Final Results

RNS Number : 4620S

dotDigital Group plc

16 November 2021

 

16 November 2021

Dotdigital Group plc

("Dotdigital" or the "Group")

Final Results for the year ended 30 June 2021

Dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of an omnichannel marketing automation and customer engagement platform, announces its final audited results for the year ended 30 June 2021 ("FY21").

Financial Highlights

·	Organic revenue growth of 23% to £58.1m (FY20: £47.4m)
	· Recurring revenue as a percentage of total revenue increased to 93% (FY20: 91%)
	· Monthly ARPC1 increased 16% to £1,251 (FY20: £1,083 per month)
·	Adjusted EBITDA2 grew 9% to £19.8m (FY20: £18.2m) and adjusted operating profit3 grew 5% to £13.7m (FY20: £13.1m)
·	Adjusted EPS from continuing operations was 4.06p (FY20: 3.90p)
·	Strong net cash balance at 30 June 2021 of £32.0m (30 June 2020: £25.4m)
·	The Board proposes to pay a final dividend of 0.86p per ordinary share, in line with its progressive dividend policy (FY20: 0.83p)

Operational Highlights

·	Acceleration of marketing digital transformation spurred by pandemic, driving significant increase in omnichannel offering, particularly SMS
·	Organic international revenue increased 22% to £18.0m (FY20: £14.8m), with international sales representing 31% of total sales (FY20: 31%)
	· APAC region delivered highest growth at 47%, albeit from a smaller base
·	Strong demand from UK customers for multi-channel functionality
·	Revenue through connectors into strategic partners grew 14% to £25.4m (FY20: £22.3m), evidencing strength of relationships and continued refinement of joint go-to-market strategies
·	Product innovation continues to drive value with functionality recurring revenue (from license fees and enhanced bolt-on functionality) up 31% to £18.9m (FY20: £14.4m)
·	Continued focus on operational excellence in areas of privacy, security and sustainability
	· First customer engagement platform awarded ISO27701 on privacy information management, ISO27001 information security management and ISO14001 environment management certifications

Outlook

·	Normalisation of trading environment continues with transition out of global lockdowns; Board continues to assess potential varied effects across broad and diversified customer base
·	High level of confidence in delivery of management expectations for the new financial year following a strong start

Milan Patel, CEO of Dotdigital, commented:

"We are pleased to report a record year for Dotdigital, delivering double digit organic growth and enhanced profitability as a result of an accelerated uptake of our omnichannel offering. This performance is testament to our robust business model, as we navigated and supported our customers through the pandemic, and the efforts of our talented and dedicated team.

"The investments we have made in our Engagement Cloud platform, international hubs and partner network are bearing fruit. Our powerful data-driven marketing automation platform continues to excel in the market as a result of its feature-rich yet user-friendly functionality, and we are well positioned to support a growing number of customers as they look to drive deeper, more personal engagement with their consumers through digital marketing.

"As we enter the new year, trading remains strong. Our healthy balance sheet, strong recurring revenues and cash generation provides the flexibility to invest in our growth strategy, giving the Board confidence in the Group's long-term prospects."

Investor Presentation : https://www.dotdigitalgroup.com/events-presentations/

Investor Video: A highlights video is available to watch here: https://bit.ly/DOTD_FY21_overview  

Notes

^{1.  ARPC means Average Revenue Per Customer (including new customers added in period and existing customers)}

^{2.  EBITDA is earnings before interest, tax, depreciation and amortisation and adjusted for acquisition costs and share-based payments}

^{3.  Operating profit is adjusted for acquisition costs and share-based payments}

For further information please contact:

Dotdigital Group Plc	Tel: [phone]
Milan Patel, CEO	[e-mail]
Paraag Amin, CFO
Alma PR (Financial PR)	Tel: [phone]
Hilary Buchanan	[e-mail]
David Ison
Faye Calow
Canaccord Genuity (Nominated Advisor and Joint Broker)	Tel: [phone]
Bobbie Hilliam
Georgina McCooke
Jonathan Barr, Sales
finnCap (Joint Broker)	Tel: [phone]
Stuart Andrews, Corporate Finance
Rhys Williams, Sales
Singer Capital Markets (Joint Broker)	Tel: [phone]
Shaun Dobson, Head of Corporate Finance
Alex Bond, Corporate Finance

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

CHAIRMAN'S STATEMENT

Overview

To have delivered our strongest year to date amid pandemic-related challenges, while managing a pronounced increase in the uptake of newer channels beyond email, is testament to the exceptional people at Dotdigital.

The effectiveness of our model and the continued desirability of our product are evident in the numbers, but without the hard work and adaptability of our teams, we would not have been able to record such a positive performance. On behalf of the Board, I would like to thank everyone involved in the business for their contributions.

After a period of disruption in Q4 of the previous financial year, we have gone from strength to strength, facilitated by the acceleration of digital transformation brought about by the pandemic. While the mix of channel usage varied as our customers' circumstances changed and evolved, we saw consistent levels of overall demand, aided by the diversity of sectors and locations across our customer base. This was achieved while helping our customers that struggled where we could.

Although restrictions are easing and vaccination programmes are under way in most territories, Covid-19 will continue to be a risk factor for the foreseeable future, and not all its after effects will be easy to foresee. We therefore need to continue to monitor its impact on our customer base, and be ready to respond accordingly.

That said, we have traded well since the onset of the pandemic, proving that the inherent versatility of our offering means we can help organisations, in both good and more challenging times. As we emerge from the worst of the pandemic and with a robust model and strong financial position, I am confident that if we continue to support our customers and execute our strategy in a measured and purposeful way, we will remain on course to meet our growth ambitions.

Strategic Progress

This financial year saw a significant increase in appetite for our omni-channel offering, with SMS proving particularly popular and more and more organisations choosing to use push messaging, social, WhatsApp for business and live chat, in line with the growing demand among consumers for alternative and more personal means of engagement.

The team has built an advanced data-led platform that is tailored to the increasingly sophisticated needs of the modern marketeer and continues to do an excellent job of penetrating international markets, with all three of our regions demonstrating good levels of growth in the year. Performance in APAC was particularly strong, supplemented by the growing conversion of pipelines in new markets such as Japan.

Our relationships with strategic partners - a key route to market for Dotdigital - have deepened considerably, enabling better collaboration in driving awareness and ultimately sales across their customer bases. As a result, we saw encouraging growth in revenue from Magento, Shopify, BigCommerce and Microsoft Dynamics - our four most valuable partnerships.

On the product front, we have continued to focus on building out our data and personalisation capabilities, and firmly believe we now have one of the most powerful, feature-packed and yet easy-to-use marketing automation platforms, capable of delivering unparalleled insight and strong return on investment without the need for a high level of technical expertise.

Sustainability

At the end of 2020, we set out to broaden and accelerate sustainability improvements throughout the organisation with a view to reducing the impact of our operations on the environment. Known internally as the 'dotgreen' initiative, it marked the point where sustainability was elevated from being an important consideration to a guiding principle for everything we do.

In the time since, our teams have worked tirelessly to make our infrastructure and working practices more environmentally friendly. I am pleased to report that, as a result, we can now claim to be the world's first carbon-neutral marketing automation platform.

We also obtained ISO 14001, the universally recognised certification awarded to organisations that meet a high standard of environmental management, became a Corporate Member of the Woodland Trust and, most recently, signed the Terra Carta, a part of HRH The Prince of Wales' Sustainable Markets Initiative that offers the basis of a recovery plan to 2030 with nature, people and planet at its heart.

In a relatively short space of time and against the backdrop of a pandemic, we have made significant, meaningful changes to become a more responsible business. While we are proud of our achievements, we know there is still room for improvement, and remain committed to driving further change to ensure we play our part in safeguarding the future of our planet.

People

Our people are the lifeblood of Dotdigital. Ensuring we have the right balance of technological prowess, interpersonal skills and commercial acumen across our organisation is vital to the delivery of our strategy, and to that end we continued to strengthen our workforce in the period. Most notably, our sales function grew and became more specialised to meet the growing demand for our product, and we bolstered our marketing and customer care teams with the internal promotion of a new Global Vice President of Marketing and the external appointment of a new Head of Customer Success EMEA from a leading competitor.

As we move through the new financial year, we will continue to hire high-quality individuals that bring new skills and experience into the Group while increasing management bandwidth where necessary to enable us to reach our strategic goals more efficiently. At the same time, we will continue to invest in our existing colleagues, cementing Dotdigital as one of the best places to work in the industry from both a development and quality of life perspective.

Dividend

The Board has agreed to maintain a progressive dividend in line with Group EBITDA growth. Therefore, subject to approval at the AGM in December 2021, the Board proposes that the Group will pay a final dividend of 0.86p per ordinary share (FY20: 0.83p).

Michael O'Leary

Non-Executive Chairman 

16 November 2021

CHIEF EXECUTIVE OFFICER'S REPORT AND FINANCIAL REVIEW

Overview

I am pleased to report on a record year for Dotdigital, delivering our strongest financial performance to date and demonstrating the solidification of our transformation to an omni-channel platform.

