilities of the acquired entity. The Group makes judgements and estimates in relation to the fair value allocation of the purchase price. If any unallocated portion is positive it is recognised as goodwill and if negative, it is recognised in the consolidated income statement.

Judgement is required in determining the fair value of identifiable assets, liabilities and contingent assets and liabilities assumed in a business combination and the fair value of the consideration payable. Calculating the fair values involves the use of significant estimates and assumptions, including expectations about future cash flows, discount rates and the lives of assets following purchase.

Management review each of the trading entities operations, particularly when it is loss making to ascertain if it is a going concern and if its assets should be impaired.

Judgement is therefore required to review future looking forecasts and review existing and future sales pipeline within the region. Thereby leading to a decision as to whether the region remains viable.

Estimates and assumptions

(a) Impairment of goodwill

The Directors have carried out a detailed impairment review in respect of goodwill. The Group assesses at each reporting date whether there is an indication that an asset may be impaired, by considering the net present value of discounted cash flow forecasts which have been discounted at 4.28% (2022: 19.75%). This has decreased as a result of the decrease in the cost equity which was impacted by the increase in the share price at the year end compared to last year and the decrease in dividend growth rate. The cash flow projections are based on the assumption that the Group can realise projected sales. A prudent approach has been applied with no residual value being factored.

Further details on the estimates and assumptions we make in our annual impairment testing of goodwill are included in note 12 to the financial statements. At the period end, based on the assumptions, there was no indication of impairment to the carrying value of goodwill.

(b) Share-based compensation

Key management believe that there will not be only one acceptable choice for estimating the fair value of share-based payment arrangements. The judgements and estimates that management apply in determination of the share-based compensation are summarised as follows:

-Selection of a valuation model

-Making assumptions used in determining the variables used in a valuation model:

i. expected life

ii. expected volatility

iii. expected dividend yield

iv. interest rate

Further detail on the estimates and assumptions we make in our share-based compensation are included in note 29 to the financial statements. The charge made to income statement for period is also disclosed there.

The Group depreciates right of use assets, short leasehold, fixtures and fittings, computer equipment and amortises customer relationships, technology, computer software, internally generated development costs and domain names on a straight-line method over the estimated useful lives. The estimated useful lives reflect the Directors' estimate of the periods that the Group intends to derive future economic benefits from the use of the Group's right of use assets, short leasehold, fixtures and fittings, computer equipment, customer relationships, technology, computer software, internally generated development costs and domain names.

(d) Bad debt provision

We perform ongoing credit evaluations of our customers and grant credit based upon past payment history, financial condition and anticipated industry conditions. Customer payments are regularly monitored and a provision for doubtful accounts is established based upon specific situations and overall industry conditions. Hence the provision is maintained for potential credit losses based upon management's assessment of the expected collectability of all accounts receivable. In making this assessment, management take into consideration (i) any circumstances of which we are aware regarding a customer's inability to meet its financial obligations and (ii) our judgements as to potential prevailing economic conditions in the industry and their potential impact on the Group's customers.

Where a general provision is set then specific rationale will be set against this which will be a combination of looking at historical data to ascertain the percentage of debt which goes bad. Plus set against debts within a specific business sector which might be facing financial difficulty, thereby leading to a deemed higher risk of defaulting on their debts.

(e) Lease accounting - incremental borrowing rate

IFRS 16 'Leases' requires lease payments to be discounted using the lessee's incremental borrowing rate. The Group's incremental borrowing rate, as at the date of adoption of IFRS 16, has been based on local commercial bank loans. Management have taken the view that specific costs of borrowing should be applied to each lease as this reflects the different economic conditions within each geography and hence is more representative of the funding facilities available in those countries.

Exceptional items

Where items of income and expense are of such size, nature or incidence that their disclosure is relevant to explain the performance of the company for the period, the nature and amount of such items should be disclosed separately.

3. SEGMENTAL REPORTING

Dotdigital's single line of business remains the provision intuitive software as a service (SaaS) via an all-in-one customer experience and data platform (CXDP). In the previous years Dotdigital had two lines of business; the additional line being communication platform as a service (CPaaS). The chief operating decision maker considers the Group's segments to be by geographical location, this being EMEA, US and APAC operations and by business activity, this being core Engagement Cloud and CPaaS as shown in the tables that follow:

Geographical revenue and results (from all operations)

	30.06.2023
	EMEA	US	APAC	Total
	£'000	£'000	£'000	£'000
Income statement
Revenue	52,338	10,862	6,028	69,228
Gross profit	39,773	9,702	5,402	54,877
Profit/(loss) before income tax	14,067	921	(602)	14,386
Total comprehensive income/(loss) attributable to the owners of the parent	12,522	686	(651)	12,557

Financial position
Total assets	95,742	4,170	261	100,173
Net current assets/(liabilities)	50,620	2,647	(1,228)	52,039

Revenue from external customers is attributed to the geographical segments noted above based on the customers' location. There were no customers who account for more than 10% of revenue (2022: none).

All revenue is from contracts signed with new customers and upgrades and additional functional recurring revenue sold to existing contracted clients. Revenue from contracts is recognised under percentage of completion method based on a percentage of services performed to date as a percentage of the total services to be performed.

	30.06.2022
	EMEA	US	APAC	Total
	£'000	£'000	£'000	£'000
Income statement
Revenue	48,191	9,688	4,953	62,832
Gross profit	38,374	8,537	4,351	51,262
Profit/(loss) before income tax	12,444	972	189	13,605
Total comprehensive income/(loss) attributable to the owners of the parent	10,967	1,049	148	12,164

Financial position
Total assets	83,664	3,498	631	87,793
Net current assets/(liabilities)	42,270	2,204	(816)	43,658

Revenue from external customers is attributed to the geographical segments noted above based on the customers' location. There were no customers who account for more than 10% of revenue (2022: none).

