Annual Report 
2013/2014
Annual Report 2013/2014   Contents
 1 Key highlights
 2 Chairman’s statement
  Strategic report
 4 The dotmailer platform
 6 Marketing automation the dotmailer way
 7 Sustainable differentiation strategy
 8 Our values
 9 Our strategy
 10 Our clients
 12 Our people
 14 Key performance indicators
 16 Risks, mitigations and impact
 18 Chief Executive’s report 
 26 Corporate social responsibility report
  Governance 
 28 Board of Directors 
 30 Corporate governance report
 31 Audit committee report
 32 Remuneration committee report
 34 Report of the Directors
 36 Report of the independent auditors
  Financial statements
 38 Consolidated income statement
 38 Consolidated statement of comprehensive income
 39 Consolidated statement of ﬁnancial position
 40 Company statement of ﬁnancial position
 41 Consolidated statement of changes in equity
 42 Company statement of changes in equity
 43 Consolidated statement of cash ﬂows
 43 Company statement of cash ﬂows
 44 Notes to the consolidated ﬁnancial statements
 68 Company information 
Corporate statement
dotdigital group’s ﬂagship product is dotmailer, the  
UK’s number one email marketing automation platform.
We understand what marketers need from a technology 
platform and bring together features and usability in a way 
that no one else does. Supported by world-class strategic 
and creative services we make it easy for our customers  
to achieve dramatic results that grow their business. 15 years of dotdigital
•  Won award for Deloitte  
Fast 500 Tech Co in EMEA
•  Ellipsis changed name  
to dotmailer
• Opened ﬁrst London ofﬁce
PLUS MARKET LISTED
SHARE PRICE 3.75p
MARKET CAP £10m 
REVENUE £2.5m
EBITDA £0.8m
2008
•  Ellipsis Media set up 
as web design and 
development agency
• Opened ﬁrst ofﬁce
1999
•  Won the National Busin
Awards Growth Strateg
of the year
•  Deloitte Fast 500  
Tech Co’s in EMEA
•  Integrated dotmailer  
with Dynamics
•  Launched Easy Editor, 
SMS Mobile feature and
services department
•  First employee share o
REVENUE £4.8m
EBITDA £1.1m
2009
•  Ground up re-write of 
dotmailer v4 launched 
and proved to be a game 
changer for marketers, 
and subsequently our 
business
2006
•  Launched dotmailer  
as a standalone product  
for the mass market
2002
• Hired ﬁrst employee
2000
•  Built an email 
broadcast tool for  
the BBC as part  
of a wide-ranging  
digital project
2001
•   Developed sales people  
and infrastructure
2003/05 Business 
rategy  
A
er  
itor,  
e and 
nt
are options
•  Rebranded company and 
updated dotmailer interface 
•  Celebrated 15 years of business 
by opening a new London 
Bridge ofﬁce
•  53 new staff join the business, 
taking total number employed 
to 179. Company’s ﬁrst ever 
employee is voted ‘employee  
of the year’ by staff
AS OF 30/06/2014
SHARE PRICE 33.13p
MARKET CAP £94m
2014
• Integrated dotmailer with Magento
•  Started accelerated investment 
strategy
• Opened New York ofﬁce
REVENUE £13.8m
EBITDA £4.1m
2013
IMAGINATION...DELIVERED
• Admission to AIM
• Launched social media management
•  Translated the platform into eight 
languages
•  Won Croydon ‘best medium-sized 
business’ award for the second  
year running
REVENUE £9.0m
EBITDA £2.6m
2011
• Deloitte Fast Track 500 Tech in EMEA
•  Opened ofﬁce in Manchester  
Edinburgh and Belarus
• Integrated dotmailer with Saleslogix
•  Won Croydon business awards  
for ‘best medium-sized business’
•  Annual sent volume reaches  
a billion emails
REVENUE £6.0m
EBITDA £1.5m
2010
•  Integrated dotmailer with 
Salesforce
•  Launched multiple automation 
features  including Segments, 
Surveys and Triggers
•  Won the ‘Ruban d’Honneur’ 
Awards at the European Business 
Awards for ‘best mid-sized 
business’
REVENUE £12.0m
EBITDA £3.4m
2012 dotdigital group plc
Annual Report 2013/2014
1
Key highlights
Revenues in SaaS products up 33%  
(from £12.2m to £16.2m)
EBITDA increase by 13% to £4.7m
Net cash generated from operating 
activities of £5.2m
Strong cash position of £9.3m as  
at 30 June 2014
Our strategy of hiring, 
retaining and investing in 
our people is a key reason 
behind our continued 
strong organic growth
 
Peter Simmonds
Chief Executive Chairman’s 
statement
Again, we are delighted to report that 
2013/14 has been another successful  
year for dotdigital group plc.
 
In the past year we have aligned our direct 
sales activities so that we now primarily 
focus on what we deﬁne as the mid-market 
for our Software-as-a-Service (SaaS) email 
platform, dotmailer. As a result, we have 
made good progress in signing larger 
clients with higher monthly spends who 
have a greater propensity to purchase 
ancillary services. A considerable amount 
of our sales effort this past year has also 
focused on exploiting the Magento sales 
channel. Magento is part of eBay Enterprise 
and has established itself as the world’s 
leading ecommerce platform and users 
of Magento tend to be high volume email 
senders and match the proﬁle of our mid-
market target customers.
Our North American operation has 
continued to grow and during this past 
year we have signed our largest US clients 
to date. Through a strong presence at 
the major trade shows in the US, there is 
growing recognition of the dotmailer brand, 
in particular in the Magento market. 
Frank Beechinor-Collins
Non-Executive Chairman
The dotmailer professional services division 
has also developed considerably in the past 
year, largely due to more effective account 
management and our focus on selling  
into larger customers.
Our decision during the last ﬁnancial year 
to exit our Agency business has been 
vindicated as the focus of management’s 
efforts on our core SaaS email business 
has ensured that dotdigital has continued 
to grow. 
The marketing and technical teams 
have been busy for the past six months 
developing the new brand identity for 
dotmailer as well as releasing the latest 
version of our dotmailer platform. This work 
has been well received by customers and 
partners alike and again demonstrates 
the business and our ability to sustain our 
technical competitive advantage in the 
email marketing industry. 
Our policy on acquisitions remains 
unchanged. Organic growth continues 
to be our focus but, from time to time, 
consider acquisition opportunities  
should they allow us to accelerate  
growth in a market or provide us with  
a technical advantage.
Governance
The Board puts strong emphasis on 
ensuring its effectiveness and the 
effectiveness of governance processes 
across the entire organisation. Monthly 
meetings are held with the Board and the 
Non-Executives are provided with detailed 
management information in advance of 
these meetings.
The remuneration, audit and risk 
committees meet regularly, ensuring the 
Non-Executive Board members are fully 
aware of potential issues in the business. 
The business holds a regular strategy 
review and these reviews include active 
involvement by the Non-Executive Board. 
The dotmailer services 
business has also 
developed considerably  
in the past year, largely 
due to more effective 
account management  
and our focus on selling 
into larger customers.
dotdigital group plc
Annual Report 2013/2014
2 An evolving Board
We continue to review our organisational 
structure to ensure we have the requisite 
skills to sustain growth and develop  
the business. 
The business has continued to ﬂourish 
under our CEO Peter Simmonds. As the 
business grows we have acknowledged 
that we need to broaden the skills and 
experience of the operational Board.  
To this end we have hired a number of 
executives from outside the business to 
ensure that we have the management 
capacity to achieve our objectives. 
In addition to the new executive 
appointments Milan Patel was promoted 
from Financial Controller to Chief Financial 
Ofﬁcer this year and joined the Board. 
 All of the above underlines our 
commitment to effective succession 
planning. 
Our responsibility as a corporate citizen
dotdigital prides itself on creating a close 
working family of employees and we 
recognise diversity and equal opportunity 
as a way to treat employees and support 
them to reach their full potential. We have 
many examples of senior and long-standing 
employees who joined dotdigital in junior 
positions and have moved up through the 
business, growing with us. 
By aligning our goals with those of our 
clients, we consistently deliver products 
and services that ensure mutual beneﬁt 
and ultimately make both parties more 
successful. To this end we foster 
strong relationships within the business 
community, working closely with partners 
and suppliers. 
The dotdigital group is committed to 
working with local communities in the 
areas where we operate. We encourage 
and support employees volunteering in the 
areas of vocational skills and developing 
employability amongst young people. 
Through our charitable giving we support 
a number of national and international 
charities and these donations are evaluated 
by our employee-led dotcharity committee.
The Group maintains its commitment 
to its environmental responsibilities with 
emphasis on the Reduce, Reuse, Recycle 
philosophy across all ofﬁces, minimising our 
impact on the environment.
Outlook 
The outlook for dotdigital over the coming 
years is very promising with interesting 
opportunities both in the UK and overseas.
On behalf of all our stakeholders,  
I would like to thank the team at dotdigital 
for their fantastic contribution to another 
successful year. I would also like to say 
a special thank you to the Executive 
Management team for its continued 
commitment, hard work and passion  
in developing the business.
Frank Beechinor-Collins
Non-Executive Chairman
dotdigital group plc
Annual Report 2013/2014
3 dotdigital group plc
Annual Report 2013/2014
4
 
The dotmailer platform
Market-leading provider of email marketing software
dotdigital has grown to become the 
leading UK supplier in the provision 
of intuitive SaaS products for digital 
marketing professionals. The ﬂagship 
product, dotmailer, is a powerful email 
and cross-channel marketing automation 
platform with easy to use tools that enable 
large corporations and SME marketers to 
efﬁciently create, manage, execute and 
evaluate effective targeted campaigns.
Alongside SaaS technology, the Group 
also provides expert email marketing 
consultancy and services for businesses 
seeking to maximise customer acquisition, 
conversion and retention. The Company is 
headquartered in London and employed  
179 staff at the end of June 2014.
 
Email is one of the most established online 
marketing channels and has year-on-year 
consistently been in the top performing digital 
channels for return on investment (ROI), as it 
can be used effectively to acquire, convert, 
retain and grow customers. The Direct 
Marketing Association (DMA) Email Marketing 
Council’ s 2013 National Client Email report 
underscores this, where respondents to a poll 
indicating an average ROI of £24.93 for every 
£1 spent in 2013 on email marketing.
 
dotmailer is a well-established product and 
Email is one of the 
most established online 
marketing channels and 
has consistently year 
on year been in the 
top performing digital 
channels for return on 
investment (ROI), as it 
can be used effectively 
to acquire, convert, retain 
and grow customers. 
over the past seven years, we have seen 
strong evidence of the scalability of the 
Group’ s platform with monthly send volumes 
growing from under 5m sends per month 
to currently over 400m sends per month. 
The Company has carried out signiﬁcant 
development work on the dotmailer platform 
over the years, providing continuous 
innovation and functionality to its users. This 
includes a highly compelling visual drag and 
drop email template editor, drag and drop 
segmentation and query builder, drag and 
drop campaign automation, translation of 
the user interface into eight languages and 
responsive template toolkits that optimise 
display content and layout on mobile devices 
(smartphones and tablets). The Company 
also has pre-built integrations with best-in-
class Customer Relationship Management 
(CRM) products and ecommerce platforms 
such as Salesforce, Microsoft Dynamics, 
SalesLogix and Magento.
 
dotmailer has a broad customer base, 
with the ﬁve largest clients accounting for 
approximately 5% of total revenues (the top 
20 clients account for less than 10% of total 
revenue). T o some extent, this reﬂects some 
of the Group’ s historical success in the  
SME space but increasingly, the Group is 
gaining solid traction in the mid-to-large 
corporate market 
Example wins in this area include Randstad, 
Shortlist Media Limited, Science in Sport, 
Hertz, Land Securities Group, Thorntons, 
Elemis, Ladbrokes International, Addison Lee 
and McLaren. See page 10 for a sample list 
of clients.
IMAGINATION...DELIVERED
Strategic report dotdigital group plc
Annual Report 2013/2014
5
dotdigital group plc
Annual Report 2013/2014
5
ODEON 
Case study 
Case study
ODEON Cinemas is the number one cinema 
operator in Europe and the largest in the world 
outside of the Americas. Over the past ﬁve years 
ODEON has built up a loyalty programme for 
regular cinemagoers, called ODEON Première Club 
(OPC), which now has a membership of 2+ million. 
ODEON needed to turn transactional and behavioural 
patterns into targeted customer segments for data-
driven email marketing. But this was proving difﬁcult 
with multiple touch points and long turnaround times. 
So ODEON chose dotmailer and our Customer  
Insight Module and the results have been impressive. 
Two statistics standout; 21.6 membership increase  
and 19,000 extra bookings from the loyalty club. 
However perhaps the most impressive statistic  
is the time saved and resultant efﬁciency gains. It used 
to take ODEON four days to run proﬁles and import the 
relevant data to their existing email platform using an 
external agency. Now this process is automated within 
dotmailer it takes just six minutes to build a list.
2+ 
million members
21.6% 
membership increase
19,000 
bookings dotdigital group plc
Annual Report 2013/2014
6
Marketing automation
the dotmailer way
The dotmailer platform does everything 
marketers need and want to do, helping 
them deliver their imagination
Marketing automation involves a range of people and 
suppliers working together over a period of time to set up, 
monitor and improve the rules and data that automate 
marketing. Businesses typically increase the level of 
automation over time as other parts of the business also 
mature. dotmailer makes it easy for marketers to start on 
the marketing automation journey, and then quickly  
scale the features and functions used as conﬁdence 
grows and ROI becomes clear. 
How dotmailer works
Data is at the heart of everything we do:
• Data import 
• Customer Insight Module (CIM) 
• Application Program Interface (API)
•  Customer Relationship Management software (CRM)
Then the clever automation logic :
• Segment & Triggers • Insight & Behavourial
• Transactional data • Lifecycle campaigns
And ﬁnally the delivery of the message :
• Email • Mobile • Social 
• API • CRM • Ecommerce platform  
 and many others
DATA
LOGIC
MESSAGE
...to form a best-of-breed 
digital marketing cloud so  
our customers experience: 
•  Deeper expertise
•  Faster innovation
•  Greater extendability
•  Better value
SEARCH
SOCIAL
WEB
ANALYTICS
EMAIL
CRM
dotmailer is built to 
 integrate with other
best-of-breed systems.
Strategic report dotdigital group plc
Annual Report 2013/2014
7
Sustainable differentiation  
strategy
From experience we know the areas 
that give us competitive advantage 
change over time as markets mature 
and clients get smarter. 
Our product strategy is devised to allows us to maintain 
our competitive advantage in all areas, for all clients.
For simplicity we have created persona’ s to help 
communicate the changing requirements of our 
customers. These are represented by the shaded  
boxes in the diagram:
 
Client maturity
Cost and immediacy Driven by ROI Strategic partners
Market maturity
Simplicity opens the door Technology is differentiator People & services key
Price
Marketing 
automation
Support
Integrations
Ease of use
People + 
strategy
Start up Sally
Mid size Martin
Enterprise Edward dotdigital group plc
Annual Report 2013/2014
8
Our values
On your marks. 
Get set.  
Grow.
 
Your success is our success. That’s why 
we grow our own people to be the best 
they can, so they can help your business 
to be the best it can. We don’t do the 
status quo. Now, off we grow. 
Two peas. 
Same pod.
 
We attract staff and clients that sing 
from the same hymn sheet as us. It’s 
an ethos that binds us together. Truth 
is, we’re more like family and friends 
than a company. 
We’re an 
unlimited 
Company.
 
We never sit still. Good enough isn’t 
good enough for us. We’re always 
thinking, always doing, always 
creating. Why? We love what we do. 
We care about how we do it. We think 
you will too. 
No nonsense.
 
Straight. Honest. Open. Truthful (even 
if it hurts). We don’t do business speak. 
We prefer common sense. That’s 
what the best and most successful 
relationships are based on. 
It’s our 
business to 
know your 
business. 
 
