Final Results

Deal Group Media PLC
11 April 2007


Press Release                                                     11 April 2007



                              Deal Group Media plc



                             ('DGM' or the 'Group')



                                 Final Results



Deal Group Media plc, a leading online media-marketing Group, today announces
its Final Results for the year ended 31 December 2006.



Highlights



Financial


•     Results for the year ended 31 December 2006 broadly in line with market 
      expectations


•     Gross Profit of £7.15 million (2005: £6.69 million)


•     EBITDA (before share based payments) of £(0.56) million 
      (2005: £1.09 million)


•     EBITDA was positive in the second of half of 2006


•     Announced in December 2006 that the Group had received commitment to a 
      £1.05 million fund raising through a Placing to facilitate the ongoing 
      growth of the Group






Operational


•     Overseas operations contributed a material element in 2006 to turnover 
      and gross profit.  The Group has further international growth plans for 
      2007

•     £1.8 million invested in technology platform (of which £700,000 is 
      non-recurring) delivering a robust platform to serve UK and overseas 
      business

•     Developed new UK initiatives for launch in 2007 including the broadening 
      of the Group's offering for advertisers and agencies.  New online 
      advertising and technology-only services will be offered as well as a 
      separate brand focused on servicing the requirements of media owners


Commenting on the results, Adrian Moss, Chief Executive, said: 'I am delighted
to have returned as Chief Executive of Deal Group Media plc.  We have now
developed a clear strategy which will leverage the Group's eight years of
experience in online advertising to recapture our strong position in the UK and
facilitate organic growth in our overseas operations, and specifically the Asia
Pacific region. These initiatives, combined with a strong technology base, will
assist the Group's evolution and I am very excited about our future prospects.'




For further information, please contact:

Deal Group Media plc
Adrian Moss, Chief Executive                        Tel: + 44 (0) 20 7691 1880
                                                     www.dealgroupmediaplc.com

Evolution Securities Limited
Tom Price, Corporate Finance                         Tel: [phone]

Jeremy Ellis, Corporate Finance
                                                      www.uk.evosecurities.com


Media enquiries:
Abchurch Communications
Ariane Comstive /  Stephanie Cuthbert                Tel: [phone]
[e-mail]                    www.abchurch-group.com




Chairman's statement


Performance during 2006

2006 was a significant year for Deal Group Media plc as we adjusted our UK
business structure to compete more effectively in the marketplace, expanded our
overseas businesses and delivered a stable technology environment upon which to
base our growth.

Results for the year ended 31 December 2006 are broadly in line with
expectations with Gross Profit of £7.15 million (2005: £6.69 million) and EBITDA
(before share based payments) of £(0.56) million (2005: £1.09 million).
Turnover for the period was £22.97 million (2005: £20.56 million).  The
operating loss for the period of £2.11 million was principally the result of
technology costs of £1.8 million (of which £700,000 is non-recurring), which, in
line with our accounting policies, have been expensed rather than capitalised.
The loss of a key customer in addition to an increasingly competitive
marketplace in 2006, also impacted the performance of the UK business.

The success of sales activity in the Asia Pacific region was very encouraging in
2006 and has highlighted the opportunity in this region where the markets are
growing at a fast pace, online advertising budgets are high and competition low,
relative to Europe.

We have significantly reduced both our UK operational and central cost base in
the final quarter of 2006.  The benefits of this should be seen in the current
financial year.


Board changes and senior management

Adrian Moss was re-appointed as Chief Executive Officer in December 2006.
Adrian founded the business in 1999 with £350,000 of seed funding.  He is an
acknowledged industry expert and a key strategic and operational driver for the
Group going forward.

We are currently looking to appoint a Chief Financial Officer to strengthen the
Board.

Andrew Dickson stepped down from the Board in December 2006 and I would like to
thank him for his contribution during his tenure.


Strategy

The Group has put in place a number of initiatives in order to set the
foundations for DGM's future growth, both in the existing UK market and
overseas.