This positive performance has been achieved in what has been a turbulent environment as a result of the Covid-19 pandemic, testing both our customers and our own resilience. We are the strong business we are today because of our passionate team who continued to innovate and stay motivated, supporting our customers through difficult times and taking our business forward to new heights. Backed by our solid financial footing, we did not have any staff on furlough and we continued to add to our teams across our global regional operations.

During the year we saw increased uptake of our digital marketing platform, from both new and existing customers, resulting in organic revenue growth of 23% to £58.1m (FY20: £47.4m) and adjusted EBITDA growth of 9% to £19.8m (FY20: £18.2m). The translation of this financial performance into platform volume growth demonstrates the scale of the Group's reach: 24 billion emails were sent via the platform, an increase of 15% YoY, complemented by an increased uptake of other channels including mobile messages, with a strong 28% YoY uplift in SMS, taking the total number of SMS sent to 665 million (FY20: 520 million).

Underpinning this growth is the Group's recurring SaaS model, with 93% of total revenue comprising of recurring revenue. The Group is cash generative and maintains a strong balance sheet, with no debt and net cash balances of £32.0m at year end (FY20: £25.4m), giving the Group visibility and scope to continue to invest in order to drive long-term, sustainable growth.

We continued to enhance our platform functionality during the year with a focus on driving greater data and automation capabilities. Recurring revenues derived from enhanced product functionality grew by 31% to £18.9m (FY20: £14.4m), demonstrating the value derived from our customer-centric R&D programme.

We remain committed to our responsibility and sustainability ethos by ensuring that all our stakeholders, including employees, partners and the broader community, are central to our decision making. We have made significant strides against this agenda, recognising that we will always be pushing for better.

The digital transformation of marketing operations across all sectors is happening at pace, and we saw an acceleration of this during the year as businesses turned to digital as the primary means of engaging with existing and prospective customers. Our powerful data-driven platform is delivering results at scale, supported by a diversified customer base with broad sector exposure and providing us with a significant opportunity to continue our growth ambitions

Business Review

Dotdigital is focused on empowering marketers to connect with customers through its powerful automation platform that unifies all digital channels. Our Engagement Cloud provides the tools to allow marketing teams to launch highly targeted and relevant campaigns to customers and prospects with personalised engagement at every touchpoint - the right message, at the right time, through the right channel. The result is faster and more effective marketing campaigns with increased engagement and demonstrable ROI.

The use cases of the Group's offering are wide and global, however the Group remains focused on mid-market and enterprise clients across target verticals including retail, non-profit, education, financial services and travel. The Group's foundations and particular strengths are in email and deep integrations into strategic partners within e-commerce and CRM.

Market

The digital transformation of the marketing industry continues to progress, with digital marketing budgets increasingly taking share of overall marketing budgets. The pace of this transition accelerated in the lockdown environment as organisations had no alternative but to engage with their end users via digital channels. As we move through various stages of lockdown easing across our global operations, the allocation of channels varies but the overall shift continues its course.

With the rise of digital marketing, the sophistication of marketeers has also increased. We've seen a greater emphasis on data and personalisation by our customers and our platform is assisting in reducing the gap between marketeers' aspirations and the reality of what they can achieve through our platform. One result is an increasing trend towards direct-to-consumer engagement. Through our platform, brands can devise more informed marketing strategies with actionable insights and analytics that help them develop a deeper understanding of their end customer and drive a positive ROI.

Growth Strategy

Dotdigital's organic growth strategy continues to be focused around its three core pillars: geographic, product innovation and strategic partnerships.

Three Growth Pillars

1.  Geographic

Despite the wider economic impact of Covid-19, all key global regions achieved strong revenue growth in the period, continuing Dotdigital's diversification of international exposure. This growth continues to be evident in that revenue from outside the UK was 31% of Group revenue for the year. We expect to continue this growth as we invest further in our key international regions. We saw strong demand for our multichannel functionality from our UK customers which we expect to continue, although it will be surpassed by growth in our international markets.

International expansion is a key tenet of our growth strategy and has been a significant area of investment in the period. We have strengthened our presence and enhanced our prospects across our key territories as reflected in the growth across our key international regions. We expect to further build on this momentum and continue organic growth as we move into FY22 and beyond.

EMEA

Revenues were up by 23% to £44.6m compared to £36.3m for the same period in FY20. We saw a normalisation of sales cycles in the region, particularly in the second half of the year, as pandemic restrictions broadly began to ease in this region. We have also seen an uptick in momentum both from a pipeline and sales conversion perspective and expect to see this trend continue as lockdown measures across the region continue to ease.

Take-up of omnichannel marketing solutions was strong in this region, particularly with SMS, driven by strong demand from our customers in the education and healthcare sectors as they accelerated their adoption of online tools to engage with their customer base during the pandemic.

North America

Revenues for North America were up 19% to US$12.5m compared to US$10.5m for FY20. This was driven by new customer wins, reflecting our growing brand awareness in this region.

North America presents the largest market opportunity for the Group, and we expect to increase our investment in this region to solidify our foundations to capture more opportunities. Our focus remains on growing and cementing relationships with partners and customers to help us build our presence while increasing brand awareness. In addition, we will invest in strengthening the customer facing teams and bolster the management structure in this region through creating an additional layer to create bandwidth and scale.

APAC

The APAC region delivered the highest growth in revenue in the year, albeit from a smaller base, as revenues were up 47% to A$7.7m vs A$5.2m in FY20, evidencing Dotdigital's increasing presence in this region and reflecting previous periods of investment. We increased our investment in this market in the period through expanding the team further into Asia. We remain mindful of the ongoing challenges in the region as a result of the Covid-19 lockdown which presents a degree of uncertainty for our end customers, however we see a strong pipeline of opportunities in Japan and the Far East, through our team based in Singapore.

2.  Product innovation

The rate at which the platform is developing means it continues to be at the forefront of the customer engagement category. Recurring revenue from enhanced product functionality and upgrades, taken by both existing and new customers, increased by 31% to £18.9m in the period vs £14.4m in FY20, illustrating continued growth in the number of customers using our enhanced functionality, including an increasing number of data connectors through our IPaaS (Integrations Platform as a Service) capabilities.

We have continued to educate the market through live online sessions and digital marketing content on how to adopt new features to enhance messaging. The platform continues to go from strength to strength, differentiated by our offering of an in-house platform and automation tools across all channels. The competitive advantage of our offering and our ability to deliver on the needs of our customers is evidenced in our strong performance this year and the increased uptake of multichannel solutions by existing and new customers alike. As we go into the new financial year the focus will be on platform adoption from the additional functionality added in the period.

Customer-centred R&D investment in the period was £6.8m compared to £6.5m in FY20, consistent with management expectations. We continued to execute against our product strategy and our roadmap has continued to develop as anticipated.

Our focused areas of innovation are:

·	Data and intelligence - joining all data together to create a single customer view and help our customers better target their campaigns from a personalisation perspective. We have dedicated a great deal of resource to this in response to increasingly sophisticated customer requirements and will continue to do so with further upgrades to the platform.
·	Marketing automation - harnessing artificial intelligence and machine learning across targeted parts of the platform's architecture. This included the launch of sector-tailored product packages for commerce customers and enhanced product recommendations capabilities.
·	Building out further omnichannel functionality - to assist businesses through the full customer journey at every touch point. This included the launch of a new live chat solution through the Engagement Cloud and additional SMS capabilities, with an increase in take-up of both in the period.

3.  Developing strategic partnerships

We have continued to invest in all our strategic partner relationships, which are a key aspect of our growth strategy as they help us to raise brand awareness, in the regions and verticals in which we operate. Revenue through connectors into strategic partners was up 14% to £25.4m vs £22.2m in FY20, evidencing the progress we have made in developing our relationships with strategic partners and refining our joint go-to-market strategies.

Continued growth in the Magento space was driven by enhanced brand awareness coupled with the additional functionality that we have developed for e-commerce merchants. Sign-up of customers in all regions remains strong, with a net new 66 Magento customers joining the platform in the period, taking the total number to 782. Revenue from Magento customers grew 11% to £14.3m from £13.0m in FY20 and we look forward to the continued collaboration between our respective teams to advance our joint marketing strategy and to enhance development of our integration.

At the end of the financial year, we had 132 customers using the Shopify connector compared to 83 this time last year, supporting the continued strength of our relationship with this partner. Revenue from Shopify customers grew 79% to £2.1m from £1.2m last year as we saw an increasing pipeline of new customers from the integration, built with Shopify Flow, which allows e-commerce merchants a seamless connection to easily deploy campaigns from the Dotdigital platform.

We saw a 249% increase in revenue from BigCommerce connected customers in the year to £0.4m from £0.1m. As BigCommerce's global elite partner through the period, we continue to deepen our strategic relationship, formulating a joint go-to-market plan through offers for e-commerce merchants, and joint efforts to the user. This plan will enable us to increase our addressable market across all regions, and we are already seeing an increasing demand to use the integration as a result.

