Good morning, and thank you for coming today for LBG Media's half year results for 2026. For those of you that haven't met me yet, I'm Solly, founder and CEO of LBG Media.

Today I'm joined by Darren. Darren joined us very recently as our CFO.

In a short space of time, he's certainly shown his impact in the business. He comes with a great background, a range of different companies in our relevant sector, whether that's The Guardian, WPP, Sky, and then I would say probably the most notable business where it really stood out to me in his CV was his time at Global, where he helped grow the business from £300 million to £800 million.

I believe in one month carried out three acquisitions, three big outdoor acquisitions, which were quite well known at the time. Darren's got a great background, comes with a wealth of experience, and certainly been putting that to work since he started.

I'm going to talk you through an overview, then I'm going to hand over to Darren to talk through the financials, and then it's going to come back to me for the operational review. There's two realities that I want to touch on today.

The first is the real strategic progress that we're making, and I'm going to talk through that and some of the examples in and around that. Then the other is the real short-term turbulence that we faced, and giving some color behind some of the numbers that we shared.

Moving on to the overview, our long-term ambition has not changed. If anything, with the changes in market around AI, the creator space, the US, and other areas that have progressed, our conviction in the business and the direction of travel has only become stronger.

In terms of the destination, we are still going to the same place. We are aiming to be the most engaged entertainment platform for young adults, global relevance, and stronger earnings quality.

And 2026 is very much a transition year for us, transition to where we see the long term. The world is moving in our direction for all of the reasons I mentioned before around AI, the US market, creators.

The right way to understand this year is through two realities for us: meaningful strategic progress and short-term pressure. The headline is straightforward: revenue growth was strong, and EBITDA margins were lower.

On the strategic side, we made progress with the revenue quality, with blue-chip demand being strong, the US platform in place, and M&A pipeline being healthy. Our direct business now constitutes 72% of the group, and that's up from 44%, higher quality, more repeatable, and the shift has happened quicker than we'd expected.

On the challenging side, our web business continues to be under pressure. There is structural issues in the market, but at the same time, I hold my hands up, the recovery plan that we put in place has not come into effect as quickly as we would have liked.

Now we've taken action. We've put in more pessimistic forecasts in the business, underplaying the recovery in that part of the business, and taking action elsewhere to accelerate the gap that that puts in place.

Cost actions, acceleration of our direct business, IP investment, YouTube expansion, which we see in the future potentially being materially higher than web over time as that mix changes, proprietary products, AI and data accelerated. We haven't stood still.

We've moved forward, although it's been a challenge. In terms of the long-term strategy, it's not changing.

What's changing is the shape and quality of the business as we execute it. There's five priorities that we're focused on: our direct business, top-tier clients, IP, proprietary products, and data and AI.

As mentioned before, our direct business now constitutes 72% of the group, up 44%. We're investing for growth in that, and we're also investing for forecasting accuracy.

Our top-tier clients have made significant progress. We're up from 17 to 23 $1 million-plus clients now, with names such as Google, Tesco, Domino's, Nike occupying those big strategic relationships which we hold.

Our IP-led revenue is accelerating. Snack Wars, Agree to Disagree, two notable formats for us that are getting global recognition in terms of the development and awareness of those brands and that IP that we're building.

Our proprietary products, we've built Mission Control, generates billions of different data points across every touch point of our content across platforms. That enables our content creators to be more informed and make better decisions.

Emma, our production efficiency tool, saved weeks and weeks of our team's time in terms of efficiency. LADradar helps us spot trends.

All of these things have enabled us to have better scale, better data, and also better advantage when it comes to execution. There's five priorities, one direction, more controllable, and a more repeatable business.

Before I hand over to Darren, what I want to show you is a video on what we've been up to, which very much demonstrates why we exist, which ultimately is to entertain and engage young adults. It demonstrates the size and scale of the impact that we have across half a billion people, reaching 2/3 of Gen Z every single month, and how that scale and engagement ultimately attracts some of the biggest blue-chip brands to advertise with us.

We are Sausage. Pathetic.

To the [jury?] .

Is your on-screen persona the real you? Pretty much.

We must do more on arrests, safety orders, better prosecutions. We have to bring about a behavioral change.

The Scribe: Petrus V. Do you want to see it?

Oh, that is good. Can you imagine three weeks going to school and you smell like egg?

You can't handle this Zinger. KFC's Daredevil Zingers.

You would never flake on me. Does it help if I say I was thinking of you the whole time?