In the UK, this includes an aggressive re-launch in the second quarter of 2007
of the core product offerings both as individual elements and as a complete
customer acquisition strategy. This evolution has been facilitated by our
material investment in technology in 2006.

Overseas the Group's further evolution will be achieved through a new base in
Singapore.  The Board anticipates that a net investment of approximately £1
million will be required to successfully enter this market over the current
financial year.  Having successfully set up DGM in the UK in 1999 with a
considerably smaller budget we believe that our ambitions for the region are
achievable.

The Board intends to rename Deal Group Media plc as DGM Holdings Plc in order to
reflect the new business structure which will incorporate new overseas
subsidiaries and separate the distinct UK operating brands from the PLC.  A
resolution to that effect will be included in the Notice of Annual General
Meeting which is to be sent to shareholders later this month.


Financing and offer talks

DGM announced in December 2006 that it had received commitment to a £1.05
million fund raising through a Placing to facilitate the ongoing growth of the
Group.

The Group has ceased all offer talks to focus on organic expansion and the Board
is confident that pursuing the Group's growth strategy should deliver superior
returns to shareholders.


Market

2006 saw strong growth in e-commerce and internet advertising across Europe and
Asia.  As internet and broadband penetration continues to increase, users are
spending a greater amount of time online (Jupiter Research, Oct 06).  There were
37 million internet users in 2006 in the UK (Internetworldstats) and they are
becoming more sophisticated in their knowledge of the internet.  In addition,
consumer purchasing trends have shown a significant increase in online shopping.
As a result advertisers are allocating increasing proportions of their budgets
towards the internet.  This positively affects the online advertising
expenditure which in Europe increased by 41.2% to £2.07bn in 2006 (Internet
Advertising Bureau and Price Waterhouse Coopers, March 07).

The Asia Pacific region shows an even higher level of anticipated growth going
forward.  In July 2006 there were 137 million internet users in China and this
is anticipated to grow to 232 million by 2010 (i.research).  This will be
reflected in online advertising spend which exceeded £600 million in 2006 and is
expected to exceed £2.4 billion by 2010. (i.research)


Prospects

DGM is well positioned to recapture a strong market position in the UK and
successfully launch into new territories, taking a market leading position in
the Asia Pacific region.



John Porter
Chairman



Chief Executive's Report


Introduction

Since my reappointment as CEO in December 2006 the Board has taken stock of the
Group's performance in the year to 31 December 2006.

The underlying performance of the Group in 2006 has been more encouraging than
the EBITDA suggests with the high margin UK business that was lost towards the
end of 2005 being replaced by growth in the overseas operations. The central
cost base is more closely controlled and the operational costs in the UK
considered more appropriate to the lower margins experienced in the core
business areas.

We continue to have a firm belief in our ability to deliver real value to
shareholders and my commitment to participate in the recently announced Placing
is evidence of this.

A strategic committee, involving the Board and senior management, has identified
key tactics on how this will be achieved.



DGM's main goals for 2007 are:


•    to reassert the Group's strong position in the UK online marketing sector

•    to leverage our experience in Australia to create a strong market position 
     in the Asia Pacific region as a whole



UK Operations

DGM works with advertisers, agencies and media owners to help them achieve their
e-business objectives - whether it is more sales or leads, increased traffic or
brand awareness.



The offering in the UK consists of:


•        Affiliate Marketing

•        Search Engine Marketing

•        Advertising Network.


Whereas the first two are strategies focused on delivering return from an
advertiser's online ad spend, the advertising network acts as an outsourced
sales team selling banner inventory on behalf of media owners looking to
maximise their revenue generation.  The UK market has become highly competitive
in all areas resulting in increased margin pressure over the last year, however
it is still growing and margins appear to be stablising.

Despite this, and the technology issues encountered in 2005, the UK operation
was EBITDA positive in the second half, successfully retained 90% of its clients
over the period and has won significant new clients.

The affiliate business represents the majority of our UK operation and I am
pleased to report that we set new records in 2006 for the level of commission
payout to our affiliates.