As evidence of our commitment to our B2B Marketing customers, we hired a partner manager to build our strategic relationship with Microsoft for our integration into Dynamics 365 in North America. Revenues from customers using our Dynamics connector increased 12% to £4.3m in the year vs £3.8m in FY20; we believe that this significant opportunity to develop a meaningful partnership with a major North American player has only begun to be recognised and we look forward to building on this relationship in future.

Building on our integration success, we have created a repeatable blueprint for building integrations into the wider connected ecosystem faster and more agile than before. Most recently, we launched integrations into Shopware 6, Google Sheets, Eventbrite and Typeform, with more planned on the roadmap for FY22.

M&A

To support the Group's organic growth strategy, the Board continues to evaluate the market for complementary acquisitions, backed by the Group's robust financial position. The Board's acquisition strategy is focused on set criteria, being: synergy technology for new revenue streams; bolt-on functionality to accelerate platform development, new talent acquisition and the expansion of expertise, and extension of the customer base in strategic territories.

FINANCIAL REVIEW

Revenues

The Group achieved continuing operations revenue growth of 23% (FY20: 12%), which delivered record overall revenues of £58.1m, driven in particular by an increased volume of ARN (alerts, reminders and notifications) SMS messaging, as the effects of the pandemic continued throughout our financial year. Recurring revenues comprise 93% of the total, whilst international revenues continue to account for 31% of the total (FY20: 31%).

Business model

The Group generates the majority of its revenues from annual message plans which are recognised equally over the life of the contract. In addition, we sell upgrade packages to customers allowing them to use additional modules and features of our platform. For more sophisticated customers we offer customised functionality and integrations so that they can maximise the use of their customer data. We also have professional services contracts which are recognised as revenue as the work is performed. Over the past year we have built other messaging channels into our core platform, including SMS and Live Chat, and access to these channels are sold separately.

Gross margin

The gross margin for the period for continuing operations was 82% (FY20: 92%). Whilst the gross margin for email and standard channels remained above 90%, the decline in overall group gross margin comes from the growth of premium messaging channels, (routing purchased via a third party on a per message basis), such as SMS.

Operating expenses

Adjusted operating profit from continuing operations grew by 5% from £13.1m to £13.7m. Operating expenses as a percentage of revenues dropped from 64% to 59%, reflecting some investment back into the business. The Group continues to invest in people in the areas of development, sales and marketing, particularly within the high-growth global offices, to continue enhancing and adding to the product suite.

Balance sheet

There was strong cash management in the year with net cash generated from continuing operations of £20.7m (FY20: £18.2m). The cash balance at the end of the period was £32.0m (FY20: £25.4m). The Group continues to be debt free and maintains a healthy balance sheet. A combination of a highly efficient cash collection process and an incentivisation push to move more customers onto Direct Debit and other automated payment collection methods helped with the year-end position.

Trade receivables have only grown by 5% in the year, reflecting revenue growth and good cash management. Overall receivables have grown 3% due to the deferment of marketing expenditure such as trade shows and conferences, which have been postponed due to the pandemic, and related deferred commission on the sale of our products.

The Group continues to invest heavily in the platform to increase functionality around marketing automation, increasing the number of messaging channels and surfacing data and providing insights for our customers to provide excellent customer engagement. This continued investment is demonstrated by the increase in product development to £6.8m (FY20: £6.5m).

Tax

Profitability from continuing operations continues to grow. This is reflected within the tax charge, which is now £1.0m with an effective tax rate of 8%, with a lower than standard rate due to enhanced R&D tax credits.

EPS

In the year the continued operations adjusted basic EPS increased to 4.12p (FY20: 3.95p) and adjusted diluted EPS increased to 4.06p (FY20: 3.90p), despite the higher effective tax rate of 8%, (FY20: 5%). Basic EPS also increased to 3.85p (FY20: 3.68p).

Dividend policy

As announced last year, the Board conducted its review of its organic business plan for the following three years. This included evaluating the cash needs required for opportunities in organic growth to increase shareholder value and capital expenditure. The Board decided that it will continue to keep a progressive dividend in line with EBITDA growth. Therefore, subject to approval at the AGM in December 2021, the Board proposes that the Group will pay a final dividend of 0.86 pence per ordinary share (FY20: 0.83p), to be payable at the end of January 2022.

Current Trading and Outlook

During the year the Group has significantly advanced its omni-channel marketing platform vision with strategic progress against all tenants of our growth strategy, delivering a record financial performance. We have progressed our geographic expansion with stronger market presence in North America, EMEA and APAC; our strategic partner relations have deepened with better collaboration in driving brand awareness to our end markets; and we've added new capabilities to our platform to drive broader customer engagement. The focus remains in driving an increased adoption of functionality within the platform.

As we enter the new year, we do so within a more normalised trading environment as our end markets transition out of the immediate implications from the pandemic. Trading remains in line with management expectation and our technology platform is uniquely positioned to capture the transition to online marketing across the mid-tier enterprise space. Whilst we remain mindful of the wider economic uncertainty, our healthy balance sheet, strong recurring revenues and cash generation provides the flexibility to invest in our growth strategy. The Board is therefore confident in the Group's long-term growth prospects.

Milan Patel  Paraag Amin

Chief Executive Officer  Chief Financial Officer

16 November 2021  16 November 2021     

DOTDIGITAL GROUP PLC

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2021

													30.6.21				Restated 30.6.20
													£'000				£'000
											Notes
CONTINUING OPERATIONS
Revenue from contracts with customers													58,124				47,404
Cost of sales											6		(10,356)				(3,899)
Gross profit													47,768				43,505
Administrative expenses											6		(34,089)				(30,443)
OPERATING PROFIT FROM CONTINUING OPERATIONS PRE SHARE-BASED PAYMENTS AND EXCEPTIONAL COSTS													13,679				13,062
Share based payments											25		(625)				(682)
Exceptional costs											4		(188)				(136)
OPERATING PROFIT FROM CONTINUING OPERATIONS													12,866				12,244
Finance costs											5		(74)				(98)
Finance income											5		20				40
PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS											6		12,812				12,186
Income tax expense											7		(1,322)				(1,219)
Profit for the year from continuing operations													11,490				10,967
Loss for the year from discontinuing operations											10		(899)				(378)
	Profit for the year attributable to the owners of the parent												10,591				10,589
Earnings per share from all operations (pence per share)
			Basic								9		3.55				3.55
			Diluted								9		3.50				3.50
		Adjusted Basic								9			3.82				3.95
		Adjusted Diluted								9			3.76				3.90
Earnings per share from continuing operations (pence per share)
Basic								9					3.85				3.68
Diluted								9					3.79				3.63
Adjusted Basic								9					4.12				3.95
Adjusted Diluted								9					4.06				3.90
Earnings per share from discontinued operations (pence per share)
Basic									9			(0.30)				(0.13)
Diluted									9			(0.30)				(0.13)
Adjusted Basic									9			(0.30)				(0.00)
Adjusted Diluted									9			(0.30)				(0.00)

DOTDIGITAL GROUP PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2021

					30.6.21		Restated 30.6.20
					£'000		£'000
PROFIT FOR THE YEAR					10,591		10,589
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations					(87)		34
Total comprehensive income attributable to:
		Owners of the parent			10,504		10,623
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Comprehensive income from continuing operations					11,403		11,001
Comprehensive loss from discontinued operations					(899)		(378)

DOTDIGITAL GROUP PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30 JUNE 2021

					30.6.21		Restated 30.6.20		Restated 30.6.19
					£'000		£'000		£'000
				Notes
ASSETS
NON-CURRENT ASSETS
Goodwill				11	9,680		9,680		9,680
Intangible assets				12	16,134		14,059		11,702
Property, plant and equipment				13	3,972		5,262		1,037
					29,786		29,001		22,419
CURRENT ASSETS
Trade and other receivables				14	13,350		12,987		12,222
Cash and cash equivalents				15	31,951		25,383		19,320
					45,301		38,370		31,542
TOTAL ASSETS					75,087		67,371		53,961
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital				16	1,494		1,493		1,490
Share premium				17	7,124		6,967		6,791
Reverse acquisition reserve				17	(4,695)		(4,695)		(4,695)
Other reserves				17	3,066		1,600		910
Retranslation reserve				17	(37)		50		16
Retained earnings				17	54,081		45,655		36,971
TOTAL EQUITY					61,033		51,070		41,483
LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities				19	2,489		3,399		-
Deferred tax				21	1,207		1,983		1,377
					3,696		5,382		1,377
CURRENT LIABILITIES
Trade and other payables				18	9,334		9,796		11,096
Financial liabilities:
-  Interest bearing loans and borrowings					-		-		5
-  Lease liabilities				19	934		1,068		-
Current tax payable					90		55		-
					10,358		10,919		11,101
TOTAL LIABILITIES					14,054		16,301		12,478
TOTAL EQUITY AND LIABILITIES					75,087		67,371		53,961