We run a business. You run a business. 
Bottom lines are top of mind for us. 
That’s why everything we do for you – 
and ourselves – is considered, thought 
through and viable. 
Strategic report In 2013/14 we delivered signiﬁcant new product 
features including: 
•  Program Builder allows users to create 
complex email marketing automation 
programmes in minutes, based on either 
customer behaviour, date, event or 
segmentation rule.
•  Order insight empowers customers to quickly 
analyse their transactional and customer 
base to identify the best targets by frequency, 
value, and product category.
•  Web insight allows customers to build 
segments and triggers from decisions  
and actions made on their site website 
Our strategy
Over the past ﬁve years as a public 
company we have enhanced shareholder 
value by focusing on proﬁtable growth  
and product innovation.
The three-year strategic plan launched in October 2013 is 
focused on continuing to deliver strong topline growth through:
In 2013/14, 10% of our revenues etc outside 
the UK, compared to 3% in the previous year. 
We expect the percentage to increase through 
2014/2015.
In 2013/14 we expanded the numbers of strategic 
partners by 118% with particular focus on system 
integrators in the CRM and ecommerce sectors, 
generalist marketing agencies and specialist email 
marketing agencies globally. 
We expect an increasing proportion of our 
business to originate through these channels  
in the coming years.
Product 
innovation
Expanding 
geographically
Developing 
strategic 
partnerships
Identifying 
new 
customer 
niches
Our product team are constantly looking for new 
market opportunities that can be satisﬁed by the 
dotmailer offering – for example during 2013 we 
focused a team of developers and relationship 
managers on building revenues within the mid-
market ecommerce sector. 
T o date this initiative has created contracted 
revenues in excess of £1.2m with signiﬁcant 
potential for further growth. Our strategy is to 
continue to identify niches where tight technical 
integrations and product innovations combine 
with the core dotmailer features to create a clearly 
differentiated solution for professional marketers. 
dotdigital group plc
Annual Report 2013/2014
9 dotdigital group plc
Annual Report 2013/2014
10
Our clients
dotmailer is the trusted email marketing partner  
of huge success stories. Here are just a few of the 
companies we work closely with.
Strategic report dotdigital group plc
Annual Report 2013/2014
11
dotmailer allows us to do things 
we have only dreamed of before.
Amberley Sherman,
Marketing Manager, Cazenove + Lloyd dotdigital group plc
Annual Report 2013/2014
12
Our people
The dotmailer platform is built and designed to be 
ﬂexible and work seamlessly with other platforms out 
there. As a company, we like to think we’re the same. 
12
I’ve been in IT Support  
for several years and the 
service dotmailer provide  
is second-to-none. Offering 
a wide range of resources, 
excellent account 
management and a fast, 
efficient and responsive 
helpdesk – the service 
dotmailer offer is fantastic 
and constantly evolving  
to give more back to  
their clients.
Molly Pugh,
Head of Support,  
William Reed Business Media
Strategic report dotdigital group plc
Annual Report 2013/2014
13 dotdigital group plc
Annual Report 2013/2014
14
Key performance indicators
We use our key performance indicators (KPI’s) to 
measure our business. These indicators provide us 
with the visibility of both our strategic and ﬁnancial 
performance. Employee remuneration is speciﬁcally 
linked to these KPI’s. 
Revenue growth from continuing operation
We aim to deliver double-digit organic revenue growth.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) before exceptional items 
We aim to have a positive EBITDA growth.
Cash position
We aim to have a strong cash position. 
2013
2013
2013
2014
2014
2014
£12,197,000
£4,149,000
£6,072,000
£16,213,000
£4,697,000
£9,306,000
33% Growth
13% Growth
53% Growth
28% Growth 
21% Growth
51% Growth
Financial
Strategic report dotdigital group plc
Annual Report 2013/2014
15
Volume of emails sent
We aim to keep increasing the amount of emails sent through the system.
Recurring revenue as a %
We aim to have recurring revenues of over 70%.
Percentage of revenue from customers outside of the UK
We aim to expand internationally.
2013
2013
2014
2014
UK Revenue
2,645,000,000
3,700,000,000
40% of sales
78% Recurring revenue
45% of sales
76% Recurring revenue
2013
2014
10% Outside of the UK
3% Outside of the UK
Strategic
An extremely powerful platform 
which is very simple to use offering 
great results.
Roy Rowlands,
Business Development Director, Cognitive Publishing Ltd dotdigital group plc
Annual Report 2013/2014
16
Risk area Impact Mitigation of risk
Supplier, computer  
hardware and internet  
reliability-related risks
An event resulting in a hosting centre going ofﬂine 
for any signiﬁcant period of time or the termination of 
provision of services by one of the Group’s hosting 
centres for any reason may result in signiﬁcant 
loss of revenues and therefore materially harm the 
Group’s business, operating results and ﬁnancial 
condition. Similarly, events preventing or obstructing 
the servers from communicating over the internet, 
such as the future availability of a ﬁnite number of 
IPv4 addresses, may restrict the capacity of the 
business.
The design of the platform along with the system’s 
architecture has multiple levels of resilience built 
in to cater for single points of failure. The Group 
continuously evaluates its key suppliers as part 
of its risk management process and diversiﬁes 
these where possible, to improve resiliency. There 
is continued investment into dotmailer’s currently 
owned IP addresses, maintaining these to be 
reputable for sending email globally, and utilising 
them to maximum effect. The Group continues to 
monitor its IPv4 capacity and seeks opportunities to 
expand its pool or utilise newer technologies to limit 
exposure to this risk. 
Internet Service Providers 
(ISPs) reputation – related risks
As a large proportion of the Group’s revenue is 
derived by charging a price per email for sending 
marketing emails on behalf of their customers the 
impact of not being able to deliver these for any 
reason is signiﬁcant. If abuse complaints from 
providers are not dealt with properly or if bad 
customer data generates multiple complaints 
through ISPs or third party Spam blacklists,  
these can impact the platform’s overall ability to 
deliver emails. 
dotmailer provides a number of services as part of 
the core product to ﬁlter known or bad data that 
may not comply to EU or US anti-spam regulations. 
It also provides a number of consultancy services 
to its customers to better improve their data and 
compliance to legislation. The Group continues to 
work closely with ISPs and third party Spam lists by 
proactively dealing with abuse complaints generated 
by customer emails and whilst dotmailer acts as 
the data processor on behalf of its customers, 
and is not directly liable for breach of the EU or 
US anti-spam regulations, it does take these 
breaches seriously, terminating customer service 
agreements if necessary. Continued investment 
into the automatic processing of abuse complaints 
generated by customers, monitoring of delivery 
rates to ISPs and the regular reviewing of dotmailer’s 
reputation on Spam lists continues to reduce the 
risk in this area.
Hacking & information security There is a possible risk that a hacking attempt 
could result in a denial of service or loss of data. 
The Group’s technical team takes measured actions 
across multiple levels to secure the dotmailer 
platform and its customers’ data. Continued 
investment into the latest technology for threat 
detection, remediation and encryption, coupled with 
its security policies and regular penetration tests, 
greatly reduces the Group’s exposure to this risk.
Competitive environment The sector the Group operates in is competitive. 
The impact of competitors having more features, 
increased ﬁnancial backing, better brand recognition 
and better global coverage increases the risk to the 
Group’s business model.
The Group continues to grow revenues year-on-
year and reinvests to deliver new product features, 
best-in-class customer support and service 
offerings, enhanced brand recognition, improved 
service delivery and markets globally to attract new 
customers.
International Expansion As the business expands into new geographic 
territories there is a risk that policies and practices 
that have worked successfully in the UK market will 
not provide the high level of service and assurance 
that would have been delivered in the UK market.
Hiring senior people with experience of developing 
successful international business models, hiring 
quality local people in important territories and 
utilising the services of expert advisers. Introducing 
management information and business intelligence 
and conducting audits and risk appraisals. 
Risks, mitigations 
and impact
Strategic report dotdigital group plc
Annual Report 2013/2014
17
Risk area Impact Mitigation of risk
Hire and retain key personnel The loss of the services of key employees could 
harm the Group’s business. The future success of 
the Group also depends on its ability to identify, 
attract and retain highly skilled technical, managerial 
and sales personnel. The Group faces intense 
competition for qualiﬁed individuals from numerous 
technology, ecommerce and marketing companies.
Investment into talent acquisition hiring programmes 
and continuous learning and development has 
enabled the Group to hire and retain highly skilled 
individuals. Enhanced employee beneﬁts, a 
competitive package, a modern and ﬂexible working 
environment utilising the latest technologies has 
continued to mitigate this risk.
Development of products There is a possible risk that without continued 
investment into new products, enhancement of old 
products and into new sectors then the growth of 
the Group will be impaired.
Continued investment into and development of the 
Group’s product offerings has enabled good growth. 
Responding to existing and prospective customers’ 
needs through enhanced service and tailored 
offerings continues to distinguish dotmailer from its 
competitors. Innovation and increased development 
of software connectors, enabling partnerships with 
third parties, has expanded the customer reach of 
the Group. Offering the ﬂexibility to integrate and 
connect best-of-breed products with dotmailer 
continues to enable the Group’s customers to grow 
at their pace without constraints.
Data privacy Such laws and regulations require or may require 
the Group and its clients to implement privacy and 
security policies, permit consumers to access, 
correct or delete personal information stored or 
maintained by such companies, inform individuals 
of security incidents that affect their personal 
information, and, in some cases, obtain consent 
to use personal information for certain purposes. 
Other possible legislation could, if enacted, impose 
additional requirements and prohibit the use of 
certain technologies, such as those that track 
individuals’ activities on web pages or record 
when individuals click on a link contained in an 
email message. Such laws and regulations could 
restrict the Group’s clients’ ability to collect and use 
email addresses, web browsing data and personal 
information, which may reduce demand for its 
products.
dotmailer’s features assist customers to be 
compliant in current legislation and in most  
cases automates these compliance processes.  
It researches the impact of new legislation and its 
effect on its customers and publishes industry-wide 
white papers and blogs. The Group’s executive 
actively contributes to the digital marketing  
space to advocate best practice and make sure  
its customers’ needs are represented. 
Evolving technology and  
customer requirements
Failure to respond to evolving technological 
channels and customer requirements or to 
introduce competitive enhancements and new 
features may make the dotmailer solution less 
competitive. The introduction of new solutions by 
competitors potentially makes the Group’s solutions 
less attractive or easy to sell. Failure to anticipate 
client requirements and successfully develop new 
solutions or features may impact growth and 
retention of existing clients.
Investment in development of new solutions and 
enhancements to the platform means that the 
Group remains a credible provider of multi-channel 
marketing SaaS solutions. SaaS development 
requires implementation of rapidly changing 
technologies, adhering to standards and regulations, 
anticipating client requirements and frequent 
product enhancements. Continued emphasis 
in recruiting and retaining expert technical and 
marketing professionals has enabled the Group to 
innovate within its sector. dotdigital group plc
Annual Report 2013/2014
18
Chief Executive’s  
report
I am pleased to announce that the  
Group delivered revenue growth, EBITDA,  
proﬁts and cash position ahead of  
market guidance.
This performance is a result of continued 
strong organic growth in the high margin 
and long-term recurring revenues 
generated by our core email marketing 
product, dotmailer. 
Financial highlights
Within the dotmailer core email marketing 
product division, revenues for the 12-month 
period grew by 33% compared to the same 
period in 2013, resulting in closing cash at the 
end of the period of £9.3m (2013: £6.1m).
 
A summary of revenues by division for the full 
year to 30 June 2014 is detailed below:
 
  Revenue £m
 12m to 12m to  % 
 30.06.14 30.06.13 Change
dotmailer  £16.2m £12.2m 33%
Discontinued * £0.2m £1.6m -88%
T otal Group £16.4m £13.8m 19%
*  In March 2013 the Board announced its plans  
to wind down the Group’ s Search Marketing  
and Web Design Division, ‘dotAgency’, whilst 
continuing to service its existing clients for  
the remaining duration of their agreements.  
These agreements have now come to an  
end culminating in the successful closure  
of this division.
Peter Simmonds
Chief Executive 
Review of 2013/14
Revenue performance was driven by  
strong growth of 33% across the dotmailer 
core product, ahead of plan.
 
This strong organic growth was underpinned 
by a combination of successful new client 
wins, particularly in the corporate and 
mid-market sector, growth in recurring 
revenue from existing clients and improved 
client retention through having a larger 
proportion of clients under contracts of 12-36 
months. Notable client wins during the year 
included Land Securities Group, Thorntons, 
Ladbrokes International, Children with Cancer 
and National Express Bus.
 
Revenues from the US region performed 
strongly, increasing from $0.4m to $1.4m, 
an increase of over 200% compared to the 
same period in 2013. The New York sales 
ofﬁce continues to focus on sector niches 
and higher value corporate clients that it 
has identiﬁed are the most attractive for the 
dotmailer product platform. 
 
Penetration into Latin America has also 
materialised in the form of working with 
Panama’ s COPA Airlines, the third largest 
carrier in South America, demonstrating how 
the dotmailer platform is travelling from our 
US base into Central America and beyond. 
The US pipeline continues to grow with the 
belief it will be beneﬁcial to allocate more 
investment in headcount and marketing 
activities over the coming year to capitalise  
on this territory.
 
The Email Creative and Managed Services 
offering (part of the wider dotmailer division) 
has had a very strong performance with an 
increase in revenue of 126% to £1.8m over 
the comparable period. We are conﬁdent that 
continued revenue growth can be unlocked 
from these new services by generating 
ROI for our clients and helping time-poor 
marketers to outsource their creative and 
campaign management/strategy to email 
marketing experts such  
as dotdigital.
 
dotdigital has grown to 
become a leader in the 
provision of intuitive  
Software-as-a-Service 
(SaaS) products for digital 
marketing professionals.
Strategic report dotdigital group plc
Annual Report 2013/2014
19
Ebay’s Magento Connector
dotdigital fully launched the Magento 
connector earlier in the year allowing 
ecommerce customers that use the Magento 
platform to synchronise their data between 
the dotmailer and Magento platforms. The 
client sign-up of the new Magento Connector 
has been strong with the average monthly 
recurring revenue spend for customers of 
over £700 per month. The product has been 
well received as evidenced by feedback 
gained from both clients and Magento 
implementation partners. Over 100 clients  
are now using this platform with most recent 
wins including 7dayshop.com, Elemis, Fraser 
Hart, Gorgeous shop, Vax, Heals, Trunki and 
Fuji Film in the UK. 
 
The US Region has also demonstrated how 
invaluable the Magento relationship has 
become over a short period of time with 
14 new clients won since the beginning of 
the year. Vizio, one of the largest consumer 
electronics companies in the US and listed in 
the top ten biggest brands in the world using 
Magento, is one of the most recent additions 
for dotdigital. New Magento partners in the 
US also include, Blue acorn, Pod1, Classy 
llama, SLI Systems, Celebros and Peer1.
 
A clear endorsement of the success of 
the Magento relationship was recently 
demonstrated when dotdigital was awarded 
‘Gold Partnership Status’ directly by 
Magento, only one in four email service 
providers in the world to have been granted 
this prestigious status. Marketing efforts 
have also been continuous with dotdigital 
sponsoring Magento’ s premier eCommerce 
‘Imagine 2014’ event held in Las Vegas  
earlier this year and the ‘MagentoLive’ event 
held in London in July of this year.
 
Cash generation
The business continues to be highly  
cash generative with cash at the end of the 
period standing at £9.3m, an increase of 
53% on the prior year (2013: £6.1m) after 
capital expenditure and product development 
of £2.0m. The Company continues to be  
debt free. Highly efﬁcient cash collection 
processes, combined with over 45% of 
clients paying retainers by direct debit, 
contributed to the Company’ s strong cash 
position at the year end.
Dividend policy 
I am pleased to report that the Board has 
conducted a review of the business plans for 
the next three years including evaluating the 
cash needs for increased investment in both 
organic growth and capital expenditure and 
has decided that an increase in dividend can 
be proposed this year.
 
Therefore subject to approval at the AGM  
on 16 December 2014 the Board proposes 
that the Company will pay a dividend of 
0.2 pence per share, payable at the end of 
January 2015.
Brand positioning 
The Company has successfully implemented 
a dotmailer re-branding initiative which 
incorporates a refresh of the dotmailer 
platform, release of powerful new features 
and the launch of a new marketing website. 
dotdigital also celebrated its 15-year 
anniversary and to commemorate this 
auspicious landmark the Company hosted  
a “15th Birthday Network Party” for over  
200 clients, partners and institutional 
investors at dotdigital’ s new ofﬁces at  
No.1 London Bridge.
I see dotmailer as an 
integral part of my 
communications team, 
delivering a quality service 
that goes far beyond 
sending out emails.
Lori Folts,
Head of Marketing Communications,  
DHL Express dotdigital group plc
Annual Report 2013/2014
20
People
As part of the long-term strategy to build a 
high-performing team capable of sustaining 
our growth we have made a number of 
strategically important hires into the senior 
management team during the year.
These have included:
•  HR Director
•  Marketing Director
•  IT Director
•  Customer experience Director  
(starts mid October)
•  Executive Vice-President  
US Operations
In addition, we appointed Milan Patel into  
the role of CFO in March this year when he 
joined the main board.
I am conﬁdent that the skills and experience 
of the Executive team put us in a strong 
position to deliver on the strategy approved 
by the Board.
In addition to the senior hires appointed 
during the year, we also embarked on a 
period of accelerated investment in sales, 
marketing and product development.
The goal we set ourselves was to recruit  
a further 30 sales and account manager  
staff and to strengthen marketing and 
product development.
The hiring process has continued through  
the autumn of 2013 and throughout 2014.
Over that period we have hired a net 
additional 29 sales and account management 
staff, 5 additional staff into our marketing 
team, 5 into managed service and 
design and a further 13 into the product 
development and systems team.
This has been a signiﬁcant undertaking 
and I have now tasked the senior team 
with ensuring that the new staff are fully 
integrated into the business and performing 
to full capacity. We will also be reviewing 
our structure to ensure we have the correct 
management processes to support the 
enlarged team.
Market size
The consulting ﬁrm Econsultancy estimate the 
total UK market for email marketing platforms 
and services to be worth around £500m. 
This, however, includes creative resources in 
agencies and client side resources. Our own 
estimate of the UK addressable market for 
email marketing automation providers is in 
the region of £180m with dotmailer enjoying a 
market share of 9% in a market with around 
30 providers.
 
Over the past seven years, revenues have 
grown 548% from £2.5m to £16.2m (year to 
June 2014). This equates to a six-year CAGR 
of 37%, which is higher than the market 
growth in that time, reﬂecting market share 
gains.
 
Whilst the Group has always enjoyed a  
high degree of repeat revenue, much work 
has been done in the last two years to shift  
its revenues to contractual, recurring 
revenues (which reduces churn), with the 
sales team incentivised on total contracted 
value of deals. The initiative has positively 
impacted the stickiness of customers, the 
ration of clients on long-term contracts albeit 
at the expense of a small erosion in margin as 
a result of incentives to sign multi year deals.
 
Chief Executive’s  
report continued
Over the past six years, 
revenues have grown 
548% from £2.5m to 
£16.2m (year to June 
2014). This equates to  
a six-year CAGR of 37%, 
which is higher than the 
market growth in that 
time, reﬂecting market 
share gains.
Strategic report dotdigital group plc
Annual Report 2013/2014
21
Danone 
(Nutricia) Medical 
Case study 
Case study
The key to its success is that 
the whole process happens 
seamlessly within the system, 
with no manual intervention. 
The campaign results have 
been impressive enjoying an 
average open rate of 48%.
 