Going forward, the focus will be on increasing sales of our existing core
product channels, and expanding our offering into strategically related areas
including the provision of complete online marketing solutions for advertisers
in addition to a technology only offering which will give advertisers and
agencies the ability to track their marketing campaigns more accurately.


Overseas Operations

From a breakeven position in 2005 the overseas operations have become a material
part of the Group's performance in 2006.


The offering consists of:


•         Affiliate Marketing
•         Search Engine Marketing
•         Strategic Media planning and buying


All three areas work individually or as part of a co-ordinated offering, focused
on delivering advertisers' objectives from their online ad spend.

Our Australian office has delivered well and has become increasingly important
to the Group both because of its financial delivery potential and also
strategically, as part of our Asia Pacific growth strategy.

In Q3 of 2006 the Group launched a small operation in South Africa which is
expected to generate positive monthly cash flow in the first half of 2007.

We will continue with a low cost entry strategy into fast growing key markets
initially servicing international agencies where our considerable experience and
historic delivery, combined with our distinct approach to customer servicing can
put us at an advantage over local and less experienced competitors.

To this end I will be dividing my time between Singapore and our existing
operating businesses and going forward much of the strategic and other
management functions will be located in Singapore.  It is anticipated that up to
£1 million will be invested in evolving an Asia Pacific regional operation
during the current financial year to take advantage of the considerable
opportunity that exists.



Employees

In the aftermath of a turbulent period in the Group's evolution I am committed
to establishing strategies to retain and develop our employees. We acknowledge
that we are a people business and a clear strategy in this area is vital to our
future success.

We have reviewed staff participation in the Group's equity and have revised the
current share option scheme to include all permanent staff, from all offices.

Three significant senior management appointments have recently been made.

We have retained an HR director, Danielle Tasker, with 15 years relevant
experience to ensure that our retention and development strategies are as
effective as possible.

The UK business is now led by UK Managing Director Paul Mitchinson.  He brings a
wealth of experience and proven expertise as an e-Commerce Managing Director,
having previously been involved in the implementation of groundbreaking web,
interactive channel, business intelligence, marketing, advertising and CRM
platforms delivering sustained profitable growth and reduced costs.

Alex Khan was appointed Commercial Director and will be instrumental in
developing elements of the overseas business.  He was previously Sales Director
responsible for elements of the UK operation.

We were pleased to see the success of our graduate training scheme and intend to
run it again in 2007.


Technology

In 2006 the Group invested £1.8 million in technology, of which £700,000 is
non-recurring.  This investment was necessary to rebuild the core affiliate
product and replace the DB2 infrastructure with SQL server. I am pleased to
report that this project was successful and is now complete.

The development of DGM's technology over the last year has provided the Group
with a stable technology platform to service our international affiliate
marketing business.

In addition we have developed our tracking ability and are now able to work with
advertisers across multiple routes to customers to deliver their objectives from
online advertising and provide more accurate reporting.

This provides us with the ability to further increase our customers' return on
investment for their online marketing spend and therefore enables DGM to better
service its customers.


Prospects

Much of the ground work is now in place for the Group to deliver growth in
existing markets and establish itself as a market leader in new markets by
applying its industry expertise.  Despite increased competition, the UK market
is still growing and continues to offer considerable opportunities for winning
new business as more advertisers are looking to the Internet for their
marketing.

The Group expects to continue to see the full benefit from last year's cost
control programme over the course of 2007 and, despite the anticipated
investment in new markets, improved performance over the course of 2007 from its
existing operations.


