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

BIG volume today.

2 sales amounting to over 6.5 million shares resulting in ratio of 4:1, sells to buys.

RNS Number:8935H Deal Group Media PLC 27 January 2005 indicating a THE EUREKA INTERACTIVE FUND LIMITED now has holding of 3.8%.

Recent trading statement is very positive. SP should be interesting between now and mid-march preliminary results.

Cheers.

GF. DGM was picked as one of Shares' 'Penny shares from heaven' buys. They just reeled off all the usual facts n figures. eg. 76% rise in spending in online advertising, turnover hitting 1 million a month, that sort of stuff.

Cheers Chad and its up again, NICE.

cheers GF.

GF. As DGM is the only independent UK listed online advertiser, does this mean there arent really any opportunities for Deal to grow by acquisitions? Is Deal a possible takeover target for bigger more well established traditional advertisers looking for a bigger piece of the online action? PS. take a look at Avanti Screen Media, another advertiser who's built up a nice little niche in the business of advertising on those flat screen tv's you see in shopping centres and pubs. Tipped in Shares mag this thursday. I bought in today.
Cheers.

Chad been in avanti screen media for a while now and earned a nice profit.

Your right about DGM and its ability for takeovers, I beleive thats one reason why we have seen the reorganisation and also the appointment of the 2 new guys this week.

Growth should be really remarkable.

cheers GF.

GF. You said youve been in ASG for a while - have you got a target price? - rise since flotation seems to have been pretty steep. You must be tempted to take profits?

Yup winnie tipped them on t1ps.com I am told by a buddy and says hold, so Im doing just that, though tempted to lop the top, a profit aint a profit untill trousered.

cheers GF.

True.

Chad asked whether DGM could eventually be a target for takeover by one of the big ad companies. Definitely ! Last week one of the big agencies, Aegis (AGS) bought De-construct, a digital media company to "plug a gap" in what Aegis can offer. Here is a bit of what Aegis said...(find more on RNS)

Doug Flynn, CEO of Aegis Group plc, said 'Digital media is generating many more
ways to reach consumers and, in an increasingly cluttered media environment,
outstanding creativity has become an integral element of effective
communication. The UK was one of the few gaps in Isobar's creative service
capability and De-construct's award winning capability in the digital space will
now deliver the highest level of service to its clients. In Isobar, we have an
international digital network that can meet all the needs of marketers in the
new media landscape and part of that will be the ability to offer outstanding
creativity around the world'.


As digital media takes more and more of the total share, the big companies MUST have a presence

thanks for that jimwren

GF, Had this on my watchlist since just before Christmas. It has more than doubled since October and I am wary of getting in too late at the peaks.
I know you won't predict, but if you were not in yet would you be buying now.
Many factors tell me to do so, your thoughts would be appreciated though.

Hi Andy I agree with Jim W, things look very bright, but remember we are already in this one. Its certainly a hold with upside but we need to see more visibility of earnings before it reaaly takes off again.

I cant rule out a take over though and probably at twice the price today shorterm, long term the skys the limit.

cheers GF.

Do you think 20p may be a barrier for now until the results?
What would be a good price to get in at? Opinion only, I know its ultimately my decision. Deciding between two on my list, DMG and KMR, can only do one at moment.

andysmith

Fund managers have been buying recently at these levels if thats anything
to go by....

Up again, wow.

cheers GF.

Yes, unfortunately guys I am going to have to leave you. I have made a nice profit on this one - I have something else to put my money into. If they retrace I may well get some more.

Trdxx,

Do you by any chance hold any DAT group (DA.)??? If so well done, they are flying.

I can empathise with you legend. I too feel very tempted to take profits. DGM has had a great run, and many other investors must feel the same. However, im still optimistic for Deals future, and any set back in the SP can only be temporary. For me DGM is a hold.

Wouldn't disagree with you whatsoever chad, I have another stock to have a go at and should do well.

I am one of the believers that you never lost money taking a profit... what price did you get in at??

Im staying put.

cheers GF.

Interesting article on online advertising -

http://news.bbc.co.uk/2/hi/business/4203805.stm

cheers