You think I'll blend in? Gemini, please show me a photo of this savory trifle.

You're the human equivalent of a trifle. I actually used Gemini to give me some ideas.

This is what I've done. It's just a bit pink, isn't it?

I found out about this job through a LADbible post. I love to perform more than anything.

Do it passionately, and do it with everything that you have inside you. Watching porn is supposed to make us feel good, right?

LADbible is doing brilliant work, and I'm really glad to see it. Oh God.

Never. LADbible.

Thank you, Solly. Good morning, everyone.

Great to be here. I thought I'd start with a few impressions of LBG as I'm just about to complete my third month, actually three months today.

I was attracted to an ambitious, passionate company operating in a really interesting space, focused on entertaining young adults at the heart of social media and with incredible content, some of which you've just seen. There's an extremely compelling strategic plan and the drive to deliver it.

I was excited by the growth potential, the potential for further international expansion, and to use strategic acquisitions to drive that growth. These are all things that I hope that I can help with my past experience.

Growth is coming through strongly, as you've seen, in the direct business, and it's nearly doubled its top-line growth in H1. We have a strong balance sheet, which allows for investment in long-term growth.

The long-term strategy is accelerating. However, we're also seeing short-term turbulence in the indirect business.

The decline in our social and web revenues has been faster than we anticipated, and the business has needed to adapt quickly. That is why we feel it's the right time now to rebase expectations.

Now I'll give you the full context around the half year results. This is the picture of our P&L.

We've seen accelerating revenue growth, but lower EBITDA margins. Starting with the revenue, adjusted revenue, which is adjusted to reflect constant currency, was up 22%.

The driver of that increase was our direct business, which grew 97% at constant currency, with exceptional growth in both the UK and the US businesses. Moving to the adjusted EBITDA, this was down 34%.

There are three main reasons for the drop. Number one, investment in growth in our direct business to capitalize on momentum and support the strategic plan.

We invested in senior leaders, in upgrading sales teams, and supporting systems and infrastructure. That cost sits in the period, while we expect the revenue benefit to build over time.

Secondly, accelerating direct growth is lower margin than our indirect business, and revenue generation has moved significantly towards direct, with, as Solly said, direct now represents 72% of total revenues, and that's compared to 44% last year. Thirdly, the indirect business has declined at a faster rate than anticipated.

That flowed through to the bottom line because of the higher margins in the indirect business. We're driving a deliberate strategic shift towards direct revenues, which have better visibility and less volatility.

I'll break down the adjusted revenue in a bit more detail. Again, it's on a constant currency basis.

I think it illustrates well the contrast in our business with direct revenues up a really impressive 97%, but indirect down 40%. If we start with the direct side, UK direct was up 64%, and in the US, direct was up 158%.

This accelerated faster than we expected on both sides of the Atlantic. The US lapped a seasonally lighter H1 in FY 2025.

Exceptional growth rates in H1, they won't replicate as much in H2. On the UK side, I would expect the growth rates to be similar to H1.

That overall picture of growth reflects strong demand from global blue-chip clients and the benefit of investments that we made, for example, in content and the quality of the sales team. This is supporting the long-term vision and the strategic direction we previously talked about of securing high-quality revenues with higher levels of visibility.

Direct is now almost 3/4 of our revenue. We have talked about the reasons for the decline in indirect, but I want to draw out a few key points.

Indirect revenue was down 40% overall. Within that, social was down 42%, and web was down 36%.

We started seeing the impact of changes to platform algorithms, particularly on Meta in H2 last year. That is the Meta algorithm changing the distribution of and reward for certain types of content and the knock-on effect on our business, which also means lower web referrals.

These continued to challenge the business in H1 this year. We also saw lower web traffic from search due to AI Overviews, although that is a smaller factor for us.

We saw the effects coming through from a long-term structural shift away from websites towards social platforms and video content. These are industry-wide dynamics, not specific to us, and we have already implemented plans to attempt to minimize the impact and focus on producing more original content, which will be supported by the algorithms, as well as taking cost action.

However, the visibility of indirect revenues remains low and hard to predict, and this is the key driver in the range in the revenue and EBITDA guidance that we put out for the full year. Just taking a step back, the growth in direct and the faster-than-expected decline in indirect means indirect is now much smaller part of the group's revenues.

That's a de-risking of the business going forward. I'm going to move on to have a look at the cost base.

Total costs in the period were £44.3 million. That's up 40% from £31.7 million in H1 last year.

