Final Results
April 21 2004 - 3:01AM
UK Regulatory
RNS Number:8237X
Deal Group Media PLC
21 April 2004
21 April 2004
Deal Group Media plc
Preliminary Results for the nine months ended 31 December 2003
Deal Group Media plc, an online marketing group providing performance based
online marketing, search engine marketing and internet monitoring and
intelligence services, today announces its preliminary results for the nine
months ended 31 December 2003.
Business Summary
- Reverse takeover of The Deal Group Limited and change of name from IBNet plc
to Deal Group Media plc
- Two businesses now fully integrated under a single management structure
- Only two and a half months of the combined operations included in the nine
month period to 31 December 2003
- 2004 seeing strong order book growth
- Strengthening of institutional shareholder base with JO Hambro holding 8.12
per cent and the Eureka Fund 5.56 per cent of company shares
Adrian Moss, CEO, commenting on Group prospects said: "2004 is already proving a
very exciting year. We have the foundations and people to excel in our
marketplace, to grow in the UK and internationally and to continue delivering
for our shareholders. We will be active in seeking to secure growth
opportunities and look forward to keeping shareholders abreast of developments."
For further information, please contact:
Enquiries:
Deal Group Media plc
Adrian Moss / Adam Black + 44 (0) 20 7691 1880
adrian@dealgroupmedia.com www.dealgroupmediaplc.com
adam@dealgroupmedia.com
KBC Peel Hunt Ltd
Capel Irwin / Megan MacIntyre + 44 (0) 20 7418 8900
capel.irwin@kbcpeelhunt.com www.kbcpeelhunt.com
Media enquiries:
Bankside Consultants Limited
Ariane Vacher / Julian Bosdet Tel: +44 (0) 207 444 4143
ariane.vacher@bankside.com www.bankside.com
Chairman's statement
Acquisition of The Deal Group Limited
On 24 September 2003 we announced the acquisition of The Deal Group Limited by
IBNet plc. The acquisition was completed on 17 October 2003, including the name
change to Deal Group Media plc and a move to a calendar year end for the Group.
As expected the two businesses have now been fully integrated with one
management structure and a new marketing strategy designed to maximise the
combined potential.
Client growth and cross sell of the new, more comprehensive range of products
focused on delivering advertisers a return on their spend has rewarded the Group
with a successful first Quarter in 2004.
This success has been secured through the cohesion and dynamic approach of the
new, strengthened management team and a consolidated offering, effectively
presented to the market by motivated staff.
The Group has adopted a results-focused remuneration strategy including the
issuing of share options motivating staff and management to enhance shareholder
value.
Results
With only two and a half months of the combined operations included in the
period, the full benefits of the acquisition are not reflected in the period end
results, nor are they representative of the Group in its current form. Figures
for the two and a half months post-acquisition are encouraging and provide a
firm foundation for 2004.
Operational review
Following the acquisition, strategic relationships have been established with
leading global companies in the sectors in which we operate. We have also
adopted a strategy of assisting traditional media and marketing agencies to
provide effective online marketing to their larger clients. We will continue to
concentrate our resources on these key strategic areas.
The Group continues to build on its blue chip client profile. Group resource is
being further dedicated to the clients who offer the potential to yield higher
volume business.
The IBNet flagship internet monitoring and intelligence product, netdetec, has
also been further developed.
The Board
The Group is led by CEO, Adrian Moss. As part of the strengthening of the
Board, Nicky Iapino, former head of Commission Junction's UK and Ireland
operation, was appointed as Chief Operating Officer in September 2003.
Following the reverse takeover, Toby Smallpeice retired from the Board in
December 2003 and subsequent to the period end converted #500,000 of his
outstanding loan notes into shares in the Group, thereby further improving the
short and medium term cash flow.
Outlook
The Board continues to be confident about the performance of the Group. 2004 is
seeing strong order book growth. Consistent performance has been achieved over
Quarter One.
Particularly encouraging is the success in building on IBNet's former search
product, webgravity, now marketed under the dealgroupmedia brand as the Group's
search product. Further growth is anticipated in this area. The re-launch of
netdetec is expected to increase Group profitability in the second half of the
year and the Group's performance based network also continues to grow
successfully.