Lloyd Ress,
Danone Nutricia
The team at Nutricia chose a 
combination of Salesforce and dotmailer 
to deliver an integrated mailing solution. 
The dotmailer platform’s ease of use 
has allowed Nutricia to take their 
online marketing activities in-house, 
allowing their existing team to produce 
campaigns quickly and effectively 
without having to learn their way around 
complex applications.
Automation features have been used 
to create and roll out multiple content 
approaches and messages to different 
audiences based upon where they are in 
the customer journey lifecycle. dotmailer is 
also used to gather customer engagement 
and purchasing information and feed back 
into the system to reﬁne both targeting and 
content for future activity. dotdigital group plc
Annual Report 2013/2014
22
City & Guilds  
Case study
City & Guilds are implementing a four-year 
marketing automation roll-out programme  
with dotmailer, so they can spend more time  
on creative work that has a greater impact  
with their customers.
The project is two thirds of the way through and 
City & Guilds are enjoying signiﬁcant and tangible 
beneﬁts. Unique email opens frequently beat  
50% with click through rates as high as 77%.  
The automation programme has helped web  
trafﬁc rise by 20% and the rate of new contacts  
has increased by 25%. Above all else sales targets 
have been beaten by 9%.
Using dotmalier’s advanced features City & Guilds 
are personalising messages based upon how and 
when people react to the emails. When this campaign 
was benchmarked against the results of a standard 
single email campaign the results were telling – on 
every single indicator the impact and response was 
several times that of a simple email, with the triggered 
campaign delivering a return on investment of 15:1.
When we saw dotmailer, we 
were totally blown away. The 
biggest attraction was its ease 
of use – it enabled us to move 
from a big effort to build a single 
email, to using that time to craft 
automated and targeted journeys 
across multiple emails. Also the 
ﬂexibility and reporting, as well 
as the ability to segment all our 
different email recipients, was 
way ahead of anything else  
we saw. The decision was a  
no-brainer.
Steve Smith
eCRM Manager, 
City & Guilds
Strategic report dotdigital group plc
Annual Report 2013/2014
23
The strategy to focus on mid-sized 
businesses with higher lifetime values and 
lower attrition has demonstrably contributed 
to higher services revenues and higher 
average monthly contract values, strong 
retention and we continue to see strong 
demand within this niche both in the UK 
and US. We are ever mindful of the need to 
constantly innovate and enhance the features 
of the dotmailer platform to meet the  
needs of today’ s ever more demanding  
digital marketer. Our product management 
and development team are planning over  
3-, 12- and 36-month time horizons to 
ensure the platform continues to deliver 
competitive advantage.
Growth strategy
During the year we evaluated a number of 
potential acquisition opportunities in the 
email marketing space. However, as in prior 
years none of the businesses evaluated 
were judged to be likely to create long-term 
shareholder value when execution and 
integration risks were factored in. 
 
Therefore our focus remains on organic 
growth by selectively investing in sales and 
account management staff to concentrate  
on key relationships and markets whilst at  
the same time investing in the dotmailer 
platform to maintain it’ s technical lead,  
ease of use, and integration.
The focus on fast growing medium-sized 
businesses and corporate clients has driven 
average monthly spend per client up by 32% 
and the average contracted monthly spend 
of new clients added during the year was 
£410. This, combined with a focus on longer 
term contracts, (78% of clients are now on 
12-24 month contracts) and client retention 
is importantly leading to signiﬁcantly higher 
client lifetime values.
In September 2013, the Board agreed 
to invest around £3.5m to accelerate our 
organic growth by hiring a further 30 sales, 
account management executives and 
increasing marketing spend. This increase in 
headcount and additional marketing spend 
largely happened in the second half of the 
year and it is now starting to be possible to 
review the return on investment from this 
decision.
Based on the early results there are clear 
indications that the potential for signiﬁcant 
further growth exists from greater investment 
in the US market and from forming strategic 
partnerships globally.
Building on the leading position of the 
dotmailer brand in the mid-market will be a 
key priority for 2015 and the Board believe 
that there are signiﬁcant future growth 
opportunities from hiring additional sales 
personnel and account management staff 
in the US and further building the team 
developing strategic partnerships globally.
Outlook
The dotmailer email marketing/marketing 
automation platform continues to perform 
very strongly in its chosen markets and in 
quarter one of the new ﬁnancial year has 
delivered total revenues in line with plan.
 
Chief Executive’s  
report continued Chief Executive’s  
report continued
 
The marketing initiatives to build our US 
presence are now starting to deliver a strong 
pipeline of new clients, particularly in the  
mid-size online retail space which continues 
to be a core focus for 2015 and as the 
customer base continues to grow we will 
need to invest further into local account 
management and managed services.
The Board intend to conduct a review of the 
progress and opportunities in the US and 
South America in the coming months with  
a view to potentially investing further.
The focus on developing strategic 
partnerships is now resulting in a steadily 
growing pipeline of orders from partners in 
the UK, US and RoW. In particular, we have 
seen the growth in numbers of Magento 
partners in the US now referring business, 
and we have recently signed a major partner 
in Australia, where we have already seen the 
ﬁrst orders ﬂowing from this partnership.
In early October, we launched a white label 
partnership to test the market, selling email 
marketing into South America using a local 
language version of dotmailer. This will be the 
basis of further expansion into this large and 
growing market.
As part of the rebranding initiative some 
signiﬁcant features have been added to the 
dotmailer platform which the board believes 
will open up new sales opportunities and 
provide enhanced revenue possibilities from 
existing clients.
Demand for email marketing and marketing 
automation continues to be strong both in 
the UK and internationally and whilst the 
sector continues to be competitive the Board 
believes that the dotmailer platform is well 
placed to continue to generate strong organic 
growth in revenues over the coming year. 
The marketing initiatives 
to build our US presence 
are now starting to deliver 
a strong pipeline of new 
clients particularly in the 
mid-size online retail 
space which continues to 
be a core focus for 2015.
dotdigital group plc
Annual Report 2013/2014
24
Strategic report Cabbages & Roses 
Case study
Case study
Upmarket fashion and homewares retailer 
Cabbages & Roses does over two-thirds of its 
business online and considers effective customer 
communication to be one of its key differentiators. 
The company sought an email platform that could be 
integrated fully with its Magento ecommerce website 
solution, and would be effective, easy to use and 
reliable. They selected dotmailer and are delighted  
with the result.
We found that after just  
a year, the ROI on web sales 
compared to the campaign 
costs is over 5,500%.
Holly Leigh-Harvey,
Operations Director, Cabbages & Roses
oun W
dotdigital group plc
Annual Report 2013/2014
25 dotdigital group plc
Annual Report 2013/2014
26
dotdigital fosters strong partnerships within 
the business community, working together 
with partners and suppliers. As the global 
reach of our business continues to extend 
we’re delighted to grow our community 
partnerships worldwide, building on the 
strong foundations created in the UK. We 
believe that investing knowledge and time 
into partnerships is a key to developing 
strong community ties, innovation and 
mutual business growth. 
The Group works closely with its ever 
growing partner network through support 
and collaboration. Regular partner meet-
ups allow networking and the development 
of sound business relationships. In the 
last year we’ve been building technology 
partnerships by working with business 
community groups and more recently 
regularly hosting tech community events 
and meet-ups.
As a part of the Group’s strong 
commitment to our local business 
community, we aim to source local 
suppliers wherever possible. dotdigital aims 
to work with suppliers with similar ethical 
standards and values. At dotdigital we 
understand the importance of fair and equal 
treatment, and particularly drive towards 
transparent and fair payment terms and 
processes.
Partnership with our community 
The dotdigital Group is committed to 
working with our local community. A key 
focus in the last year has been our work 
with young people in the Croydon area 
though a number of initiatives. 
Employees have been volunteering 
with Code Club, an initiative to teach 
programming in primary schools via after 
school clubs. Volunteers worked with 
four primary schools in the Croydon area, 
teaching 9-11 year olds the fundamentals 
of programming, allowing them to develop 
problem solving, planning and collaboration 
skills alongside computational thinking. 
In addition, the Group has participated 
in consultation with Croydon Council 
Youth Development Programme, focusing 
on youth employability and life skills 
development. dotdigital sponsored the 
TEDxYouth@Croydon event, a platform for 
young people in Croydon to be inspired 
by their peers following the ‘ideas worth 
spreading’ philosophy of the global TED 
community.
dotdigital, and in particular Simon Bird, has 
also taken an active role in the Croydon 
Tech City community, working to make 
Croydon a go-to location for technology 
organisations and in particular start-ups 
and driving the growth of Croydon as a UK 
technology hub. 
This year dotdigital further developed 
its social responsibility activities to 
ensure we fully developed and utilised 
our human capital for the beneﬁt of our 
employees, partners, clients, suppliers 
and the wider community.
As a company listed on AIM, dotdigital is 
not required to produce a corporate social 
responsibility report. However, the Directors 
believe that in the interest of transparency  
a brief commentary should be included.
Helping our clients win
By aligning our goals with those of our 
clients we consistently deliver products 
and services that ensure mutual beneﬁt 
and ultimately make both parties more 
successful. 
We care what our clients think of dotmailer 
and value their feedback. We collect 
this feedback naturally though our close 
partnerships and account management 
and also in more structured ways such as 
surveys and net promoter scoring. We we 
know the key is to act on what they tell us 
so our products and services constantly 
evolve to ensure we adapt to meet their 
needs and use our experience and vision  
to lead for the future and stay ahead  
of the curve.
Our thought leadership and best practice 
delivery of marketing automation ensures 
we always strive to be the best and our 
clients share in this success. Through close 
association with industry bodies such the 
DMA, we ensure the best interests of our 
business and our client’s business are 
considered and represented.
Working within our business community
Corporate social  
responsibility report
Strategic report dotdigital group plc
Annual Report 2013/2014
27
We select and hire new employees for our 
team purely on the basis of; experience, 
skills, aptitude and potential without 
reference to irrelevant factors such as 
race, religion, age, gender or nationality. 
We are proud of the diversity of dotdigital 
and through culture, leadership and policy 
ensure all employees experience a working 
environment free from discrimination and 
harassment. 
This year we reviewed and re-launched our 
employee beneﬁt programme to ensure 
our employees were provided with an 
attractive, relevant and cost-effective suite 
of beneﬁts. This programme also ensured 
we remained an attractive employer to 
support our recruitment activities as part of 
our continued growth plans. Key beneﬁts 
include; pension provision, health care 
insurance, child care vouchers, cycle to 
work scheme and season ticket loans.
Between our landmark ofﬁces in East 
Croydon and our newest ofﬁce location 
on the Thames at London Bridge, we 
provide modern, creative and collaborative 
environments for our employees, partners 
and clients. This promotes a high-quality, 
collaborative, team working space that 
ensures we continue to provide best of 
breed products and services. 
Strategic report
The strategic report was approved by a 
duly authorised committee of the Board of 
Directors on 13 October 2014 and signed 
on its behalf by: 
Milan Patel
Company Secretary
13 October 2014
The Group’s commitment to charitable 
organisations has continued with the 
creation of a dotcharity committee 
responsible for fundraising initiatives and 
events. This year there have been a number 
of charities supported including the British 
Heart Foundation, Save the Children and 
the British Red Cross. 
As part of dotdigital’s work with our 
community, the Group sustains its 
environmental responsibilities with 
emphasis on the Reduce, Reuse,  
Recycle philosophy across all ofﬁces.  
Our datacentres set industry standards  
in energy efﬁciency and the very nature  
of our products and services are  
low-impact on the environment. 
Being a great employer
dotdigital prides itself on creating a close 
working family of employees – dotfamily. 
We recognise diversity and equal 
opportunity as a way to treat employees 
as individuals with individual needs, and 
support and develop employees to reach 
their full potential. We have many examples 
of senior and long-standing employees who 
joined dotdigital in junior positions and have 
moved up through the business, growing 
with us.  dotdigital group plc
Annual Report 2013/2014
28
Simon Bird
President & Co-Founder
Simon Bird has developed an  
in-depth technical knowledge of 
the internet and its applications. 
Prior to co-founding dotdigital 
Group he assisted in the 
development of a major internet 
access provider. He has 
provided services to a number 
of well-known companies and 
organisations in helping create 
websites, intranets, extranets, 
content management systems 
and other online solutions.
 
Milan Patel ACCA ACSI 
Chief Financial Ofﬁcer  
& Company Secretary
Milan joined the Company 
in 2007 and was appointed 
Group Company Secretary in 
2009. Milan is a member of 
the Association of Chartered 
Certiﬁed Accountants, an 
associate member of the 
Chartered Institute of Securities 
and Investments and holds a 
BA (Hons) degree in accounting 
and ﬁnance. Milan has over eight 
years’ experience in accounting 
and ﬁnance within the technology 
and logistics industry. He 
has been responsible for the 
ﬁnancial and legal aspects of the 
reverse acquisition of West End 
Ventures PLC, the acquisition of 
Netcallidus, admission to Plus 
and the introduction to AIM. 
He is also responsible for the 
Group’ s functions in ﬁnancial 
management and reporting, 
regulatory compliance, legal  
and corporate governance.
Peter Simmonds FCCA 
Chief Executive 
Peter Simmonds commenced 
his career in 1976 as a trainee 
accountant with Unilever Plc and 
has over 30 years of experience 
at senior management and board 
level, principally in the areas of 
banking, insurance, ﬁnance, 
IT , outsourcing and software. 
As well as large company 
experience he has considerable 
entrepreneurial experience 
having been involved at start-up 
or early stage of a number of 
companies in various industry 
sectors including consultancy 
services, vehicle leasing, software 
and internet solutions. As 
well as being an experienced 
ﬁnance professional Peter has 
considerable experience of 
acquisitions, disposals, post-
acquisition integration, change 
management and creating 
cultures and structures to 
facilitate entrepreneurship  
and growth.
 
Board of Directors
Executive Directors
“Tink” Ian Taylor 
President & Co-Founder
Tink T aylor has 20 years’ 
experiencein the ﬁeld of digital 
communications. With vast 
experience of introducing digital 
marketing to companies large 
and small, he has been pivotal 
in the development of digital 
marketing since its outset in both 
the UK and now the US. Serving 
as a key and inﬂuential member 
of the UK Direct Marketing 
Association’ s Email Marketing 
Council and also the Internet 
Advertising Bureau since 2006, 
Tink has been judging the Email, 
Mobile and Agency categories 
at the UK DMA’ s awards for 
over half a decade whilst also 
chairing the Email Marketing 
category. In 2014, Tink was 
elected as Advisory Committee 
Member of the Board of the US 
Direct Marketing Association’ s 
Email Experience Council. 
He constantly strives to help 
individual organisations, and the 
industry as a whole to develop 
and progress.
Governance dotdigital group plc
Annual Report 2013/2014
29
Simone Barratt
Non-Executive Director
Simone Barratt has over  
15 years’ experience of 
ecommerce and online 
marketing. She has grown 
businesses to multi $m 
from incorporation. She 
has international expansion 
experience in Europe and the 
AsiaPac. She was appointed 
Global President of e-Dialog Inc, 
an Ebay company in 2011 with 
Income Statement responsibility 
for just under $100m business 
across USA, EMEA and APAC 
and 450 employees.
 
Frank Beechinor-Collins
Non-Executive Chairman
Frank Beechinor-Collins, was  
for 11 years, CEO of One Click 
HR, an AIM-listed IT/Human 
Resources business of which he 
was a co-founder. The company 
operated in the UK and North 
America and had around 200 
employees. Frank oversaw the 
successful sale of the business 
to ADP , a $4bn NYSE-listed 
company, for $25m. In notable 
addition, Frank was for ﬁve years, 
Operations Director of GMCS, 
part of Grand Metropolitan, 
a UK-based training services 
provider, with several thousand 
employees. Frank brings a great 
deal of corporate experience 
to the Board, gained over 25 
years of working for and running 
public and private companies. 
Frank has a strong track record 
in M&A and brings with him a 
quality network of contacts in the 
ﬁelds of managed services and 
software as a service.
 
Richard Kellett-Clarke, FCA
Non-Executive Director
Richard Kellett-Clarke brings 
to the Board over 25 years of 
management experience in 
the turn round and strategic 
repositioning and recovery of 
creative businesses in CMCG, 
media, electronics and software 
industries. He was a founder of 
AFX NEWS Limited, now part of 
Thomson Reuters, and Sealed 
Media, now owned by Oracle. 
He has held numerous CFO roles 
in subsidiaries of large Plc’ s as 
well as the role of IT Director at 
Financial Times Information. He 
was part of the team as CFO 
which brought Pickwick Group 
Plc to the main market and Brady 
Plc to AIM. He is currently the 
CEO of Idox Plc, an AIM-listed 
specialist software and services 
business.
 
Non-Executive Directors dotdigital group plc
Annual Report 2013/2014
30
is determined by the whole Board. The 
Directors are conscious of the importance of 
performance-related incentives and bonuses 
are paid based on performance as deemed 
appropriate by the remuneration committee. 
The remuneration committee use both 
ﬁnancial and non-ﬁnancial benchmarks to 
determine the Executive Director bonuses.
(c) Relations with shareholders
The Group encourages two-way 
communications with all its shareholders  
and responds quickly to all requests or 
queries received. 
All shareholders have at least 21 working 
days’ notice of the annual general meeting  
at which all of the Directors and the Chairman 
are normally available for questions. 
Comments and questions are encouraged 
from the shareholders at the meeting.
(d) Accountability and Audit
(i) Financial reporting
Detailed reviews of the performance and 
ﬁnancial position of the Group are included 
in the Chief Executive’ s statement. The 
Board uses this and the Directors’ report 
on pages 34–35 to present a balanced and 
understandable assessment of the Group’ s 
position and prospects. The Directors’ 
responsibility for the ﬁnancial statements is 
described on page 35.
(ii) Internal control
The Board conﬁrms that it has established 
the procedures necessary to implement 
the guidance set out in “Internal Control: 
Guidance for Directors on the Combined 
Code”. The process of risk identiﬁcation, 
evaluation and management has been 
considered by the Board. It is their intention 
that this will continue to be kept under 
constant review and will be considered at 
each Board meeting in the future. The Board 
is continuing to take steps to embed internal 
control and risk management further into 
the operations of the business and to deal 
with areas of improvement which come to 
management and the Board’ s attention.
 