More than 95% of that increase was from investment and scaling of the direct business. We've invested in content costs to scale and drive impressive direct revenue growth.

A strong focus has been on original content. Within content costs, we've also seen talent costs increase as we produce larger-scale campaigns for clients such as Google, Uber, and Dunkin'.

We also invested more in marketing and paid social to support distribution of larger campaigns. Finally, we trialed one-off entry campaigns for large brands in the US at lower margin, and that drove about $6 million worth of revenue.

Investment in content was a strategic decision as part of our shift to higher growth, more predictable direct revenues, which we guided to in our FY 2025 results. Payroll was up 11%.

That's below the 22% revenue growth at constant currency. This was mainly investment in senior management and also upgrading sales teams in Direct UK and Direct US.

Headcount reductions on the indirect side of the business means that overall headcounts stayed broadly flat at about 470 people across the period, and some restructuring that we've carried out in H1 will mean that we'll see a headcount reduction into H2. Overheads were up 21%, again reflecting the build-out of the direct business, including technology and marketing costs as key investment areas.

In summary, we're focusing investment on our growth areas of the business, and that's the direct side. Going to move on to talk a little bit about our KPIs.

You'll see that we've aligned the KPIs for our Direct US and UK businesses. I'll start with Direct US.

Number of clients spending more than $1 million grew to seven. That's up from five last year.

Repeat client revenue was broadly consistent at 61%. Importantly, clients are coming back, but spending more when they do.

You can see the average deal size, which grew significantly up to $257,000. It was $139,000 in H1 last year.

That's an 85% increase in the average deal size, and it reflects the bigger mandates from the high-profile blue-chip clients that we talked about. KPIs on Direct UK, number of clients on the UK side that are over $1 million grew to 16.

That's up from 12 last year. Repeat client revenues were actually 89%, 78% last year, so that's really encouraging for future growth.

Like in the US, we saw a very strong increase in the average deal size, in this case, nearly doubling. That's creating deeper, larger, more embedded deals with top-tier clients, and it's a key part of our strategy.

Finally to indirect. Global audience was steady at half a billion.

You can really see the structural issues we're facing if you look at the daily web sessions. Daily web sessions, the average for the half was at 2.3 million, and that was down from 5 million in the same period in 2025.

The steps we're taking to stabilize performance is coming through somewhat in the web yields. Web yields per 1,000 sessions actually improved to £13.93 from £10.34 last year.

Having a look at cash, we opened the period with £30.8 million of cash, and we ended with £28.4 million of cash. That's a slight decrease over the period.

We don't hold any external debt. Cash conversion was at 63%.

That's lower than our typical conversion rate, but it was mainly driven by one large client payment, which was at about £2.8 million. It was during March.

It came in in April. If you kind of normalize for that, then cash conversion was actually over 90%.

Our expectation is that we will have a much more typical cash conversion in the second half, between 80% and 100%. Closing cash was also impacted by the move to our fantastic new offices, and that refit is reflected in the CapEx costs as a one-off.

Finally from me, our capital allocation policy remains the same. We're driving the same strategy, those are the kind of key elements you can see up there.

On the earn-out side, there wasn't actually any earn-out payments in H1, but we did in April make the FY 2025 Betches earn-out payment, so that's gone out just after the half year end, and that really kind of reflects the success of that business since the group acquired it. That just leaves one more payment on the Betches earn-out, which will go out in FY 2027.

Supporting our people through our Employee Benefit Trust is a core part of how we retain and motivate talent in a competitive market. Organic growth is obviously a key priority.

Solly's going to come back and talk about that some more in a minute, but the business generates cash, and we reinvest it for growth. On the M&A side, we have a very healthy M&A pipeline.

Future acquisitions are a key pillar in our growth strategy. I'm hoping that's a key part of what I can help with given my background.

All of this is supported by our strong cash position and with no external debt. Hopefully that's given you a good overview of the financials, and I am going to hand back to Solly, and he's going to talk through some of the strategy some more.

Thank you, Darren. Onto the operational progress.

The first half has reinforced two things for us: the strategic direction is right; the market has shifted, and we need to act with more pace and discipline. Both lessons have been taken on, and the actions have already been coming into place.

In terms of the long-term strategic progress that we've been making operationally, everything links back to the five priorities I mentioned before: direct, top-tier clients, IP, proprietary products, and data-led measurement. When I talk about transition and a year of transition for us, these are five core important elements that we're focused on in terms of delivering long-term value, which gives us more visibility, more control, and more repeatability.