The Company has strengthened its shareholder base with the addition of several
large institutions. These include JO Hambro, now holding 8.12 per cent of the
Company's shares and the Eureka Fund, holding 5.56 per cent. Their continued
support should give the Group increased flexibility with regard to growth
options, particularly with a view to international expansion.
The market outlook for the online sector is positive. The target growth rate
set by the Interactive Advertising Bureau (IAB) of 2 per cent of overall
advertising spend by Autumn 2004 has been reached ahead of schedule. The most
recent figures published by the IAB in June 2003 expected spend to exceed #300
million for the first time. 2004 is building upon this success. Customer
volumes and internet usage are also on the increase. Recent figures published
by the European Interactive Advertising Association show online media
consumption at 10 per cent of overall media consumption whereas traditional
magazine consumption stands at 8 per cent. The Group is well positioned to
continue leading the online marketing sector by anticipating industry
developments.
David Lees
Chairman
20 April 2004
Consolidated profit and loss account for the period ended
31 December 2003
Nine months Year
to to
31-Dec-03 31-Mar-03
NOTES #'000 #'000 #'000 #'000
TURNOVER 1
- Continuing activities 1,097 1,881
- Acquisition 1,868 -
2,965 1,881
COST OF SALES (2,038) (580)
GROSS PROFIT 927 1,301
ADMINISTRATIVE EXPENSES
- Fixed asset impairment 1 - (452)
- Amortisation of goodwill (485) (485)
- Fixed assets depreciation (119) (226)
- Other administrative expenses (1,853) (1,674)
(2,457) (2,837)
OPERATING LOSS
- Continuing activities (1,247) (1,536)
- Acquisition (283) -
(1,530) (1,536)
Exceptional items (280) -
Loss after exceptional items (1,810) (1,536)
NET INTEREST (22) (48)
LOSS ON ORDINARY ACTIVITIES (1,832) (1,584)
TAXATION 2 - 179
TOTAL LOSS AFTER TAXATION FOR PERIOD (1,832) (1,405)
BASIC AND FULLY DILUTED LOSS PER SHARE 3 1.15p 1.76p
There were no other recognised gains or losses other than the loss for the
period.
All operations are continuing.
The accompanying accounting policies and notes form part of these financial
statements.
Consolidated balance sheet as at 31 December 2003
As at As at
31-Dec-03 31-Mar-03
NOTES #'000 #'000 #'000 #'000
FIXED ASSETS
Intangible fixed assets 8,111 1,545
Tangible fixed assets 622 118
8,733 1,663
CURRENT ASSETS
Investments - 107
Debtors 2,698 268
Cash at bank and in hand 5 561 104
3,259 479
CURRENT LIABILITIES
Creditors: Amounts falling due within one year (4,541) (746)
Net current liabilities (1,282) (267)
Total assets less current liabilities 7,451 1,396
Creditors: Amounts falling due after more than (193) (736)
one year
Provision for liabilities and charges - (177)
7,258 483
CAPITAL AND RESERVES
Called up share capital 3,504 14,067
Capital redemption reserve 13,188 -
Share premium account 20,686 14,704
37,378 28,771
Profit and loss account (30,120) (28,288)
Equity shareholders' funds 7,258 483
The financial statements were approved by the board of directors and signed on
their behalf on 20 April 2004.
A. Moss
Director
Consolidated cash flow statement for the period ended
31 December 2003
Nine Months Year
To To
31-Dec-03 31-Mar-03
NOTES #'000 #'000 #'000 #'000
Net cash outflow from operating activities 4 (817) (283)
Returns on investments and servicing of finance
Interest received 5 8
Interest paid (25) (56)
(20) (48)
Tax credit - 185
Capital expenditure and financial investments
Purchase of tangible fixed assets (332) (105)
Sale of current asset investment 84 450
(248) 345
Acquisition
Cash acquired on acquisition 169 -
Expenses paid in connection with acquisition (342) -
(173) -
Net cash (outflow) / inflow before financing (1,258) 199
Financing
Issue of ordinary share capital 1,750 125
Capital element of finance lease rentals (7) (4)
Expenses paid in connection with share issues - (6)
Repayment of loan notes (28) (253)
1,715 (138)
Increase in cash 5 457 61
Notes to the financial statements for the period ended 31 December 2003
1 TURNOVER AND LOSS ON ORDINARY ACTIVITIES BEFORE TAX
The turnover is attributable to the principal activities, which are mainly
carried out in the United Kingdom and Europe.
