Deal Group Media is the biggest and only true online advertiser on the whole of the London stock exchange. Its business is that of focussing on delivering high returns to its clients from online advertising through all differing sizes of web site and search engines. The massive increase in online advertising means it is at the very leading edge of the growth in the industry.

Just a few raw figures to look at in this industry.

*Internet advertising now accounts for around 4% of all company advertising and is growing as a % of all company advertising, we are only at the very beginning of a Mass market.

*The market is expected to break 500 million by the end of December.

*The market saw a 75% increase in revenues in the first 6 months of 2004, so you can see the growth is really staggering.

*Just take a look at this site and others and see all the adverts and pop ups plastered around, theres a good chance that DGM have a hand in many of these adverts.

*The biggest growth stimulant has to be the growth in online shopping and this should increase the market size for many years to come.


The last results reported were very encoraging indeed and 2005 shold be the year this one really breaks out and shines, here are the main points.

Deal Group Media plc, the online marketing group whose activities include
performance-based advertising and search engine marketing, today announces its
interim results for the six months ended 30 June 2004.

Highlights


Business transformed by merger of The Deal Group and IBNet plc


Combined operations turnover 6.55 million (878,000 by former IBNet plc)*


Pre-tax profit 619,000 (before amortisation of goodwill)


Pre-tax profit 45,000 (623,000 loss by former IBNet plc)*


New blue chip clients being won


Core business achieving record growth month on month


An increasingly positive online marketing outlook


Further progress anticipated in the second half of 2004.

The company as an impressive list of clients.......

: AOL, Autotrader, American Express, BT, B&Q, Cancer
Research, Comet, Coral, Dial-a-phone, easyjet, esure, Halifax, Interflora, John
Lewis, Littlewoods, Ladbrokes, Lloyds TSB, Match, MBNA, MoreThan, Nestle, phones
4U, Tiscali, Virgin Megastore, 888 and many more.


Key growth sectors are: mobile telecommunications, broadband, financial and
automotive, with further growth coming from gaming, travel and retail.


On results Adrian Moss, Chief Executive, said:

'We are delighted with the results now being delivered by the Group and our
promising potential. The foundations put in place following the merger, our
focus on delivering return on investment through measurable online marketing for
advertisers and our industry profile, are proving to be a combination that is
delivering value for clients, shareholders and other stakeholders alike. In a
marketplace that continues to grow and consolidate, we are seeking further
acquisitions to broaden the width of our offering and extend our geographic
reach. We look forward to continued growth.'

The company are making great strides to grow organically and are looking at the very large European market were acquisitions will be made.

Outlook

We anticipate that the second half of 2004 will continue to progress
successfully. Turnover exceeded the 1 million a month landmark for the first
time in 2004 and has consistently remained there. Month-on-month, the
Performance Network channel is enjoying record growth. The online advertising
channel is now establishing itself with regular repeat orders. Search remains a
strong growth opportunity and the newly launched affinity channel shows early
signs of success. Our key channels are growing and we anticipate they will
continue to do so.
With nine months of the new business operating and significantly outperforming
the previous entities, we have a solid base to continue delivering for our
clients and shareholders. We can only repeat the sentiments of our 2003 Annual
Report - we remain confident and excited about the Group's prospects.

Fundies.

Y/Ending 31-12-2004 EPS 0.50p P/E 25.00
Y/Ending 31-12-2005 EPS 0.80p P/E 8.5

So forward P/E of 8.5 is very cheap for an online growth stock.

Alpha/Beta

The beta is on the low side so it wont exactly fly, but all in all it looks a solid growth investment. Certainly not another 'As Seen On Screen' but as per this weeks Investors Chronicle, low beta stock have greatly outperformed high beta stock this past year.

Does it have any minuses, well although not a minus some from the old school would be looking at Intangible assets and amortisation of goodwill but as an healthy profit making company I see no reasons to be negative here.

It is a cyclical industry is advertising but lets face it we are now on the upcurve and more and more businesses are turning to the internet for cheaper advertising solutions.

Conclusion

This looks a solid sound investment and although I wont put a figure on the Sp with its ongoing fantastic growth I would be hoping for a very exciting performance during 2005.

DYOR

Cheers GF.

By the way the chart added as per Dils request.....................

Legend. I was in at 9p, so ive had a more than decent return so far. What about you?

Goldfinger,

Have you seen IBG? how does it compare with DGM?
Both companies have gone crazy over the past few months! The main factor seems to be the increased usage of the net for shopping etc

Any thoughts would be well received.

Looks like Fidelity have picked up a few more shares - their stake is now 5%

I really think this is going to double within 6 months.

MS

Strange activity today. I've heard Comdirect offer no spread 19.13 to buy and sell??

Yup Fidelity getting stuck in and increasing its stake.

cheers GF. IBG will have a look., although Im going through Air Music And Medias accounts and it looks a little gem so far.

Forgot to post this from Fidelity..................

Change in holding since last filing: +3,341,388 ordinary shares.

cheers GF.

GF,

busy busy busy... lol! IBG seem to be in the same boat as DGM, but have yet to release any figures(due out in a few weeks). Take a look and see what you think.

All uphill since september.



cheers GF.

Lots of stock purchase at the moment could this be a similar build up to the mid-march intrims that we are seeing with neteller?

Dont know but its now through 20p and that l do me fine. May purchase more this afternoon.

cheers GF.

GF. Up 5% again today. I was feeling really tempted to sell this morning. But then I thought to myself that this one is a real winner. What I ought to be doing is buying more like yourself! I really cannot see anything going against this company.

Over 5 million shares traded already today

Moved up again.

cheers GF.

Got in on Monday at 19.25p before I set off for France, nice to see it up on my return. gf saw my post on IDS about culture changes which would make that fly and I'm 150% up already, I think DGM are in the same boat especially as most retailers saw lower sales this Christmas in favour of on-line sales and at the endof the day most people spend more time on-line than in the high street these days.

This is really motoring today.

MS

When you say tip for 2005,Goldfinger,do you think there is still a way to go with this one ..

Nearly three times more sells than buys and the price rises. - What the hell is going on. does anybody know?

More buy transactions though than sell transactions.

Hi Jimmy,

I think we will see more growth/visibility in earnings as the year goes on. Acquisitions arent ruled out and Im sure thats why the two new high profile members have been added to the board.

I wouldnt rule out a bid for this one either at some time during the year. Its P/E is high now but you are paying for future growth within a niche stock.

cheers GF.