Company Profile

YooMedia plc is one of the fastest growing interactive entertainment companies in the UK.
Since 1997 we have been developing and launching leading B2C consumer brands in the gaming and community sectors. We also work in a B2B capacity with leading brand owners, agencies, content developers and broadcasters to design and develop their interactive content strategies.

Led by Executive Chairman Dr. Michael Sinclair and Group Managing Director Neil MacDonald, YooMedia has assembled a highly experienced management team that possesses a unique blend of skills and experience in the areas of Digital TV, Internet and mobile phone services and technology.

With main office locations in London, Exeter and Maidstone, YooMedia manages core assets including:

Over 30 office locations throughout the UK alone

State-of-the-art studio, production and post-production facilities at our Wapping location.

UK broadcast return path & bandwidth owner

Fully fledged UK Bookmaker License

Database with over 350K UK singles

SMS Engine access with international reach

Fully staffed 50 seat Customer Contact Centre in Maidstone, Kent

YooMedia Dating & Chat - Our dating subsidiary company manages the oldest and largest UK-owned dating brands including Dateline, Club Sirius and Avenues. YooMedia Dating has over 20 office locations throughout the UK and also manages YooChat, our world-leading interactive chat service found on UK digital cable on the Telewest platform (platform extensions planned for 2005).

YooMedia Gambling & Games - Combining the brands of Avago and Channel 425 (in partnership with William Hill) YooMedia is on the leading-edge of interactive fixed odds, casino and poker gambling services for digital TV, the web and 3G mobile phones. Our gaming business also manages YooPlay, the only interactive just for fun games channel found on all four Digital TV platforms in the United Kingdom.

YooMedia Enhanced Solutions (YES) - YES works with brand owners, agencies, content owners and broadcasters to clarify the options, define the strategies and deliver the interactive content that enhances consumer and audience experiences. YES customers include the BBC, Nestle, Celador, William Hill, Channel 4, ZipTV, The Cartoon Network and HR Owen.

Eric, you wanna be careful. They'll get sick of you at Shares magazine!!
Good letter.

Thanks, Beasties. My letter and reply as follows

"You recently included YOO as a Play of the Week. The argument was strong for a company with a leadership position in the emerging interactive digital TV marketplace. Since then the shares have been off the market for two and a half weeks, justified on the basis that a reverse takeover was being negotiated. The shares were 23.5p when suspended and closed on Friday at 19.5p. Subject to approval at an EGM on 21st December, the total of issued shares is to be increased from 163 million approximately to 450 million approximately of which 167 million have been provisionally placed, I understand, by evolution at 15p.

The Directors and institutional shareholders will, no doubt, have participated in the placing and will have had the opportunity therefore to maintain their % holding in the company. But not the ordinary shareholder! He or she finds his shareholding diluted by something like 64%. The value of the holding is diminished overnight. The EGM is a foregone conclusion with 42% of the votes already in the bag. It should be illegal and is certainly immoral! Why not a proper rights issue? Against the likely argument that speed was of the essence, the issue could still have been underwritten and the funds available as required. Please publicise the specific situation and raise the moral questions and the need for legal action."

Eric Robson via e-mail

Timon Day replies: "The slump in Yoomedia (YOO) has indeed disappointed as the shares shot up a third after being tipped at 20.5p on 7 October before crumbling to 17p.
But don't be too hard on the company. The deal is a cracker, establishing it as the dominant force in interactive digital TV with strong gambling and dating content.
You are not the only shareholder diluted. Executive chairman Michael Sinclair and fellow directors were also diluted.
Nothing illegal has occurred. Immoral maybe, as you didn't get a chance to buy at 15p.
I suggest averaging down at 17p because if I'm right the shares will recover sharply before too long as profits will start rocketing rapidly in 2006 onwards.
The company said a rights issue would have been much more expensive and taken much longer. Take consolation from the fact that well-known institutions like Cazenove, Scottish Widows, Artemis, and Invesco have become shareholders. (See Plays of the Week updates, p.8)."