 
The Directors acknowledge their responsibilities 
for the Group’ s system of internal ﬁnancial 
control. Such a system can provide reasonable 
but not absolute assurance against material 
misstatement or loss. The Board conﬁrms that 
the procedures necessary to comply with the 
provisions of the Code, including the guidance 
of Turnbull, have been in place throughout 
the year ended 30 June 2014 and up to the 
date of the Directors’ report. It has considered 
the major business risks and the control 
environment. Important control procedures, 
in addition to the day-to-day supervision of 
the business, include comparison of monthly 
management accounts to the budget.
(iii) Audit committee and auditors
The Audit Committee comprises Frank 
Beechinor-Collins and is chaired by Richard 
Kellett-Clarke. The auditors of the Group may 
also attend part or all of each meeting and 
they have direct access to the committee for 
independent discussions, without the presence 
of the Executive Director if required. The audit 
committee may examine any matters relating 
to the ﬁnancial affairs of the Group, and to 
the Group’ s audit. This includes reviews of 
the annual accounts and announcements, 
accounting policies, compliance with 
accounting standards, the appointment 
and fees of auditors and such other related 
functions as the Board may require.
(iv) Going concern basis
After making enquiries, the Directors have 
formed a judgment, at the time of approving 
the ﬁnancial statements, that there is a 
reasonable expectation that the Group has 
adequate resources to continue in operational 
existence for the foreseeable future. For this 
reason the Directors continue to adopt the 
going concern basis in preparing the ﬁnancial 
statements.
The Board has sought to comply with a 
number of the provisions of the Code in so 
far as it considers them to be appropriate 
for a company of their size and nature. They 
make no statement of compliance with the 
Code overall and do not ‘explain’ in detail any 
aspect of the Code with which they do not 
comply.
Compliance statement
(a) Directors
The details of the Group’ s Board, together 
with the audit and remuneration committees, 
are set out on pages 26–29 and 31–33.
The Board meets monthly and is responsible 
for strategy, performance, approval of major 
capital projects and the framework of internal 
controls. The Board has a formal schedule 
of matters reserved for speciﬁc review and 
decision. T o enable the Board to discharge 
its duties, all Directors receive appropriate 
and timely information. Brieﬁng papers are 
distributed to all Directors in advance of 
Board meetings. All Directors have access 
to the advice and services of the Company 
Secretary, who is responsible for ensuring 
that Board procedures are followed and 
that applicable rules and regulations are 
complied with. At the year end there were 
four Executive Directors, two independent 
Non-Executive Directors and an independent 
Non-Executive Chairman.
The current constitution of the remuneration 
committee and the audit committee is shown 
on pages 31, 32 and 33.
Appointments to the Board are nominated by 
an Executive Director and then considered 
by the full Board. The service contracts of the 
Executive Directors are less than one year 
and determinable by six months notice.
(b) Directors’ remuneration
As set out on page 32 and 33 and the 
remuneration of the Executive Directors  
is determined by the Remuneration  
Committee, whilst that of the Non-Executives  
 
Corporate governance  
report
Governance dotdigital group plc
Annual Report 2013/2014
31
Composition of the Audit Committee
The Audit Committee comprises  
Frank Beechinor-Collins and Richard 
Kellett-Clarke. The Chairman of the Audit 
Committee is Richard Kellett-Clarke. The 
Committee meets separately with the 
external auditors without management 
being present. The Secretary to the 
committee is Milan Patel, the Company 
Secretary.
Main activities of the Audit Committee
At its meeting on the 30 September 2014 
the Committee reviewed the Group’s 
preliminary announcement of its results for 
the ﬁnancial year 30 June 2014 and the 
draft report and accounts for that year. 
The Committee received reports from 
the external auditors on the conduct of 
their audit, their review of the accounts, 
including accounting policies and areas 
of judgment, and their comments on risk 
management and control matters. 
The Committee also reviewed the 
performance of both the internal 
accounting function and external auditors. 
The review of the external auditors was 
used to conﬁrm the appropriateness of their 
reappointment and included assessment of 
their independence, qualiﬁcation, expertise 
and resources, and effectiveness of their 
audit process.
The Audit Committee also reviewed the 
effectiveness of the Company’s systems 
for internal ﬁnancial control and risk 
management. The Committee reviewed the 
Group’s credit control procedures and risks 
concerning IT controls.
The Audit Committee is a sub-committee 
of the Board. The responsibilities of the 
committee include:
•  Reviewing the half-yearly and full-year 
accounts and results announcements 
of the Company and any other 
formal announcements relating to the 
Company’s ﬁnancial performance and 
recommending them to the Board for 
approval;
•  Reviewing the Group’s systems for 
internal ﬁnancial control and risk 
management;
•  Monitoring and reviewing the 
effectiveness of the Group’s internal 
accounting function and considering 
regular reports which arise;
•  Considering the appointment of the 
external auditors, overseeing the 
process for their selection and making 
recommendations to the Board in 
relation to their appointment to be 
put to shareholders for approval at a 
general meeting;
•  Monitoring and reviewing the 
effectiveness and independence of the 
external auditors, agreeing the nature 
and scope of their audit, agreeing 
their remuneration, and considering 
their reports on the Group’s accounts, 
reports to shareholders and their 
evaluation of the systems of internal 
ﬁnancial control and risk management.
Independence of External Auditors
Both the Board and the external auditors 
have safeguards in place to avoid the 
possibility that the auditors’ objectivity and 
independence could be compromised. Our 
policy in respect of services provided by the 
external auditors is as follows:
•  Audit related services – the external 
auditors are invited to provide services 
which, in their position as auditors, 
they must or are best placed to 
undertake. This includes formalities 
relating to borrowings, shareholders’ 
and other circulars, various other 
regulatory reports and work in respect 
of acquisitions and disposals;
•  Tax consulting – in cases where they 
are best suited, we use the external 
auditors. All other signiﬁcant tax 
consulting work is put out to tender;
•  General consulting – in recognition 
of public concern over the effect 
of consulting services on auditors’ 
independence, our policy is that the 
external auditors are not invited to 
tender for general consulting work.
Internal management accounting
The Audit Committee reviewed the 
performance of the internal accounting 
function, the department’s resource 
requirements and also approved the 
internal budgets for the year ended  
30 June 2014. The Committee concluded 
that these budgets were both prudent  
and realistic in the context of the  
Group’s ambitions.
Audit committee  
report dotdigital group plc
Annual Report 2013/2014
32
Key elements of remuneration for 
Executive Directors
The Committee considers the key elements 
in total to ensure there is the right balance 
between reward for short-term success and 
long-term growth. For executive directors, 
this is summarised as follows:
Base pay 
Reviewed against:
•  Salary levels in comparable sized 
companies listed on AIM;
•  Market conditions and Company 
performance;
•  Level of pay awards in rest of the 
business;
•  Role and responsibility of the individual 
Director.
Beneﬁts  
Reviewed against:
•  Aligned to total reward structure for all 
employees;
•  Provided on a market competitive basis.
Annual bonus scheme  
Reviewed against:
•  Group PBT with an individual 
performance element linked to object 
delivery;
•  Drive proﬁtability and strategic change 
across the Group;
•  Delivery of the overall business strategy.
Service contracts
On 7 January 2009, the Executive Directors 
each entered into a service contract with the 
Group, the terms of which commenced  
upon admission to PLUS Markets on the  
2 February 2009. Each appointment runs 
for one year from that date and is terminable 
by six months’ notice by either party to 
expire at the end of that year or at any time 
thereafter. The agreement contains restrictive 
covenants. Upon termination, no beneﬁts 
(other than those accruing during the notice 
period) are due to the Director.
Employee Incentive Schemes
The Group has awarded share options under 
EMI, approved share option schemes to 
key employees who had completed their 
probation period at the date of grant. The 
board considers the performance of staff in 
conjunction with the Group during the, bi-
annual review process. Discretionary bonuses 
are awarded based on individual and Group 
performance.
Approved by the Remuneration Committee 
Signed on its behalf by
Richard Kellett-Clarke
Chairman of Remuneration Committee
 
         12-month period to 30.06.14
      Share based Number of 
 Salary/Fees Beneﬁts Bonus Pension Total payment outstanding 
Executive Directors £’000 £’000 £’000 £’000 £‘000 £‘000 options
P Simmonds 140 7 90 14 251 - -
I Taylor 120 7 65 12 204 - -
S Bird 120 7 65 12 204 - -
G Fidura (resigned 11 March 2014) 53 4 - 2 59 - 2,137,932
M Patel (appointed 11 March 2014) 36 3 65 2 111 5 2,087,397
 469 28 285 42 829 5
The Remuneration Committee
The Company discloses the following 
information on Directors’ remuneration 
mindful of Rule 19 of the AIM Rules and the 
fact that as the Company is quoted on AIM, 
it is not required to comply with the Main 
Market UK Listing Rules or those aspects 
of the Companies Act to listed companies 
regarding the disclosure of Directors’ 
remuneration.
The Committee comprised Richard Kellett-
Clarke (Chairman) and Frank Beechinor-
Collins.
The Secretary to the committee is  
Milan Patel, Chief Financial Ofﬁcer and  
Company Secretary.
Remuneration policy
The Group’ s executive remuneration policy 
objectives are:
(a)  T o ensure that individual rewards and 
incentives are directly aligned with the 
performance of the Group and that of 
the interests of the shareholders;
(b)  T o maintain a competitive programme 
which enables the Group to attract and 
retain high-calibre executives; and
(c)  T o determine the terms of employment 
and remuneration for executive directors.
Remuneration  
committee report
Governance dotdigital group plc
Annual Report 2013/2014
33
         12-month period to 30.06.14
      Number of 
 Salary/Fees Beneﬁts Bonus Pension Total outstanding 
Non-Executive Directors £’000 £’000 £’000 £’000 £‘000 options
F Beechinor-Collins 35 - - - 35 -
R Kellett-Clarke 30 - - - 30 -
S Barratt 30 - - - 30 -
 95 - - - 95
         12-month period to 30.06.13
      Number of 
 Salary/Fees Beneﬁts Bonus Pension Total outstanding 
Executive Directors £’000 £’000 £’000 £’000 £‘000 options
P Simmonds 120 11 50 11 192 -
I Taylor 111 7 50 11 179 -
S Bird 111 7 50 11 179 -
G Fidura 80 4 - 2 86 2,137,932
 422 29 150 35 636
      Number of 
 Salary/Fees Beneﬁts Bonus Pension Total outstanding 
Non-Executive Directors £’000 £’000 £’000 £’000 £‘000 options
F Beechinor-Collins 35 - - - 35 -
R Kellett-Clarke 30 - - - 30 -
S Barratt 23 - - - 23 -
 88 - - - 88
Director interests
The respective interests, all of which are beneﬁcial, in the shares of the Company for the members of the Board at the year end and  
subsequent to that date are stated below:
    No of    
    shares held  % Holding
P Simmonds*    9,573,841  3.39
I Taylor    40,267,667  14.24
S Bird    32,267,667  11.41
F Beechinor-Collins    299,194  0.11
S Barratt    215,000  0.08
M Patel    382,078  0.14
    83,005,447  29.37
           
* 2.18% of P Simmonds holdings/voting rights has been held by Frank Nominees Limited who acts as the nominee for Alliance Trust Pensions 
Limited, which is the trustee of a SIPP established by Peter Anthony Simmonds. Frank Nominees is the vehicle used by Kleinwort Benson 
Limited to hold securities for clients, trusts, SIPPs etc. The beneﬁciary of the SIPP is Peter Anthony Simmonds.
Directors’ interest in share options
Under the Group’ s executive share option scheme the following Directors have the right to acquire ordinary shares.
    No. share  Option price Date ﬁrst Expiry 
Executive Director   Grant date options granted (pence) exercisable date
M Patel   22/02/09 60,000 5.000 01/02/2010 01/02/2019
   22/10/09 200,000 5.000 01/07/2010 01/02/2019
   11/11/10 400,000 5.125 01/05/2012 31/12/2015
   13/10/11 400,000 7.250 01/05/2013 01/02/2016
   15/10/13 1,027,397 18.250 01/11/2015 31/10/2018 dotdigital group plc
Annual Report 2013/2014
34
The Directors present their report with the 
ﬁnancial statements of the Company and the 
Group for the year ended 30 June 2014. 
Dividends
The Board propose a dividend payment of 
£566,000 (2013: £279,000) 0.2p per ordinary 
share (2013: 0.1p per ordinary share) to be 
distributed to shareholders in respect to the 
Group’ s reported performance.
The Board’ s dividend policy will be reviewed 
annually in line with ensuring there is 
adequate cash within the business to 
maintain high growth strategy. 
 
Directors
The Directors shown below have held  
ofﬁce during the period from 1 July 2013  
to the date of this report. 
•  I T aylor
•  S Bird
•  P Simmonds
•  R Kellett-Clarke
•  F Beechinor-Collins
•  S J Barratt
•  G Fidura (resigned 11 March 2014)
•  M Patel (appointed 11 March 2014)
Report of  
the Directors
The Directors who served during the period and their beneﬁcial interests in the shares 
of the Group as recorded in the Register of Directors’ interests at 30 June 2014 are as 
follows:-
     30 June 2014       30 June 2013
      Percentage  Percentage 
     Number of shareholding Number of shareholding 
Directors shares held % shares held %
I Taylor 40,267,667 14.24 49,876,667 17.98 
S Bird 32,267,667 11.41 41,879,667 15.09
P Simmonds 9,573,841* 3.39 16,073,841* 5.79
F Beechinor-Collins 229,194** 0.11 674,194** 0.24
S Barratt 215,000 0.08 215,000 0.08
R Kellett-Clarke - - - -
M Patel 382,078 0.14 - -
G Fidura - - - -
 
