RNS Number:2244K
Deal Group Media PLC
29 March 2005


Press Release                                                      29 March 2005


                              Deal Group Media plc

                      ("Deal Group Media" or "the Group")

                                 Final Results

Deal Group Media plc, the online marketing group whose activities include
performance-based advertising and search engine marketing, today announces its
Final Results for the year ended 31 December 2004.

Highlights
     
*    Turnover increased to #14,802,000 (9 months in 2003: #2,965,000)
*    EBITDA increased to #1,652,000 (9 months in 2003: Loss #926,000)
*    Pre-tax profit up to #219,000 (9 months in 2003: Loss #1,832,000)
*    Diluted earnings per share up to 0.50p (9 months in 2003: Diluted loss per 
     share of 1.15p)
*    #300,000 invested in reporting systems and technology in last quarter of 
     2004 in anticipation of future growth

Commenting on the results, Adrian Moss, Chief Executive, said: "The Group
underwent a complete transformation from 2003 to 2004, from being loss making to
a profitable Group with three distinct products sold through the UK trading name
'dgm'.  Our expansion has been fuelled by significant growth in the online
marketing sector, that in turn has been driven by broadband penetration and an
increased consumers' propensity to spend online.  The outlook for the Group
continues to be extremely positive."


For further information, please contact:

Deal Group Media plc
Adrian Moss / Andrew Dickson                               + 44 (0) 20 7691 1880
adrian.moss@dgm-uk.com                                 www.dealgroupmediaplc.com
andrew.dickson@dgm-uk.com

Durlacher Limited
Richard Swindells / Katherine Roe                          + 44 (0) 20 7459 3600
richard.swindells@durlacher.com                                www.durlacher.com
katherine.roe@durlacher.com

Media enquiries:
Abchurch Communications
Ariane Comstive / Julian Bosdet                        Tel: +44 (0) 20 7398 7700
ariane.comstive@abchurch-group.com                        www.abchurch-group.com

Chairman's statement for the year ended 31 December 2004

Deal Group Media plc has seen a complete transformation in the performance of
the business since the reverse takeover of The Deal Group in October 2003.

The Group has moved from being loss making to a profitable Group with three
distinct products sold through the UK trading name 'dgm'.

During 2004, the Group achieved an above market growth rate with turnover
increasing to #14,802,000 (9 months in 2003: #2,965,000) that produced pre-tax
profit of #219,000 (9 months in 2003: Loss #1,832,000).

On an EBITDA basis, the Group generated #1,652,000 in 2004 (9 months in 2003:
Loss #926,000). The Group generated operating cash flow of #1,450,000 which led
to an overall increase in cash during the year of #1,376,000.

Performance in the final quarter of 2004 when compared to that of 2003 on a like
for like basis shows that turnover has increased 170% and the Group has moved
from an operating loss of #662,000 to an operating profit of #965,000 for that
period.

Key Business Drivers

The growth of the Group has been driven by a number of factors, both external
and internal:

There has been an increase in online advertising spend, which in the UK has been
influenced by a combination of consumers' propensity to purchase goods online
and broadband penetration.

An internal focus on selling our range of products to our existing client base
alongside a drive to acquire new clients. Our client base reflects closely what
consumers are purchasing online, in particular, retail, travel, gaming, telecoms
and financial products.

Strategy

The Board's aim is to continue to grow dgm above the industry average and we
believe that we will be able to do this through a combination of approaches:-

  * Continuing to optimise the existing clients' return on online spending.
    Last year 67% of the Group's gross profit growth can be attributed to this
    approach.

  * Winning new clients is a key part of the Group's continuing success.  To
    ensure a regular pipeline of additional business, dgm tripled the size of
    its sales team in 2004 and is targeting blue-chip companies that are capable
    of delivering at a material gross profit level.  This strategy is already
    proving to be a success.

  * In addition, the Group is looking to diversify its portfolio of services
    through complementary acquisitions.

Management will continue to focus on the UK operations, although advantage will
be taken of any acquisition opportunities in Europe.  Any target company needs
to have an immediate positive impact on the Group's earnings and a committed,
experienced management team.

