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.....................

Great finish today. Recovery towards the end makes it look like tomorrow will be another good day hopefully. Could we have another ASOS on our hands here?

Not sure if this is old news or not but found this from yesterday:-

On Aim, Deal Group Media, the online advertising agency, gained 2.5p to 21.75p on whispers of an upbeat research note from heavyweight broker Merrill Lynch in which it said earnings per share of 1.1p were possible in 2005.

This will be the next ASOS of 2005.

Cluckin bell, I thought SEO was ASOS of 2005, I have them both!!!
Don't feel blue about my blue days at the moment!!

Ready to tick up I think.

cheers GF.

Google and Yahoo have already identified online advertising as major contributer to improved fortunes, now for Ask Jeeves ... (from the BBC):

"Ask Jeeves has become the third leading online search firm this week to thank a revival in internet advertising for improving fortunes.

The firm's revenue nearly tripled in the fourth quarter of 2004, exceeding $86m (46m).

Ask Jeeves, once among the best-known names on the web, is now a relatively modest player.

Its $17m profit for the quarter was dwarfed by the $204m announced by rival Google earlier in the week.

During the same quarter, Yahoo earned $187m, again tipping a resurgence in online advertising.

New year, new optimism

The trend has taken hold relatively quickly.

Late last year, marketing company Doubleclick, one of the leading providers of online advertising, warned that some or all of its business would have to be put up for sale.

But on Thursday, it announced that a sharp turnaround had brought about an unexpected increase in profits.

Neither Ask Jeeves nor Doubleclick thrilled investors with their profit news, however. In both cases, their shares fell by some 4%.

Analysts attributed the falls to excessive expectations in some quarters, fuelled by the dramatic outperformance of Google on Tuesday."

Looking for DGM to really breakout in the near future.

Cheers,
Stuart

GF. Had a look at the blue sky portfolio yet in Shares mag? Any thoughts?

No not yet chad but I hope to be able to get a copy saturday, just been too busy.

I see a few are taking weekend pocket money in this one.

cheers GF.

DGM will be a good buy for 2005...I believe Shares has missed on this in its BlueSky Portfolio.

They certainly have, perhaps its one they think that is guranteed to move forward so doesnt need any pushing.

cheers GF.

Nice to see this one going back into the blue.

cheers GF.

yea, but some heavy selling coming through.

Seems the norm for the market this morning ted. Just wondering if the MMs are looking for big profit taking in the US after Fridays stormer.

cheers GF.

Anyone know what the prospective P/E is at the current price?

Forward P/E to 31/12/2005 on a EPS of just over 1p per share (as per house brokers present forecasts) would place it around 23. But theres plenty more growth to be added in if the board goes for acquisitions as previously stated.

I would think with its future potential at standstill now a high P/E of around 28 to 30 is justified, so on that basis we still have more room for capital appreciation and an increase in share price.

cheers GF.

A post on another board indicates that DGM have recruited a new Sales Director from YAHOO starting on March 1st.

I cannot vouch for the acuracy of this - just relaying what is being discussed!!!

Anyone heard anything on this? Seems a very positive appointment.

Cheers.

Not heard anything but certainly would be good news if confirmed.

cheers GF.

Very tight spread today, and that does sound like good news. What do we think on those 2 x 250k trades are they both buys? Price is holding up well.

Not sure Ted on the transactions. Sometimes they get them in the wrong column. Have noted the tight spread, wish it was the same alround. A dull day for me after 10 days of bedlum.

cheers GF

stuartth1309

A rumour.


More importantly is the instis backing which seems to be offsetting what should be an obvious retracement.