I think Timon Day has been reading this column as he pictures YOO "as the Microsoft of digital TV". New points here are that the Directors did not benefit from the placing and the list of institutions. Play Update gives forecast of profits of 2.5M in 2005 and 6M in 2006. I assume these are from Evolution. That's a prospective PE of 20 in 2006 at 24p.

OK, time for humble pie! Having been preening with pride after second letter in Shares in a month (after PET), I have to admit that I 'did a Willfagg' and sold out, responding to 'her as has to be obeyed' wanting funds for Christmas trip to Whistler, buying some back this morning at 21p. Oh no! the final indignity, I feel a cfd purchase coming on for tomorrow!

Eric

EWROBSON

What did you sell for before buying back? This is the trouble! If you sold, why are you back now?

iPublic

18p! Sold before our dialogue - threw the teddy bear out of the pram in a rage! As I stated earlier, couldn't see the cap. past 100M in the short to medium term. Second thoughts from your's and mac's input plus Shares. Not losing sleep over it! I think I've lost more money over YOO in the last 18 months than any other share (oh! except perhaps earthport - another Shares Play). But its better the 'devil you know'. Just been talking with johngtudor over on the ASC channel on investment styles. Overall, I am 100% up since Jan 2003 but I am taking stock of the number of poor decisions, particularly with the ease of on-line trading. John admits to being an out and out chartist and makes rules-based decisions; that is his style. I am a fundamentals man and make intuitive decisions. But I accept the need to balance out with the chartist perspective. Can develop the theme if you like. The value of these BBs is in accelerating the learning procss as well as supporting research into particular shares. Can see the YOO wood again instead of just the short-term thicket: so a bit poorer, but a bit wiser!

Eric

Done it myself in the summer. What I sold went up, what I bought went down. Lost a packet.

If its seasonal, how come its still happenning to me????????

December to March is normally peak, bull run time for techs. Pick three strong favourites, stick your shirt on them and have a Happy Christmas!

I feel like I am married to YOO media! All my little eggs are in this basket and now feel slightly bemused and bedazzled by recent events. Like a rabbit caught in the headlights I am unable to buy anymore or sell and just have to keep my fingers crossed that next year will be spectacular.

I did well in 2003 - have done really appallingly badly in 2004 - lost several shirts and am getting ever closer to my nom-de-plume! However I am at least relieved that the bloody things are no longer suspended - with the risk that ALL may be lost!

As marriages go, these days it seems, I don't think YOO and I will see our golden wedding anniversary - but we may have some decent parties in our time.

The only real lesson that I could pass on to anyone thinking about buying any shares in any company is DON'T DO IT! I am a sad and lost case myself. The ASOS experience happens once in about 40 purchases and therefore isn't worth all the trauma of the ones that head south!

Merry Christmas.

Hey, guys, I am glad I bared my soul and confessed my sins publicly! I find that I not alone in the desert! I liked dynamite's post (329). The conventional wisdom is to spread the risk over 10 to 20 shares - that way, you never get to know the shares well enough; even if you include a real winner then it doesn't have much effect. So my portfolio is simple: ASC heavily overweight, AZM, YOO (after a hiccough) and PET for a high risk play but with huge potential returns; plus a couple of minnows. The dedication of iPublic and mactavish to YOO is admirable and compares with mine for ASC; you get to the position that you know why the market is behaving as it is and you can probably second guess the next move. You may even, a point made by johngtudor on the ASC channel, buy and sell the share because you are anticipating the shape of the graph. So far, with YOO, I have been buying when I should have been selling and vice versa: I may just judge better during the next year (what was that about pig's flying?).