Board Changes

In January 2005 I was appointed to the Board as Non-Executive Chairman.   My
appointment was announced at the same time as Andrew Dickson, who was appointed
as Finance Director. I believe the appointment of a Finance Director is a sign
of an evolving business and facilitates growth within an environment of strong
financial governance. Additionally, it frees up the Chief Executive to focus on
the strategic evolution of the Group in a rapidly changing sector.

David Lees stepped down as Non-Executive Chairman but remains on the board as a
Non-Executive Director, and I am pleased to have retained his knowledge of the
business on the Board.

Review of operations

The Group has undergone a massive transformation at an operational level to
reflect the increase in the size of the business and to provide a structure for
the anticipated growth.  Aside from the integration of The Deal Group into IBNet
plc, the UK operations have been restructured, the product channels have been
rebranded and the technical infrastructure has been upgraded.

Products

The rebranding of the UK operations as 'dgm' has coincided with the rebrand of
the three distinct product channels: dgmPerformance, dgmAdNetwork, dgmSearchLab:
-

dgmPerformance delivers sales, leads and email capture or other commercially
valuable actions through a network of several thousand small online media owners
and entrepreneurs. dgm receives a revenue share from the advertisers for every
action that is taken.

Advertisers pay once a predetermined action has been completed by a consumer,
such as the ordering of a brochure or the sale of a product.  The fee paid for
this cost-per-acquisition model is influenced by market forces and by how much
an advertiser is willing to pay to generate a result.

dgmAdNetwork offers low cost advertising on a variety of large portals and
content websites.  dgm acquires inventory at a low cost from various media
owners which is bundled and sold to advertisers at a discounted rate. The
advantage to advertisers is that the space is acquired at relatively inexpensive
rates on high traffic websites that enhance the prospect of a return on spend.

dgmSearchLab operates in two distinct areas of search engine marketing.  The
first is the fine tuning of clients' websites to allow superior listings on
search engines. Revenues are based on  fixed fees and on improved listings on
search engines.

The second area involves the management of clients 'pay for performance' search
engine campaigns.  dgm bids on behalf of advertisers for listings on specific '
keyword' search terms.  The advertiser is listed as a 'Sponsored Link'.  dgm
derives its revenue from fees for the management of campaigns and commission
from the search engines on the media spend.

Technology

In the last quarter of 2004, the Group invested approximately #300,000 into dgm
in anticipation of future growth.  Much of this was spent on enhancing dgm's
online reporting systems that allows the user to track the success of their
campaigns and to improve the robustness of our systems.

Such improvements are necessary to maintain a competitive advantage and provide
a service that befits dgm's evolving blue-chip client base.   The changes have
allowed dgm to compete successfully for larger customers who have stringent
procurement processes in place and require an extensive level of real time
reporting and high availability of service.

People

As a young company we have an enthusiastic and talented team delivering for our
clients. They are supported through training programmes to develop them to meet
the future challenges and their goals are aligned through share options and
bonus schemes.

The management of the Group has been strengthened by the appointment of Mark
Hopwood as Chief Technical Officer, who has extensive experience in interactive
marketing and best practice IT management having spent time with PwC Technical
Consulting and WPP Group companies, and Jonathan Lines as Chief Marketing
Officer, who was formerly sales and marketing Director at fish4 and the BBC's
commercial web operation.

With these two key appointments, and our approach to developing our team, I feel
that the Group is well placed to achieve its objectives.

Market

The online advertising market has been extremely buoyant in the last 12 months,
currently accounting for 3.4 per cent of total advertising spend (IAB H1 2004)
and forecasters remain optimistic of further growth.

The growth is being fuelled by online consumer spending and broadband
penetration.  Online consumer spending is forecast to more than double from #28
billion in 2004 to #72 billion in 2007 (IMRG & Forester Research), whilst
broadband penetration in the UK is expected to grow from 10.4 per cent. in 2004
to 42.3 per cent. in 2010 (The Future Foundation / Technology Futures / Volterra
2004).  This level of growth is also reflected in analyst estimates for UK
online advertising spend which predict that it will double by 2010 (PWC/
Interactive Advertising Bureau/Keynote 2005).

