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

On-line advertising growing as very fast rate, plently more to come from DGM. If all goes to plan I'll take my stake out at 40p and sit back and watch what happens to the rest. Companies with the right product at the start of culture changes should do well.

Hang in there guys, If I can at an entry point of just over 6p I am sure you can. Remember new top brass on board, money to spend, and a fantastic growth area. The results not far off will give us the chance to see this one far cheaper and new investors flocking in.

cheers GF.

Do you mean this will make it look cheap GF, or it will fall on results?

No im basicaly saying the growth in earnings per share will bring down the P/E and the forward P/E.

cheers GF.

andysmith

you hit it right on the nail with your comments regarding culture change. Saw martin sorrell of WPP being interviewed this morning about the challenges facing them and he mentioned on-line ads on and the need for WPP to adapt to changing needs. The message is obviously sinking in even among the big boys.

Could make DGM a bid target. Always thought that they might be.

cheers GF.

GF

Who do you think would make a move on them.?

MS

Any of the big ad companies - WPP, Aegis or the French one , Havas (?). If your clients are losing share by sticking with conventional but declining media such as newpapers or TV ads then you have got to offer something else.

Im with Jim here but I think WPP will have their eyes on DGM.

cheers GF.

1 million sell after hours?!?!

Hope it goes up further tomorrow

Thats a new high for the year surely?.

cheers GF

results out march 29th.

ugez009

Any idea what they might look like.


MS

Press Release 20 January 2005:


"Trading conditions for the year ended 31 December 2004 continued to be very

strong and the Board expects the Preliminary Results to be in line with the

uplifted market expectations as stated in the second quarter of 2004.

Trading for the last quarter reflected a growing demand among Christmas shoppers

to buy online with Group turnover increasing to 4.45 million for Q4 2004

representing 232 per cent. of the equivalent period for 2003."



I think management comments on future trading environment in 05 will be important if we want to see a good sp increase following results.

Any reason for the drop today or just a correction?

I am thinking just profit taking, I am not aware of any news that is affecting SP. Could be an opportunity to top up. I am hanging on into the results come out at end of month.

Just profit taking guys.

cheers GF.

A bit disturbing that it has broken through 20DMA. Unless there is a bounce tomorrow/ soon I think I may head for the exit for the time being.

rgrds
gk

What when result are coming up?
cheers GF.