Adrian Moss
Chief Executive



Consolidated profit and loss account for the year ended 31 December 2006


                                                                          2006                      2005
                                                                                                  (restated)
                                                    NOTES          £'000          £'000        £'000        £'000

TURNOVER                                              2                          22,965                    20,561

COST OF SALES                                                                  (15,828)                  (13,876)

GROSS PROFIT                                                                      7,137                     6,685

ADMINISTRATIVE EXPENSES
 - Amortisation of intangible assets                             (1,010)                     (1,149)
 - Depreciation of tangible fixed assets                           (385)                       (292)
 - Share based payments                               6            (298)                       (181)
 - Other administrative expenses                                 (7,697)                     (5,593)
                                                                                (9,390)                   (7,215)

OPERATING LOSS                                        2                         (2,253)                     (530)

NET INTEREST                                          3                              16                        36

LOSS ON ORDINARY ACTIVITIES                                                     (2,237)                     (494)

TAXATION                                              4                         (1,806)                         -

TOTAL LOSS AFTER TAXATION
FOR THE PERIOD                                                                  (4,043)                     (494)


BASIC LOSS PER SHARE                                  5                         (1.06p)                   (0.13p)






Consolidated balance sheet as at 31 December 2006

                                                                         2006                       2005
                                                                                                 (restated)
                                                  NOTES          £'000          £'000       £'000          £'000

FIXED ASSETS
Intangible assets                                                               5,004                      5,857
Tangible assets                                                                   582                        647
Fixed asset investments                                                           181                          -

                                                                                5,767                      6,504

CURRENT ASSETS
Debtors                                                          4,962                      6,150
Cash at bank and in hand                                           584                      1,682
                                                                 5,546                      7,832


CREDITORS:
Amounts falling due within one year                            (5,039)                    (4,317)

NET CURRENT ASSETS                                                                507                      3,515

TOTAL ASSETS LESS CURRENT LIABILITIES                                           6,274                     10,019

CREDITORS:
Amounts falling due after more than one year                                        -                       (65)

                                                                                6,274                      9,954

CAPITAL AND RESERVES
Called up share capital                                          3,816                      3,798
Capital redemption reserve                                      13,188                     13,188
Share-based payments reserve                                       527                        229
Share premium account                                           21,505                     21,458
                                                                               39,036                     38,673

Profit and loss account                                                      (32,762)                   (28,719)

Shareholders' funds                                                             6,274                      9,954




Consolidated cash flow statement for the year ended 31 December 2006


                                                                          2006                      2005
                                                    NOTES           £'000        £'000        £'000        £'000

Net cash (outflow) / inflow from                      7
operating activities                                                             (585)                        32

Returns on investments and servicing
of finance
Interest received                                                      27                        40
Interest paid                                                        (11)                       (4)
                                                                                    16                        36

Taxation                                                                           (3)                      (44)

Capital expenditure and
Financial investments
Purchase of tangible fixed assets                                   (396)                     (454)
Purchase of fixed asset investments                                 (119)                         -
Sale of tangible fixed assets                                          32                         -
Purchase of intangible assets                                       (158)                      (44)
                                                                                 (641)                     (498)

Net cash outflow
before financing                                                               (1,213)                     (474)

Financing
Advances in respect of ordinary share capital                         203                       279
Capital element of hire purchase payments                            (43)                      (15)
Repayment of loan notes                                              (45)                      (45)
                                                                                   115                       219

Decrease in cash                                      8                        (1,098)                     (255)




Notes to the financial information


1          BASIS OF PREPARATION

The financial information set out in this announcement does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985.

The financial information has been extracted from the Company's financial
statements which have received an unmodified auditor's report but have not yet
been delivered to the Registrar of Companies.

The financial statements have been prepared in accordance with applicable
accounting standards, including a true and fair override, and under the
historical cost convention.

The principal accounting policies of the Group have remained unchanged from the
previous year except in respect of the adoption of FRS 20 'share based 
payments'. The directors have reviewed the accounting policies adopted by the 
Group and consider them to be the most appropriate.

The Group financial statements incorporate the financial statements of the
Company and its subsidiaries. The companies make up their accounts to the same
date.


2          TURNOVER AND OPERATING LOSS

The turnover is attributable to the principal activity, which is mainly carried
out in the United Kingdom, Europe and Australia.