Eric

Thanks Eric.....I haven't forgotten last year when I sat on NOP for months with no movement, yet a trader friend of mine told me to have patience it would be a ten or twenty bagger, he bought at 2p. I bought at 4p and more along the way, ok so I have only doubled my money so far. I have learnt to have patience. That does not mean to say some shares I don't sell them and re buy, I do. PDX I have bought at 46p sold at 89, bought 89 and 116 sold 167, bought at 120 and currently sitting on them. I only sell when I don't think there will be any news for a quite a while. With PDX that is no longer the case as with YOO, too much is now at stake and good news could happen at any time. If I have any spare cash I will buy some more on dips and sit on it all like a queen on her throne. By the way I had Earthport too and I lost on Thus but never put all your eggs in too few baskets and you will live to invest another day. See you all at the Xmas bash next week if you are going, I have never met any of you. :-))

The behavior of the SP today, is EXACTLY why EVERYONE should consider voting NO to the merger.

NO, NO, NO!!!

Shareholders representing 4.65m shares have contacted me this week. Many of you have expressed grave concerns and are not happy with the actions of the management.

Please consider voting NO.

If ALL of you vote no, it may well make a difference.

If you hold your shares in a nominee account, you will need to contact your broker NOW, to secure a Proxy Voting Form. The forms MUST be returned by the 18th Dec.

Do not let APATHY spoil your right to control YOUR financial destiny.

NO, NO, NO.

Hold on iPublic!! Am I missing something here? Everything now points to the new deal being good for Yoo not the opposite. If this deal goes through Yoo are being hyped as"as the Microsoft of digital TV". New points here are that the Directors did not benefit from the placing and the list of institutions now holding shares has to be to our benefit. If this deal is going to help 'fast forward' Yoo to super profits should we put a spanner in the works even if we could? You may be sore about the current share price but that is only short term....Buy some more and average down is my advice imho.

Dynamite

I believe iPublic's stance to be very appropriate. Yes, the deal is good for YOO and the shareholders in the medium term. But let's face it, it would have been far better if the deal had been financed either: (a) with a rights issue alongside a placement or (b) with some shares plus loan stock, probably convertible, as argued on this board. The approach taken is morally wrong. It ought to be legally excluded. I differ from Timon Day, not in the impact of the deal on the future of YOO, but that there were better options. A rights issue, properly underwritten, could have been in place on the same time schedule, I would submit. The argument seems to be that they had been working on this since July and Evolution's solution was the best option or only option. I just don't believe that. There are other brokers who would have played it differently. I believe that there is enough knowledge and experience on this board to have done it for them - for a fee, of course.

So I don't accept the hype. I do accept the potential and am increasing my stake - to take it back at least to where it was before TBOOP; hey! that's good, folk (refer to my previous chagrin-filled post to interpret if you're NOTB!)

Eric

absolutely right Dynamite. I felt the same initially as i Public but when you step back i come up with the same view as yourself. I sold and went back in again ....when i had calmed down. I hope he will not mind me for saying so but I believe Eric did the same

Dear Shareholder.

I now have the holding and contact details of shareholders, representing, 4.65m shares. This is a significant figure and if enough of you decide to vote NO, we may still be able to block this merger. Many sharholders are unhappy with the severely discounted placement and 16m of new share options at 15p and there is no reason why we must accept the destruction of our shareholder value.

In respect of my holding of Yoomedia shares, of 405k, I will be voting NO the merger. I urge you to consider doing the same.


Although I approve of the merger of DITG, TGG and Yoomedia in principle, the problem is the massively discounted placement at 15p. The effect of this undermines any short or medium term benefit of the aquisition, for existing Yoomedia shareholders.

EVO's latest research for Yoomedia, forecasts a pre- goodwill, PBT of 2.6m, in FY05 and as a consequence, at 24p, were only trading on 14*, next years post tax earnings.

At 24p, the shares were excellent value, on a forward looking, 12 months basis. I believe the high growth sector Yoomedia operates in, justifies a PE of 25, therefore a 12 month SP target of 40p was extremely realsitic, providing EVO's assumptions for FY 2005 were accurate. Be in no doubt, before the details of this proposed merger entered the public domain, Yoomedia were an extremely attractive investment.