Business activity revenue and results

	30.06.2023
		Core	CPaaS	Total
		£'000	£'000	£'000
Income statement
Revenue		69,228	-	69,228
Gross profit		54,877	-	54,877
Profit/(loss) before income tax		14,386	-	14,386
Total comprehensive income attributable to the owners of the parent		12,557	-	12,557

Financial position
Total assets		100,173	-	100,173
Net current assets/(liabilities)		52,039	-	52,039

	30.6.2022
		Core	CPaaS	Total
		£'000	£'000	£'000
Income statement
Revenue		62,832	-	62,832
Gross profit		51,262	-	51,262
Profit/(loss) before income tax		13,655	(50)	13,605
Total comprehensive income/(loss) attributable to the owners of the parent		12,214	(50)	12,164

Financial position
Total assets		87,774	19	87,793
Net current assets/(liabilities)		43,640	18	43,658

4. EMPLOYEES AND DIRECTORS

		30.6.23	30.6.22
		£'000	£'000

	Wages and salaries	26,290	24,650
	Social security costs	2,744	2,396
	Other pension costs	671	561

		29,705	27,607

The average monthly number of employees during the year is as follows

		30.6.23	30.6.22

	Directors	4	5
	Sales and marketing product	193	157
	Development and system engineers	126	117
	Administration	61	69

		384	348

	Included in the total employees cost above, £6,581,768 (2022: £6,194,834) was capitalised in relation to internally generated development costs.

5. EXCEPTIONAL COSTS
Exceptional costs incurred in the year relate to the amortisation of acquired intangibles of £120,000 (2022: £120,000), professional acquisition costs £100,000 (2022: £nil) please see note 33, professional fees related to the valuation of share options £14,000 (2022: £nil) and senior management settlement costs of £nil (2022: £355,053).
6. FINANCE INCOME AND COSTS
		30.6.23	30.6.22
		£'000	£'000
	Finance income
	Deposit account interest	895	57

	Total finance income	895	57

Finance cost
Interest on lease liabilities	(57)	(57)

Total finance cost	(57)	(57)

7. OPERATING PROFIT

Costs by nature
Profit from continuing operations has been arrived at after charge and crediting:-
	30.6.23	30.6.22
	£'000	£'000

Outsourcing and tech infrastructure	14,351	11,570

Total cost of sales	14,351	11,570


	30.6.23	30.6.22
	£'000	£'000

Direct marketing	3,004	3,066
Partner commission	1,109	2,125
Staff related costs (inc Directors' emoluments)	23,544	20,290
Auditor's remuneration	140	81
Amortisation of intangibles*	6,458	6,001
Depreciation charge*	1,025	1,080
Legal, professional and consultancy fees	840	1,028
Computer expenditure	1,081	802
Bad debts	(193)	682
Foreign exchange losses/(gains)	593	(452)
Travel and subsistence costs	421	119
Office running	465	413
Insurance	214	122
Staff welfare	535	432
Bank and credit card	431	401
Recruitment fees	214	195
Other costs	478	341

Total administrative expenses	40,359	36,726

During the year the Group obtained the following services from the Group's auditor at costs detailed below:

	30.6.23	30.6.22
	£'000	£'000

Fees payable to the Company's auditor for the audit of Parent Company and consolidated financial statements	41	33
Fees payable to the Company's auditor for other services
- audit of Company subsidiaries	63	45
- review of interim accounts	4	3
- overrun of prior year audit services	32	-

	140	81

*Both amortisation of intangibles and depreciation charge will not agree to the relevant notes as these numbers exclude amounts capitalised as development expenditure, amounts included in exceptional costs and amounts in cost of sales.

8. INCOME TAX EXPENSE

	Analysis of the tax charge from continuing operations:
			30.6.23		30.6.22
			£'000		£'000

	Current tax on profits for the year		1,448		968
	Foreign tax suffered		266		212
	Changes in estimates related to prior years		38		329
	Deferred tax on origination and reversal of timing differences		39		265

			1,791		1,774


	Factors affecting the tax charge:
		30.6.23		30.6.22
		£'000		£'000

Profit on ordinary activities from all operations before tax		14,386		13,605
Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK: 25% (2022: 19%)		3,597		2,585
Effects of:
Adjustments in respect of prior years		(46)		142
Expenses not deductible		66		98
Research and development enhanced claim		(1,761)		(1,439)
Income not taxable		(18)		(21)
Share options		78		71
Tax rate changes		(160)		291
Effects of overseas tax rates		35		38
Other		-		9
Total tax charge for the year		1,791		1,774

Deferred tax was calculated using the rate 25% (2022: 25%). For further details on deferred tax see note 24.

Taxation for each region is calculated at the rates prevailing in the respective jurisdiction.

The main rate of UK corporation tax increased on 1 April 2023 from 19% to 25%. The effective tax rate in the period was 12.44% (2022: 13.03%). UK deferred balances have been recognised at 25% in the period (2022: 25%).

9. PROFIT OF PARENT COMPANY

The profit and loss account of the Parent Company is not presented as part of these financial statements. The Parent Company's profit for the financial year was £4,459,042 (2022: £4,163,416)

10. DIVIDENDS

Amounts recognised as distributions to equity holders in the period
	30.6.23	30.6.22
	£'000	£'000

Paid dividend for year end 30 June 2022 of 0.98p (2021: 0.86p) per share	2,926	2,564

Proposed dividend for the year end 30 June 2023 of 1.00p (2022: 0.98p) per share	3,050	2,925
The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The number of shares considered for the proposed dividend includes 6,862,683 shares issued post year end as part of the consideration for the acquisition of Fresh Relevance.

11. EARNINGS PER SHARE

Earnings per share data is based on the consolidated profit using and the weighted average number of shares in issue of the Parent Company. Basic earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares. Adjusted earnings per share is based on the consolidated profit deducting the acquisition related exceptional costs and share-based payment.

A number of non-IFRS adjusted profit measures are used in this annual report and financial statements. Adjusting items are excluded from our headline performance measures by virtue of their size and nature, in order to reflect management's view of the performance of the Group. Summarised below is a reconciliation between statutory results to adjusted results. The Group believes that alternative performance measures such as adjusted EBITDA are commonly reported by companies in the markets in which it competes and are widely used by investors in comparing performance on a consistent basis without regard to factors such as depreciation and amortisation, which can vary significantly depending upon accounting methods (particularly when acquisitions have occurred), or based on factors which do not reflect the underlying performance of the business. The adjusted profit after tax earnings measure is also used for the purpose of calculating adjusted earnings per share.