**  Frank Nominees Limited holds 2.18% in respect of P Simmonds holding/voting rights 
act as nominee for Trust Alliance Pensions Limited. Frank Nominees is a vehicle used by 
Kleinwort Benson Limited to hold securities for clients, trusts, SIPPs etc.  
The beneﬁciary of the SIPP is Peter Anthony Simmonds.
**  The 229,194 share shown as being held by Mr Beechinor-Collins are owned by  
Curra Trust, a trust established for the beneﬁt of his children and in which he has  
no beneﬁcial interest.
The Directors who served during the period and their beneﬁcial interests in share options  
in the Group, as recorded in the register of Directors’ interests as at 30 June 2014 are  
as follows:- 
       30.6.14 30.6.13 
       Number of  Number of 
Executive Directors   options held options held
M Patel   2,087,397 1,060,000
Substantial interests
On 8 October 2014, the following parties had notiﬁed the Group of a beneﬁcial interest  
that represents 3% or more of the Group’s issued share capital at that date: 
        Percentage 
       Number of shareholding 
Shareholder   shares held %
I Taylor   40,276,667 14.24
S Bird   32,276,667 11.41
Lion Trust Asset Management   24,817,058 8.75
Investec Asset Management   24,519,000 8.65
Old Mutual Global Investors   21,629,329 7.75
River and Mercantile Asset Management  11,000,000 3.88
Unicorn Asset Management   9,849,072 3.47
Franklin Templeton   9,700,000 3.42
Peter Simmonds   9,573,841 3.39
Governance dotdigital group plc
Annual Report 2013/2014
35
The Directors are responsible for keeping 
adequate accounting records that are 
sufﬁcient to show and explain the company’ s 
and the Group’ s transactions and disclose 
with reasonable accuracy at any time the 
ﬁnancial position of the Company and 
the Group and enable them to ensure 
that the ﬁnancial statements comply with 
the Companies Act 2006. They are also 
responsible for safeguarding the assets of the 
company and the Group and hence for taking 
reasonable steps for the prevention and 
detection of fraud and other irregularities. 
The Directors are responsible for the 
maintenance and integrity of the corporate 
and ﬁnancial information included on the 
company’ s website. Legislation in the United 
Kingdom governing the preparation and 
dissemination of ﬁnancial statements may 
differ from legislation in other jurisdictions.
Statement as to disclosure of information 
to auditors
So far as the Directors are aware, there is 
no relevant audit information (as deﬁned by 
Section 418 of the Companies Act 2006) of 
which the Group’ s auditors are unaware, and 
each Director has taken all the steps that he 
ought to have taken as a Director in order 
to make himself aware of any relevant audit 
information and to establish that the Group’ s 
auditors are aware of that information. 
Auditors
The auditors, Jeffreys Henry LLP , will 
be proposed for re-appointment at the 
forthcoming Annual General Meeting.
On behalf of the Board
M Patel
Director  
13 October 2014
Publication of accounts on  
company website
Financial statements are published on the 
Company’ s website. The maintenance and 
integrity of the website is the responsibility 
of the Directors. The Directors’ responsibility 
also extends to the ﬁnancial statements 
contained therein.
Indemnity of ofﬁcers
The Group purchases Directors and ofﬁcers 
insurance against their costs in defending 
themselves in legal proceedings taken 
against them in that capacity, and in respect 
of damages resulting from the unsuccessful 
defence of any proceedings.
Financial instruments
Details of the Group’ s risk management 
objectives and policies together with its 
exposure to ﬁnancial risk are set out in  
Note 22 to the ﬁnancial statements.
The purpose of the policies is to ensure  
that adequate cost-effective funding is 
available to the Group and exposure to 
ﬁnancial risk – interest rate, liquidity and  
credit risk is minimised.
Product development
In the markets in which the Group operates, 
effective development is vital to maintaining 
competitive advantage and securing future 
income streams.
Going concern
After making appropriate enquires, the 
Directors consider that the Company and the 
Group has adequate resources to continue 
in operational existence for the foreseeable 
future. For this reason, they continue to 
adopt the going concern basis preparing the 
ﬁnancial statements.
Events after the reporting period
There are no events after the date of this 
report or the date the ﬁnancial statements 
were approved by the Board of Directors 
which impact on the ﬁgures as presented.
Listing
The Group’ s ordinary shares have been 
traded on London Alternative Investment 
Market (AIM) since 29 March 2011. N+1 
Singer are the Group’ s nominated advisors 
and together with Finncap are the joint 
brokers. The closing mid-market share 
price at 30 June 2014 was 33.12p (2013: 
14.875p).
Statement of Directors’ responsibilities
The Directors are responsible for preparing 
the Report of the Directors and the ﬁnancial 
statements in accordance with applicable law 
and regulations. 
Company law requires the Directors to 
prepare ﬁnancial statements for each ﬁnancial 
year. Under that law the Directors have 
elected to prepare the ﬁnancial statements 
in accordance with International Financial 
Reporting Standards as adopted by the 
European Union. Under company law the 
Directors must not approve the ﬁnancial 
statements unless they are satisﬁed that they 
give a true and fair view of the state of affairs 
of the Company and the Group and of the 
proﬁt or loss of the Group for that period. 
In preparing these ﬁnancial statements, the 
Directors are required to: 
•  select suitable accounting policies and 
then apply them consistently; 
•  make judgements and accounting 
estimates that are reasonable and 
prudent; 
•  state whether the Group and parent 
Company ﬁnancial statements have 
been prepared in accordance with  
IFRSs as adopted by the European 
Union subject to any materials 
departures disclosed and explained  
in the ﬁnancial statements. 
•  prepare the ﬁnancial statements on 
the going concern basis unless it is 
inappropriate to presume that the 
company will continue in business.  dotdigital group plc
Annual Report 2013/2014
36
Scope of the audit of the  
ﬁnancial statements 
An audit involves obtaining evidence about 
the amounts and disclosures in the ﬁnancial 
statements sufﬁcient to give reasonable 
assurance that the ﬁnancial statements are 
free from material misstatement, whether 
caused by fraud or error. This includes an 
assessment of: whether the accounting 
policies are appropriate to the Group’s 
circumstances and have been consistently 
applied and adequately disclosed; the 
reasonableness of signiﬁcant accounting 
estimates made by the Directors; and 
the overall presentation of the ﬁnancial 
statements. In addition, we read all the 
ﬁnancial and non-ﬁnancial information 
in the Chairman’s  report, Strategic 
report, Corporate Governance report, 
Audit Committee report, Remuneration 
Committee report, and Directors report 
to identify material inconsistencies with 
the audited ﬁnancial statements and to 
identify any information that is apparently 
materially incorrect based on, or materially 
inconsistent with, the knowledge acquired 
by us in the course of performing the 
audit. If we become aware of any apparent 
material misstatements or inconsistencies 
we consider the implications for our report. 
Opinion on ﬁnancial statements 
In our opinion the ﬁnancial statements: 
•  Give a true and fair view of the state  
of the Group’s affairs as at 30 June 
2014 and of its proﬁt for the year  
then ended;
•  Have been properly prepared in 
accordance with IFRSs as adopted  
by the European Union; 
•  The ﬁnancial statements have been 
prepared in accordance with the 
requirements of the Companies 
Act 2006 and Article 4 of the IAS 
regulation.
Opinion on other matter prescribed  
by the Companies Act 2006 
We have audited the ﬁnancial statements 
of dotdigital group plc for the year 
ended 30 June 2014, which comprise 
the consolidated income statement, 
consolidated statement of comprehensive 
income, consolidated statement of 
changes of equity, company statement of 
changes in equity, consolidated statement 
of ﬁnancial position, company statement of 
ﬁnancial position, consolidated statement 
of cash ﬂows, company statement of cash 
ﬂows and the related notes. The ﬁnancial 
reporting framework that has been applied 
in their preparation is applicable law and 
International Financial Reporting Standards 
(IFRSs) as adopted by the European Union. 
This report is made solely to the Company’s 
members, as a body, in accordance with 
Chapter 3 of Part 16 of the Companies Act 
2006. Our audit work has been undertaken 
so that we might state to the Company’s 
members those matters we are required 
to state to them in an auditors report and 
for no other purpose. To the fullest extent 
permitted by law, we do not accept or 
assume responsibility to anyone other than 
the company and the Company’s members 
as a body, for our audit work, for this 
report, or for the opinions we have formed. 
Respective responsibilities of  
Directors and Auditors 
As explained more fully in the Statement 
of Directors’ Responsibilities set out on 
page 35, the Directors are responsible 
for the preparation of the group ﬁnancial 
statements and for being satisﬁed that they 
give a true and fair view. Our responsibility 
is to audit the ﬁnancial statements in 
accordance with applicable law and 
International Standards on Auditing (UK 
and Ireland). Those standards require us to 
comply with the Auditing Practices Board’s 
Ethical Standards for Auditors. 
In our opinion the information given in 
the Report of the Directors and Strategic 
Report for the ﬁnancial year for which  
the group ﬁnancial statements are  
prepared is consistent with the Group 
ﬁnancial statements. 
Matters on which we are required  
to report by exception 
We have nothing to report in respect of  
the following matters where the Companies 
Act 2006 requires us to report to you if,  
in our opinion: 
•  Adequate accounting records have 
not been kept by the Group, or returns 
adequate for our audit have not been 
received from branches not visited by 
us; or 
•  The Group ﬁnancial statements are 
not in agreement with the accounting 
records and returns; or 
•  Certain disclosures of Directors’ 
remuneration speciﬁed by law are not 
made; or 
•  We have not received all the 
information and explanations we 
require for our audit. 
Jonathan Isaacs
Senior Statutory Auditor
For and on behalf of  
Jeffreys Henry LLP (Statutory Auditors)
Finsgate 5-7 Cranwood Street
London EC1V 9EE
13 October 2014
Report of the  
independent auditors
Governance dotdigital group plc
Annual Report 2013/2014
37
Financial statements
  Contents
38 Consolidated income statement
38 Consolidated statement of comprehensive income
39 Consolidated statement of ﬁnancial position
40 Company statement of ﬁnancial position
41 Consolidated statement of changes in equity
42 Company statement of changes in equity
43 Consolidated statement of cash ﬂows
43 Company statement of cash ﬂows
44 Notes to the consolidated ﬁnancial statements
68 Company information 
Financial 
statements dotdigital group plc
Annual Report 2013/2014
38
Consolidated income statement  
For the year ended 30 June 2014
Notes
30.6.14 
£’000
30.6.13 
£’000
Continuing operations
Revenue 16,213 12,197
Cost of sales (1,533) (887)
Gross proﬁt 14,680 11,310
Administrative expenses 7 (11,059) (7,338)
Operating proﬁt 3,621 3,972
Finance income 6 20 13
Proﬁt before income tax 7 3,641 3,985
Income tax expense 8 (181) (220)
Proﬁt for the year from continuing operations 3,460 3,765
Discontinued operations
Loss for the year from discontinued operations 4 (41) (3,023)
Proﬁt for the year 3,419 742
Attributable to the owners of the parent:
Proﬁt for the year from continuing operations 4 3,460 3,765
Loss for the year from discontinuing operations (41) (3,023)
Proﬁt for the year attributable to the owners of the parent 3,419 742
Earnings per share from continuing operations (pence per share)
Basic 11 1.24 1.36
Diluted 11 1.19 1.32
Earnings per share from continuing and discontinued operations 
(pence per share)
Basic 11 1.22 0.27
Diluted 11 1.18 0.26
Adjusted earnings per share from continuing and discontinued 
operations (pence per share)
Adjusted excluding exceptional items 11 1.22 1.11
Adjusted diluted 11 1.18 1.07
Consolidated statement of comprehensive income 
For the year ended 30 June 2014
Notes
30.6.14 
£’000
30.6.13 
£’000
Proﬁt for the year 3,419 742
Other comprehensive income 
Items that may be subsequently reclassiﬁed to proﬁt and loss:
Exchange differences on translating foreign operations (4) (2)
Total comprehensive income attributable to:
Owners of the parent 3,415 740
Total comprehensive income for the year
Comprehensive income from continuing operations 3,456 3,763
Comprehensive income from discontinued operations (41) (3,023) dotdigital group plc
Annual Report 2013/2014
39
Financial statements
Consolidated statement of ﬁnancial position 
For the year ended 30 June 2014
Notes
30.6.14 
£’000
30.6.13 
£’000
Assets
Non-current assets
Goodwill 12 609 609
Intangible assets 13 2,991 2,449
Property, plant and machinery 14 827 472
4,427 3,530
Current assets
Trade and other receivables 16 3,662 2,893
Cash and cash equivalents 17 9,306 6,072
12,968 8,965
Total assets 17,395 12,495
Equity attributable to the owners of the parent
Called up share capital 18 1,414 1,387
Share premium 19 5,147 4,863
Reverse acquisition reserve 19 (4,695) (4,695)
Other reserves 19 82 13
Retranslation reserve 19 (6) (2)
Retained earnings 19 12,211 9,071
Total equity 14,153 10,637
Liabilities
Non-current liabilities
Deferred tax 23 58 14
Current liabilities
Trade and other payables 20 2,984 1,681
Current tax payable 200 163
3,184 1,844
Total liabilities 3,242 1,858
Total equity and liabilities 17,395 12,495
The ﬁnancial statements were approved and authorised for issue by the Board of Directors on 13 October 2014 
and were signed on its behalf by
M Patel
Director 
Company registration number: 06289659 (England and Wales) dotdigital group plc
Annual Report 2013/2014
40
Company statement of ﬁnancial position  
For the year ended 30 June 2014
Notes
30.6.14 
£’000
30.6.13 
£’000
Assets
Non-current assets
Investments 15 5,186 5,186
5,186 5,186
Current assets
Trade and other receivables 16 3,845 5,423
Cash and cash equivalents 17 109 70
3,954 5,493
Total assets 9,140 10,679
Equity attributable to the owners of the parent
Called up share capital 18 1,414 1,387
Share premium 19 5,147 4,863
Other reserves 19 82 13
Retained earnings 19 2,423 3,065
Total equity 9,066 9,328
Liabilities
Current liabilities
Trade and other payables 20 74 1,351
74 1,351
Total liabilities 74 1,351
Total equity and liabilities 9,140 10,679
The ﬁnancial statements were approved and authorised for issue by the Board of Directors on 13 October 2014 
and were signed on its behalf by
M Patel
Director 
Company registration number: 06289659 (England and Wales) dotdigital group plc
Annual Report 2013/2014
41
Financial statements
Consolidated statement of changes in equity  
For the year ended 30 June 2014
Called up  
share capital 
£’000
Retained 
earnings  
£’000
Share  
premium  
£’000
Balance as at 1 July 2012 1,377 8,202 4,755
Issue of share capital 10 – 108
Reclassiﬁcation of reserves – 127 –
Transactions with owners 10 127 108
Proﬁt for the year – 742 –
Other comprehensive income – – –
Total comprehensive income – 742 –
Balance as at 30 June 2013 1,387 9,071 4,863
Issue of share capital 27 – 284
Dividends –(279)–
Transactions with owners 27 (279) 284
Proﬁt for the year – 3,419 –
Other comprehensive income – – –
Total comprehensive income – 3,419 –
Balance as at 30 June 2014 1,414 12,211 5,147
Retranslation 
reserve 
£’000
Reserve 
acquisition 
reserve  
£’000
Other  
reserves 
£’000
Total  
equity 
£’000
Balance as at 1 July 2012 – (4,695) 127 9,766
Issue of share capital – – – 118
Reclassiﬁcation of reserves – – (127) –
Share based payments – – 13 13
Transactions with owners – – (114) 131
Proﬁt for the year – – – 742
Other comprehensive income (2) – – (2)
Total comprehensive income (2) – – 740
Balance as at 30 June 2013 (2) (4,695) 13 10,637
Issue of share capital – – – 311
Dividends – – – (279)
Share based payments – – 69 69
Transactions with owners – – 69 101
Proﬁt for the year – – – 3,419
Other comprehensive income (4) – – (4)
Total comprehensive income (4) – – 3,415
Balance as at 30 June 2014 (6) (4,695) 82 14,153
• 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  
of the net share issue expenses.
• Retranslation reserve relates to the retranslation of a foreign subsidiary into the functional currency  
of the Group.
• The reverse acquisition reserve relates to the adjustment required to account the reverse acquisition in 
accordance with International Financial Reporting Standards.
• Other reserves relate to the charge for the share based payment in accordance with International  
Financial Reporting Standard 2. dotdigital group plc
Annual Report 2013/2014
42
Company statement of changes in equity  
For the year ended 30 June 2014
Called up  
share capital  
£’000
Retained 
earnings  
£’000
Share  
premium  
£’000
Balance as at 1 July 2012 1,377 129 4,755
Issue of share capital 10 – 108
Reclassiﬁcation of reserves – 127 –
Transactions with owners 10 127 108
Proﬁt for the year – 2,809 –
Other compressive income – – –
Total comprehensive income – 2,809 –
Balance as at 30 June 2013 1,387 3,065 4,863
Issue of share capital 27 – 284
Dividends – (279) –
Transactions with owners 27 (279) 284
Loss for the year – (363) –
Other comprehensive income – – –
Total comprehensive income – (363) –
Balance as at 30 June 2014 1,414 2,423 5,147
Other  
reserves 
£’000
Total  
equity 
£’000
Balance as at 1 July 2012 127 6,388
Issue of share capital – 118
Reclassiﬁcation of reserves (127) –
Share based payments 13 13
Transactions with owners (114) 131
Proﬁt for the year – 2,809
Other comprehensive income – –
Total comprehensive income – 2,809
Balance as at 30 June 2013 13 9,328
Issue of share capital 311
Dividends – (279)
Share based payments 69 69
Transactions with owners 69 101
Loss for the year – (363)
Other comprehensive income – –
Total comprehensive income – (363)
Balance as at 30 June 2014 82 9,066
• 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  
of the net share issue expenses.
• Other reserves relate to the charge for the share based payment in accordance with International Financial 
Reporting Standard 2. dotdigital group plc
Annual Report 2013/2014
43
Financial statements
Consolidated statement of cash ﬂows 
For the year ended 30 June 2014
Notes
30.6.14 
£’000
30.6.13 
£’000
Cash ﬂows from operating activities
Cash generated from operations 28 5,297 3,817
Tax paid (100) (253)
Net cash generated from operating activities 5,197 3,564
Cash ﬂows from investing activities
Purchase of intangible ﬁxed assets (1,408) (1,352)
Purchase of tangible ﬁxed assets (607) (292)
Interest received 20 13
Net cash ﬂows used in investing activities (1,995) (1,631)
Cash ﬂows from ﬁnancing activities
Equity dividends paid (279) –
Share issue 311 118
Net cash ﬂows from ﬁnancing activities 32 118
Increase in cash and cash equivalents 3,234 2,051
Cash and cash equivalents at beginning of year 29 6,072 4,021
Cash and cash equivalents at end of year 29 9,306 6,072
Increase in cash and cash equivalents from continuing operations 3,268 2,076
Increase in cash and cash equivalents from discontinuing operations (34) (25)
Increase in cash and cash equivalents 3,234 2,051
The above does not include the effect of foreign exchange rate changes on cash and cash equivalents due to its 
immaterial nature.
Company statement of cash ﬂows 
For the year ended 30 June 2014
Notes
30.6.14 
£’000
30.6.13 
£’000
Cash ﬂows from operating activities
Cash generated from operations 28 7 (273)
7 (273)
Net cash generated from operating activities
Cash ﬂows from ﬁnancing activates
Loan from Group companies – 142
Equity dividends paid (279) –
Share issue 311 118
Net cash ﬂows from ﬁnancing activities 32 260
Increase in cash and cash equivalents 39 (13)
Cash and cash equivalents at beginning of year 29 70 83
Cash and cash equivalents at end of year 29 109 70 dotdigital group plc
Annual Report 2013/2014
44
Notes to the consolidated ﬁnancial statements  
For the year ended 30 June 2014
1. General information
dotdigital group plc (“dotdigital”) is a company incorporated in England and Wales and quoted on the AIM 
Market. The address of the registered ofﬁce is disclosed on the inside back cover of the ﬁnancial statements. 