DOTDIGITAL GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2021

			Called up share		Retained		Share
			capital		earnings		premium
			£'000		£'000		£'000
Balance as at 1 July 2019, as previously reported			1,490		37,161		6,791
Impact of correction of errors (note 30)			-		(190)		-
Restated balance at 1 July 2019			1,490		36,971		6,791
Transactions with owners (restated)
Issue of share capital			3		-		176
Dividends			-		(1,996)		-
Adjustments in relation to IFRS 16			-		61		-
Transfer in reserves			-		30		-
Deferred tax on share options			-		-		-
Share-based payments			-		-		-
Transactions with owners (restated)			3		(1,905)		176
Total comprehensive income (restated)
Profit for the year			-		10,589		-
Other comprehensive income			-		-		-
Total comprehensive income (restated)			-		10,589		-
Restated balance as at 30 June 2020			1,493		45,655		6,967
Balance as at 1 July 2020			1,493		45,655		6,967
Issue of share capital			1		-		157
Dividends			-		(2,472)		-
Transfer in reserves			-		307		-
Deferred tax on share options			-		-		-
Share-based payments			-		-		-
Transactions with owners			1		(2,165)		157
Profit for the year			-		10,591		-
Other comprehensive income			-		-		-
Total comprehensive income			-		10,591		-
Balance as at 30 June 2021			1,494		54,081		7,124

DOTDIGITAL GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2021

CONTINUED…
			Retranslation		Reverse acquisition		Other		Total equity
			reserve		reserve		reserves
			£'000		£'000		£'000		£'000
Balance as at 1 July 2019, as previously reported			16		(4,695)		720		41,483
Impact of correction of errors (note 30)			-		-		190		-
Restated balance at 1 July 2019			16		(4,695)		910		41,483
Transactions with owners (restated)
Issue of share capital			-		-		-		179
Dividends			-		-		-		(1,996)
Adjustments in relation to IFRS 16			-		-		-		61
Transfer in reserves			-		-		(30)		-
Deferred tax on share options			-		-		38		38
Share-based payments			-		-		682		682
Transactions with owners (restated)			-		-		690		(1,036)
Total comprehensive income (restated)
Profit for the year			-		-		-		10,589
Other comprehensive income			34		-		-		34
Total comprehensive income (restated)			34		-		-		10,623
Balance as at 30 June 2020			50		(4,695)		1,600		51,070
Balance as at 1 July 2020
Issue of share capital			-		-		-		158
Dividends			-		-		-		(2,472)
Transfer in reserves			-		-		(307)		-
Deferred tax on share options			-		-		1,148		1,148
Share-based payments			-		-		625		625
Transactions with owners			-		-		1,466		(541)
Profit for the year			-		-		-		10,591
Other comprehensive income			(87)		-		-		(87)
Total comprehensive income			(87)		-		-		10,504
Balance as at 30 June 2021			(37)		(4,695)		3,066		61,033

· 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 International Financial Reporting Standards.

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

  DOTDIGITAL GROUP PLC

  CONSOLIDATED STATEMENT OF CASH FLOWS

  FOR THE YEAR ENDED 30 JUNE 2021

					30.6.21		30.6.20
					£'000		£'000
				Notes
Cash flows from operating activities
Cash generated from operations				26	17,969		15,907
Tax paid					(975)		(124)
Net cash generated from all operating activities					16,994		15,783
Net cash generated from continuing operating activities					20,710		18,214
Net cash used in discontinued operating activities					(3,716)		(2,431)
Cash flows from investing activities
Purchase of intangible fixed assets					(6,870)		(6,505)
Purchase of property, plant and equipment					(169)		(277)
Proceeds from sale of property, plant and equipment					2		-
Interest received					20		40
Net cash flows used in investing activities					(7,017)		(6,742)
Net cash used in from continuing investing activities					(7,017)		(6,741)
Net cash used in discontinued investing activities					-		(1)
Cash flows from financing activities
Equity dividends paid					(2,472)		(1,996)
Payment of lease liabilities					(1,182)		(1,127)
Proceeds from share issues					158		179
Net cash flows used in financing activities					(3,496)		(2,944)
Net cash used in continuing financing activities					(3,446)		(2,884)
Net cash used in discontinued financing activities					(50)		(60)
Increase in cash and cash equivalents					6,481		6,097
Cash and cash equivalents at beginning of year				27	25,383		19,320
Effect of foreign exchange rate changes					87		(34)
Cash and cash equivalents at end of year				27	31,951		25,383

  .

  DOTDIGITAL GROUP PLC

  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

  FOR THE YEAR ENDED 30 JUNE 2021

1.  GENERAL INFORMATION

Dotdigital Group Plc ("Dotdigital") is a public limited company incorporated in England and Wales and quoted on the AIM Market.

2.  SEGMENTAL REPORTING

Dotdigital's single line of business remains the provision of data-driven omni-channel marketing automation. 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)

		30.6.2021
		EMEA		US		APAC		Total
		£'000		£'000		£'000		£'000
Income statement
Revenue		47,024		9,264		4,262		60,550
Gross profit		36,878		8,241		3,864		48,983
Profit/(loss) before income tax		11,699		609		(294)		12,014
Total comprehensive income attributable to the owners of the parent		10,436		379		(311)		10,504
Financial position
Total assets		71,566		3,098		423		75,087
Net current assets/(liabilities)		33,942		1,387		(386)		34,943

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 (2020: 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.

		30.6.2020
		EMEA		US		APAC		Total
		£'000		£'000		£'000		£'000
Income statement
Revenue		43,810		8,325		2,777		54,912
Gross profit (restated* see note 30)		35,181		7,420		2,496		45,097
Profit/(loss) before income tax		11,256		598		(46)		11,808
Total comprehensive income attributable to the owners of the parent (restated** see note 30)		10,429		291		(97)		10,623
Financial position
Total assets		60,959		4,846		1,566		67,371
Net current assets/(liabilities) (restated** see note 30)		26,915		1,006		(470)		27,451

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 (2019: 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.

Business activity revenue and results

		30.6.2021
				Core		CPaaS		Total
				£'000		£'000		£'000
Income statement
Revenue				58,124		2,426		60,550
Gross profit				47,768		1,215		48,983
Profit/(loss) before income tax				12,812		(798)		12,014
Total comprehensive income attributable to the owners of the parent				11,403		(899)		10,504
Financial position
Total assets				74,976		111		75,087
Net current assets/(liabilities)				34,974		(31)		34,943

		30.6.2020
				Core		CPaaS		Total
				£'000		£'000		£'000
Income statement
Revenue				47,404		7,508		54,912
Gross profit (restated* see note 30)				43,505		1,592		45,097
Profit/(loss) before income tax				12,186		(378)		11,808
Total comprehensive income attributable to the owners of the parent (restated** see note 30)				11,001		(378)		10,623
Financial position
Total assets				65,114		2,257		67,371
Net current assets/(liabilities) (restated** see note 30)				29,174		(1,723)		27,451

* Direct marketing and partner commission were reclassified from cost of sales to administrative expenses and tech infrastructure was reclassified from administrative expenses to cost of sales to reflect more appropriately the gross profit and administrative expenses.

    ** In the prior year there was a correction re deferred tax and corporation tax provision. See note 30 for details.

3.  EMPLOYEES AND DIRECTORS

					30.6.21		30.6.20
					£'000		£'000
		Wages and salaries			22,005		20,892
		Social security costs			2,228		2,377
		Other pension costs			534		505
					24,767		23,774
The average monthly number of employees during the year is as follows
					30.6.21		30.6.20
		Directors			5		4
		Sales and marketing product			160		164
		Development and system engineers			105		103
		Administration			69		67
					339		338
	Included in the total employees cost above, £5,198,785 (2020: £5,293,321) was capitalised in relation to internally generated development costs.
4.  EXCEPTIONAL COSTS
Continuing exceptional costs incurred in the year relate to the ongoing acquisition costs of Comapi of  £68,095 (2020: £15,714) and amortisation of acquired intangibles of £120,000 (2020: £120,000). Discontinued exceptional costs in the year relate to the amortisation of acquired intangibles of £nil (2020: £381,072).
5.  NET FINANCE INCOME
					30.6.21		30.6.20
					£'000		£'000
		Finance income:
		Deposit account interest			20		40
		Finance cost:
		Finance lease interest			(74)		(98)
					(54)		(58)

6.  OPERATING PROFIT

	Costs by nature
	Profit from continuing operations has been arrived at after charge and crediting:-
							30.6.21				Restated* 30.6.20
							£'000				£'000
	Outsourcing and tech infrastructure							10,356				3,899
		Total cost of sales						10,356				3,899
								30.6.21				30.6.20
								£'000				£'000
	Direct marketing							2,976				1,727
	Partner commission							2,198				2,566
	Staff related costs (inc Directors' emoluments)							19,208				17,929
	Auditor's remuneration							52				64
	Amortisation of intangibles**							4,675				3,647
	Depreciation charge**							1,410				1,475
	Legal, professional and consultancy fees							848				479
		Computer expenditure						538				578
	Bad debts							897				1,248
	Foreign exchange losses/(gains)							543				(120)
	Travel and subsistence costs							87				509
	Office running							388				176
	Gain on disposal of property, plant and equipment							(2)				(3)
	Staff welfare							342				399
	Other costs							549				531
	Management charge							(620)				(762)
	Total administrative expenses							34,089				30,443

	During the year the Group obtained the following services from the Group's auditor at costs detailed below:
				30.6.21				30.6.20
				£'000				£'000
	Fees payable to the Company's auditor for the audit of Parent Company and consolidated financial statements				28				22
	Fees payable to the Company's auditor for other services
	-  audit of Company subsidiaries				47				47
	-  review of interim accounts				5				3
					80				72

*Partner commission and direct marketing have been reclassed under administrative expenses and tech infrastructure have been reclassed under cost of sales and comparatives restated (see note 30).