The perception that online goods are more attractively priced than goods on the
high street and the visibility between online advertising and consumer response
is likely to make the online advertising industry more robust to economic
pressures than other advertising channels.

Within this context and the highly positive market forecasts, the outlook for
the Group remains strong.

Lord Stone of Blackheath
Chairman

Consolidated profit and loss account for the year ended 31 December 2004


                                                                         Year to             9 months to
                                                                        31 Dec 04             31 Dec 03
                                                            NOTES      #'000      #'000      #'000      #'000

TURNOVER                                                        2
 - Continuing activities                                              14,802                 1,097
 - Acquisition                                                             -                 1,868
                                                                                 14,802                 2,965

COST OF SALES                                                                   (9,045)               (2,038)

GROSS PROFIT                                                                      5,757                   927

ADMINISTRATIVE EXPENSES
 - Amortisation of goodwill                                          (1,149)                 (485)
 - Depreciation of tangible fixed assets                               (283)                 (119)
 - Other administrative expenses                                     (4,105)               (1,853)
                                                                                (5,537)               (2,457)

OPERATING PROFIT/(LOSS)                                         2
 - Continuing activities                                                 220               (1,247)
 - Acquisition                                                             -                 (283)
                                                                                    220               (1,530)

Exceptional items                                                                     -                 (280)

Profit/(loss) after exceptional items                                               220               (1,810)

NET INTEREST                                                    3                   (1)                  (22)

PROFIT/(LOSS) ON ORDINARY ACTIVITIES                                                219               (1,832)

TAXATION                                                        4                 1,724                     -

TOTAL PROFIT/(LOSS) AFTER TAXATION
FOR THE PERIOD                                                                    1,943               (1,832)

BASIC EARNINGS/(LOSS) PER SHARE                                 5                 0.54p               (1.15p)

FULLY DILUTED EARNINGS/(LOSS) PER SHARE                         5                 0.50p               (1.15p)

There were no other recognised gains or losses other than the results for the
periods.

All operations are continuing.

The accompanying accounting policies and notes form part of these financial
statements.


Consolidated balance sheet as at 31 December 2004


                                                                       As at                  As at
                                                                     31 Dec 04              31 Dec 03
                                                         NOTES      #'000       #'000      #'000       #'000

FIXED ASSETS
Intangible fixed assets                                                         6,962                  8,111
Tangible fixed assets                                                             498                    622

                                                                                7,460                  8,733

CURRENT ASSETS
Debtors                                                      6      4,751                  2,698
Cash at bank and in hand                                            1,937                    561
                                                                    6,688                  3,259

CURRENT LIABILITIES
Creditors:
Amounts falling due within one year                          7    (4,039)                (4,541)

Net current assets/(liabilities)                                                2,649                (1,282)

Total assets less current liabilities                                          10,109                  7,451

Creditors:
Amounts falling due after more than one year                 7                  (121)                  (193)

                                                                                9,988                  7,258

CAPITAL AND RESERVES
Called up share capital                                             3,715                  3,504
Capital redemption reserve                                         13,188                 13,188
Share premium account                                              21,262                 20,686
                                                                               38,165                 37,378

Profit and loss account                                                      (28,177)               (30,120)

Shareholders' funds                                                             9,988                  7,258

The financial statements were approved by the board of directors and signed on
their behalf on 24 March 2005.