Reconciliations to earnings figures used in arriving at adjusted earnings per share are as follows:

	30.6.23	30.6.22
From all operations	£'000	£'000

Profit for the year attributable to the owners of the parent	12,595	11,831
Amortisation of acquisition-related intangible fixed assets (see note 13)	120	120
Other exceptional costs (see note 5)	114	355
Share-based payment (see note 29)	736	456
Adjusted profit for the year attributable to the owners of the parent	13,565	12,762

Management does not consider the above adjustments to reflect the underlying business performance. The other exceptional costs relate to acquisition costs and professional fees. In 2022 the other exceptional costs related to senior management settlement costs.

	30.6.23
		Weighted
		average	Per share
From all operations	Earnings	number of	Amount
	£'000	shares	Pence

Basic EPS
Profit for the year attributable to the owners of the parent	12,595	299,216,130	4.21

Adjusted Basic EPS
Adjusted profit for the year attributable to the owners of the parent	13,565	299,216,130	4.53

Options and warrants	-	7,219,476	-

Diluted EPS
Profit for the year attributable to the owners of the parent	12,595	306,435,606	4.11

Adjusted Diluted EPS
Adjusted profit for the year attributable to the owners of the parent	13,565	306,435,606	4.43

	30.6.22
		Weighted
		average	Per share
From all operations	Earnings	number of	Amount
	£'000	shares	Pence

Basic EPS
Profit for the year attributable to the owners of the parent	11,831	298,995,582	3.96

Adjusted Basic EPS
Adjusted profit for the year attributable to the owners of the parent	12,762	298,995,582	4.27

Options and Warrants	-	6,222,724	-

Diluted EPS
Profit for the year attributable to the owners of the parent	11,831	305,218,306	3.88

Adjusted Diluted EPS
Adjusted profit for the year attributable to the owners of the parent	12,762	305,218,306	4.18


Weighted average number of shares	30.6.23	30.6.22
	Shares	Shares

Basic EPS	299,216,130	298,995,582

Diluted EPS	306,435,606	305,218,306

12. GOODWILL

Group
	30.6.23	30.6.22
COST	£'000	£'000
At 1 July	13,192	13,192
At 30 June	13,192	13,192

IMPAIRMENT
At 1 July	3,512	3,512

At 30 June	3,512	3,512

NET BOOK VALUE	9,680	9,680

Goodwill is allocated to the Groups cash generating unit (CGUs) identified, being Dotdigital.

Goodwill arising on business combinations is not amortised but is reviewed for impairment on an annual basis, or more frequently if there are indications that goodwill may be impaired. Goodwill acquired in a business combination is allocated, at acquisition, to CGUs that are expected to benefit from that business combination.

The carrying amount of goodwill relates to the Groups trading activity and business segment. This has been tested for impairment during the current period by comparison with the recoverable amounts of the CGU. Recoverable amounts for CGUs are based on the higher of value in use and fair value less costs to sell. The recoverable amounts of the CGU have been determined from value in use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rate for the continuing operations of the Group. These long-term growth rates are management's estimates. The discount rates used are pre-tax and reflect specific risks relating to the continuing operations of the Group.

The key assumptions for the value in use calculations are those regarding discount rates, growth rates, and expected changes in margins.

Discount rate

Management estimates discount rates using pre-tax rates that reflect the current market assessment of the time value of money and the risks specific to the CGUs. The pre-tax discount rate used to calculate the value in use is 4.28% (2022: 19.75%). This has decreased as a result of the decrease in the cost equity which was impacted by the increase in the share price at the year end compared to last year and the decrease in dividend growth rate.

Growth rates

The growth rate is stated as the compound annual growth rates in the initial five years for the continuing operations of the Group which are then used for impairment testing. These are performed using the projected cash flows based on budgets approved by management over a five-year period. Cash flow projections from the sixth year onwards are based on an estimated constant growth rate. The growth rate used to calculate the value in use is 11% (2022: 15%).

Gross profit margin

Changes in income and expenditure are based on experience and expectations of the future changes in the market. The impairment review is based on these estimated gross profit margins which were included with the budgets approved by management over a five-year period. From the sixth year onwards, an assumed constant margin is used. The gross profit margin used to calculate the value in use in 73% (2022: 75%).

The valuations indicate sufficient headroom such that a reasonably possible change in key assumptions would not result in impairment of goodwill.

Sensitivity analysis

The principal variables used, being both the discount rate and growth rates, these would need to change before an impairment is required, this being 145% (2022: 161%) discount rate and growth rate of -5% (2022: -5%).

13. INTANGIBLE ASSETS

Group

	Customer
	relationships	Technology
	£'000	£'000
COST
At 1 July 2022	1,205	1,200
Additions	-	-
Disposals	-	-
Exchange differences	-	-

At 30 June 2023	1,205	1,200

AMORTISATION
At 1 July 2022	1,205	550
Amortisation for the year	-	120
Disposals	-	-
Exchange differences	-	-

At 30 June 2023	1,205	670

NET BOOK VALUE At 30 June 2023	-	530

		Computer	Internally generated development		Domain
		software	costs		names		Totals
		£'000	£'000		£'000		£'000
	COST
	At 1 July 2022	1,111	41,651		46		45,213
	Additions	26	8,729		5		8,760
	Disposals	(1)	(17)		-		(18)
	Exchange differences	(1)	(4)		-		(5)

	At 30 June 2023	1,135	50,359		51		53,950

	AMORTISATION
	At 1 July 2022	945	24,778		37		27,515
	Amortisation for the year	83	6,375		-		6,578
	Disposals	-	(2)		-		(2)
	Exchange differences	(1)	-		-		(1)

	At 30 June 2023	1,027	31,151		37		34,090
	NET BOOK VALUE At 30 June 2023	108	19,208		14		19,860


				Customer
				relationships		Technology
				£'000		£'000
COST
At 1 July 2021				1,205		1,200
Additions				-		-

At 30 June 2022				1,205		1,200

AMORTISATION
At 1 July 2021				1,205		430
Amortisation for the year				-		120

At 30 June 2022				1,205		550

NET BOOK VALUE At 30 June 2022				-		650


	Computer	Internally generated development	Domain
	software	costs	names	Totals
	£'000	£'000	£'000	£'000
COST
At 1 July 2021	1,023	34,052	46	37,526
Additions	87	7,599	-	7,686
Exchange differences	1	-	-	1

At 30 June 2022	1,111	41,651	46	45,213

AMORTISATION
At 1 July 2021	874	18,847	36	21,392
Amortisation for the year	71	5,931	1	6,123

At 30 June 2022	945	24,778	37	27,515

NET BOOK VALUE At 30 June 2022	166	16,873	9	17,698

Development cost additions represents resources the Group has invested in the development of new, innovative and ground-breaking technology products for marketing professionals. This platform allows them to create, send and automate marketing campaigns. Following development of the products the Group intends to licence the use of the platform.