**Both amortisation of intangibles and depreciation charge will not agree to the relevant notes as these numbers only apply to the continuing operations.

7.  INCOME TAX EXPENSE

	Analysis of the tax charge from continuing operations:											*Restated
							30.6.21					30.6.20
							£'000					£'000
	Current tax on profits for the year								1,008				575
	Changes in estimates related to prior years								(53)				-
	Deferred tax on origination and reversal of timing differences							367					644
									1,322				1,219
	Analysis of the tax charge from discontinuing operations:
					30.6.21								30.6.20
					£'000								£'000
Current tax on profits for the year										-			-
Deferred tax on origination and reversal of timing differences										101			-
										101			-
	Factors affecting the tax charge:
									30.6.21				*Restated 30.6.20
									£'000				£'000
	Profit on ordinary activities from all operations before tax								12,014				11,808
	Profit on ordinary activities multiplied by the average rate of corporation tax suffered globally: 19% (2020: 19%)							2,283					2,244
	Effects of:
	Expenses not deductible								281				176
	Research and development enhanced claim								(2,239)				(2,069)
	Expenditure permitted on exercising options								(49)				(98)
	Overseas tax losses								(5)				(20)
	Depreciation in excess of capital allowances								737				843
	Group relief losses brought forward								-				(501)
	Current tax on profit for the year								1,008				575
	Changes in estimates related to prior years								(53)				-
	Deferred tax on origination and reversal of timing differences								468				644
	Total tax charge for the year								1,423				1,219

  *See note 30

    Deferred tax was calculated using the rate 25% (2020: 19%). For further details on deferred tax see note 21.

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

The main rate of UK corporation tax in the period was 19% (2020: 19%). UK deferred balances have been recognised at 25% in the period (2020: 19%).

8.  DIVIDENDS

	Amounts recognised as distributions to equity holders in the period
				30.6.21			30.6.20
				£'000			£'000
	Paid dividend for year end 30 June 2021 of 0.83p (2020: 0.67p) per share				2,472		1,996
	Proposed dividend for the year end 30 June 2021 of 0.86p (2020: 0.83p) per share				2,583		2,480
	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.

9.  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:

				30.6.21		*Restated 30.6.20
From all operations				£'000		£'000
Profit for the year attributable to the owners of the parent				10,591		10,589
Amortisation of acquisition-related intangible fixed assets (see note 12)				120		501
Other exceptional costs (see note 4)				68		16
Share-based payment (see note 25)				625		682
Adjusted profit for the year attributable to the owners of the parent				11,404		11,788

Management does not consider the above adjustments to reflect the underlying business performance. The other exceptional costs relate to ongoing acquisition costs of Comapi.

				30.6.21		*Restated 30.6.20
				£'000		£'000
Adjusted profit for the year attributable to the owners of the parent for continuing activities.				12,303		11,785
Adjusted loss for the year attributable to the owners of the parent for discontinuing activities.				(899)		3
Adjusted profit for the year attributable to the owners of the parent				11,404		11,788

					30.6.21
								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				10,591			298,598,459				3.55
	Adjusted Basic EPS
		Adjusted profit for the year attributable to the owners of the parent				11,404			298,598,459				3.82
	Options and warrants				-			4,322,868				-
	Diluted EPS
	Profit for the year attributable to the owners of the parent				10,591			302,921,327				3.50
	Adjusted Diluted EPS
	Adjusted profit for the year attributable to the owners of the parent				11,404			302,921,327				3.76

						30.6.21
								Weighted
								average		Per share
		From continuing operations				Earnings		number of		Amount
						£'000		shares		Pence
		Basic EPS
		Profit for the year attributable to the owners of the parent				11,490		298,598,459		3.85
		Adjusted Basic EPS
		Adjusted profit for the year attributable to the owners of the parent				12,303		298,598,459		4.12
		Options and Warrants				-		4,322,868		-
		Diluted EPS
		Profit for the year attributable to the owners of the parent				11,490		302,921,327		3.79
		Adjusted Diluted EPS
		Adjusted profit for the year attributable to the owners of the parent				12,303		302,921,327		4.06

							30.6.21
											Weighted
											average			Per share
		From discontinued operations					Earnings				number of			Amount
							£'000				shares			Pence
		Basic EPS
		Loss for the year attributable to the owners of the parent					(899)				298,598,459			(0.30)
		Adjusted Basic EPS
		Adjusted loss for the year attributable to the owners of the parent					(899)				298,598,459			(0.30)
		Options and warrants					-				4,322,868			-
		Diluted EPS
		Loss for the year attributable to the owners of the parent					(899)				302,921,327			(0.30)
		Adjusted Diluted EPS
		Adjusted loss for the year attributable to the owners of the parent					(899)				302,921,327			(0.30)

							*Restated 30.6.20
										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					10,589			298,306,813			3.55
		Adjusted Basic EPS
		Adjusted profit for the year attributable to the owners of the parent					11,788			298,306,813			3.95
		Options and Warrants					-			3,883,050			-
		Diluted EPS
		Profit for the year attributable to the owners of the parent					10,589			302,189,863			3.50
		Adjusted Diluted EPS
		Adjusted profit for the year attributable to the owners of the parent					11,788			302,189,863			3.90

								*Restated 30.6.20
												Weighted
												average			Per share
		From continuing operations						Earnings				number of			Amount
								£'000				shares			Pence
		Basic EPS
		Profit for the year attributable to the owners of the parent						10,967				298,306,813			3.68
		Adjusted Basic EPS
		Adjusted profit for the year attributable to the owners of the parent						11,785				298,306,813			3.95
		Options and warrants						-				3,883,050			-
		Diluted EPS
		Profit for the year attributable to the owners of the parent						10,967				302,189,863			3.63
		Adjusted Diluted EPS
		Adjusted profit for the year attributable to the owners of the parent						11,785				302,189,863			3.90
								30.6.20
												Weighted
												average			Per share
			From discontinued operations					Earnings				number of			Amount
								£'000				shares			Pence
			Basic EPS
			Loss for the year attributable to the owners of the parent					(378)				298,306,813			(0.13)
			Adjusted Basic EPS
			Adjusted Loss for the year attributable to the owners of the parent					3				298,306,813			(0.00)
			Options and Warrants					-				3,883,050			-
			Diluted EPS
			Loss for the year attributable to the owners of the parent					(378)				302,189,863			(0.13)
			Adjusted Diluted EPS
			Adjusted loss for the year attributable to the owners of the parent					3				302,420,648			(0.00)

			30.6.21		30.6.20
			Shares		Shares
Basic EPS			298,598,459		298,306,813
Diluted EPS			302,921,327		302,189,863

Weighted average number of shares

    *See note 30

10.   CONTINUING AND DISCONTINUED OPERATIONS

  The analysis between continuing and discontinued operation is as follows:

  Year ended 30 June 2021

			Continuing operations		Discontinuing operations		TOTAL
			£'000		£'000		£'000
Revenue			58,124		2,426		60,550
Cost of sales			(10,356)		(1,211)		(11,567)
Gross profit			47,768		1,215		48,983
Administrative expense			(34,089)		(2,012)		(36,101)
Share based payments			(625)		-		(625)
Exceptional costs			(188)		-		(188)
OPERATING PROFIT			12,866		(797)		12,069
Finance income			20		-		20
Finance costs			(74)		(1)		(75)
PROFIT BEFORE INCOME TAX			12,812		(798)		12,014
Income tax expense			(1,322)		(101)		(1,423)
PROFIT FOR THE YEAR			11,490		(899)		10,591

Year ended 30 June 2020

			Continuing operations		Discontinuing operations		TOTAL
			£'000		£'000		£'000
Revenue			47,404		7,508		54,912
Cost of sales (restated see note 30)			(3,899)		(5,916)		(9,815)
Gross profit			43,505		1,592		45,097
Administrative expense (restated see note 30)			(30,443)		(1,587)		(32,030)
Share based payments			(682)		-		(682)
Exceptional costs			(136)		(381)		(517)
OPERATING PROFIT			12,244		(376)		11,868
Finance income			40		-		40
Finance costs			(98)		(2)		(100)
PROFIT BEFORE INCOME TAX			12,186		(378)		11,808
Income tax expense			(1,219)		-		(1,219)
PROFIT FOR THE YEAR			10,967		(378)		10,589

11.  GOODWILL

	Group
			30.6.21		30.6.20
	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 Group's two cash generating units (CGUs) identified, those being Dotdigital and Comapi.