In terms of what that looks like, I'm going to show you some elements around that. The first is our strategic client partnerships.

I think what this slide shows you is some of the quality of what we're building, some of the names in which we're working with across the board, whether it's Google, Tesco, Domino's, Nike, Dunkin', or some of the other big brands that we're working with. We are working with the best in the world, and we are working very closely and driving strategic relationships where we are moving the needle for their businesses.

Google has been a client for a number of years now. We don't just work on the basis of doing advertisement for them; we understand their business objectives, and we help them drive results.

We've done that across a range of different products, whether that's Google Pixel, Search, Android, or more recently, Gemini, where they're aiming to be the number one AI provider, and we're working very closely with them and their team. The next is Tesco, and their objectives are to grow market share, and we are working with them very closely when it comes to growing that within young adults.

We reach one in two millennial and Gen Z across our audience space, and we're working with them to help them move that needle. Then it's the same with Domino's.

The big objectives for them are to continue to grow their market share, and also with new products like chicken and dip where they've entered into that market, we're helping them drive that and launch that into the market with our audience base that we understand better than anyone else. Before I head into the IP side of our business, what I want to talk about is the continued meaningful part that indirect will play in our business.

Although the shape is going to be different, it's still going to be an important part of the mix. By that, I mean there's going to be a different mix around YouTube.

That's going to be a bigger part of the puzzle for us. There's a 93% growth in viewership year on year on that platform.

Over time, with the investment in repeatable IP, we see that as a bigger part of the puzzle and a bigger part of contribution as part of that. The key thing is just going to be about timing that.

The other elements that are important are Facebook and Snapchat. The shifts that Darren mentioned before with platforms like Facebook are that they are moving more and more towards original content, which is absolutely in favor of the investment that we're making into repeatable IP and original content.

We believe, over time, we'll benefit from that. We've also demonstrated that our audience continues to grow.

April was our biggest ever month on Instagram: 2.3 billion impressions, and our YouTube subscribers were growing at a rate of knots. Web has been a genuine managed decline.

That decline has hit us harder, but we have remained cost-disciplined. We've initiated AI to help support and build and grow that.

Ultimately, the indirect part of our business continues to be important, but the shape of it is evolving. Onto the IP element and the progress that we've been making.

Snack Wars and Agree to Disagree are important because they're not just content; they're repeatable entertainment formats which are TV-grade. Most recently, we had the likes of Daniel Radcliffe, Ashton Kutcher, all The Devil Wears Prada cast, and a number of others across both of those formats, and that happened just in the last six months.

We also launched an offshoot of Snack Wars. Snack Wars, for those of you that aren't familiar, is a studio-based format that we have where celebrities come in and taste different country snacks, some brilliant reactions and scenes and entertainment.

We have now started to build that out in different directions. We've launched an award show, and we've recently just launched a world tour where, for those of you that are familiar, probably via I'm A Celebrity, we had Angry Ginge and his friend, Jake, traveling to Japan to taste some of the best flavors within Japan, and that was also sponsored by Domino's, promoting chicken and dip.

Snack Wars is a great example of how we're looking to expand that. Some of you will have seen The Sunday Times Fast Track this week.

What was fascinating to see was the number one company on there was actually an IP-led, creator-based company built by Gary Lineker, Goalhanger, and that was the number one fastest-growing company on there. For us, that further reinforces the opportunity that we are in fast-growth areas of this market, and that was the fastest-growing business out of all of the different sectors on that list, which is encouraging to see.

For us, in terms of how we monetize that, we work with brands such as Domino's, Google, and others who will sponsor that content. We've seen fantastic results and ROI that has been driven that is market-leading and has encouraged further investment into that repeatable IP.

We also see opportunity to monetize the IP further across our indirect platforms. Sponsorship and platform revenue share are the two engines that are going to drive this part of our business.

In terms of AI, it's already improving how we operate on a day-to-day basis. It's not just theory; it's not just something that we're talking about.

We are seeing practical leverage that is benefiting our business. In terms of that AI stack that we've built, we've got Emma, which is a virtual traffic manager that has saved 4,000-plus hours a year so far since it was built.

We've got Arnold, which is our AI video spell checker, which cuts a process down from 69 days to 29 hours in terms of savings that it's made so far. We've got LADradar, which is our real-time cultural trend identifier, which enables us to get to trends quicker than others out in market.