I beleive I represent the views of the majority of retail shareholders, who have e.mailed me their concerns since the details of the merger were announced. The 15p placement is so dilutionary for existing shareholders, all benefit derived from the merger is cancelled out. Infact we feel substantially worse off.

If the enlarged group, does indeed turn cash flow positive next March and IF the enlarged group achieve a profit before tax of 4m for 2005 (no tax payable), the EPS for FY 2005 would still be around half the FY 2005 EPS for the old Yoomedia, without DIGT & TGG.

So either the directors are expecting a FY2005 PBT of 8m, which should deliver an SP in 12 to 16 months, equaling the performance of the existing Yoomedia, OR they acknowledge the consequences of this deal, will destroy shareholder value for a minimum of 18 months.

So are they really expecting FY 2005 PBT of 8m?? If FY 2005 PBT, is not at least 6m, they are eroding the value of the existing shares. If not, the whole exercise is very damaging to existing shareholders. We will be forced to wait at least 18 months, maybe more for an SP of 40p, which would have been delivered by the existing company, providing the targets in EVO's research note were met.

Why are they doing this? Please contact Yoomedia (details on website) demanding they reconsider. It's not to late to change their minds. The idea of the merger was beautiful and the target group blends perfectly with Yoomedia. However, the 15p placement turns a good deal for shareholders into a very bad one indeed.

How can they justify the 16m of new share options at 15p, when the actions of the directors has eroded 25% of the value of Yoomedia since suspension and is ensuring through the merger, investors must realistically wait two years for a share price of 40p, instead of one.

The old Yoomedia represents our only chance of an SP of 40p in 12 months.

If the proposed merger is approved, I will still hold, but I expect to wait MUCH longer, for the SP to reach 40p.

iPublic

Very good note (worth putting the spell-checker on it if transferred from, say, Word). Suggest you copy Shares (although I believe they are following this board), IC, FT and Times. Will never change the EGM but what might be achieved from a good media campaign?

Eric

EWRobson

Are yoo questing my abellity tooo spel?????

The cheek!!!!!

Eric: I thought the Shares response to your note was trying to smooth over this deplorable action by the company and its advisors. I agree with iPublic it will be some time before the company is able to realise the benefit of this acquisition (if it goes through) in terms of shareholder value. As for the Institutions, fine they get the good deal with a discounted offer at the expense of the small shareholders. Worth looking at the respective performance of the Fund Managers who bought into this offer though! Tells it owns story, and as I stated earlier I have sold my holding and have no regrets about it. Had I held it though I would have pledged the holding to iPublic, to ensure at least the protest vote is registered. jgt

The 16m share options.

Presumably, there will be an announcement after the EGM, concerning how these options will be allocated?

Will the directors maintain their own percentage holdings? I expect they will and what a smash and grab raid it will be! Legalised robbery, nothing more, nothing less.

Still never mind folks! The good old British stiff upper lip, is the order of the day. Pretend it's not happening. Pretend it does not matter. Vote yes, because they are nice men and Mrs Smith from Surrey likes the photographs of the handsome directors on the Yoomedia website.

The following are laughing thier socks off:

1. EVO

2. The 15p investors.

3. The directors, though the 16m of new share options at 15p.

Still, if you all want to go ahead and vote yes, than that's your perogative.

In the long term, this is an excellent long term investment. Possible 100% upside in 12 months, IF a takeover approach is made. The 29m of tax losses from the enlarged group, means once profitable, investors can look forward to tax free profits for years, boosting EPS.

THE 16M OF NEW SHARE OPTIONS IS MORALLY WRONG.

There is absoulutely no justification for this. The directors COULD and SHOULD have set the option price at 20p. If they had done so, then I would not be spending my time typing this message.