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 Group's two trading activities and business segments. 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 6.2% (2020: 6.2%).

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 14% (2020: 12%).

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 75% (2020: 86%).

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 225% (2020: 155%) discount rate and growth rate of (21%) (2020: -17%).

12.  INTANGIBLE ASSETS

  Group

					Customer
					relationships		Technology
					£'000		£'000
COST
At 1 July 2020					1,205		1,200
Additions					-		-
At 30 June 2021					1,205		1,200
AMORTISATION
At 1 July 2020					1,205		310
Amortisation for the year					-		120
At 30 June 2021					1,205		430
NET BOOK VALUE At 30 June 2021					-		770

		Computer			Internally generated development				Domain
		software			costs				names				Totals
		£'000			£'000				£'000				£'000
	COST
	At 1 July 2020	954			27,255				42				30,656
	Additions	69			6,797				4				6,870
	At 30 June 2021	1,023			34,052				46				37,526
	AMORTISATION
	At 1 July 2020	793			14,255				34				16,597
	Amortisation for the year	81			4,592				2				4,795
	At 30 June 2021	874			18,847				36				21,392
	NET BOOK VALUE At 30 June 2021	149			15,205				10				16,134
								Customer
								relationships				Technology
								£'000				£'000
COST
At 1 July 2019								1,205				1,200
Additions								-				-
At 30 June 2020								1,205				1,200
AMORTISATION
At 1 July 2019								824				190
Amortisation for the year								381				120
At 30 June 2020								1,205				310
NET BOOK VALUE At 30 June 2020								-				890

		Computer		Internally generated development		Domain
		software		costs		names		Totals
		£'000		£'000		£'000		£'000
	COST
	At 1 July 2019	911		20,794		41		24,151
	Additions	43		6,461		1		6,505
	At 30 June 2020	954		27,255		42		30,656
	AMORTISATION
	At 1 July 2019	697		10,706		32		12,449
	Amortisation for the year	96		3,549		2		4,148
	At 30 June 2020	793		14,255		34		16,597
	NET BOOK VALUE At 30 June 2020	161		13,000		8		14,059

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.

13.  PROPERTY, PLANT AND EQUIPMENT

  Group

				Right of		Short		Fixtures &		Computer
				Use assets		leasehold		fittings		equipment		Totals
				£'000		£'000		£'000		£'000		£'000
	COST
	At 1 July 2020			5,458		730		770		2,473		9,431
	Additions			115		-		-		169		284
	Disposals			(136)		-		(4)		(14)		(154)
	Exchange differences			(53)		(5)		(12)		(14)		(84)
	At 30 June 2021			5,384		725		754		2,614		9,477
	DEPRECIATION
	At 1 July 2020			1,058		465		632		2,014		4,169
	Depreciation for the year			1,091		65		63		244		1,463
	Disposals			(66)		-		(2)		(10)		(78)
	Exchange differences			(22)		(4)		(13)		(10)		(49)
	At 30 June 2021			2,061		526		680		2,238		5,505
	NET BOOK VALUE
	At 30 June 2021			3,323		199		74		376		3,972
				Right of		Short		Fixtures &		Computer
				Use assets		leasehold		fittings		equipment		Totals
				£'000		£'000		£'000		£'000		£'000
	COST
	At 1 July 2019			-		646		779		2,294		3,719
	Additions			63		78		22		177		340
	Disposals			-		-		(30)		-		(30)
	Adjustment on transition of IFRS 16			5,335		-		-		-		5,335
	Exchange differences			60		6		(1)		2		67
	At 30 June 2020			5,458		730		770		2,473		9,431
	DEPRECIATION
	At 1 July 2019			-		402		554		1,726		2,682
	Depreciation for the year			1,122		63		77		286		1,548
	Disposals			(61)		-		-		-		(61)
	Exchange differences			(3)		-		1		2		-
	At 30 June 2020			1,058		465		632		2,014		4,169
	NET BOOK VALUE
	At 30 June 2020			4,400		265		138		459		5,262

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 2020					5,376		82		5,458
	Termination of leases					(136)		-		(136)
	Additions					42		73		115
	Foreign currency translation					(53)		-		(53)
	At 30 June 2021					5,229		155		5,384
	DEPRECIATION
	As at 1 July 2020					1,015		43		1,058
	Depreciation for the year					1,010		81		1,091
	Termination of leases					(65)		-		(65)
	Foreign currency translation					(18)		(5)		(23)
	At 30 June 2021					1,942		119		2,061
	NET BOOK VALUE
	At 30 June 2021					3,287		36		3,323

								Motor
						Properties		vehicles		Totals
						£'000		£'000		£'000
	COST
	Transition on adoption of IFRS 16					5,678		82		5,760
	Re-measurement of existing lease liabilities					(156)		-		(156)
	Termination of leases					(269)		-		(269)
	Additions					63		-		63
	Foreign currency translation					60		-		60
	At 30 June 2020					5,376		82		5,458
	DEPRECIATION
	Depreciation for the year					1,079		43		1,122
	Termination of leases					(61)		-		(61)
	Foreign currency translation					(3)		-		(3)
	At 30 June 2020					1,015		43		1,058
	NET BOOK VALUE
	At 30 June 2020					4,361		39		4,400

14.  TRADE AND OTHER RECEIVABLES

		Group
		30.6.21		30.6.20
		£'000		£'000
	Current:
	Trade receivables	10,895		10,364
	Less: Provision for impairment of trade receivables	(1,785)		(1,589)
	Trade receivables - net	9,110		8,775
	Other receivables	60		194
	Amounts owed by Group undertakings	-		-
	VAT	-		-
	Tax receivable	-		-
	Prepayments and contract assets	4,180		4,018
		13,350		12,987

  Further details on the above can be found in note 20.

Included within Group prepayments is an amount of £299,016 (2020: £404,150) 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.

15.  CASH AND CASH EQUIVALENTS

		Group
		30.6.21		30.6.20
		£'000		£'000
	Bank accounts	31,951		25,383
		31,951		25,383

Further details on the above can be found in note 20.

16.  CALLED UP SHARE CAPITAL

	Allotted, issued, fully paid			Nominal		30.6.21		30.6.20
	number			value		£'000		£'000
	298,778,630 (2020: 298,547,645)			£0.005		1,494		1,493
						1,494		1,493

During the reporting period the Company undertook the following transactions involving the issuing of share capital:

On 12 March 2021 an employee exercised their share options, increasing the issued share capital by 20,000 shares at a premium price of 68.5p.

On 12 March 2021 an employee exercised their share options, increasing the issued share capital by 65,000 shares at a premium price of 68.5p.

On 28 April 2021 an employee exercised their share options, increasing the issued share capital by 145,985 shares at a premium price of 68.5p.

17.  RESERVES

  Group

					Retained		Share		Reverse acquisition
					earnings		premium		reserve
					£'000		£'000		£'000
	As at 1 July 2020				45,655		6,967		(4,695)
	Issue of share capital				-		157		-
	Dividends				(2,472)		-		-
	Profit for the year				10,591		-		-
	Transfer of reserves				307		-		-
	Deferred tax on share options				-		-		-
	Other comprehensive income: currency translation				-		-		-
	Share-based payment				-		-		-
	Balance as at 30 June 2021				54,081		7,124		(4,695)
					Retranslation		Other
					Reserve		reserves			Totals
					£'000		£'000			£'000
	As at 1 July 2020				50		1,600			49,577
	Issue of share capital				-		-			157
	Dividends				-		-			(2,472)
	Profit for the year				-		-			10,591
	Transfer of reserves				-		(307)			-
	Deferred tax on share options				-		1,148			1,148
	Other comprehensive income: currency translation				(87)		-			(87)
	Share-based payment				-		625			625
	Balance as at 30 June 2021				(37)		3,066			59,539

  Group

					Retained				Share				Reverse acquisition
						earnings				premium				reserve
						£'000				£'000				£'000
	Restated balance as at 1 July 2019 (see note 30)					36,971				6,791				(4,695)
	Issue of share capital					-				176				-
	Dividends					(1,996)				-				-
	Profit for the year					10,589				-				-
	Transfer in reserves					30				-				-
	Deferred tax on share options					-				-				-
	Adjustments in relation to IFRS 16					61				-				-
	Currency translation					-				-				-
	Share-based payment					-				-				-
	Restated balance as at 30 June 2020 (see note 30)					45,655				6,967				(4,695)

				Retranslation		Other
				reserve		reserves		Totals
				£'000		£'000		£'000
	Restated balance at 1 July 2019 (see note 30)			16		910		39,993
	Issue of share capital			-		-		176
	Dividends			-		-		(1,996)
	Profit for the year			-		-		10,589
	Transfer in reserves			-		(30)		-
	Deferred tax on share options			-		38		38
	Adjustments in relation to IFRS 16			-		-		61
	Currency translation			34		-		34
	Share-based payment			-		682		682
	Restated balance as at 30 June 2020 (see note 30)			50		1,600		49,577

18.  TRADE AND OTHER PAYABLES

		Group
		30.6.21		30.6.20
		£'000		£'000
	Current:
	Trade payables	769		1,732
	Amounts owed to Group undertakings	-		-
	Social security and other taxes	29		50
	Other payables	84		179
	VAT	18		1,801
	Accruals and contract liabilities	8,434		6,034
		9,334		9,796

Further details on liquidity and interest rate risk can be found in note 20. Amounts owed to group undertakings are non-interest bearing and are repayable on demand.