We've got LADscribe, which is our editorial content tool, and then Mission Control and the Brief Unpacker, both of those tools and technologies I've talked about before, which enable us to make better decisions when it comes to content creation and the way in which we service clients. We're also embracing a range of different enterprise use cases across all of the different AI providers and giving access to our team to help them on their day-to-day basis.

We've got fantastic audience proof here when it comes to the Instagram business, whereby LADbible has had its highest ever engagement month for many, many years, and you can see the greens across there. We're now starting to turn AI towards our web business and how we can also use that on the recovery plan which we're putting in place.

For us, we are putting AI to work in a practical way that is driving genuine value in the business already. When it comes to our acquisition strategy, M&A remains an important lever within the business, but only if it clearly strengthens the strategy.

We've been strong and selective in terms of our track record around this, with Betches being a great example of that, with the US presence and platform that has enabled us to build. UNILAD enabled us to corner the UK market when it comes to young adults.

Again, we've been very focused on the fit. In terms of the future opportunities that we're looking at, we're looking at US, Gen Z, platform strength, IP value, audience footprint, diversification, and feasibility, all of the different criteria which we run these opportunities through.

We've got 100 opportunities identified, 30 shortlisted, 20 closely monitored, and nine in live discussion. We've got the flexibility to move per the balance sheet that Darren mentioned before, but the bar remains high.

Just before I hand over to you guys for questions, let me leave you with five points. First, 2026 is a transition year for us towards where we see the long-term value.

Second, the direct momentum is real, even whilst the indirect business is being reshaped. Third, the long-term strategy is unchanged, and we've got proof points starting to build around those focus areas: IP, AI, US, and top-tier clients.

Then fourth, the indirect remains core. It's going to be a lower mix over time, and the shape is going to be changing towards YouTube and quality performance.

Fifth, we're obviously disappointed about the revised guidance. I see that as part of growing pains and building a much stronger and a much more valuable business.

We have the audience, the brands, the data, the client demand, and the US platform to build something significantly bigger. Thank you.

Hand over for Q&A.

Hi, morning. It's Jessica Pok from Peel Hunt.

Can I have my usual three, please? You talked about the recovery plan for the indirect business and accelerating that.

Within that, you've talked about a bit more on original content, on AI. Can you talk whether there's more cost elements related to that, and just expand a little bit and have more color on the recovery plan?

The second is we're now heading into the World Cup. Can you talk a little bit about what the pipeline for Direct is looking like over the next couple of months, both US and the UK?

Then the final one is can you give us a bit more color on the trading environment for content creators and how that compares across the different platforms?

Yep. I'll take the first one, to just play that back, indirect, the web recovery plan,

trading around the

UK, the direct, and then creators. I'll kick off on the indirect and let Darren add to that where necessary.

We absolutely back the recovery plan that we've put in place in terms of the web business. The key thing for us there is giving it time to grow and build.

We've put new leadership in place. We've made a series of cost adjustments in and around that.

We believe we've made the right actions on that, and we just need to give it the space to breathe and for those recovery plans to come into place. We're not standing still.

We have put more pessimistic forecast forward in regards to that, and we're looking at that internally. The areas that we're looking to accelerate are the YouTube expansion.

I cited some strong performance metrics that we're seeing within that platform. The move towards repeatable IP is something that is only going to benefit us.

We also have a strong team building in that area of the business. We're also looking at accelerating further direct growth and introducing proprietary products that we can offer clients and using data, and also offering further sponsorship to enable us to bolster the business there, as well as being disciplined around cost.

We're not standing still. We're looking at it through a realistic lens, and we are pushing on in terms of that.

Those are the main actions that we've been taking. Anything you'd add?

No, just to say that some cost action that we took in the first half, which was a restructuring more on the social side of the business, the benefits of that, a little bit's come through the first half, but most of the people savings will come through the second half, there's a bit of that to come. On kind of future investment, it will be around the new strategic areas that Solly talked about, potentially a little bit around YouTube, hired some senior people, but it's going to be sort of small amounts.

We're not putting big investment back into the indirect side of the business. If these things take off, then we'll scale the cost base as appropriate.

Other than that, we'll be managing the cost base carefully.

In terms of the trading, the future trading aspect of the business and the direct business, the investment that we're making into the top-tier clients and also the sponsorship products and the growth that we're seeing within our audience across both countries, we believe will put us in good stead with our top-tier clients. We are driving genuine results, market-leading results for those top-tier clients that we're working with.