Technology represents the cost that would be incurred to build the entire Comapi platform had the acquisition not occurred. Customer relationships represent the value of high-value customer contracts within Comapi.

14. PROPERTY, PLANT AND EQUIPMENT

Group

	Right of	Leasehold	Fixtures &	Computer
	Use assets	improvements	fittings	equipment	Totals
	£'000	£'000	£'000	£'000	£'000
COST
At 1 July 2022	5,555	731	773	3,102	10,161
Additions	406	3	53	250	712
Disposals	(719)	(46)	(200)	(323)	(1,288)
Re-measurement of existing lease liabilities	(33)	-	-	-	(33)
Exchange differences	-	(3)	(14)	(31)	(48)

At 30 June 2023	5,209	685	612	2,998	9,504

DEPRECIATION
At 1 July 2022	3,055	593	736	2,492	6,876
Depreciation for the year	873	52	23	278	1,226
Disposals	(719)	(46)	(190)	(311)	(1,266)
Re-measurement of existing lease liabilities	14	-	-	-	14
Exchange differences	(3)	(3)	(14)	(22)	(42)

At 30 June 2023	3,220	596	555	2,437	6,808

NET BOOK VALUE
At 30 June 2023	1,989	89	57	561	2,696


	Right of	Leasehold	Fixtures &	Computer
	Use assets	improvements	fittings	equipment	Totals
	£'000	£'000	£'000	£'000	£'000
COST
At 1 July 2021	5,384	725	754	2,614	9,477
Additions	167	-	-	465	632
Disposals	(60)	-	-	-	(60)
Exchange differences	64	6	19	23	112

At 30 June 2022	5,555	731	773	3,102	10,161

DEPRECIATION
At 1 July 2021	2,061	526	680	2,238	5,505
Depreciation for the year	983	61	40	236	1,320
Disposals	(45)	-	-	-	(45)
Exchange differences	56	6	16	18	96

At 30 June 2022	3,055	593	736	2,492	6,876

NET BOOK VALUE
At 30 June 2022	2,500	138	37	610	3,285

Included in the net carrying amount of property, plant and equipment are the right-of-use assets as follows:

			Motor
	Properties	vehicles		Totals
	£'000	£'000		£'000
COST
As at 1 July 2022	5,400	155		5,555
Termination of leases	(719)	-		(719)
Additions	366	40		406
Re-measurement of existing lease liabilities	(33)	-		(33)
Foreign currency translation	-	-		-

At 30 June 2023	5,014	195		5,209

DEPRECIATION
As at 1 July 2022	2,906	149		3,055
Depreciation for the year	836	37		873
Termination of leases	(719)	-		(719)
Re-measurement of existing lease liabilities	14	-		14
Foreign currency translation	(3)	-		(3)

At 30 June 2023	3,034	186		3,220

NET BOOK VALUE
At 30 June 2023	1,980	9		1,989

		Motor
	Properties	vehicles	Totals
	£'000	£'000	£'000
COST
As at 1 July 2021	5,229	155	5,384
Termination of leases	(60)	-	(60)
Additions	167	-	167
Foreign currency translation	64	-	64

At 30 June 2022	5,400	155	5,555

DEPRECIATION
As at 1 July 2021	1,942	119	2,061
Depreciation for the year	953	30	983
Termination of leases	(45)	-	(45)
Foreign currency translation	56	-	56

At 30 June 2022	2,906	149	3,055

NET BOOK VALUE
At 30 June 2022	2,494	6	2,500

Company

				Computer Equipment
				£'000
COST
As at 1 July 2022				11
Additions				6
Foreign currency translation				-

At 30 June 2023				17

DEPRECIATION
As at 1 July 2022				4
Depreciation for the year				4

At 30 June 2023				8

NET BOOK VALUE
At 30 June 2023				9


						Computer Equipment
						£'000
COST
As at 1 July 2021						6
Additions						5

At 30 June 2022
						11
DEPRECIATION
As at 1 July 2021						2
Depreciation for the year						2

At 30 June 2022
						4
NET BOOK VALUE
At 30 June 2022						7

15. INVESTMENTS

Company

	Group	Group
	undertakings	undertakings
	30.6.23	30.6.22
COST	£'000	£'000

At 1 July Additions Disposals	22,116 721 -	21,660 456 -
At 30 June	22,837	22,116

IMPAIRMENT
At 1 July and 30 June	3,754	3,519
Impairment	36	235
At 30 June	3,789	3,754
NET BOOK VALUE
At 30 June	19,047	18,362

The Group's or the Company's investments at the balance sheet date in the share capital of companies include the following:


Subsidiaries		Nature of business		Class of share	Proportion of
					voting power
					held directly %
Dotdigital EMEA Limited		All-in-one customer experience and data platform		Ordinary	100

Dotdigital Inc		All-in-one customer experience and data platform		Ordinary	100
Dotdigital APAC Pty Limited			All-in-one customer experience and data platform	Ordinary	100
Dotdigital B.V.		All-in-one customer experience and data platform		Ordinary	100
Dotmailer Development Ltd	J	Holding company		Ordinary	100
Dotdigital Development SA Pty		Development hub		Ordinary	100
Dotdigital SG Pte Limited		All-in-one customer experience and data platform		Ordinary	100
Dynmark International Ltd		All-in-one customer experience and data platform		Ordinary	100
Dotdigital Poland S.p. z.o.o		Development hub		Ordinary	100

All of the above subsidiaries have been included within the consolidated results, however Dynmark International Ltd was exempt from audit by virtue of s479A of Companies Act 2006 plus Dotmailer LLC was also dissolved on 29 June 2023. Dotdigital EMEA Limited, Dotmailer Development Limited and Dynmark International Ltd were incorporated in England and Wales. Dotdigital Inc was incorporated in Delaware (US), Dotdigital APAC Pty Limited was incorporated in New South Wales (Australia), Dotdigital B.V. was incorporated in Netherlands, Dotdigital SG Pte Ltd was incorporated in Singapore, Dotdigital Development SA Pty was incorporated in South Africa, and Dotdigital Poland S.p. z.o.o was incorporated in Poland.