The principal activity of the Group is described on page 4.
2. Accounting policies
Basis of preparation
These ﬁnancial statements have been prepared in accordance with International Financial Reporting Standards 
as adopted by the European Union (IFRS’s as adopted by the EU) and those parts of Companies Act 2006 that 
applies to companies reporting under IFRS. The ﬁnancial statements have been prepared under the historical 
cost convention. 
The Group has applied all accounting standards and interpretations issued by the International Accountancy 
Standards Board and International Accounting Interpretations Committee effective at the time of preparing the 
ﬁnancial statements.
New and amended standards adopted by the Company
There are no IFRSs or IFRIC interpretations that are effective for the ﬁrst time for the ﬁnancial year beginning  
on or after 1 July 2013 that would be expected to have a material impact on the Group.
Standards, interpretations and amendments to published standards that are not yet effective.
The following new standards, amendments to standards and interpretations have been issued, but  
are not effective for the ﬁnancial year beginning 1 July 2013 and have not been early adopted:
Reference Title Summary
Application  
date of  
standard
Application 
date of 
Group
Amendments  
to IFRS 2, IFRS 3
Amendments 
resulting from Annual 
Improvements 2010-
12 Cycle
IFRS 2: clariﬁes deﬁnition of vesting conditions 
IFRS 3: clariﬁes contingent consideration in a business combination
1 July 2014 1 July 
2014
Amendments  
to IAS 19
Deﬁned Beneﬁt 
Plans: Employee 
Contributions
Clariﬁes that the treatment of contributions when they are 
independent  
of the number of years of service
Periods commencing  
on or after 1 July 2014
1 January 
2015
IFRS 9 Financial Instruments Revised standard for accounting for ﬁnancial instruments Periods commencing on  
or after 1 January 2015
1 January 
2015
IAS 36 Impairment of assets Limited scope amendments to disclosure requirements Periods commencing on  
or after 1 January 2014
1 January 
2014
IAS 39 Hedge accounting and 
novation of derivatives
Provides relief from discontinuing hedge accounting when novation 
of  
a hedging instrument to a central counterparty meets speciﬁed 
criteria
Periods commencing on  
or after 1 January 2014
1 January 
2014
IFRS 21 Accounting for 
levies imposed by 
governments
Clariﬁes that the obligating event giving rise to a liability to pay a levy 
is  
the activity described in the relevant legislation that triggers payment  
of the levy
Periods commencing on  
or after 1 January 2014
1 January 
2014
IFRS 10, IFRS 12, 
IAS 27
Exception from 
consolidation for 
‘investment entities’
Amendments have been made to deﬁne an ‘investment entity’ 
and to introduce an exception from consolidation and the required 
disclosures
Periods commencing on  
or after 1 January 2014
1 January 
2014
IAS 32 Financial instruments: 
Presentation
Clariﬁes the requirements for offsetting of ﬁnancial assets and  
ﬁnancial liabilities
Periods commencing on  
or after 1 January 2014
1 January 
2014
IFRS 14 Regulatory deferral 
accounts
Aims to enhance the comparability of ﬁnancial reporting by entities  
subject to rate-regulations
Periods commencing on  
or after 1 January 2016
1 January 
2016
IFRS 15 Revenue from 
contracts with 
customers
Speciﬁes how and when to recognise revenue from contracts as 
well  
as requiring more information and relevant disclosures
Periods commencing on 
or after 1 January 2017
1 January 
2017
IFRIC 21 Levies Provides guidance on when to recognise a liability for government 
levies
Periods commencing on 
or after 1 January 2014
1 January 
2014
The Directors anticipate that the adoption of these standards and the interpretations in future periods will have no material impact on the 
ﬁnancial statements of the Group.
The ﬁnancial statements are presented in sterling (£), rounded to nearest thousand pound. dotdigital group plc
Annual Report 2013/2014
45
Financial statements
Basis of consolidation
In the period ended 2009 the Company acquired  
via a share for share exchange the entire issued share 
capital of dotmailer Limited, whose principle activity is 
that of web and email based marketing.
Under IFRS 3 ‘Business combinations’ the dotmailer 
Limited share exchange has been accounted for as  
a reverse acquisition. Although these consolidated 
ﬁnancial statements have been issued in the name  
of the legal parent, the Company it represents in 
substance is a continuation of the ﬁnancial information 
of the legal subsidiary, dotmailer Limited. The following 
accounting treatment has been applied in respect of 
the reverse acquisition:
• The assets and liabilities of the legal subsidiary, 
dotmailer Limited are recognised and measured  
in the consolidated ﬁnancial statements at their  
pre combination carrying amounts, without 
restatement to their fair value;
• The retained reserves recognised in the 
consolidated ﬁnancial statements for the beginning 
of the prior period reﬂect the retained reserves of 
dotmailer Limited to 30 April 2008. However, in 
accordance with IFRS3 ‘Business combinations’  
the equity structure appearing in the consolidated 
ﬁnancial statements reﬂects the equity structure of 
the legal parent dotdigital, including the equity 
instruments issued under the share exchange to 
effect the business combination;
• A reverse acquisition reserve has been created to 
enable the presentation of a consolidated balance 
sheet which combines the equity structure of the 
legal parent with the non statutory reserves of the 
legal subsidiary;
• Comparative numbers are prepared on the  
same basis.
The following accounting treatment has been applied in 
respect of the acquisition of dotdigital:
• The assets and liabilities of dotdigital are 
recognised and measured in the consolidated 
ﬁnancial statements at their fair value at the date 
of acquisition.
• The cost of an acquisition is measured as the  
fair value of the assets given, equity instruments 
issued and liabilities incurred or assumed at the 
date of exchange, plus costs directly attributable 
to the acquisition. Identiﬁable assets acquired and 
liabilities assumed in a business combination are 
measured initially at their fair values at the date of 
acquisition, irrespective of the extent of any 
minority interest. The excess of the cost of 
acquisition over the fair value of the Group’s  
share of the identiﬁable net assets acquired is 
recorded as goodwill. If the cost of acquisition  
is less than the fair value of the net assets of the 
subsidiary acquired, the difference is recognised 
directly in the income statement.
Subsidiaries
A subsidiary is an entity whose operating and ﬁnancing 
policies are controlled by the Group. Subsidiaries are 
consolidated from the date on which control was 
transferred to the Group. Subsidiaries cease to be 
consolidated from the date the Group no longer has 
control. Intercompany transactions, balances and 
unrealised gains on transactions between Group 
companies have been eliminated on consolidation.
As a result of applying reverse acquisition accounting 
since 30 January 2009, the consolidated IFRS ﬁnancial 
information of dotdigital Group Plc is a continuation of 
the ﬁnancial information of dotmailer Limited.
Revenue recognition
Revenue comprises the fair value of the consideration 
received or receivable for the sale of goods and 
services in the ordinary course of the Group’s activities. 
Revenue is shown net of value added tax returns, 
rebates and discounts after eliminating sales within  
the Group.
The Group recognises revenue when the amount of 
revenue can be reliably measured and it is probable 
that the future economic beneﬁts will ﬂow to the  
entity. The Group bases it’s estimates on historical 
results, taking in to consideration the type of customer, 
the type of transaction and the speciﬁcs of each 
arrangement.
The Group sells web based marketing services to  
other businesses and services are either provided on a 
usage basis or ﬁxed price bespoke contract. Revenue 
from contracts are 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.
Going concern
The directors, at the time of approving the ﬁnancial 
statements, a reasonable expectation that the 
Company and the Group have adequate resources  
to continue in operational existence for the foreseeable 
future. Thus they continue to adopt the going  
concern basis of accounting in preparing the  
Financial statements. Further detail is contained in  
the strategic review. dotdigital group plc
Annual Report 2013/2014
46
Operating proﬁt
Operating proﬁt is stated after charging operating 
expenses but before ﬁnance costs.
Exceptional items
Exceptional items are non-recurring material items 
which are outside the normal scope of the Group’s 
ordinary activities such as costs arising from the 
impairment of investments and closure of divisions. 
Such items are disclosed separately within the  
ﬁnancial statements.
Dividends
Final dividend distributions to the Company’s 
shareholders are recognised as a liability in the ﬁnancial 
statements in the period in which the dividends are 
approved by the Company’s shareholders while interim 
dividends distributions are recognised in the period in 
which the dividends are declared and paid.
Goodwill
Goodwill represents the excess of the fair value of the 
consideration over the fair values of the identiﬁable net 
tangible and intangible assets acquired.
Under IFRS 3 “Business Combinations” goodwill 
arising on acquisitions is not subject to amortisation 
but is subject to annual impairment testing. Any 
impairment is recognised immediately in the income 
statement and not subsequently reversed.
Investments in subsidiaries
Investments are held as non-current assets at cost less 
any provision for impairment. Where the recoverable 
amount of the investment is less then the carrying 
amount, impairment is recognised.
Intangible assets
Intangible assets are recorded as separately identiﬁable 
assets and recognised at historical cost less any 
accumulated amortisation. These assets are amortised 
over their useful economic lives 4-5 years, with the 
charge included in administrative expenses in the 
income statement.
Intangible assets are reviewed for impairment  
annually. Impairment is measured by determining the 
recoverable amount of an asset or cash generating unit 
(CGU) which is the greater of its value in use and its fair 
value less costs to sell. In assessing value in use, the 
estimated future cash ﬂows are discounted to their 
present value using a pre-tax discount rate that reﬂects 
current market assessments of the time value of 
money and the risks speciﬁc to the asset or CGU. For 
the purpose of impairment testing, assets that cannot 
be tested individually are grouped together into the 
smallest Group of assets that generates cash inﬂows 
from continuing use that are largely independent of the 
cash inﬂows of other assets or CGU.
• Domain names
Acquired domain names are shown at historical 
cost. Domain names have a ﬁnite life and are carried 
at cost less accumulated amortisation. Amortisation 
is calculated using straight line method to allocate 
the cost of domain names over their useful lives of 
four years.
• Software
Acquired software and websites are shown at 
historical cost. They have a ﬁnite life and are carried 
at cost less accumulated amortisation. Amortisation 
is calculated using straight line method to allocate 
the cost of software and websites over their useful 
lives of four years.
• Product development
Product development expenditure is capitalised 
when it is considered that there is a commercially 
and viable technically product, the related 
expenditure is separable identiﬁable and there is a 
reasonable expectation that the related expenditure 
will be exceeded by future revenues. Following initial 
recognition, product developments are carried at 
cost less any accumulated amortisation and any 
accumulated impairment losses. The useful lives of 
these intangible assets are assessed to have a ﬁnite 
life of ﬁve years. Amortisation is charged on assets 
with ﬁnite lives and until economic beneﬁt can be 
received and recognised, this expense is taken to 
the income statement and useful lives are reviewed 
on an annual basis. Amortisation is charged from 
the point when the assets is available for use.
Other development expenditures that do not meet 
these criteria are recognised as an expense as 
incurred. Development costs previously recognised 
as an expense are not recognised as an asset in a 
subsequent period. Capitalised development costs 
are recorded as intangible assets and amortised 
from the point at which they are ready for use on  
a straight line basis over its useful life.
Costs incurred on development projects (relating to 
the design and testing of new or improved products) 
are recognised as intangible assets when the 
following criteria are fulﬁlled:
• It is technically feasible to complete the intangible 
asset so that it will be available of use or resale;
• Management intends to complete the intangible 
asset and use or sell it;
• There is an ability to use or sell the intangible;
• It can be demonstrated how the intangible asset 
will generate possible future economic beneﬁts
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
47
Financial statements
• Adequate technical, ﬁnancial and other resource 
to complete the development and to use or sell 
the intangible asset are available and;
• The expenditure attributable to the intangible 
asset during its development can be reliably 
measured.
• Impairment of non ﬁnancial assets  
(excluding goodwill)
At each balance sheet date, the Group reviews  
the carrying amounts of its tangible and intangible 
assets to determine whether there is any indication 
that those assets have suffered an impairment loss. 
If any such indication exists, the recoverable amount 
of the asset is estimated in order to determine the 
extent of the impairment loss (if any). Where the 
asset does not generate cash ﬂows that are 
independent from other assets, the Group estimates 
the recoverable amount of the cash-generating unit 
to which the asset belongs. An intangible asset with 
an indeﬁnite useful life is tested for impairment 
annually and whenever there is an indication that  
the asset may be impaired.
Property, plant and equipment
Tangible non current assets are stated at historical  
cost less accumulated depreciation. Historical cost 
includes expenditure that is directly attributable to  
the acquisition of the items.
Subsequent costs are included in the assets carrying 
amount or recognised as a separate asset, as 
appropriate, only when it is probable that future 
economic beneﬁts are associated with the item will 
ﬂow to the company and the cost of the item can be 
measured reliably. The carrying amount of the replaced 
part is derecognised. All other repairs and maintenance 
are charged to the income statement during the 
ﬁnancial period in which they are incurred. Depreciation 
is provided at the following rates in order to write off 
each asset over its estimated useful life and are based 
on the cost of assets less residual value. Signiﬁcant 
components of individual assets are assessed and if a 
component has a useful life that is different from the 
remainder of that asset, that component is depreciated 
separately. 
Short leasehold: over the term of the lease
Fixtures and ﬁttings: 25% on cost
Computer equipment: 25% on cost
The asset’s residual values and useful economic lives 
are reviewed and adjusted, if appropriate, at each 
reporting date. An asset’s carrying amount is written 
down immediately to its recoverable amount if the 
asset’s carrying amount is greater then its estimated 
recoverable value.
Gains and losses on disposals are determined by 
comparing the proceeds with the carrying amount  
and are recognised within other (losses) or gains in  
the income statement. 
Capital risk management
The Group manages it’s capital to ensure it is able  
to continue as a going concern while maximising the 
return to stakeholders through the optimisation of the 
debt and equity balance. The capital structure of the 
Group consists of cash equivalents and equity 
attributable to the owners of the parent as disclosed  
in the Statement of Changes in Equity.
Taxation
The tax expense for the year comprises current  
and deferred tax. Tax is recognised in the Income 
statement, extent to the extent that it relates to items 
recognised in other comprehensive income or directly 
in equity. In this case, the tax is also recognised in 
other comprehensive income for directly in equity, 
respectively.
Current tax
Current taxes are based on the results shown in the 
ﬁnancial statements and are calculated according to 
local tax rules, using tax rates enacted or substantially 
enacted by the balance sheet date.
Deferred taxation
Deferred income tax is provided in full, using the liability 
method, on temporary differences arising between the 
tax bases of assets and liabilities and their carrying 
amounts in the ﬁnancial statements.
Deferred income tax assets are recognised to the 
extent that it is probable that future taxable proﬁt will 
be available against which the temporary difference will 
be utilised.
Deferred income tax is determined using tax rates  
that have been enacted or substantially enacted by  
the balance sheet date and are expected to apply 
when they related deferred income asset is realised  
or deferred income tax liability is settled.
Operating leases
Rent payable under operating leases is not recognised 
in the Group’s statement of ﬁnancial position. Such 
costs are expensed on a straight line basis over the 
term of the lease. Lease incentives received are 
recognised as an integral part of the total expense, 
over the term of the lease.
Financial instruments
Financial assets and ﬁnancial liabilities are recognised 
on the statement of ﬁnancial position when an entity 
becomes a party to the contractual provisions of the 
instruments. Financial assets and ﬁnancial liabilities  
are initially measured at fair value. Transaction costs 
that is directly attributable to the acquisition or issue  
of ﬁnancial assets and ﬁnancial liabilities (other than  dotdigital group plc
Annual Report 2013/2014
48
ﬁnancial assets and ﬁnancial liabilities at fair value 
through proﬁt or loss) are added to or deducted from 
the fair value of the ﬁnancial assets or ﬁnancial 
liabilities, as appropriate, on initial recognition. 
Transaction costs directly attributable to the acquisition 
of ﬁnancial assets or ﬁnancial liabilities at fair value 
through proﬁt or loss are recognised immediately in  
the income statement.
• Financial assets
The Group’s accounting policies for ﬁnancial assets 
are set out below.
Management determine the classiﬁcation of its 
ﬁnancial assets at initial recognition depending  
on the purpose for which the ﬁnancial assets  
were acquired and where allowed and appropriate, 
revaluate this designation at every reporting date.
All ﬁnancial assets are recognised on a trade date 
when, and only when, the Group becomes a party 
to the contractual provisions of an instrument. When 
ﬁnancial assets are recognised initially, they are 
measured at fair value plus transaction costs, 
except for those ﬁnance assets classiﬁed as at fair 
value through proﬁt or loss (‘FVTPL’), which are 
initially measured at fair value.
Financial assets are classiﬁed into the following 
speciﬁed categories: ﬁnancial assets at FVTPL, 
’held-to-maturity’ investments, ‘available for sale’ 
(AFS) ﬁnancial assets and loans and receivables. 
The classiﬁcation depends on the nature and 
purpose of the ﬁnancial assets and is determined  
at the time of recognition.
Derecognition of ﬁnancial assets occurs when the 
rights to receive cash ﬂows from the investments 
expire or are transferred and substantially all of the 
risks and rewards of ownership have been 
transferred.
At each reporting date, ﬁnancial assets are reviewed 
to assess whether there is objective evidence of 
impairment. If any such evidence exists, impairment 
loss is determined and recognised based on the 
classiﬁcation of the ﬁnancial asset.
Loans and receivables (including trade receivables, 
prepayments, deposits and other receivables, cash 
and bank balances) are non-derivative ﬁnancial 
assets with ﬁxed or determinable payments that are 
not quoted on an active market. At each reporting 
date subsequent to initial recognition, loans and 
receivables are carried at amortised cost using the 
effective interest method, less any identiﬁed 
impairment losses.  
 