Andrew Dickson
Director


Consolidated cash flow statement for the year ended 31 December 2004


                                                                      Year to             9 months to
                                                                     31 Dec 04             31 Dec 03
                                                         NOTES      #'000      #'000      #'000       #'000

Net cash inflow/(outflow) from
operating activities                                         8                 1,450                  (817)

Returns on investments and servicing
of finance
Interest received                                                       6                     5
Interest paid                                                         (7)                  (25)
                                                                                 (1)                   (20)

Corporation tax paid                                                            (56)                      -

Capital expenditure and
financial investments
Purchase of tangible fixed assets                                   (240)                 (332)
Sale of current asset investment                                        -                    84
Sale of tangible fixed assets                                         199                     -
                                                                                (41)                  (248)

Acquisition
Cash acquired on acquisition                                            -                   169
Expenses paid in connection with
Acquisition                                                             -                 (342)
                                                                                   -                  (173)

Net cash inflow/(outflow) before financing                                     1,352                (1,258)

Financing
Issue of ordinary share capital                                       287                 1,750
Capital element of finance lease rentals                            (169)                   (7)
Repayment of loan notes                                              (94)                  (28)
                                                                                  24                  1,715

Increase in cash                                             9                 1,376                    457


Notes to the financial statements for the year 31 December 2004
     
1.   ACCOUNTING POLICIES

     Basis of preparation

     The financial statements have been prepared in accordance with applicable
     accounting standards and under the historical cost convention.

     The financial statements have been prepared for the year ended 31 December 
     2004. Comparative figures were prepared for the nine month period ended 
     31 December 2003.

     The principal accounting policies of the Group have remained unchanged from 
     the previous year. The directors have reviewed the accounting policies 
     adopted by the Group and consider them to be the most appropriate.

     The Group financial statements incorporate the financial statements of the
     Company and its subsidiaries. The companies make up their accounts to the 
     same date.
     
2    TURNOVER AND OPERATING PROFIT

     The turnover is attributable to the principal activities, which are mainly
     carried out in the United Kingdom and Europe.

     An analysis of turnover and operating profit by geographical market is 
     given below:


                                                                Turnover             Operating profit/(loss)
                                                            Year to    9 months to      Year to     9 months to
                                                          31 Dec 04      31 Dec 03    31 Dec 04       31 Dec 03
                                                              #'000          #'000        #'000           #'000

     United Kingdom                                          13,422          2,146          368         (1,145)
     Overseas                                                 1,380            819        (148)           (385)

                                                             14,802          2,965          220         (1,530)

     No segmental analysis of net assets has been provided, as the assets and
     liabilities attributable to overseas sales are not separately identified.

     Operating profit is stated after charging:


                                                                 Year to                   9 months to
                                                                31 Dec 04                   31 Dec 03
                                                               #'000         #'000         #'000         #'000

     Auditors' remuneration
      - Audit services                                            33                          31
      - Non audit services                                        18                          20

                                                                                51                          51

     Operating lease rentals
      - land and buildings                                       125                          70
      - equipment                                                 29                           -

                                                                               154                          70

     Depreciation and amortisation
      - Tangible fixed assets (owned)                            251                         110
      - Tangible fixed assets (held under
         hire purchase contracts)                                 32                           9
      - Goodwill amortisation                                  1,149                         485
     
                                                                             1,432                         604
     
3    NET INTEREST


                                                                            Year to                 9 months to
                                                                          31 Dec 04                   31 Dec 03
                                                                              #'000                       #'000

     Interest payable and other similar charges                                 (7)                        (27)
     Interest receivable and other similar income                                 6                           5

                                                                                (1)                        (22)
     
4    TAXATION
     
     There are tax losses of approximately #5,747,000 (31 December 2003: 
     #7,200,000) to carry forward and use against future profits of the same 
     trades. These losses represent a potential deferred tax asset of 
     approximately #1,724,000 (31 December 2003: #1,368,000) at a corporation 
     tax rate of 30% (31 December 2003: 19%). This deferred tax asset has been 
     recognised in the year resulting in a credit to the profit and loss account 
     of #1,724,000.