Subsidiary Registered office

Dotdigital EMEA Ltd No.1 London Bridge

Dynmark International Ltd London

Dotmailer Development Ltd SE1 9BG

Dotdigital Inc 16192 Coastal Highway

Lewes

Delaware 19958-9776

County of Sussex

USA

Dotdigital APAC Pty Ltd 60/2 O'Connell Street

Parramatta

New South Wales 2150

Australia

Dotdigital SG Pte Ltd 6001 Beach Road

11-06 Golden Mile Tower

199589 Singapore

Dotdigital Development SA Pty Ltd BDO Building

Wanderers Office Park

52 Corlett Drive

Illovo

Johannesburg 2196

South Africa

Dotdigital B.V. Spaces Amstel

Mr. Treublaan 7

Amsterdam

1097DP

Netherlands

Dotdigital Poland S.p. z.o.o Al. Jana Pawla II 22

00-133 Warsaw

Poland

16. TRADE AND OTHER RECEIVABLES

	Group		Company
	30.6.23	30.6.22	30.6.23	30.6.22
	£'000	£'000	£'000	£'000
Current:
Trade receivables	11,487	10,748	-	-
Less: Provision for impairment of trade receivables	(1,305)	(1,892)	-	-

Trade receivables - net	10,182	8,856	-	-
Other receivables	29	52	-	-
Amounts owed by Group undertakings	-	-	2,834	1,426
VAT	-	-	34	34
Tax receivable	-	186	-	-
Prepayments and contract assets	5,050	4,117	71	85

	15,261	13,211	2,939	1,545

Further details on the above can be found in note 22.

Included within Group prepayments is an amount of £255,846 (2022: £246,057) in relation to deferred commission which is considered to be long term. The Group has applied IFRS 9 simplified approach to measuring expected credit losses, the balances have been assessed based on each entitiy's ability to repay amounts owed and no expected credit loss has been recognised.

17. CASH AND CASH EQUIVALENTS

	Group		Company
	30.6.23	30.6.22	30.6.23	30.6.22
	£'000	£'000	£'000	£'000

Cash at bank	17,534	23,458	396	163
Short term deposit accounts	35,142	20,461	-	-

	52,676	43,919	396	163

Further details on the above can be found in note 22.

18. CALLED UP SHARE CAPITAL

Allotted, issued, fully paid	Nominal	30.6.23	30.6.22
number	value	£'000	£'000

299,216,130 (2022: 299,216,130)	£0.005	1,496	1,496

		1,496	1,496

19. RESERVES

Group

	Retained	Share	Reverse acquisition
	earnings	premium	reserve
	£'000	£'000	£'000

As at 1 July 2022	63,582	7,124	(4,695)

Issue of share capital	-	-	-
Dividends	(2,926)	-	-
Profit for the year	12,595	-	-
Transfer of reserves	285	-	-
Deferred tax on share options	-	-	-
Other comprehensive income: currency translation	-	-	-
Share-based payment	-	-	-

Balance as at 30 June 2023	73,536	7,124	(4,695)

	Retranslation	Other
	Reserve	reserves	Totals
	£'000	£'000	£'000

As at 1 July 2022	296	2,005	68,312

Issue of share capital	-	-	-
Dividends	-	-	(2,926)
Profit for the year	-	-	12,595
Transfer of reserves	-	(285)	-
Deferred tax on share options	-	150	150
Other comprehensive income: currency translation	(38)	-	(38)
Share-based payment	-	721	721

Balance as at 30 June 2023	258	2,591	78,814

Group

	Retained	Share	Reverse acquisition
	earnings	premium	reserve
	£'000	£'000	£'000

As at 1 July 2021	54,081	7,124	(4,695)

Issue of share capital	-	-	-
Dividends	(2,564)	-	-
Profit for the year	11,831	-	-
Transfer of reserves	234	-	-
Deferred tax on share options	-	-	-
Other comprehensive income: currency translation	-	-	-
Share-based payment	-	-	-

Balance as at 30 June 2022	63,582	7,124	(4,695)

	Retranslation	Other
	reserve	reserves	Totals
	£'000	£'000	£'000

As at 1 July 2021	(37)	3,066	59,539

Issue of share capital	-	-	-
Dividends	-	-	(2,564)
Profit for the year	-	-	11,831
Transfer in reserves	-	(234)	-
Deferred tax on share options	-	(1,283)	(1,283)
Other comprehensive income: currency translation	333	-	333
Share-based payment	-	456	456

Balance as at 30 June 2022	296	2,005	68,312

Company
	Retained	Share	Other
	earnings	premium	Reserves	Totals
	£'000	£'000	£'000	£'000

At 1 July 2022	9,400	7,124	1,915	18,439

Issue of share capital	-	-	-	-
Dividends	(2,926)	-	-	(2,926)
Profit for the year	4,459	-	-	4,459
Transfer in reserves	36	-	(36)	-
Share based payments	-	-	721	721

Balance as at 30 June 2023	10,969	7,124	2,600	20,693


Company
	Retained	Share	Other
	earnings	premium	Reserves	Totals
	£'000	£'000	£'000	£'000

At 1 July 2021	7,570	7,124	1,690	16,384

Issue of share capital	-	-	-	-
Dividends	(2,564)	-	-	(2,564)
Profit for the year	4,163	-	-	4,163
Transfer in reserves	231	-	(231)	-
Share based payments	-	-	456	456

Balance as at 30 June 2022	9,400	7,124	1,915	18,439

20. TRADE AND OTHER PAYABLES

	Group		Company
	30.6.23	30.6.22	30.6.23	30.6.22
	£'000	£'000	£'000	£'000
Current:
Trade payables	2,175	2,428	-	81
Social security and other taxes	588	68	-	-
Other payables	170	151	-	-
VAT	730	228	-	-
Accruals and contract liabilities	10,966	9,779	202	61

	14,629	12,654	202	142

Further details on liquidity and interest rate risk can be found in note 2.

