DGM Deal Grp

RNS Number:6957R
Deal Group Media PLC
23 September 2005


Press Release                                   23 September 2005





                              Deal Group Media plc



                            ("dgm" or "the Company")



                               Trading statement





The Company expects that its profit before tax for the year to 31 December 2005
will show no increase on the same period last year and will therefore fall
significantly short of market expectations.



The primary reason for this is that there has been a fundamental change in the
terms of trade with a major long-standing client in response to external factors
within its own industry.  This particular client accounted for some 30% of high
margin gross profit.  The Company was informed of this change of terms at a
meeting yesterday afternoon, 22 September 2005.  The impact is exacerbated by
the seasonality of the client's business which is weighted towards Christmas
sales.



The key change in terms of trade relates to the methodology that the client uses
to recognise a sale introduced by dgm's affiliate network.  dgm continues to
trade with the client, albeit on a much reduced basis, and will be less reliant
on any single client for  revenues or profit going forward.



Two other issues contributed marginally to the shortfall indicated above.  A
supplier of advertising space has decided to market directly to advertisers and,
secondly, the conversion time of new leads to sales across the Company is
slightly behind expectations.



Adrian Moss, Chief Executive, said:  "It is very disappointing to lose revenue
and contribution to profit, but the cause is client specific rather than a flaw
in the overall business model, which remains robust and cash generative.
Excluding this specific revenue loss, sales continue to grow.



"The Company has augmented the management team recently with additional high
calibre executives and the business continues to be driven forward.  The
implementation of dgmPro, the Company's new proprietary tracking technology,
remains on target and is an extremely important step forward for the Company.



"We are confident of maintaining our position as the UK's leading online
marketing group in a marketplace that is seeing year-on-year growth."



                                    - Ends -





For further information, please contact:



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



Enquiries:
Deal Group Media plc
Adrian Moss, Chief Executive                     Tel: + 44 (0) 20 7691 1880
Andrew Dickson, Finance Director                  www.dealgroupmediaplc.com


Panmure Gordon & Co
Richard Swindells                                Tel: +44 (0) 20 7459 3600
richard.swindells@panmure.com                              www.panmure.com




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

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