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

Took my profits a while back--now I wish I had some spare cash to get back in!!

If you go into the individual buys it looks like an institution as been buying since yesterday afternoon.

cheers GF.

All - I don't normally read this thread but I noticed the activity this week.

I haven't had chance to pull it off the web but when I departed the Eurostar last night I picked up a copy of the European version of the FT - sadly only the Companies and Markets sections though as Deal Group Media was referenced within the "Fund Management" supplement. I'm sure someone will be able to get hold of this off the web and will no doubt shed some light on the recent buys!!! I hope this helps!!! If it is good news keep me posted and I might be back in with you all!

Cheers

It has all gone a little quiet here has anyone any views on what is happening. Did gingerjimmo find the article in the FT?

sjtee, recent speculation, albiet in The Guardian, suggests a takeover bid going on in the background. Its not much but here is the clip from Thursday's paper:
'some traders reckon IBG coud be a takeover target for rival Deal Group Media, 1p higher at 21.75p.'

tau thanks for info. Sorry for seemingly ignoring you having trouble with on line access

After a quiet period, significant increase in volume over the past few days.

Could this be due to the IBG speculation? Any other explanation?

Cheers.
Stuart

Any reasons for DGM going the wrong way in recent days?

Interesting to see the speculation in the guardian that DGM will take-over IBG. As far as I'm aware these are the only companies on the LSE that are in the affiliate marketing business. Looking at the IBG board on the other site and saw that there is a nice write-up on the business. I wonder if the share price of DGM is going down in anticipation of a take-over (price usually drops when a company is about to take another one over, only to rise once the deal is done and positive results are seen). Is it time to take a dabble in IBG, or stock-up on DGM, or both?



"the analyst - 12 Jul'05
WH-Ireland initiate coverage with a BUY note:
http://www.ibg.co.uk/Investors/Research/IBG15june05.pdf
Hoodless Brennan forecast strong growth:
http://www.ibg.co.uk/Investors/IBG%20Research%20Note.pdf

Internet Business Group (IBG) has three divisions:

1 - Online Advertising
IBGs main business, Affiliatefuture, a rapidly expanding and profitable performance-based affiliate advertising network. Affiliatefuture bring together merchants (e-commerce sites) with affiliates (web site owners that display banner ads for the e-commerce sites), earning revenue from taking a percentage of all sales made after a customer clicks through a banner advert. Revenues for affiliatefuture during H1 2005 were 1.5m, up 250% over H1 2004.

2 - E-commerce
IBGs e-commerce sites are sweatband.com, gadgethub.co.uk and mp3playerdeals.co.uk. The e-commerce division has recently shown an increase in sales and profit, reaching record turnover levels in H1 05 at 906k, up 45% on the comparable period of 2004.

3 - Web Hosting and Services
Once central to overall business, web hosting and services are no longer a main focus for IBG.

The rapid growth of Affiliatefuture has been evident for some time in terms of clients. The network has a strong reputation in the field. This performance is now being realised in terms of both revenue and profit. Increase in revenues at Affiliatefuture comes from compound growth due to: 1/the general overall increase in e-commerce spending, 2/growth in number of new merchants within the network and 3/the increase in numbers of affiliates advertising the e-commerce sites. Growth of clients has risen remarkably from a few in 2002, to 200 in 2003, 350 in 2004 and currently over 440 clients. Of particular note is the expansion into the US that is gaining momentum with 5-10 new merchants being added each month. Importantly, the costs associated with this oversees expansion are very low. The company predicts it will take 2 years to build up the US to levels on par with their current UK offering. Affiliatefuture are also expanding into mainland Europe and this expansion should help contribute to maintaining the rapid increase in revenue currently being observed:

Growth in revenue at Affiliatefuture:
H1/03 - 60k
H2/03 - 210k
H1/04 - 420k
H2/04 - 630k
H1/05 - 1,496k

The IBG e-commerce operations made a strong, profitable contribution to H1/05, expanding revenue 45% over last year. Moving forward, the Company is adopting a new strategy of bringing in 'exclusive' products where IBG will be the sole UK distributor, initially through Sweatband.com, where IBG state they already has a substantial customer base.

In terms of profit, IBG became profitable in H1/05. They are forecast to make 171-270k in 2005 and 610-729k in 2006. The overall market is strong, with DGM, the other performance-based affiliate network listed on the LSE, making 580k in 2003 and 1.6m in 2005, with forecast profit of 3.1m in the current year and 7.1m in 2006. The market in e-commerce is also strong. WH-Ireland compare the e-commerce activities to ASC, the online clothing retailer that made 625k in 2004, 1.1m in 2005 and an expected profit of 2.2m in 2006."

IBG would certainly make a good fit for DGM. The on-line market is only in its infancy and we can expect big growth over the next few years as retailers try to target specific groups of people rather than blanket ads such as radio and TV.

Deal Group Media plc

Interim Results - Tuesday 6 September 2005





Deal Group Media plc, the full service online marketing group, will announce its
Unaudited Interim Results for the six months ended 30 June 2005 on Tuesday 6
September 2005.

Aegis, one of the big boys in the ad world is buying Glue one of the smaller online advertisers. IMHO I think we will see more consolodation in this area as the big companies try to bolster their online presence.

Good solid interims, plenty of optimism and confirmation of the sort of growth we can expect in the on-line ad market in coming years. I would expect DGM to start moving again once we get newsflow from them and the media in general during the run up to Christmas.

Does anyone know why DGM is going down and not up after results?

I have the same problem prom. Why the sudden drop?

B2B

A lot of people buy on the run-up to results and then sell - I can't see anything bad in the results, quite the opposite in fact and DGM's busiest months are still ahead. I'm holding.

On a downward slide. Anyone know if it's time to bail out?

Only you can decide that one prom. I got out a while ago.

MS

DGM is sliding downhill fast...sell down to 10p

Investor Chronicle 16 September 2005

Considering the growth prospects in online advertising, and an undemanding rating of 15 for 2006, the shares are good value