Included within revenue is £1,322,000 relating to contract liabilities that had been recognised at 30 June 2022 (£636,000 related to contract liabilities recognised at 30 June 2021 that had been included within revenue in 2022)

21. LEASE LIABILITIES

Group

	Properties	Motor Vehicles	Totals
	£'000	£'000	£'000

At 1 July 2022	2,540	36	2,576
Termination of leases	(4)	-	(4)
Additions	366	41	407
Principal repayments	(864)	(53)	(917)
Interest	79	2	81
Foreign currency retranslation	1	-	1

At 30 June 2023	2,118	26	2,144

Current	797	26	823
Non-current	1,321	-	1,321

At 30 June 2023	2,118	26	2,144

Group

	Properties	Motor Vehicles	Totals
	£'000	£'000	£'000

At 1 July 2021	3,359	64	3,423
Termination of leases	(15)	-	(15)
Additions	167	-	167
Principal repayments	(1,081)	(29)	(1,110)
Interest	89	1	90
Foreign currency retranslation	21	-	21

At 30 June 2022	2,540	36	2,576

Current	796	22	818
Non-current	1,744	14	1,758

At 30 June 2022	2,540	36	2,576

The properties are office leases located in various location where the term ranges from one to ten years. The motor vehicles are company cars offered to senior staff where the term is always three years.

22. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Group's activities expose it to a number of financial risks that include credit risk, liquidity risk, currency risk and interest rate risk. These risks and the Group's policies for managing them have been applied consistently during the year and are set out below.

The Group holds no financial or other non-financial instruments other than those utilised in the working operations of the Group and that are listed in this note. It is the Group's policy not to trade in derivative contracts.

Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument rate risk arises, are as follows:

-Trade receivables

-Cash and cash equivalents

-Trade and other payables

- Lease Liabilities

Financial instruments by category

The following table sets out the financial instruments as at the reporting date:

	Group		Company
	30.6.23	30.6.22	30.6.23	30.6.22
	£'000	£'000	£'000	£'000
Financial assets at amortised cost
Trade and other receivables	10,211	8,908	-	-
Amounts owed from group undertakings	-	-	2,834	1,426
Cash and cash equivalents	52,676	43,919	396	163

	62,887	52,827	3,230	1,589

Financial liabilities at amortised cost
Trade payables	2,175	2,428	-	81
Accrued liabilities and other payables	5,380	4,974	202	61
Lease liabilities	2,144	2,576	-	-

	9,699	9,978	202	142

General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies and whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's Risk Committee. The Board receives quarterly reports from the Risk Committee, through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company's competitiveness and flexibility. Further details regarding these policies are set out below:

Interest rate risk

The Group's interest rate risk arises from interest-bearing assets and liabilities. The Group has in place a policy of maximising finance income by ensuring that cash balances earn a market rate of interest offsetting where possible cash balances, and by forecasting and financing its working capital requirements. As at the reporting date the Group was not exposed to any movement in interest rates as it has no external borrowings and therefore is not exposed to interest rate risk. No sensitivity analysis has been prepared.

The Group's working capital requirements are managed through regular monitoring of the overall cash position and regularly updated cash flow forecasts to ensure there are sufficient funds available for its operations.

Liquidity risk

The Group's working capital requirements are managed through regular monitoring of the overall position and regularly updated cash flow forecasts to ensure there are funds available for its operations. Management forecasts indicate no new borrowing facilities will be required in the upcoming financial period.

Trade and other payables of £8,377,583 (2022: £8,220,247) are expected to mature in less than a year.

Credit risk

Credit risk arises principally from the Group's trade receivables, as there are no trade receivables within the Company, which comprise amounts due from customers. Prior to accepting new customers, a credit check is obtained. As at 30 June 2023 there were no significant debts past their due period which had not been provided for. The maturity of the Group's trade receivables is as follows:


	30.6.23	30.6.22
	£'000	£'000

0-30 days	609	432
30-60 days	664	653
More than 60 days	1,184	702

	2,457	1,787

The maturity of the Group's provision for impairment is as follows:

	30.6.23	30.6.22
	£'000	£'000

0-30 days	68	195
30-60 days	11	231
More than 60 days	1,226	1,466

	1,305	1,892

The movement in the provision for the impairment is as follows:

	30.06.23	30.6.22
	£'000	£'000

As at 1 July	1,892	1,785

Provision for impairment	13	126
Receivable written off in the year	(193)	(19)
Unused amount reversed	(407)	-

As at 30 June	1,305	1,892

The Group minimises its credit risk by profiling all new customers and monitoring existing customers of the Group for changes in their initial profile. The level of trade receivables older than the average collection period consisted of a value of £2,203,244 (2022: £1,614,266) of which £1,219,374 (2022: £1,476,586) was provided for. The Group felt that the remainder would be collected post year-end as they were with long-standing relationships, and the risk of default is considered to be low and write-offs due to bad debts are extremely low. The Group has no significant concentration of credit risk, with the exposure spread over a large number of customers.

The credit risk on liquid funds is low as the counterparts are banks with high credit ratings assigned by international credit rating bodies. The majority of the Group's cash holdings are held at NatWest Bank and Investec Bank Plc, which have A+ and BBB+ credit ratings respectively.

The carrying value of both financial assets and liabilities approximates to fair value.

Capital policy

The Group's objectives when managing capital are to safeguard its ability to continue as a going concern in order to

provide optimal returns for shareholders and to maintain an efficient capital structure to reduce the cost of capital.

In doing so the Group's strategy is to maintain a capital structure commensurate with a strong credit rating and to retain appropriate levels of liquidity headroom to ensure financial stability and flexibility. To achieve this, the Group monitors key credit metrics, risk and fixed charge cover to maintain this position. In addition the Group ensures a combination of appropriate short-term and long-term liquidity headroom.

During the year the Group had a short-term loan balance of £nil (2022: £nil) and amounts payable over one year are £nil (2022: £nil). The Group had a strong cash reserve to utilise for any short-term capital requirements that were needed.

The Group has continued to look for further long-term investments or acquisitions and therefore, to maintain or re-align the capital structure, the Group may adjust when dividends are paid to shareholders, return capital to shareholders, issue new shares or borrow from lenders.

Foreign currency exchange rate risk

Refer to foreign currency exchange rate risk under note 2 on page 63.

Maturities of financial liabilities

The tables below analyse the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities (the Group does not hold any derivative financial instruments in the current or prior financial year).

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of the discounting is not significant.