 
 
 
 
An impairment loss is recognised in the statement 
of comprehensive income when there is objective 
evidence that the asset is impaired, and is 
measured as the difference between the asset’s 
carrying amount and the present value of estimated 
future cash ﬂows discounted at the original effective 
interest rate. Impairment losses are reversed in 
subsequent periods when an increase in the asset’s 
recoverable amount can be related objectively to an 
event occurring after the impairment was 
recognised, subject to a restriction that the carrying 
amount of the asset at the date the impairment is 
reversed does not exceed what the amortised cost 
would have been had the impairment not been 
recognised.
• Cash and cash equivalents
Cash and cash equivalents comprise cash at bank 
and on hand, demand deposits with banks and 
other ﬁnancial institutions, and short-term, highly 
liquid investments that are readily convertible into 
known amounts of cash and which are subject to 
an insigniﬁcant risk of changes in value, having been 
within three months of maturity at acquisition. Bank 
overdrafts that are repayable on demand and form 
an integral part of the Group’s cash management 
are also included as a component of cash and cash 
equivalents for the purpose of the consolidated 
statement of cash ﬂows.
• Trade receivables
Trade receivables are recognised initially at the lower 
of their original invoiced value and recoverable 
amount. A provision is made when it is likely that  
the balance will not be recovered in full. Terms on 
receivables range from 30 to 90 days.
• Financial liabilities and equity
Financial liabilities and equity are recognised on  
the Group’s statement of ﬁnancial position when  
the Group becomes a party to a contractual 
provision of an instrument. Financial liabilities and 
equity instruments issued by the Group are 
classiﬁed according to the substance of the 
contractual arrangements entered into and the 
deﬁnitions of a ﬁnancial liability and an equity 
instrument. An equity instrument is any contract  
that evidences a residual interest in the assets of  
the Group after deducting all of its liabilities. Equity 
instruments issued by the Group are recognised  
at the proceeds received, net of transaction costs.
The Group’s ﬁnancial liabilities include trade 
payables and accrued liabilities.
• Trade payables
Trade payables are recognised initially at fair value 
and subsequently measured at amortised cost 
using the effective interest method. Terms on 
accounts payables range from 10 to 90 days.
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
49
Financial statements
Foreign currency risk
Currency risk is the risk that the holding of foreign 
currencies will affect the Group’s position as a result  
of a change in foreign currency exchange rates. The 
Group has no signiﬁcant foreign currency risk as  
most of the Group’s ﬁnancial assets and liabilities are 
denominated in functional currencies of relevant  
group entities. Accordingly, no quantitative market  
risk disclosures or sensitivity analysis for currency risk 
have been prepared.
The results and ﬁnancial position of all the group 
entities (none of which has the currency of a hyper-
inﬂationary economy) that have a functional currency 
different from the presentation currency are translated 
into the presentation currency as follows:
(a)  Assets and liabilities for each balance sheet 
presented are translated at the closing rate at the 
date of that balance sheet;
(b)  Income and expenses for each income statement 
are translated at average exchange rates (unless 
this average is not a reasonable approximation of 
the cumulative effect of the rates prevailing on the 
transaction dates, in which case income and 
expenses are translated at the rate on the dates of 
the transactions); and
(c)  All resulting exchange differences are recognised in 
other comprehensive income.
Equity
Share capital is the amount subscribed for shares at 
their nominal value.
Share premium represents the excess of the amount 
subscribed for the share capital over the nominal value 
of the respective shares net of share issue expenses.
Retained earnings represent the cumulative earnings of 
the Group attributable to equity Shareholders.
The reverse acquisition reserve relates to the 
adjustment required by accounting for the  
reverse acquisition in accordance with IFRS3  
‘Business combinations’.
Other reserves relate to the charge for share  
based payments in accordance with IFRS2 ‘Share 
based payments’.
Share based payments
For equity settled share based payment transactions 
the Group, in accordance with IFRS 2 “Share Based 
Payments” measures their value, and the 
corresponding increase in equity, indirectly, by 
reference to the fair value of the equity instruments 
granted. The fair value of those equity instruments is 
measured at the grant date using the trinomial method. 
The expense is apportioned over the vesting period of 
the ﬁnancial instrument and is based on the number 
which is expected to vest and the fair value of those 
ﬁnancial instruments at the date of grant. If the equity 
instruments granted vested immediately, the expense 
is recognised in full.
Functional currency translation
• Functional and presentation currency
Items included in the ﬁnancial statements of the 
company are measured using the currency of the 
primary economic environment in which the entity 
operates (functional currency), which is mainly 
pounds sterling (£) and it this currency the ﬁnancial 
statements are presented in.
• Transaction and balances
Foreign currency transactions are translated in to 
the functional currency using exchange rates 
prevailing at the dates of the transactions. Foreign 
exchange gains and losses resulting from the 
settlement of such transactions and from the 
translation at the year end exchange rates of 
monetary assets and liabilities denominated in 
foreign currencies are recognised in the income 
statement.
Employee beneﬁt costs
The Group operates a deﬁned contribution pension 
scheme. Contributions payable by the Group’s pension 
scheme are charged to the income statement in the 
period in which they relate.
Segment reporting
Operating segments are reported in a manner 
consistent with the internal reporting provide to the 
chief operating decision-maker. The chief operating 
decision maker who is responsible for allocating 
resources and assessing performance of the operating 
segments as identiﬁed by the board of directors. dotdigital group plc
Annual Report 2013/2014
50
Critical accounting estimates and judgements
The Group makes certain estimates and assumptions 
regarding the future. Estimates and judgements are 
continually evaluated based on historical experience 
and other factors, including expectations of future 
events that are believed to be reasonable under the 
circumstances. In the future, actual experience may 
differ from these estimates and assumptions. The 
estimates and assumptions that have a signiﬁcant risk 
of causing a material adjustment to the carrying 
amounts of assets and liabilities within the next 
ﬁnancial year are discussed below.
• Judgements
(a)  Capitalisation of development costs
Our business model is underpinned by our 
email and cross-channel marketing automation 
platform, dotMailer. Internal activities are continually 
undertaken to enhance and maintain the product 
in a bid to stay ahead of our competition. 
Management review the work of developers during 
the period and make the following judgements:
• Internal work relating to product development 
is reviewed against IAS 38 criteria and will be 
capitalised if management feel the criteria have 
been met.
• Internal work relating to the maintenance of 
existing products is expensed to the income 
statement and accounted for in payroll costs.
• Estimates and assumptions
(a)  Impairment testing of goodwill
The Directors have carried out a detailed impairment 
review in respect of goodwill. The Group assesses 
at each reporting date whether there is an indication 
that an asset may be impaired, by considering 
the net present value of discounted cash ﬂows 
forecasts which have been discounted using a pre-
tax discount rate of 10%. The cash ﬂow projections 
are based on the assumption that the Group can 
realise projected sales. A prudent approach has 
been applied with no residual value being factored. 
Further detail on the estimates and assumptions we 
make in our annual impairment testing of goodwill 
are included in Note 12 to the Financial Statements. 
At the period end, based on these assumptions 
there was no indication of impairment to carrying 
value of goodwill.
(b)  Share-based compensation
Key management believe that there will not be 
only one acceptable choice for estimating the fair 
value of share-based payment arrangements. The 
judgments and estimates that management apply in 
determination of the share-based compensation are 
summarise below: 
• Selection of a valuation model
• Making assumptions used in determining  
the variables used in a valuation model
i. expected life, 
ii. expected volatility, 
iii. expected dividend yield
iv. interest rate
Further detail on the estimates and assumptions  
we make in our share-based compensation are 
included in Note 27 to the Financial Statements. The 
charge made to income statement for the period is 
also disclosed here.
(c) Depreciation and amortisation
The Group depreciates short leasehold, ﬁxture 
and ﬁttings, computer equipment and amortises 
computer software, internally generated 
development costs and domain names on a 
straight-line method over the estimated useful lives. 
The estimated useful lives reﬂect the directors’ 
estimate of the periods that the Group intends to 
derive future economic beneﬁts from the use of 
the Group’s short leasehold, ﬁxture and ﬁttings, 
computer equipment, computer software, internally 
generated development costs and domain names.
(d) Bad debt provision
We perform ongoing credit evaluations of our 
customers and grant credit based upon past 
payment history, ﬁnancial condition, and anticipated 
industry conditions. Customer payments are 
regularly monitored and a provision for doubtful 
accounts is established based upon speciﬁc 
situations and overall industry conditions. Hence the 
provision is maintained for potential credit losses 
based upon management’s assessment of the 
expected collectability of all accounts receivable. In 
making this assessment, management takes into 
consideration (i) any circumstances of which we 
are aware regarding a customer’s inability to meet 
its ﬁnancial obligations; and (ii) our judgements 
as to potential prevailing economic conditions 
in the industry and their potential impact on the 
Company’s customers.
3. Segmental reporting
The Group’s single line of business is the provision  
of web based marketing services.
More than 90% of the Group’s revenue arises in  
the UK and all of the Group’s non-current assets  
are held there.
There are no customers who account for more than 
10% of revenue (2013: none)
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
51
Financial statements
4. Discontinued operations
Discontinued operations refers to the closure of the Service Division.
Analysis of continuing and discontinued operations is as follows:
Year ended 30 June 2014
Continuing 
operations 
30.6.14  
£’000
Discontinued 
operations 
30.6.14 
£’000
Revenue 16,213 199
Cost of sales (1,533) (122)
Gross proﬁt 14,680 77
Administrative expenses (11,059) (118)
Operating proﬁt/(loss) before exceptional items 3,621 (41)
Finance income 20 –
Income tax (181) –
Proﬁt/(loss) for the year attributable to owners of the parent 3,460 (41)
Year ended 30 June 2013
Continuing 
operations 
30.6.13  
£’000
Discontinued 
operations 
30.6.13 
£’000
Revenue 12,197 1,651
Cost of sales (887) (1,033)
Gross proﬁt 11,310 618
Administrative expenses (7,338) (1,315)
Operating proﬁt/(loss) before exceptional items 3,972 (697)
Exceptional item: Impairment to goodwill – (2,326)
Finance income including exceptional items 13 –
Income tax (220) –
Proﬁt/(loss) for the year attributable to owners of the parent 3,765 (3,023)
5. Employees and Directors
30.6.14  
£’000
30.6.13 
£’000
Wages and salaries 6,024 4,222
Social security costs 679 475
Other pension costs 147 97
6,850 4,794
The average monthly number of employees during the year are as follows:
30.6.14 30.6.13
Directors 77
Sales 80 60
Web designers, SEO and developers 41 46
Administration 44 41
172 154
Remuneration of key management personel is included in note 25. dotdigital group plc
Annual Report 2013/2014
52
6. Net ﬁnance income
30.6.14  
£’000
30.6.13 
£’000
Finance income:
Deposit account interest 20 13
20 13
7. Operating proﬁt before exceptional items
Costs by nature
Proﬁt from continuing operations has been arrived after charging/(crediting):
30.6.14  
£’000
30.6.13 
£’000
Direct marketing 1,033 474
Outsourcing 471 376
Other costs 29 37
Total cost of sales 1,533 887
30.6.14  
£’000
30.6.13 
£’000
Staff related costs (inc Directors emoluments) 6,850 4,794
Operating leases: Land and buildings 586 353
Operating lease: Other 68 63
Audit remuneration 36 38
Amortisation of intangibles 866 655
Depreciation charge 251 219
Legal, professional and consultancy fees 480 323
Computer expenditure 584 282
Bad debts 302 138
Foreign exchange losses/(gains) 67 (3)
Travelling 250 187
Ofﬁce running 160 153
Other costs 559 136
Total administration costs 11,059 7,338
During the year the Group obtained the following services from the Group’s auditor at costs detailed below:
30.6.14  
£’000
30.6.13 
£’000
Fees payable to the Company’s auditor for the audit of Parent 
Company and consolidated ﬁnancial statements
77
Fees payable to the Company’s auditor for other services: 26 26
– The audit of Company subsidiaries
– Non audit fees: All other services 3 5
36 38
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
53
Financial statements
8. Income tax expense
Analysis of the tax charge from continuing operations:
30.6.14  
£’000
30.6.13 
£’000
Current tax on proﬁts for the year 166 231
Deferred tax on origination and reversal of timing differences 44 (11)
210 220
Over provision in previous year (29) –
181 220
Tax charge from continuing operations 181 220
Tax charge from discontinued operations – –
181 220
30.6.14  
£’000
30.6.13 
£’000
Current tax on proﬁts for the year 3,600 962
Proﬁt on ordinary activities before tax
Proﬁt on ordinary activities multiplied by the standard rate of 
corporation tax in the UK of 22.50% (2013: 23.75%)
810 228
Effects of:
Expenses not deductible 281 52
Research and development enhanced claim (661) (716)
Effect of proﬁts within marginal rate – (18)
Expenditure permitted on exercising options (247) (45)
Deferred tax movement 44 –
Overseas tax losses 25 –
Exceptional item: impairment of goodwill – 552
Capital allowances in excess of depreciation (42) 167
Total income tax 210 220
Deferred tax was calculated using the rate 20.75% (2013: 25.5%). There is unused tax carried forward losses of 
£125,000 (2013: £117,000), no deferred tax asset has been recognised in respect of these.
9. Proﬁt/(loss) of parent company
As permitted by Section 408 of the Companies Act 2006, the proﬁt and loss account of the Parent Company 
is not presented as part of these ﬁnancial statements. The Parent Company’s loss for the ﬁnancial year was 
£363,022 (2013: £2,808,521 – proﬁt). 
10. Dividends
Amounts recognised as distributions to equity holders in the period
30.6.14 
 £’000
30.6.13 
£’000
Final dividend for year end 30 June 2013 of 0.1p per share 279 –
Proposed dividend for the year end 30 June 2014 of 0.2p  
(2013: 0.1p) per share
566 279
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. dotdigital group plc
Annual Report 2013/2014
54
11. Earnings per share
Earnings per share data is based on the consolidated proﬁt using and the weighted average number of shares 
in issue of the parent company. Basic earnings per share are calculated by dividing the earnings attributable to 
ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the 
conversion of all dilutive potential ordinary shares.
Reconciliations are as follows
30.06.14
From continuing and discontinued operations
Earnings  
£’000
Weighted 
average  
number of 
shares
Per share 
amount  
pence
Basic EPS
Proﬁt for the year attributable to the owners of the parent 3,419 279,107,898 1.22
Options and Warrants – 11,272,536 –
Diluted EPS
Proﬁt for the year attributable to the owners of the parent 3,419 290,380,434 1.18
30.06.14
From continuing operations
Earnings  
£’000
Weighted 
average  
number of 
shares
Per share 
amount  
pence
Basic EPS
Proﬁt for the year attributable to the owners of the parent 3,460 279,107,898 1.24
Options and Warrants – 11,272,536 –
Diluted EPS
Proﬁt for the year attributable to the owners of the parent 3,460 290,380,434 1.19
From continuing operations
30.6.14  
£’000
30.6.13 
£’000
Proﬁt for the year attributable to the owners of the parent 3,419 742
Adjustments to exclude loss from discontinued operations 41 3,023
Proﬁt for the year from continuing operations for  
the purpose of basic earnings per share excluding 
discontinued operations
3,460 3,765
From discontinued operations
30.6.14  
Per share (p)
30.6.13 
Per share (p)
Basic EPS (0.01) (1.10)
Diluted EPS (0.01) (1.10)
 