19.  LEASE LIABILITIES

	Group
			Properties		Motor Vehicles		Totals
			£'000		£'000		£'000
	At 1 July 2020		4,427		40		4,467
	Termination of leases		(67)		-		(67)
	Additions		42		73		115
	Principal repayments		(1,132)		(50)		(1,182)
	Interest		110		1		111
	Foreign currency retranslation		(21)		-		(21)
	At 30 June 2021		3,359		64		3,423
	Current		906		28		934
	Non-current		2,453		36		2,489
	At 30 June 2021		3,359		64		3,423

	Group
			Properties		Motor Vehicles		Totals
			£'000		£'000		£'000
	At 1 July 2019		-		-		-
	Transition on adoption of IFRS 16		5,678		82		5,760
	Re-measurement of existing lease liabilities		(162)		-		(162)
	Termination of leases		(264)		-		(264)
	Additions		63		-		63
	Principal repayments		(1,084)		(44)		(1,128)
	Interest		136		2		138
	Foreign currency retranslation		60		-		60
	At 30 June 2020		4,427		40		4,467
	Current		1,034		34		1,068
	Non-current		3,393		6		3,399
	At 30 June 2020		4,427		40		4,467

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

20.  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
		30.6.21		30.6.20
		£'000		£'000
	Financial assets
	Trade and other receivables	9,167		8,969
	Bank balances	31,951		25,383
		41,118		34,352

	Financial liabilities
	Trade payables	769		1,732
	Amounts owed to group undertakings	-		-
	Accrued liabilities and other payables	8,221		7,268
		8,990		9,000

The fair value of the financial assets and financial liabilities is equal to their carrying values. All financial assets are categorised as loans and receivables and all financial liabilities are categorised as financial liabilities at amortised costs.

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 £10,221,000 (2020: £9,013,000) 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 2021 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:

						30.6.21		30.6.20
						£'000		£'000
	0-30 days					5,734		6,770
	30-60 days					2,701		911
	More than 60 days					2,550		2,683
						10,985		10,364

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

						30.6.21		30.6.20
						£'000		£'000
	0-30 days					140		1
	30-60 days					154		13
	More than 60 days					1,491		1,575
						1,785		1,589

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

						30.06.21		30.6.20
						£'000		£'000
	As at 1 July					1,589		999
	Provision for impairment					262		1,048
	Receivable written off in the year					(66)		(335)
	Unused amount reversed					-		(123)
	As at 30 June					1,785		1,589

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 £2,484,862 (2020: £2,960,513) of which £1,502,918 (2020: £1,574,891) 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 Company's cash holdings are held at NatWest Bank, which has a BBB credit rating.

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 (2020: £nil) and amounts payable over one year are nil (2020: £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.

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 2021
Trade and other payables	9,334		-		-		-		9,334
Lease liabilities	480		454		759		1,730		3,423
Total non-derivatives	9,814		454		759		1,730		12,757
	<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 2020
Trade and other payables	9,796		-		-		-		9,796
Lease liabilities	532		536		960		2,439		4,467
Total non-derivatives	10,328		536		960		2,439		14,263

21.  DEFERRED TAX

						30.6.21		Restated* 30.6.20
						£'000		£'000
	As at 1 July					1,983		1,377
	Current year provision					(776)		606
						1,207		1,983

  The deferred tax liability above comprises the following temporary differences:

					30.6.21		Restated * 30.6.20
					£'000		£'000
Acquired intangibles					146		169
Capital allowances in excess of depreciation					38		53
R&D relief in excess of amortisation					2,963		2,325
Share option relief					(1,805)		(495)
Losses					(135)		(69)
					1,207		1,983

*Refer to note 30.

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.

22.  CAPITAL COMMITMENTS

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

23.  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.

							30.6.21		30.6.20
							£'000		£'000
	Sale of services
	Ipswich Town Football Club	Entity under common directorship			Email marketing services		4		-
	Epwin Group Plc	Entity under common directorship			Email marketing services		6		4
							10		4

Year end balances arising from sale of services						30.6.21 £'000		30.6.20 £'000
Ipswich Town Football Club	Entity under common directorship			Email marketing services		1		-
Epwin Group Plc	Entity under common directorship			Email marketing services		1		1
						2		1

  Directors

						30.6.21		30.6.20
						£'000		£'000
	Aggregate emoluments					1,136		897
	Company contributions to money purchase pension scheme					26		25
	Share-based payments from the LTIP options granted					347		438
						1,509		1,360

Directors' pay summary does include Non-Executive Directors.

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

								30.6.21		30.6.20
								£'000		£'000
	Salaries							574		440
	Other benefits							14		17
	Pension costs							16		15
	Share-based payments on the LTIP options granted							198		289
								802		761

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

						30.6.21		30.6.20
						£'000		£'000
	Dotdigital EMEA Limited	Subsidiary
	As at 1 July					(3,545)		(4,580)
	Loans advanced					5,075		3,060
	Loans repaid					(2,571)		(2,025)
						(1,041)		(3,545)

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

24.  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 Developments Limited, Dotmailer SA Pty, Dotmailer LLC, Dotdigital SG Pte. Limited, Dynmark International Ltd, Dotdigital Canada Inc and Dynmark S.p. z.o.o.

25.  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 £625,000 (2020: £682,000).

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 2021 had a WAEP of 26.05p (2020: 51.09p) and a weighted average contracted life of 5.14 years (2020: 3.01 years) and their exercise prices ranged from 0.5p to 147.5p. All share options are settled in form of equity issued.

30.06.21 30.6.20 No of options WAEP No of options WAEP Outstanding at the beginning of the period 3,910,984 51.09p 4,428,064 49.16p Granted during the year 1,093,728 107.54p - 0p Forfeited/cancelled during the period (480,992) 13.03p - 0p Exchanged for shares (230,985) 68.50p (517,080) 34.57p Outstanding at the end of the period 4,292,735 27.51p 3,910,984 51.09p Exercisable at the end of the period - - 230,985 68.50p The weighted average share price at the date of the exercise for share options exercised during the period was 178.57p (2020: 92p). The Black Scholes model was used in measuring the fair use of the options granted. 22December 2020 14 December 2020 24 October 2018 19 December 2017  Number of options granted   306,728 787,000 2,305,000 1,375,000  Share price at grant date 152.0p 147.50p 77.5p 85.95p  Exercise price 0.50p 147.50p 0.50p 0.50p  Option life in years 5 years 10 years 5 years 5 years  Risk-free rate 0.95% 1.23% 1.23% 1.33%  Expected volatility   30% 32% 30% 30%  Expected dividend yield   1% 1% 1% 1%  Fair value of    103.72p 26.99p 52.70p 65.03p  options Expected volatility was determined by calculating the historical volatility of the Group's share price from the date it listed to the grant date of the share option. 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 and 22 December 2020 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.
	26.	GROUP RECONCILIATION OF PROFIT BEFORE CORPORATION TAX TO CASH GENERATED FROM OPERATIONS

		Group
		30.6.21		30.6.20
		£'000		£'000
	Current:
	Profit before tax from all operations	12,014		11,808
	Amortisation	4,795		4,148
	Depreciation	1,267		1,548
	Exceptional costs	68		16
	Finance lease non-cash movement	(48)		4
	Adjustments in relation to IFRS 16	-		61
	Gain on disposal of fixed assets	(2)		(3)
	Loss on disposal of investments	-		-
	Share-based payments	625		682
	Finance expense	75		100
		18,794		18,364
	(Increase)/decrease in trade receivables	(363)		(1,157)
	Increase in trade payables	(462)		(1,300)
	Cash generated from operations	17,969		15,907

27.  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
						£'000
	As at 1 July 2019					19,320
	As at 30 June 2020					25,383
	As at 30 June 2021					31,951

28.  PROJECT DEVELOPMENT

During the year the Group incurred £6,797,279 (2020: £6,461,313) in development investments. All resources utilised in development have been capitalised as outlined in the accounting policy governing this area.

29.  EVENTS AFTER THE END OF THE REPORTING PERIOD

  There are no events after the end of the reporting period which impact the Group's and Company's financial statements .

30.	PRIOR YEAR RESTATEMENT NOTE

During the year, the Group made the decision to modify the classification of direct marketing and partner commission from cost of sales to administrative expenses and tech infrastructure from under administrative expenses to cost of sales, to reflect more appropriately gross profit and gross profit margin plus also administrative expenses under continuing operations. Comparative amounts in the Consolidated Income Statement have been reclassified for consistency. As a result, £4,293,125 was reclassified from cost of sales to administrative expenses and £1,826,195 were reclassified from administrative expenses to cost of sales. There has been no impact on the prior year's profit for the year however gross profit has increased from £41,038,000 to £43,505,000 and administrative expenses have increased from £27,976,000 to £30,443,000.