	<6 months	6 to 12 months	1 to 2 years	2 to 5 years	Total contractual cash flows carrying amounts
	£'000	£'000	£'000	£'000	£'000
Contractual maturities at 30 June 2023
Trade and other payables	8,873	-	-	-	8,873
Lease liabilities	474	415	426	955	2,270

Total non-derivatives	9,347	415	426	955	11,143



	<6 months	6 to 12 months	1 to 2 years	2 to 5 years	Total contractual cash flows carrying amounts
	£'000	£'000	£'000	£'000	£'000
Contractual maturities at 30 June 2022
Trade and other payables	7,698	-	-	-	7,698
Lease liabilities	463	448	816	1,082	2,809

Total non-derivatives	8,161	448	816	1,082	10,507

23. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITES

	30.06.23	30.6.22
	Lease Liabilities	Lease Liabilities
	£'000	£'000

As at 1 July	2,576	3,423

Cash flows	(917)	(1,110)
Interest	81	90
Foreign exchange movement	1	21
Lease additions and terminations	403	152

As at 30 June	2,144	2,576

24. DEFERRED TAX

The gross movement in deferred tax is as follows:

		Acquired	Accelerated		Short-term		R&D relief	Share-		Tax	Total
		intangibles	capital		timing		in excess of	based		Losses
	Deferred tax liability		allowances		differences		amortisation		payments
		£'000	£'000		£'000		£'000	£'000		£'000		£'000
At 1st July 2021		146	38	-		2,963		(1,805)		(135)			1,207
(Credit)/charge to the consolidated income statement		17	44	(82)		218		69		(1)			265
(Credit)/charge to the consolidated statement of changes in equity		-	-	-		-		1,283		-			1,283
At 1st July 2022		163	82	(82)		3,181		(453)		(136)			2,755
(Credit)/charge to the consolidated income statement		(30)	(22)	(18)		350		(176)		(65)			39
(Credit)/charge to the consolidated statement of changes in equity		-	-	-		-		(150)		-			(150)
At 30 June 2023		133	60	(100)		3,531		(779)		(201)			2,644

	30.6.23	30.6.22
	£'000	£'000

As at 1 July	2,755	1,207
Current year provision	(111)	1,548

	2,644	2,755

The following is the analysis of the deferred tax balances after any offset:

	30.6.23	30.6.22
	£'000	£'000

Deferred tax assets	(201)	(136)
Deferred tax liabilities	2,845	2,891

	2,644	2,755

Deferred tax provision relates to taxes to be levied by the same authority on the same entity expected to be settled at the same

time. As such deferred tax assets and liabilities have been offset.

25. CAPITAL COMMITMENTS

The Company and Group have no capital commitments as at the year end.

26. CONTINGENT LIABILITIES

The company and Group have no Contingent liabilities as at the year end.

27. RELATED PARTY DISCLOSURES

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Group

The following transactions were carried out with related parties and were made on terms equivalent to those that prevail in arm's length transactions.

			30.6.23	30.6.22
			£'000	£'000
Sale of services
Ipswich Town Football Club	Entity under common directorship	Email marketing services	-	5
Epwin Group Plc	Entity under common directorship	Email marketing services	-	4

			-	9

Year end balances arising from sale of services			30.6.23 £'000	30.6.22 £'000
Ipswich Town Football Club	Entity under common directorship	Email marketing services	-	-
Epwin Group Plc	Entity under common directorship	Email marketing services	-	-


			-	-

Key Management Personnel

	30.6.23	30.6.22
	£'000	£'000

Aggregate emoluments	1,191	938
Ex-gratia payment	-	213
Company contributions to money purchase pension scheme	22	25
Share-based payments from the LTIP options granted	248	176

	1,461	1,352

The Board of Directors are deemed to be key management personnel. Details of directors' emoluments are provided in the Remuneration Committee report on page 41. Ex-gratia payment related to a settlement payment made to a former CFO.

Information in relation to the highest paid Director is as follows:

	30.6.23	30.6.22
	£'000	£'000

Salaries	698	529
Other benefits	4	2
Pension costs	19	18
Share-based payments on the LTIP options granted	224	126

	945	675

The number of directors for whom retirement benefits are accruing under defined contribution pension schemes amounted to 2 (2022: 2).

Company

The following transactions were carried out with related parties

			30.06.23	30.06.22
			£'000	£'000
Year end balances arising from sales/purchase of services

Dotdigital EMEA Limited	Subsidiary	Receivables/(Payables)	4,904	2,151

			4,904	2,151

The receivables and payables are unrestricted in nature and bear no interest. No provisions are held against receivables from related parties.

Loans to/from related parties

		30.6.23	30.6.22
		£'000	£'000
Dotdigital EMEA Limited	Subsidiary
As at 1 July		726	(1,041)
Loans advanced		5,330	5,653
Loans repaid		(3,923)	(3,886)

		2,133	726

IAS 24 Related Party Disclosure (Revised) allows disclosure exemption of transactions between wholly-owned subsidiaries that are eliminated on consolidation.

28. ULTIMATE CONTROLLING PARTY

There is no ultimate controlling party of the Group. Dotdigital Group Plc acts as the Parent Company to Dotdigital EMEA Limited, Dotdigital Inc, Dotdigital APAC Pty Limited, Dotdigital B.V., Dotmailer Development Limited, Dotdigital Development SA Pty Ltd, Dotdigital SG Pte. Limited, Dynmark International Ltd, and Dotdigital Poland S.p. z.o.o.

29. SHARE-BASED PAYMENT TRANSACTIONS

The measurement requirements of IFRS 2 have been implemented in respect of share options that were granted after 7 November 2002. The expense recognised for share-based payment made during the year is £721,070 and £15,003 movement in the provision of NI (2022: £455,549).

Vesting conditions of the options dictate that employees must remain in the employment of the Group for the whole period to qualify.

Movement in issued share options during the year

The table below illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options during the period. The options outstanding at 30 June 2023 had a WAEP of 36.91p (2022: 49.04p) and a weighted average contracted life of 7.27 years (2022: 5.82 years) and their exercise prices ranged from 0.5p to 181.2p. All share options are settled in form of equity issued.