We offer best-in-class service, access to young adults at an unrivaled level to others in market. In terms of the investments that we're making into that support for our top clients across that, we feel very encouraged by what we can see moving forward.

Darren gave a steer when he talked through his numbers in terms of expected for the second half across both of those businesses, and I would absolutely support that. I don't know if there's anything else you'd add there.

No, I think that's good. I think the third question was World Cup.

All right,

the World Cup was related to that, in the pipeline for the World Cup.

I can give a little bit more of the numbers around World Cup. World Cup's quite an interesting market for us.

I think it came in late, but now it's doing pretty well. I think that might just be a function of kind of macroeconomic circumstances, but bookings broadly around the World Cup are at about £6 million.

It's more weighted towards the UK business than the US. We have seen some upside in the US, but I think it's mainly to do with the demographics of the audience.

About £6 million worth has come in in relation to the World Cup. What I would say is that I wouldn't think of it as all incremental.

Some of this is brands that spend with us anyway diverting money into the World Cup. It's not completely incremental.

I think when we get into next year, these brands will still be spending. The kind of key ones spending around the World Cup are Nike, Google, Tesco, some real core clients from us, and a longer list of others.

I think it's definitely driving upside in H2, and the bookings are coming through now, but I think that some of that will be clients that would have spent anyway that are putting World Cup campaigns out there.

In terms of the creator piece, we're in a great position to further capitalize on that growth in the market. Betches, I think, is a great example given their heritage.

They are creators. You walk into the office, you've got creators that have formed their content team on a day-by-day basis.

You can see that in the Instagram feeds. We have a lot of demand for that creator roster that we have in the business.

We've just launched something called Betches List, which is our exclusive base of creators. We offer them the ability to tap into a large audience, which we have across the business, access to our key clients, access to analytics tools, and support and helping them grow their business.

We're in a great position to benefit from that. We also have something similar in the UK.

I guess a good example of working with creators is Angry Ginge and Jake featuring as part of Snack Wars World Tour. We've got a great understanding of the market, and we have a lot to offer in terms of helping them.

We also represent a number of creators out in market. It's going to continue to be a big feature of our business moving forward, whether that's the repeatable IP that we're building or whether it's them featuring within our brands and us supporting them with theirs in terms of distribution, audience, usage of our analytics tools, etc.

We are certainly in a great position when it comes to tapping into that market that's growing very quickly, and we're moving forward on those basis.

Thanks.

Morning. Roddy Davidson from Singers.

Thanks for the presentation. I think I've got three questions, too.

The first one is with regard to the US. I know that one thing you've been working hard on is, I guess, kind of optimizing the skills in your sales team in the US to allow you to build relationships and increase and grow relationships with blue-chip clients.

Just wondering the extent to which more has to happen on that front, whether you've got the resource in place or whether you feel you need to add more. Just on the back of that, can you give a sense of how quickly you think those large clients in the US and more broadly could build?

The second question is just with regard to perhaps a little bit more granularity on the assumptions that you've made to get to the guidance for the full year. I think that would be useful.

Finally, just on the CMA ruling recently in the UK, I don't know to what extent, maybe you could tell me to what extent you think that has any relevance at all to the way that the business is building. Thank you.

Thank you. I'll take the first one on the US, and no doubt Darren can add any additional elements that he feels necessary.

It's a significant opportunity for us. We've got a platform that we've now built via the Betches acquisition, and we certainly see further opportunity in that business as we start to make progress.

One of those areas of progress is the investment into the leadership team, we recently hired a COO, comes with great experience and rigor to help us through that next phase of growth in that business, and then also a Chief Commercial Officer amongst some other hires within that business. They are at very early stages, very much like Darren actually came in at a very similar point in time.

We're making the right steps, and I can see from experience of the growth of our business here in the UK, which now is 350 to 400 people, that business is just short of 100, they're going through similar growth journeys as we have in the UK business, and we're helping them instill the infrastructure, the commercial nouse, as you mentioned, with the right leadership and the right people within there. We certainly believe that we're making the right steps for the long term on really capitalizing on that US market.

Obviously the numbers are big in terms of the growth that we've seen. That's going to be a tough comparator moving forward, as has some of the previous growth within that business.

The key thing is about doing the right things and setting that business up for success in the future, and we believe that we're doing that with the investment in the people, the product, and taking some of the similar steps that we have here in the UK. Is there anything you'd add?