An analysis of turnover and operating loss by geographical market is given
below:

                                                                Turnover          Operating (loss)/profit
                                                           2006          2005         2006          2005
                                                                   (restated)                 (restated)
                                                          £'000         £'000        £'000         £'000

United Kingdom                                           16,159        18,551        1,454         3,363
Overseas                                                  6,806         2,010        1,116            84
Central costs                                                 -             -      (4,823)       (3,977)

                                                         22,965        20,561      (2,253)         (530)


The presentation of the segmental analysis has been adapted from the previous
year as the directors feel this gives a more appropriate analysis of the Group's
performance in the markets it operates in.

No segmental analysis of net assets has been provided, as the assets and
liabilities attributable to overseas sales are not separately identified.


3          NET INTEREST
                                                                          2006                        2005
                                                                         £'000                       £'000

Interest payable and other similar charges                                (11)                         (4)
Interest receivable and other similar income                                27                          40

                                                                            16                          36


4          TAXATION
                                                                          2006                        2005
                                                                         £'000                       £'000

UK Corporation tax                                                           -                           -
Foreign tax                                                                 82                           -
Deferred tax                                                             1,724                           -

                                                                         1,806                           -



At 31 December 2005 the Group had a deferred tax asset of £1,724,000.  The
Directors feel it is prudent to write off this balance in full, due to the
uncertainty of being able to utilise brought forward tax losses against future
taxable profit.

At 31 December 2006 the group has unutilised tax losses of £7,953,000 (2005
£7,136,000) available to offset against future taxable trading profits. These
losses represent an unrecognised deferred tax asset of £2,386,000 (2005
£2,140,000) at a tax rate of 30%.



5          LOSS PER SHARE

The calculation for the basic earnings per share is based upon the loss
attributable to ordinary shareholders divided by the weighted average number of
shares on issue during the year.

Reconciliation of the loss and weighted average number of shares used in the
calculations are set out below:

                                                                          2006                          2005
                                                                                                  (restated)
Loss on ordinary activities after tax
£'000                                                                  (4,043)                         (494)

Weighted average number of shares                                  380,831,210                   376,573,277

Amount of loss per share in pence                                       (1.06)                        (0.13)


In view of the loss for the year, options in issue have no dilutive effect.


6          SHARE-BASED PAYMENT

During the year 13,700,000 options (2005: 6,325,000) were issued at an average
fair value of 1.94 pence per share (2005: 4.17p).

The fair values of the options granted during the period ended 31 December 2006
were determined using the Binomial valuation model. The valuation was performed
by Chiltern plc.  The model has been applied to each issue of options at the
price prevailing at the time the options were issued. The value of the options
has been adjusted for future dividends, the assumption being that they will be
paid from 2009 as a result of a capital reorganisation by the Group.

The model takes into account a volatility rate of 80%, being the assumed ongoing
volatility for the future share based on historical experience and a risk free
interest of between 3.8%-5.1%.


The remaining life of options is assumed on the following basis:



Executives and non-executives          8 years
Management                             6 years
Non-management                       3.5 years


The amount of employee remuneration expense in respect of the share options
granted amounts to £298,000 (2005 £181,000).


7          NET CASH FLOW FROM OPERATING ACTIVITIES

                                                                          2006                        2005
                                                                                                (restated)
                                                                         £'000                       £'000

Operating loss                                                         (2,253)                       (530)
Depreciation                                                               385                         292
Loss on disposals of fixed asset                                            43                          13
Amortisation                                                             1,010                       1,149
Share-based payment                                                        298                         181
Increase in debtors                                                      (538)                     (1,399)
Increase in creditors                                                      470                         326

Net cash flow from operating activities                                  (585)                          32



8          ANALYSIS OF CHANGES IN NET FUNDS

                                                                   2005     Cash flow          2006
                                                                  £'000         £'000         £'000

Cash at bank and in hand                                          1,682       (1,098)           584
Debt                                                               (77)            45          (32)
Finance leases                                                     (43)            43             -

                                                                  1,562       (1,010)           552



Copies of the Report and Accounts will be sent to shareholders shortly and will
be available from the registered office 19 Cavendish Square, London, W1A 2AW.



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