	30.06.23		30.06.22
	No of options	WAEP	No of options	WAEP

Outstanding at the beginning of the period	6,059,337	49.04p	4,292,735	26.05p
Granted during the year	1,654,722	2.30p	2,463,663	89.85p
Forfeited/cancelled during the period	(201,636)	117.51p	(259,562)	137.88p
Exchanged for shares	-	-	(437,500)	0.50p
Outstanding at the end of the period	7,512,423	36.91p	6,059,337	49.04p
Exercisable at the end of the period	-	-	-	-

The weighted average share price at the date of the exercise for share options exercised during the period was n/a (2022: 0.84p). For options granted after 2019, a Monte Carlo model was used in measuring the fair use of options granted that were subject to a TSR performance condition. A Black Scholes model was used in measuring the fair use of all other options granted.

22 December 2020

23 September 2021

24 December 2021

Relative

EPS (50%)

TSR (50%)

EPS (50%)

TSR (50%)

EPS (50%)

TSR (50%)

Number of options granted

153,364

100,729

193,894

Share price at grant date

152.0p

264.0p

196.0p

Exercise price

0.50p

Option life in years

10 years

Risk-free rate

(0.08)%

0.38%

0.57%

Expected volatility

40.40%

39.00%

43.00%

Expected dividend yield

Fair value of options

152.0p

99.0p

264.0p

181.0p

196.0p

115.0p

08 December 2022

24 December 2022

Relative

EPS (50%)

TSR (50%)

EPS (50%)

TSR (50%)

Number of options granted

438,435

438,434

283,157

283,156

Share price at grant date

93.0p

83.9p

Exercise price

0.50p

Option life in years

10 years

Risk-free rate

3.10%

3.50%

Expected volatility

52.60%

52.70%

Expected dividend yield

Fair value of options

92.54p

71.0p

83.45p

60.0p

19 December

24 October

14 December

15 December

12 April

2017

2018

2020

2021

2022

Number of options granted

1,375,000

2,305,000

535,920

567,300

91,127

Share price at grant date

85.95p

77.5p

148.0p

181.0p

86.4p

Exercise price

0.50p

147.5p

181.2p

0.50p

Option life in years

5 years

10 years

5 years

Risk-free rate

1.33%

1.23%

(0.01)%

0.54%

1.65%

Expected volatility

30.0%

34.3%

35.5%

53.2%

Expected dividend yield

0.56%

0.46%

Fair value of options

65.3p

52.7p

47.0p

62.0p

80.5p

	14 April	22 December	12 April
	2022	2022	2023

Number of options granted	1,367,547	35,149	85,264
Share price at grant date	90.0p	83.9p	91.8p
Exercise price	86.5p	85.35p	0.50p
Option life in years	10 years	5 years	5 years
Risk-free rate	1.68%	3.55%	3.40%
Expected volatility	50.3%	60.7%	58.3%
Expected dividend yield	0.96%	1.03%	1.07%
Fair value of options	42.0p	46.56p	85.25p

Expected volatility was determined by calculating the historical volatility of the Group's share price over a 3-year/6.5-year period prior to the date of grant. The expected life used in the model is based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The share options granted on 24 October 2018, 22 December 2020, 23 September 2021, 24 December 2021, 8 December 2022 and 24 December 2022 were following the approval of the LTIP scheme at the AGM on 19 December 2017 and the end-to-end awards that were granted to key personnel.

30.	GROUP RECONCILIATION OF PROFIT BEFORE CORPORATION TAX TO CASH GENERATED FROM OPERATIONS

	Group		Company
	30.6.23	30.6.22	30.6.23	30.6.22
	£'000	£'000	£'000	£'000
Current:
Operating profit from all operations	13,548	13,605	4,459	4,163
Amortisation	6,578	6,123	-	-
Depreciation	1,035	1,124	4	2
Finance lease non-cash movement	212	152	-	-
Loss on disposal of fixed assets	38	-	-	-
Share-based payments	721	456	-	-
Impairment on investment	-	-	36	235
Finance expense	57	57	-	-

	22,189	21,517	4,499	4,400

(Increase)/decrease in trade receivables	(2,236)	325	(1,394)	(1,405)
Increase in trade payables	1,975	3,320	60	(350)

Cash generated from operations	21,928	25,162	3,165	2,645

31. GROUP CASH AND CASH EQUIVALENTS

The amounts disclosed in the statement of cash flow in respect of cash and cash equivalents are in respect of these statements of financial position amounts:

	Group	Company
	£'000	£'000

As at 1 July 2021	31,951	85

As at 30 June 2022	43,919	163


As at 30 June 2023	52,676	396

32. PROJECT DEVELOPMENT

During the year the Group incurred £8,729,106 (2022: £7,599,073) in development investments. All resources utilised in development have been capitalised as outlined in the accounting policy governing this area.

33. EVENTS AFTER THE END OF THE REPORTING PERIOD

On 11 September 2023 Dotdigital Group Plc acquired 100% of the voting equity instruments in Fresh Relevance Limited, a vendor of cross-channel personalisation technology.

The principal reason for the acquisition was to bring complementary personalisation technology and website expertise to the Group which accelerates Dotdigital's CXDP roadmap, together with technical expertise. The increased functionality the acquisition will both increase our total addressable market and help drive net revenue expansion.

The financial effects of this transaction have not been recognised at 30 June 2023. The operating results and assets and liabilities of the acquired company will be consolidated from 11 September 2023.

As the acquisition was completed a short time before the authorisation date of these financial statements, it was not practical to disclose an accurate book value of the net assets acquired as at 11 September 2023. The following figures presented represent Fresh Relevance Limited unaudited management accounts for 31 August 2023:

			Provisional
			31-Aug-23
			£'000

Intangible assets			208
Property, plant and equipment			22
Trade and other receivables			909
Cash and cash equivalents			1,545
Assets			2,684


Trade and other payables			1,612
Interest bearing loans and borrowings			1,899
Liabilities			3,511

Total net liabilities			(827)

At the date of authorisation of these financial statements a thorough and extensive detailed assessment of the fair value of the identifiable net assets has not been completed.

Fair value of consideration paid

Dotdigital paid a total consideration of £25.0 million, 100% payable on completion, with circa £18.9 million being satisfied in cash and circa £6.1 million by the issue of 6,862,683 new ordinary shares in Dotdigital at 88.698p, which are subject to a 12 month lock-in.

It is expected that post fair value adjustments this will result in recognised goodwill especially after pre acquisition adjustments such as the repayment of interesting bearing loans. The goodwill represents items, such as the know how of the workforce, which do not qualify as assets.

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