I'd just say on the sales team, a bit like the journey we've had in the UK, when you get these really big, embedded, large clients, you just need a slightly different type of salesperson to account manage these big relationships. I think that's what we're kind of investing in and trying to hire and change out some of the people that are kind of used to dealing with a high-volume, but lower-end of the sales pipeline.

I think that that's what we've done in the UK, and I think that will really boost the business as we get that right. It starts with the leaders, which Solly already talked about, who we think we've got the right ones in place.

In terms of the trading,

I'll Let me talk a little bit on the guidance. I would say that we have very good visibility of our direct business, obviously tracking bookings.

We track the pipeline, and I think we have confidence in the full-year picture around direct. The uncertainty and the reason we put a range into the market is around our indirect business.

We have seen volatility. As Solly said and I said, we thought we saw the bottom of the market when we came and made a trading statement in April, but actually, particularly on the website, it's got worse than it was then.

What we've done this time round is to say, if we kind of drive no improvement and no growth in any side of the indirect business, then that's kind of the lower end of the guidance that we put out there. That's based on particularly the website of the business and web sessions coming down to a level which is below the average that you saw for H1, and they've fallen to about 1.1 million sessions per day.

Now we're just starting to see some green shoots, and they're going up to sort of 1.2, 1.3-ish. If we build in no kind of upside and assume that they just kind of flatline, that's the lower end of the range.

Then, as we sort of improve that business and drive a bit more through social, you get up towards the higher end of the range. Visibility is hard on that side of the business, we've talked about it.

I think we have a sensible range in there that we'll be confident with, but obviously disappointing that we've brought the guidance down from the last time we put it out in April.

I think I'd just add to that is, I put my hand up in terms of the expectations around the recovery plan that was expected in there. As Darren mentioned, of course, it's disappointing to be in this position, but we believe we've taken the correct action now, which is to be planning on a conservative basis and accelerating in the areas that will effectively counter that, as well as giving the recovery plan the time to move into place.

The other elements remain unchanged, the long-term direction is unchanged. We've always had to respond to the short-term elements of it.

The key thing for us here are continuing to move forward with our direct revenue growth, the client relationships at the top-tier level, stronger IP, and working on a business that has better long-terms earning quality. In terms of the other questions, the CMA ruling, on paper, it could be a real positive, and anything that encourages original journalism and support of that, etc., absolutely should be.

Right now, we are obviously very focused on the recovery plan, and would absolutely welcome any structural changes that may benefit us. Just checking that's in relation to Google, yeah.

That's correct.

Thanks. Can I just ask one quick sort of supplementary just to clarify, so, coming back to the Direct US, seven clients over $1 million at the moment, is the message that you would expect that to build relatively slowly?

I think the key thing for us is putting the fundamentals in place. This is a business that is going from $15 million when we first brought it into the group to sort of setting up eventually to get to that $100 million point is the next big, big milestone, which obviously we've got a way to go.

By putting in place the Chief Commercial Officer, the COO, and the other members of the team within there, and setting up for us to be able to replicate the success here in the UK Direct, we'd absolutely expect that to grow nicely over time based on the changes that we're making, the size and scale of the market, the quality of the product. Right now we're not guiding in terms of future years because we're very focused on this year, but we believe that we're making the right steps forward in terms of the moves that we're making to grow that business.

Understood. Thank you.

Thank you.

Hi there, Lorne Daniel from Zeus. Couple of quick questions.

You touched on the AI tools and the AI you're deploying. Can you give us some quantification on either the revenue impact or the margin impact?

Did we see that in the first half? Is there more to come in the second half, next year, or as those tools are fully deployed?

Secondly, if there is a sort of social media ban for youth under-16s, obviously well below your target market, but does that give you a pipeline problem in future? Is there any impact, or is that a concern?

I'll take both of these. In terms of the AI tools, it will be very challenging to pinpoint exactly a pound or a dollar to the exact returns in regards to that.

From what we're seeing, as I mentioned before, whether it's Emma, the tool which is saving considerable amounts of time, just recapping on that, 4,000 of hours each week saved as part of that production efficiency tool that we've made, we can obviously put a quantum against the time on the people side. We haven't today.

Arnold in terms of the video spell checker, which has saved us 69 days in terms of time and efficiencies. Then certainly in terms of LADradar, whereby it enables us to spot trends quicker than others out there, I'm sure that will have given us a significant advantage when it comes to growth in our audience and also for our clients to tap into that.