During the year, the Group discovered that the share-based payment arrangement had been erroneously recognised in Dotdigital Group PLC instead of being recognised in the subsidiaries in which the employees are employed. Under IFRS 2 Share based payments, when a parent grants rights to its equity instruments to employees of its subsidiaries this arrangement should be accounted for as equity-settled in the consolidated financial statements but results in an investment being created in the parent's own statement of financial position. Therefore, the subsidiaries should in their own separate financial statements, measure the services received from its employees in accordance with the requirements of IFRS 2 applicable to equity-settled share-based payment transactions. Thereby resulting in a corresponding increase recognised in equity as a capital contribution from the parent. There has been no impact on the prior year's Group profit for the year, however company only investments increased from £15,142,000 to £17,516,000 and retained earnings increased from £3,550,000 to £5,924,000.

At the year end, the Group discovered on the calculation of deferred tax on the share options and the internally generated development costs that this had been misallocated and miscalculated respectively. On the matter of the misallocation of the deferred tax on the share option under IFRS 2 Share based payment, where the final deferred tax calculation exceeds the cumulative amount recognised as a share-based payment expense in the Income Statement, the maximum amount of deferred tax income that can be recognised in the Income Statement can only equal the total share-based payment expense. Any excess deferred tax income is recognised directly in reserves.

As for the miscalculation of deferred tax on the internally generated development costs this is with respect to the identification and calculation of the net book value for internally generated development costs qualifying for research and development, thereby impacting the deferred tax liability.

Both adjustments have impacted the prior year's profit for the year from continuing operations where this has increased from £10,636,000 to £10,967,000 and total comprehensive income attributable to owners of the parent has increased from £10,292,000 to £10,623,000. Net assets as per the consolidated statement of financial position have also increased from £50,701,000 to £51,070,000.

Consolidated Income Statement for the year ended 30 June 2020

				As previously reported		Adjustments		As restated
				£'000		£'000		£'000
CONTINUING OPERATIONS
Revenue from contracts with customers				47,404		-		47,404
Cost of sales				(6,366)		2,467		(3,899)
Gross profit				41,038		2,467		43,505
Administrative expenses				(27,976)		(2,467)		(30,443)
OPERATING PROFIT FROM CONTINUING OPERATIONS PRE SHARE-BASED PAYMENTS AND EXCEPTIONAL COSTS				13,062		-		13,062
Share-based payments				(682)		-		(682)
Exceptional costs				(136)		-		(136)
OPERATING PROFIT FROM CONTINUING OPERATIONS				12,244		-		12,244
Finance costs				(98)		-		(98)
Finance income				40		-		40
PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS				12,186		-		12,186
Income tax expense				(1,550)		331		(1,219)
Profit for the year from continuing operations				10,636		331		10,967
Loss for the year from discontinuing operations				(378)		-		(378)
Profit for the year attributable to the owners of the parent				10,258		331		10,589

Consolidated Statement of Comprehensive Income for the year ended 30 June 202 0

				As previously reported		Adjustments		As restated
				£'000		£'000		£'000
PROFIT FOR THE YEAR				10,258		331		10,589
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations				34		-		34
Total comprehensive income attributable to:
	Owners of the parent			10,292		331		10,623
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Comprehensive income from continuing operations				10,670		331		11,001
Comprehensive loss from discontinued operations				(378)		-		(378)

Operating Profit  Costs by nature
Profit from continuing operations has been arrived after charging:-
	As previously				As
	reported		Adjustments		restated
	£'000		£'000		£'000
Direct marketing	1,727		(1,727)		-
Outsourcing and other costs	4,639		(4,639)		-
Outsourcing and tech infrastructure	-		3,899		3,899
Total cost of sales	6,366		(2,467)		3,899
	As previously				As
	reported		Adjustments		restated
	£'000		£'000		£'000
Direct marketing	-		1,727		1,727
Partner commission	-		2,566		2,566
Staff-related costs (inc Directors' emoluments)	17,929		-		17,929
Auditor's remuneration	64		-		64
Amortisation of intangibles	3,647		-		3,647
Depreciation charge	1,475		-		1,475
Legal, professional and consultancy fees	479		-		479
Computer expenditure	2,404		(1,826)		578
Bad debts	1,248		-		1,248
Foreign exchange losses/(gains)	(120)		-		(120)
Travel and subsistence costs	509		-		509
Office running	176		-		176
Gain on disposal of tangible asset	(3)		-		(3)
Staff welfare	399		-		399
Other costs	531		-		531
Management charge	(762)		-		(762)
Total administration costs	27,976		2,467		30,443

Consolidated Statement of Financial Position

30 June 2019

				As previously reported		Adjustments		As restated
				£'000		£'000		£'000
ASSETS
NON-CURRENT ASSETS
Goodwill				9,680		-		9,680
Intangible assets				11,702		-		11,702
Property, plant and equipment				1,037		-		1,037
				22,419		-		22,419
CURRENT ASSETS
Trade and other receivables				12,222		-		12,222
Cash and cash equivalents				19,320		-		19,320
				31,542		-		31,542
TOTAL ASSETS				53,961		-		53,961
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital				1,490		-		1,490
Share premium				6,791		-		6,791
Reverse acquisition reserve				(4,695)		-		(4,695)
Other reserves				720		190		910
Retranslation reserve				16		-		16
Retained earnings				37,161		(190)		36,971
TOTAL EQUITY				41,483		-		41,483
LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities				-		-		-
Deferred tax				1,377		-		1,377
				1,377		-		1,377
CURRENT LIABILITIES
Trade and other payables				11,096		-		11,096
Financial liabilities:
-  Interest bearing loans and borrowings				5		-		5
				11,101		-		11,101
TOTAL LIABILITIES				12,478		-		12,478
TOTAL EQUITY AND LIABILITIES				53,961		-		53,961

Consolidated Statement of Financial Position

30 June 2020

				As previously reported		Adjustments		As restated
				£'000		£'000		£'000
ASSETS
NON-CURRENT ASSETS
Goodwill				9,680		-		9,680
Intangible assets				14,059		-		14,059
Property, plant and equipment				5,262		-		5,262
				29,001		-		29,001
CURRENT ASSETS
Trade and other receivables				12,987		-		12,987
Cash and cash equivalents				25,383		-		25,383
				38,370		-		38,370
TOTAL ASSETS				67,371		-		67,371
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital				1,493		-		1,493
Share premium				6,967		-		6,967
Reverse acquisition reserve				(4,695)		-		(4,695)
Other reserves				1,372		228		1,600
Retranslation reserve				50		-		50
Retained earnings				45,514		141		45,655
TOTAL EQUITY				50,701		369		51,070
LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities				3,399		-		3,399
Deferred tax				2,169		(186)		1,983
				5,568		(186)		5,382
CURRENT LIABILITIES
Trade and other payables				9,796		-		9,796
Financial liabilities:
-  Lease liabilities				1,068		-		1,068
Current tax payable				238		(183)		55
				11,102		(183)		10,919
TOTAL LIABILITIES				16,670		(369)		16,301
TOTAL EQUITY AND LIABILITIES				67,371		-		67,371

  Company Statement of Financial Position

30 June 2019				As previously reported		Adjustments		As restated
				£'000		£'000		£'000
ASSETS
NON-CURRENT ASSETS
Investments				15,147		1,692		16,839
				15,147		1,692		16,839
CURRENT ASSETS
Trade and other receivables				808		-		808
Cash and cash equivalents				594		-		594
				1,402		-		1,402
TOTAL ASSETS				16,549		1,692		18,241
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital				1,490		-		1,490
Share premium				6,791		-		6,791
Other reserves				720		-		720
Retained earnings				3,515		1,692		5,207
TOTAL EQUITY				12,516		1,692		14,208
LIABILITIES
CURRENT LIABILITIES
Trade and other payables				4,033		-		4,033
TOTAL LIABILITIES				4,033		-		4,033
TOTAL EQUITY AND LIABILITIES				16,549		1,692		18,241

Company Statement of Financial Position 30 June 2020				As previously reported		Adjustments		As restated
				£'000		£'000		£'000
ASSETS
NON-CURRENT ASSETS
Owned Property, plant and equipment				3		-		3
Investments				15,142		2,374		17,516
				15,145		2,374		17,519
CURRENT ASSETS
Trade and other receivables				797		-		797
Cash and cash equivalents				396		-		396
				1,193		-		1,193
TOTAL ASSETS				16,338		2,374		18,712
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT
Called up share capital				1,493		-		1,493
Share premium				6,967		-		6,967
Other reserves				1,372		-		1,372
Retained earnings				3,550		2,374		5,924
TOTAL EQUITY				13,382		2,374		15,756
LIABILITIES
CURRENT LIABILITIES
Trade and other payables				2,956		-		2,956
TOTAL LIABILITIES				2,956		-		2,956
TOTAL EQUITY AND LIABILITIES				16,338		2,374		18,712

 

END

 

 

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