There was no difference in the weighted average number of shares used for the calculation of basic and diluted 
earnings per share as the effect of all notiently dilutive share outstanding was anti-dilutive.
Weighted average number of shares Shares Shares
Basic EPS 279,107,898 275,839,565
Diluted EPS 290,380,434 285,687,852
The denominators and numerators used are the same to those detailed above for both basic and diluted 
earnings per share from continuing and discontinued operations.
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
55
Financial statements
30.06.13
From continuing and discontinued operations
Earnings  
£’000
Weighted 
average  
number of 
shares
Per share 
amount  
pence
Basic EPS
Proﬁt for the year attributable to the owners of the parent 742 275,839,565 0.27
Diluted EPS
Proﬁt for the year attributable to the owners of the parent 742 285,687,852 0.26
30.06.13
From continuing operations
Earnings  
£’000
Weighted 
average  
number of 
shares
Per share 
amount  
pence
Basic EPS
Proﬁt for the year attributable to the owners of parent 3,765 275,839,565 1.36
Diluted EPS
Proﬁt for the year attributable to the owners of parent 3,765 285,687,852 1.32
Adjusted EPS
Effect of exceptional items:
– Impairment of goodwill 2,326 – –
Adjusted earnings 3,068 275,839,565 1.11
Effect of dilutive shares
Options and Warrants – 9,848,287 –
Adjusted diluted EPS
Adjusted proﬁt for the year 3,068 285,687,852 1.07
Adjusted earnings per share represents the performance of the company had the exceptional item listed above 
not occurred in the year and is only presented for guidance purposes.
12. Goodwill
Group
30.6.14  
£’000
30.6.13 
£’000
Cost
At 1 July
And 30 July 4,121 4,121
Amortisation
At 1 July 3,512 1,186
Impairment – 2,326
At 30 June 3,512 3,512
Net book value 609 609
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 cash generating units (CGUs) that are expected to beneﬁt from that 
business combination. 
The carrying amount of goodwill relates wholly to the group’s single trading activity and business segment. This 
has been tested for impairment during the current ﬁnancial year by comparison with the recoverable amount of 
the CGU.  dotdigital group plc
Annual Report 2013/2014
56
12. Goodwill continued 
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 CGUs have been determined from value in use calculations. These calculations use 
pre-tax cash ﬂow projection based on ﬁnancial budgets approved by management covering a ﬁve year period. 
The key assumptions for the value in use calculations are those regarding discount rates, growth rates and 
expected changes in margins. Management estimate 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. Changes in income and 
expenditure are based on past experience and expectations of the future changes in the market. The pre-tax 
discount rate used to calculate the value in use are 10% (2013 – 10%). The valuations indicate  
sufﬁcient headroom such that a reasonably possible change in key assumptions would not result in an 
impairment in goodwill.
13. Intangible assets
Group
Computer 
softwares 
£’000
Internally 
generated 
development 
costs 
£’000
Domain  
names  
£’000
Totals 
£’000
Cost
At 1 July 2013 211 3,668 16 3,895
Additions 63 1,345 – 1,408
At 30 June 2014 274 5,013 16 5,303
Amortisation
At 1 July 2013 155 1,278 13 1,446
Amortisation for the year 40 824 2 866
At 30 June 2014 195 2,102 15 2,312
Net book value
At 30 June 2014 79 2,911 1 2,991
Computer 
softwares 
£’000
Internally 
generated 
development 
costs 
£’000
Domain  
names  
£’000
Totals 
£’000
Cost
At 1 July 2012 199 2,328 16 2,543
Additions 12 1,340 – 1,352
At 30 June 2013 211 3,668 16 3,895
Amortisation
At 1 July 2012 112 668 11 791
Amortisation for the year 43 610 2 655
At 30 June 2013 155 1,278 13 1,446
Net book value
At 30 June 2013 56 2,390 3 2,449
Development cost additions represents resources the Group have 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.
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
57
Financial statements
14. Property, plant and equipment
Group
Short 
Leasehold 
£’000
Fixtures  
and ﬁttings 
£’000
Computer 
equipment  
£’000
Totals 
£’000
Cost
At 1 July 2013 107 155 620 882
Additions 181 154 272 607
Disposals – (1) (4) (5)
At 30 June 2014 288 308 888 1,484
Depreciation
At 1 July 2013 25 64 321 410
Depreciation for the year 22 49 180 251
Eliminated on disposal – (1) (3) (4)
At 30 June 2014 47 112 498 657
Net book value
At 30 June 2014 241 196 390 827
At 1 July 2013 82 91 299 472
Short 
Leasehold 
£’000
Plant and 
machinery 
£’000
Fixtures  
and ﬁttings 
£’000
Computer 
equipment  
£’000
Totals 
£’000
Cost
At 1 July 2012 12 3 192 716 923
Additions 95 – 85 112 292
Disposals – (3) (122) (208) (333)
At 30 June 2013 107 – 155 620 882
Depreciation
At 1 July 2012 11 2 144 361 518
Depreciation for the year 14 – 42 163 219
Eliminated on disposal – (2) (122) (203) (327)
At 30 June 2013 25 – 64 321 410
Net book value
At 30 June 2013 82 – 91 299 472
15. Investments
Company
Shares in 
Group 
undertakings 
30.6.14 
£’000
Shares in 
Group 
undertakings 
30.6.13 
£’000
Cost
At 1 July 8,705 8,704
Inter group transfer –1
And 30 July 8,705 8,705
Amortisation
At 1 July 3,519 1,193
Impairment – 2,326
At 30 June 3,519 3,519
Net book value
At 30 June 5,186 5,186 dotdigital group plc
Annual Report 2013/2014
58
15. Investments
Company
In the previous reporting period the Board took the decision in the year to wind down the operations of 
dotAgency Limited resulting in the full impairment of the remaining investment arising from the acquisition  
of Netcallidus Limited now known as dotAgency Limited.
The Group or the company’s investments at the balance sheet date in the share capital of companies include the 
following:
Subsidiaries
dotmailer Limited 
Class of shares:
Proportion of voting  
power held %
Ordinary 100.00
Ordinary A 100.00
dotsurvey (previously known as dotagency) Limited 
Class of shares:
Proportion of voting  
power held %
Ordinary 100.00
dotsearch Europe Limited
Class of shares:
Proportion of voting  
power held %
Ordinary 100.00
dotcommerce Limited 
Class of shares:
Proportion of voting  
power held %
Ordinary 100.00
doteditor Limited 
Class of shares:
Proportion of voting  
power held %
Ordinary 100.00
dotSEO Limited 
Class of shares:
Proportion of voting  
power held %
Ordinary 100.00
dotagency Limited   
Class of shares:
Proportion of voting  
power held %
Ordinary, B, C & D 100.00
dotmailer Inc  
Incorporated: US  
Class of shares:
Proportion of voting  
power held %
Ordinary 100.00
All the above subsidiaries have been included within the consolidated accounts.
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
59
Financial statements
16. Trade and other receivables
Group Company
30.6.14 
£’000
30.6.13 
£’000
30.6.14 
 £’000
30.6.13 
£’000
Current:
Trade receivables 3,119 2,572 – –
Less: Provision for impairment of trade receivables (336) (249) – –
Trade receivables – net 2,783 2,323 – –
Other receivables 35 56 – –
Amounts owed by Group undertakings – – 3,821 5,400
VAT – – 12 9
Prepayments and accrued income 844 514 12 14
3,662 2,893 3,845 5,423
Further details on the above can be found in Note 22.
17. Cash and cash equivalents
Group Company
30.6.14 
£’000
30.6.13 
£’000
30.6.14 
 £’000
30.6.13 
£’000
Bank accounts 9,306 6,072 109 70
9,306 6,072 109 70
Further details on the above can be found in Note 22.
18. Called up share capital
Allotted, issued, fully paid number
Nominal  
value
30.6.14 
 £’000
30.6.13 
£’000
282,782,065 (2013: 277,472,065) £0.005 1,414 1,387
1,414 1,387
During the reporting period the company undertook the following transactions involving the issuing and 
reclassifying issued share capital:
On 28 November 2013 a number of employees exercised their share options increasing the issued share capital 
by 840,000 shares. 
On 18 December 2013 a number of employees exercised their share options increasing the issued share capital 
by 860,000 shares.
On 1 April 2014 a number of employees exercised their share options increasing the issued share capital by 
2,190,000 shares
On 2 June 2014 a number of employees exercised their share options increasing the issued share capital by 
1,420,000 shares dotdigital group plc
Annual Report 2013/2014
60
19. Reserves
Group
Retained 
earnings 
£’000
Share 
premium 
£’000
Reverse 
acquisition 
reserve 
£’000
As at 1 July 2013 9,071 4,863 (4,695)
Issue of share capital – 284 –
Dividends (279) – –
Proﬁt for the year 3,419 – –
Balance as at 30 June 2014 12,211 5,147 (4,695)
Retranslation 
reserve 
£’000
Other 
reserves 
£’000
Totals 
£’000
As at 1 July 2013 (2) 13 9,250
Issue of share capital – – 284
Dividends – – (279)
Proﬁt for the year – – 3,419
Other comprehensive income: Currency translation (4) – (4)
Share based payment – 69 69
Balance as at 30 June 2014 (6) 82 12,739
Retained 
earnings 
£’000
Share 
premium 
£’000
Reverse 
acquisition 
reserve 
£’000
As at 1 July 2012 8,202 4,755 (4,695)
Issue of share capital – 108 –
Reclassiﬁcation of reserves 127 – –
Proﬁt for the year 742 – –
Balance as at 30 June 2013 9,071 4,863 (4,695)
Retranslation 
reserve 
£’000
Other 
reserves 
£’000
Totals 
£’000
As at 1 July 2012 – 127 8,389
Issue of share capital – – 108
Reclassiﬁcation of reserves – (127) –
Proﬁt for the year – – 742
Currency translation (2) – (2)
Share based payment – 13 13
Balance as at 30 June 2013 (2) 13 9,250
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
61
Financial statements
Company
Retained 
earnings 
£’000
Share  
premium 
£’000
Share based 
payments 
£’000
Totals 
£’000
As at 1 July 2013 3,065 4,863 13 7,941
Issue of share capital – 284 – 284
Reclassiﬁcation of reserves (279) – – (279)
Loss for the year (363) – – (363)
Share based payment – – 69 69
At 30 June 2014 2,423 5,147 82 7,652
Retained 
earnings 
£’000
Share  
premium 
£’000
Share based 
payments 
£’000
Totals 
£’000
As at 1 July 2012 129 4,755 127 5,011
Issue of share capital – 108 – 108
Reclassiﬁcation of reserves 127 – (127) –
Loss for the year 2,809 – – 2,809
Share based payment – – 13 13
At 30 June 2013 3,065 4,863 13 7,941
20. Trade and other payables
Group Company
30.6.14 
£’000
30.6.13 
£’000
30.6.14 
 £’000
30.6.13 
£’000
Current
Trade payables 819 367 2 22
Amounts owed to group undertakings – – – 1,298
Social security and other taxes 549 369 – –
Other payables 391 171 12 –
VAT 559 504 – –
Accruals and deferred income 666 270 60 31
2,984 1,681 74 1,351
Further details on liquidity and interest rate risk can be found in Note 22. dotdigital group plc
Annual Report 2013/2014
62
21. Leasing agreements
Minimum lease payments under non cancellable operating leases fall due as follows:
30.06.14
Land and  
Buildings 
£’000
Others 
£’000
Totals 
£’000
Within one year 311 34 345
Between two to ﬁve years 2,147 19 2,166
2,458 53 2,511
30.06.13
Land and  
Buildings 
£’000
Others 
£’000
Totals 
£’000
Within one year 312 21 333
Between two to ﬁve years 806 12 818
1,118 33 1,151
Operating leases represent rental payable by the Group for its ofﬁce properties. Leases are negotiated for an 
average term of ﬁve years and rentals are ﬁxed on average of two years with an option to extend for a further ﬁve 
years at the prevailing market rate at the time. 
22. Financial instruments and risk management
The Group’s activities expose it to a number of ﬁnancial risks that include credit risk, liquidity risk, currency risk 
and interest rate risk. These risks, and the Group’s policies for managing them have been applied consistently 
throughout the year and are set out below.
The Group hold no ﬁnancial or non other ﬁnancial instruments other than those utilised in the working operations 
of the Group and that 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 risk arises, are as follows:
• Trade receivables
• Cash and cash equivalents
• Trade and other payables
Financial instruments by category
The following table sets out the ﬁnancial instruments as at the reporting date:
Group Company
30.6.14 
£’000
30.6.13 
£’00
30.6.14 
 £’000
30.6.13 
£’00
Financial assets
Trade and other receivables 3,662 2,893 24 23
Bank balances 9,306 6,072 109 70
12,968 8,965 133 93
Financial liabilities
Trade payables 819 367 2 22
Accrued liabilities and other payables 2,165 1,314 72 31
2,984 1,681 74 53
The fair value of the Financial assets and Financial liabilities 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 cost.
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
63
Financial statements
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and 
policies 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 monthly 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 Group’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 not external borrowings and 
therefore 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 £1,876,000 (2013: £808,000) 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 2014 there were no signiﬁcant debts pass their due period which had not been provided 
for. The maturity of the Group’s trade receivables is as follows:
30.6.14  
£’000
30.6.13 
£’000
0-30 days 1,817 1,808
30-60 days 702 65
More than 60 days 600 699
3,119 2,572
The maturity of the Group’s provision for impairment is as follows:
30.6.14  
£’000
30.6.13 
£’000
0-30 days –3
30-60 days 82 23
More than 60 days 253 223
336 249
The movement in the provision for the impairment is as follows:
30.6.14  
£’000
30.6.13 
£’000
As at 1 July 2013 249 211
Provision for impairment 300 148
Receivable written off in the year (163) (110)
Unused amount reversed (50) –
As at 30 June 2014 336 249 dotdigital group plc
Annual Report 2013/2014
64
22. Financial instruments and risk management
The Group minimises its credit risk by proﬁling all new customers and monitoring existing client of the Group for 
changes in their initial proﬁle. The level of trade receivables older then the average collection period consisted of 
a value of £678,260 of which £336,242 was provided for. The Group felt that the remainder would be collected 
post year end as they were with long standing relationships, 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 ratings. The majority of the company’s cash holdings are held at NatWest Bank who has  
an A 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 (2013: £nil) and amounts payable over one  
year are nil. The Group had a strong cash reserve to utilise for any short-term capital requirements that were 
needed by the Group.
The Group has continued to look for a 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.
23. Deferred tax
30.6.14  
£’000
30.6.13 
£’000
As at 1 July 14 25
Current year provision 44 –
Release of provision – (11)
58 14
The above is comprised of temporary differences in respect of capital allowances in excess of depreciation 
amounting to £58,000, temporary differences in respect of development costs amounting to £600,000 and a 
deferred tax asset of £600,000 in respect of share options.
24. Capital commitments
The Company and Group had capital committed of £191,000 at the year end towards the ﬁt out of the new  
London Bridge ofﬁce.
25. 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.
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
65
Financial statements
Group
The following transactions were carried out with related parties.
Sale of services
30.6.14  
£’000
30.6.13 
£’000
Cadence  
performance 
Entity under common 
directorship
Email marketing  
services
21
21
Sales of services are based on the price lists in force and at terms that would be available to third parties.
Purchase of services
30.6.14  
£’000
30.6.13 
£’000
F-Beechinor-Collins* Entity under common 
directorship
Consultancy  
services
–6
Barratts of Old Ltd Entity under common 
directorship
Consultancy  
services
41 12
41 18
* Consultancy services to assist with the international expansion and development of channel sales strategy.
Key management compensation
Key management include Directors and the Company Secretary. The compensation paid for key management  
for employee services are shown below.
30.6.14  
£’000
30.6.13 
£’000
Remuneration and other short-term employee beneﬁts 966 893
Share-based payment 15 –
Pension cost 42 38
1,023 931
Directors
30.6.14  
£’000
30.6.13 
£’000
Aggregate emoluments 877 601
Company contributions to money purchase pension scheme 42 35
Share based payment 5 –
924 636
Information in relation to the highest paid Director is as follows:
30.6.14  
£’000
30.6.13 
£’000
Salaries 230 170
Other beneﬁts 77
Pension costs 14 11
251 188
The highest paid director did not exercise any share options.
Company 
The following transactions were carried out with related parties.
Year end balances arising from sales/purchase of services
30.6.14  
£’000
30.6.13 
£’000
dotmailer Limited Subsidiary Payables (1,864) (1,303)
dotagency Limited Subsidiary Receivables 9 9
(1,855) (1,294)
The receivables and payables are unrestricted in nature and bear no interest.  
No provisions are held against receivables from related parties. dotdigital group plc
Annual Report 2013/2014
66
Loans to related parties
30.6.14  
£’000
30.6.13 
£’000
dotmailer Limited Subsidiary
As at 1 July 5,400 –
Loans advanced 324 5,400
Loans repaid (43) –
5,681 5,400
Key management compensation
Key management are Non-Executive Directors. The compensation paid for key management for employee 
services are shown below.
30.6.14  
£’000
30.6.13 
£’000
Remuneration and other short-term employee beneﬁts 95 88
95 88
Directors
30.6.14  
£’000
30.6.13 
£’000
Aggregate emoluments 95 88
95 88
26. Ultimate controlling party
There is no ultimate controlling party of the Group. dotdigital group plc acts as the Parent Company to dotmailer 
Limited, dotagency Limited, dotsearch Europe Limited, dotmailer Inc, dotsurvey Limited (Dormant), dotseo 
Limited (Dormant), dotcommerce Limited (Dormant) and doteditor Limited (Dormant). 
27. 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 £69,469 
(2013: £13,190)
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 illustrates the number and weighted average exercise price (WAEP) of, and movements in share 
options during the period. The options outstanding at 30 June 2014 had a WAEP of 8.63p (2013: 6.34p),  
a weighted average contracted life of 2.8 years and their exercise prices ranged from  
1p to 18.25p. All share options are settled in form of equity issued.
30.06.14 
No of options WAEP
30.6.13 
No of options WAEP
Financial assets
Outstanding at the beginning of the period 16,117,930 7.54p 17,909,930 7.25p
Granted during the year 3,655,860 18.25p 1,500,000 13.00p
Forfeited/cancelled during the period 540,000 12.57p 1,182,222 8.36p
Exchanged for shares 5,310,000 5.86p 2,109,778 5.61p
Outstanding at the end of the period 13,923,790 8.82p 16,117,930 7.54p
Exercisable at the end of the period 9,517,930 4.09p 14,867,930 5.94p
The weighted average share price at the date of the exercise for share options exercised during the period was 
30.58p (2013: 14.56p)
Notes to the consolidated ﬁnancial statements continued 
For the year ended 30 June 2014 dotdigital group plc
Annual Report 2013/2014
67
Financial statements
The inputs into the Black-Scholes model are as follows:
18 October 
2013
9 November 
2012
Number of options granted 3,554,794 1,500,000
Share price at grant date 17.82p 12.95p
Exercise price 18.25p 13.00p
Option life in years 5 years 6 years
Risk free rate 1.40% 2.05%
Expected volatility 30% 30%
Expected dividend yield 0.4% 0%
Fair value of option/warrant 3.81p 2.72p
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.
28. Group reconciliation of proﬁt before corporation tax to cash generated from operations 
Group Company
30.6.14 
£’000
30.6.13 
£’00
30.6.14 
 £’000
30.6.13 
£’00
Current
Proﬁt before tax from all operations 3,600 962 (363) 2,809
Currency revaluation (4) (2) – –
Exceptional item: Impairment of goodwill – 2,326 – 2,326
Depreciation 1,117 831 – –
Loss on disposal of ﬁxed assets 1 50 – –
Share based payments 69 13 69 13
Finance income (20) (13) – –
4,763 4,167 (294) 5,148
Decrease/(increase) in trade receivables (769) (696) 1,578 (5,410)
Increase/(decrease) in trade payables 1,303 346 (1,277) (11)
Cash generated from operations 5,297 3,817 7 (273)
29. Group cash and cash equivalents
The amounts disclosed on the statement of cash ﬂow in respect of cash and cash equivalents are in respect of 
these statements of ﬁnancial position amounts: 
Group 
£’000
Company 
£’000
As at 1 July 2012 4,021 83
As at 31 July 2013 6,072 70
As at 30 June 2014 9,306 109
Net cash ﬂows from discontinued operations
30.06.14 
£’000
30.06.13 
£’000
Net cash generated from operating activities (95) (148)
Net cash generated from investing activities –1
Net cash used in ﬁnancing activities ––
30. Project development
During the period the Group incurred £1,344,414 (2013: £1,339,730) in development investments. All  
resources utilised in development has been capitalised as outline in the accounting policy governing this area.
31. Post balance sheet events
There are no post balance sheet events which impact the Group’s ﬁnancial statements. dotdigital group plc
Annual Report 2013/2014
68
Company information 
For the year ended 30 June 2014
Directors 
S Bird  
P A Simmonds 
I Taylor
R Kellett-Clarke 
F Beechinor-Collins
S J Barratt
M Patel
Secretary
M Patel 
Registered ofﬁce 
Finsgate
5-7 Cranwood Street
London
EC1V 9EE
Registered number
06289659 (England and Wales)
Auditors: 
Jeffreys Henry LLP
Statutory auditor
Finsgate 5-7 Cranwood Street
London
EC1V 9EE
Nomad/Broker 
N+1 Singer
1 Bartholomew Lane
London
EC2N 2AX 
Joint Broker 
Finncap
60 New Broad Street
London
EC2m 1JJ
Solicitors 
BPE Solicitors LLP
St James House
St James Square
Cheltenham
Gl50 3PR  Annual Report 2013/2014