The loss on ordinary activities before taxation is stated after charging:
Nine months to Year to
31-Dec-03 31-Mar-03
#'000 #'000 #'000 #'000
Auditors' remuneration
- Audit services 31 14
- Non audit services 20 4
51 18
Operating lease rentals land and buildings 70 79
Depreciation and amortisation
- Tangible fixed assets (owned) 110 217
- Tangible fixed assets (held under hire purchase contracts) 9 9
- Goodwill amortisation 485 485
604 711
Fixed asset impairment losses
- Software write down - 215
- Impairment to short term investments - 237
- 452
Notes to the financial statements (continued)
2 TAXATION
There are tax losses of approximately #7,200,000 (31 March 2003: #4,435,000) to
carry forward and use against future profits of the same trades. Should suitable
taxable profits arise, these losses would represent a deferred tax asset of
approximately #1,368,000 (31 March 2003: #887,000) at a corporation tax rate of
19 per cent (31 March 2003: 20 per cent).
There is no tax charge or credit for the period. An explanation of the tax
position compared to the Group's reported results is set out below:
Nine months Year
to to
31-Dec-03 31-Mar-03
#'000 #'000
Loss on ordinary activities before taxation (1,832) (1,584)
Loss on ordinary activities before taxation (348) (301)
multiplied by small companies corporation tax
rate of 19 per cent (20 per cent)
Effect of:
Surplus of depreciation compared to capital
allowances 32 84
Amortisation of goodwill 74 137
Other expenses not deductible 13 11
Loss carried forward to be offset against future
taxable trading profits 229 69
Refunds in respect of prior year - (179)
Current tax charge for the period - (179)
3 LOSS PER SHARE
The calculation for the basic loss per share is based upon the loss attributable
to ordinary shareholders divided by the weighted average number of shares on
issue during the period.
Reconciliation of the loss and weighted average number of shares used in the
calculations are set out below:
Nine months Year
to to
31-Dec-03 31-Mar-03
Loss on ordinary activities before tax (#'000) (1,832) (1,405)
Weighted average number of shares 159,517,300 80,069,808
Amount of loss per share in pence 1.15p 1.76p
In view of the loss for the period there is no dilutive effect of the options in
issue at 31 December 2003.
As at As at
31-Dec-03 31-Mar-03
#'000 #'000
Operating loss (1,530) (1,528)
Exceptional items (280) -
Depreciation 119 227
Fixed asset investment amortisation/impairment - 237
Loss on sale of fixed assets 20 215
Loss on sale of investment 22 -
Amortisation 485 485
(Increase) / decrease in debtors (1,864) 346
Increase / (decrease) in creditors and 2,211 (265)
provisions
Net cash flow from operating activities (817) (283)
5 ANALYSIS OF CHANGES IN NET DEBTS
As at Non Cash As at
01-Apr-03 Cash flow Items 31-Dec-03
#'000 #'000 #'000 #'000
Cash in hand and at bank 104 457 - 561
Debt (709) 28 (35) (716)
Finance leases (15) 7 (75) (83)
Net debt (620) 492 (110) (238)
6 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Nine months Year
to to
31-Dec-03 31-Mar-03
#'000 #'000
Increase in cash in the period 457 61
Cash inflow from decrease in liquid resources - -
Cash (outflow)/inflow from debt and leasing (35) 4
financing
Change in net debt resulting from cash flows 422 65
Adjustment to loan notes 35 191
Liabilities acquired (75) (6)
Change in net debt during the period 382 250
Net debt as at 1 April 2003 (620) (870)
Net debt as at 31 December 2003 (238) (620)
7 COPIES OF THE PRELIMINARY STATEMENTS
Copies of the Preliminary statements are being sent to shareholders and are
available to the public from the Company's registered office at 19 Cavendish
Square, London, W1A 2AW. Copies of the results can also be viewed online at
www.dealgroupmediaplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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