     There is no current tax charge for the year. An explanation of the tax 
     position compared to the Group's reported results is set out below:

                                                                            Year to                 9 months to
                                                                          31 Dec 04                   31 Dec 03
                                                                              #'000                       #'000

     Profit/(loss) on ordinary activities before                                219                     (1,832)
     taxation
     
     Profit/(loss) on ordinary activities before                                 66                       (348)
     taxation multiplied by corporation tax rate of 30%
     (2003: 19%)

     Effect of:

     Surplus of depreciation compared to
     capital allowances                                                        (30)                          32
     Amortisation of goodwill                                                   345                          74
     Other expenses not deductible                                               38                          13
     Loss carried forward to be offset against
     future taxable trading profits                                             189                         229
     Accumulated losses utilised in the year                                  (609)                           -
     Other differences                                                            1                           -

     Current tax charge for the period                                            -                           -
     
5    EARNINGS/(LOSS) PER SHARE

     The calculation for the basic earnings per share is based upon the profit/
     (loss) attributable to ordinary shareholders divided by the weighted 
     average number of shares on issue during the period.

     Reconciliation of the profit/(loss) and weighted average number of shares 
     used in the calculations are set out below:


                                                                             Year to                9 months to
                                                                           31 Dec 04                  31 Dec 03

     Profit/(loss) on ordinary activities after tax                            1,943                    (1,832)
     (#'000)

     Weighted average number of shares                                   358,342,580                159,517,300

     Amount of earnings/(loss) per share in pence                              0.54p                    (1.15p)

     On a fully diluted basis the weighted average number of shares is 
     389,699,303 and amount of earnings per share is 0.5p
     
6    DEBTORS

                                                                              Group
                                                                           As at        As at
                                                                       31 Dec 04    31 Dec 03
                                                                           #'000        #'000

     Trade debtors                                                         2,416        2,164
     Amounts owed by group undertakings                                        -            -
     Deferred taxation                                                     1,724            -
     Other debtors                                                            81           85
     Prepayments and accrued income                                          530          449
 
                                                                           4,751        2,698
7    CREDITORS

                                                                               Group     
                                                                            As at         As at
                                                                        31 Dec 04     31 Dec 03
                                                                            #'000         #'000
     Amounts falling due within one year
     Loan notes                                                                45           591
     Amounts owed to group undertakings                                         -             -
     Trade creditors                                                        2,293         1,032
     Corporation tax                                                           50           106
     Social security and other taxes                                          592           316
     Other creditors                                                          315         1,285
     Accruals and deferred income                                             730         1,197
     Amount due under hire purchase contracts                                  14            14
          
                                                                            4,039         4,541

     Amounts falling due after more than one year
     Loan notes                                                                77           125
     Amounts due under hire purchase contracts                                 44            68

                                                                              121           193
     All amounts fall due after one and within five years.

     The loan notes represent part of the consideration for the acquisition of
     Webgravity Limited. The loan notes are interest free and unsecured.

     Subsequent to the acquisition, a loan note repayment schedule was approved 
     by the Board to discharge this liability by monthly instalments by August 
     2007. During 2004 #500,000 of loan notes were converted into ordinary 
     shares.
     
8    NET CASH FLOW FROM OPERATING ACTIVITIES

                                                                           Year to               9 months to
                                                                         31 Dec 04                 31 Dec 03
                                                                             #'000                     #'000

     Operating profit/(loss)                                                   220                   (1,530)
     Exceptional items                                                           -                     (280)
     Depreciation                                                              283                       119
     Loss on sale of fixed assets                                               27                        20
     Loss on sale of investment                                                  -                        22
     Amortisation                                                            1,149                       485
     (Increase) in debtors                                                   (329)                   (1,864)
     Increase in creditors and provisions                                      100                     2,211

     Net cash flow from operating activities                                 1,450                     (817)
     
9    ANALYSIS OF CHANGES IN NET (DEBT)/FUNDS


                                                          As at                    Non cash         As at
                                                      31 Dec 03     Cash flow         items     31 Dec 04
                                                          #'000         #'000         #'000         #'000

     Cash at bank and in hand                               561         1,376             -         1,937
     Loan notes                                           (716)            94           500         (122)
     Finance leases                                        (82)           169         (145)          (58)

     Net (debt)/funds                                     (237)         1,639           355         1,757
     
10   Copies of this announcement will be available for collection from the 
     Company's head office at Unit 800 Highgate Studios, 53 - 79 Highgate Road,
     London NW5 1TL


                                    - Ends -


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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