Across that range of tools that we mentioned before, there is no doubt there is a significant value in that, and we are embracing AI and the use of that moving forward. To be able to put a specific number right now would be very challenging.

It's an area we're massively leaning into.

Was it fully deployed in the first half? Did we have some impact in the first half or is it yet to come?

I think, in terms of let's say the AI Brief Unpacker, I'm absolutely certain that would have contributed towards the direct business. Then equally so, LADradar in terms of enabling us to get to content quicker, that is a key reason for clients to come for us.

They want our understanding of the audience, whether it's through LADradar or Mission Control, and they also will use that data themselves to help inform their decisions on a day-to-day basis, whether that's through their social teams or through the work that they do with us on driving effectiveness with clients. I can't sit here and say exactly yes, but I'm absolutely certain that's added significant value.

In terms of the social media and the potential under-16 ban, we're obviously watching it very closely. From a commercial standpoint, we don't have any clients that specifically target that under-16, there's not going to be a commercial impact on that.

We obviously think about Gen Alpha and the next wave coming through and ensuring that we're at the forefront of that. How that may impact that engagement with that next wave of audiences, we shall see.

I suspect we're just going to see platforms with parental guidance and certain restrictions in place. I believe we'll still be able to create entertainment and content for that audience, but there will be more restrictions.

I'm sure all of us agree that there should be some governance and restrictions around this for the safety of young audiences, and that's something that we stand behind. We'll absolutely be supportive of whatever changes.

We will see minimal commercial impact on it, and we'll watch it closely.

Bob Liao at Zeus. Just to say that impressive growth in the direct business, and my questions are around the investment that you're making in that business.

Really three quick questions. One is what sort of pace or timing of returns do you expect from those investments?

Are those sort of big platform changes where it's not something that you're going to get necessary return from straightaway? Are you going to get those returns in this fiscal year, next fiscal year, etc.?

Then secondly, on those investments, what's your plans for further investment in that area for the next 12 months? Then the final question is just on flexibility of that investment.

Is that something that you see as something you can tweak or alter in the case of different scenarios around your indirect business?

I'll give the high level, and then

Sure.

you can speak to specifics. All of the investment that we're making is tied to those five areas of focus that I mentioned before.

Let's take top-tier clients. We've just hired a gentleman called Dan who previously ran Meta's key accounts, grew that business to £300 million.

He comes with a wealth of experience, whether it's great black book or client servicing on helping with driving top-tier client results through the likes of our audience. We're investing in people like Dan to come in, Maggie who joined us in the US business, who again came from Business Insider and great experience in terms of growth of top-tier clients.

Then, the other areas where the investment is going is in that repeatable IP, that expansion of the likes of Snack Wars, Agree to Disagree, and AI and product, and the other areas that I mentioned before. Everything is very much focused in on those strategic areas of growth.

Timings of returns, I think the first half was up 97% on the direct business, I think we're already seeing the benefit of returns on investment that's gone into the direct business. I would expect to see that coming through in the second half.

Talked a little bit about the fact that the US business is lapping a very low first half, and it'll be more tricky year on year, but absolutely, I think we're seeing those returns coming through already on the direct business. I'd expect to see them come through as we go on and kind of grow.

It's not like a big gap before we see the benefits. We're seeing the benefits now in our business.

Does that mean that you're basically expecting margins to be relatively steady in that business?

In the direct business? Yes, over time, I think there's opportunities for us to sort of improve the margin in the direct business, and that's certainly kind of one of the objectives that Solly and I will be working on together.

I think there's some efficiencies we can put through that business. That doesn't mean we won't continue to invest in the business as well, but the investment will kind of follow the growth and we'll scale it appropriately.

I think there's an opportunity for a little bit of improvement on the margin, and, as we kind of scale, we should be able to find efficiencies around the way the fixed costs kind of contribute to the margin. That's kind of the way we see that business.

With regard to flexibility, we have a internal discipline around investment, which we call our engine for growth, which is basically about making sure that we put our investment in the parts of the business that are growing and in proportion to how they're growing. That's the kind of internal discipline.

Sometimes we'll invest ahead, YouTube is a really good example. We've invested ahead because we have a confidence that we can grow that business well, but I think that discipline is in place and will stay in place.

A lot of the investment that we're doing is really around people. There is flexibility around that, some flexibility.

I think we just need to be very careful as we scale and manage the business that we do it proportionally.

Other questions?

There's nothing coming through online,

no.

No.

Okay. Thank you.

Thank you, everybody.